Marui : Consolidated Financial Results for the Three Months Ended June 30, 2025 (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. August 5, 2025 Consolidated Financial Results for the Three Months Ended June 30, 2025 [Japanese GAAP] Company name: MARUI GROUP CO.,LTD. Listing: Tokyo Stock Exchange Securities code: 8252 URL: https://www.0101maruigroup.co.jp/en/ Representative: Hiroshi Aoi President and Representative Director Inquiries: Masakazu Iizuka General Manager, Financial Department Telephone: +81-3-3384-0101 Scheduled date to commence dividend payments: -Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (For institutional investors and analysts) (Yen amounts are rounded down to millions, unless otherwise noted.) Consolidated Financial Results for the Three Months Ended June 30, 2025 (April 1, 2025 to June 30, 2025) Consolidated Operating Results (Percentages indicate year-on-year changes.) Revenue Operating profit Ordinary profit Profit attributable to owners of parent Three months ended June 30, 2025 June 30, 2024 Millions of yen 67,401 59,715 % 12.9 11.5 Millions of yen 13,949 10,175 % 37.1 29.1 Millions of yen 12,400 9,276 % 33.7 25.4 Millions of yen 7,920 6,205 % 27.6 43.1 (Note) Comprehensive income: Three months ended June 30, 2025: ¥ 10,250 million [ 79.3%] Three months ended June 30, 2024: ¥ 5,717 million [ 6.1%] Basic earnings per share Diluted earnings per share Three months ended Yen Yen June 30, 2025 44.12 - June 30, 2024 33.06 - Consolidated Financial Position Total assets Net assets Capital adequacy ratio Net assets per share As of June 30, 2025 March 31, 2025 Millions of yen 1,126,789 1,053,352 Millions of yen 242,597 246,636 % 21.5 23.4 Yen 1,349.27 1,362.18 (Reference) Equity: As of June 30, 2025: ¥ 242,176 million As of March 31, 2025: ¥ 246,140 million Dividends Annual dividends 1st quarter-end 2nd quarter-end 3rd quarter-end Year-end Total Fiscal year ended March 31, 2025 Fiscal year ending March 31, 2026 Yen - - Yen 53.00 Yen - Yen 53.00 Yen 106.00 Fiscal year ending March 31, 2026 (Forecast) 65.00 - 66.00 131.00 Dividend on equity ratio (DOE) Fiscal year ended March 31, 2025 8.1% Fiscal year ending March 31, 2026 (forecast) 10.0% (Note) Revision to the forecast for dividends announced most recently: None Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2026(April 1, 2025 to March 31, 2026) (Percentages indicate year-on-year changes.) Revenue Operating profit Ordinary profit Profit attributable to owners of parent Basic 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% (Note) Revision to the financial results forecast announced most recently: None * Notes: (1) Significant changes in the scope of consolidation during the period: None Newly included: - (Company name: Excluded: - (Company name: ) ) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes Changes in accounting policies, changes in accounting estimates, and restatement Changes in accounting policies due to revisions to accounting standards and other regulations: None Changes in accounting policies due to other reasons: None Changes in accounting estimates: None Restatement: None Number of issued shares (common shares) Total number of issued shares at the end of the period (including treasury shares): June 30, 2025: 183,660,417 shares March 31, 2025: 208,660,417 shares Number of treasury shares at the end of the period: June 30, 2025: 4,173,115 shares March 31, 2025: 27,965,135 shares Average number of shares outstanding during the period: Three months ended June 30, 2025: 179,491,565 shares Three months ended June 30, 2024: 187,715,066 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 June 30, 2025: 482,135 shares As of March 31, 2025: 482,435 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. Three months ended June 30, 2025: 482,135 shares Three months ended June 30, 2024: 663,890 shares Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: Yes(voluntary) 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) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information” on page 8 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 7 Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information 8 Medium- to Long-term Corporate Management Strategy 9 Sustainability Approach and Initiatives 15 Consolidated Financial Statements, Etc. 34 Quarterly Consolidated Balance Sheet 34 Quarterly Consolidated Statements of Income and Comprehensive Income 36 Quarterly Consolidated Statement of Cash Flows 38 Notes to Consolidated Financial Statements 39 (Accounting treatments adopted specially for the preparation of consolidated financial statements) . 39 (Segment information) 39 (Notes in case of significant changes in shareholders’ equity) 39 (Notes on going concern assumption) 40 Independent Auditor’s Interim Review Report 41 1 1. Overview of Operating Results, etc. for the Period under Review Overview of Operating Results (Consolidated business results) EPS was 44.1 yen (+33% year on year, +11.0 yen year on year), higher than the previous year due to increased profits. Group transactions totaled 1,284.0 billion yen (+9% year on year, +109.4 billion yen year on year), a record high for the first quarter, driven by FinTech's card credit transactions. Operating revenue increased in sales for the fifth consecutive period to 67.4 billion yen (+13% year on year), operating profit increased for the fourth consecutive period to 13.9 billion yen (+37% year on year), ordinary profit increased for the fourth consecutive period to 12.4 billion yen (+34% year on year), and net income increased for the fifth consecutive period to 7.9 billion yen (+28% year on year). * In "1. Overview of Operating Results, etc. for the Period under Review," 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 increased by 2.6 billion yen due to a 3.2 billion yen increase in gain on transfer of receivables from liquidated accounts receivable (4.9 billion yen) and a 0.6 billion yen increase in amortization and other expenses (2.4 billion yen) compared to the previous year. Excluding the impact of liquidated accounts receivable mentioned above, operating profit increased 1.2 billion yen (retailing: +0.7 billion yen, FinTech: +0.4 billion yen). □Breakdown of changes in operating profit (Business results by segment) Operating profit in the retailing segment was 2.5 billion yen (+40% year on year), 0.7 billion yen higher than the previous year. Operating profit in the FinTech segment was 13.5 billion yen (+28% year on year), 3.0 billion yen higher than the previous 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 are introducing 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 during the current fiscal year (+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, and regular payments for utility bills, etc. As a result, credit card transaction volume for the first quarter was 1.1814 trillion yen (+9% year on year). Changes in card credit transaction volume Transaction volume of installment and revolving payments expanded to 113.2 billion yen (+10% year on year), and the balance of installment and revolving payments, including liquidated accounts receivable, reached a record high of 476.7 billion yen (+8% year on year). The number of new cardholders of the Epos Card was 210,000 (+30,000 year on year), and the number of cardholders at the end of the fiscal year reached a record high of 8.0 million (+ 350,000 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 123. 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 our 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 90,000, and the number of members at the end of the fiscal year was 1.18 million (+220,000 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 39.2 billion yen (+6% year on year), and the ratio of recurring revenue to gross profit was 64.6% (-3.3% year on year). At the start of the period, contracted future recurring gross profit was 398.4 billion yen (+5% year on year), and it is expected to generate future earnings approximately 1.8 times the gross profit of the fiscal year ended March 31, 2025. 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 fee 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 683.5 billion yen (+53.7 billion yen compared to the end of the previous fiscal year) as a result of an increase in credit card transaction volume, etc. Total assets were 1,126.8 billion yen (+73.4 billion yen compared to the end of the previous fiscal year). Interest-bearing debt (excluding lease obligation) amounted to 728.1 billion yen (+91.6 billion yen compared to the end of the previous fiscal year.) As a result of the acquisition of treasury shares and the payment of dividends, shareholders’ equity amounted to 242.2 billion yen (-4.0 billion yen compared to the end of the previous fiscal year), and the equity ratio was 21.5% (-1.9% compared to the end of the previous fiscal year). Balance sheet Overview of Cash Flows Cash flow from operating activities was an outflow of 71.6 billion yen, compared to an outflow of 76.3 billion yen in the previous year. Core operating cash flow, which excludes changes in operating receivables and other items from operating cash flow, decreased by 0.5 billion yen from the previous fiscal year to 7.9 billion yen, mainly due to an increase in income taxes paid, despite an increase in income before income taxes. Net cash used in investing activities amounted to 6.7 billion yen (compared to 5.7 billion yen used in the previous year), mainly due to 5.9 billion yen for the acquisition of Property and equipment as well as intangible assets and 0.3 billion yen for the acquisition of investment securities. Financing cash flow was 79.7 billion yen (83.3 billion yen in the previous year), mainly due to 92.8 billion yen in proceeds from an increase in Interest-bearing debt, 3.2 billion yen for the purchase of treasury shares, and 9.6 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 Operating receivables (Accounts receivable and operating loans), as an indicator of profitability and soundness. Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information At this time, there are no changes to the forecast for the fiscal year ending March 31, 2026 from that announced on May 13, 2025. A summary of the full-year forecast is as follows. For the fiscal year ending March 31, 2026, we forecast EPS of 155.0 yen (+8% year on year, +11.8 yen 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 forecast to be 5,390 billion yen (+9% year on year). Operating revenue is forecast to increase in sales and profit to 272.5 billion yen (+7% year on year), Operating profit to 50.0 billion yen (+12% year on year), and net income to 28.0 billion yen (+5% year on year). Operating profit in the retailing segment is forecast at 11.0 billion yen (+28% year on year). Operating profit for the FinTech segment is forecast at 47.0 billion yen (+7% year on year). Annual dividends are forecast to increase for the 14th consecutive period, reaching a record high of 131 yen (+25 yen year on year). □ Consolidated financial results forecast for the fiscal year ending March 31, 2026 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 services, 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, organizations, and workstyles, with a focus on FinTech, aiming to further expand our corporate value. *The word “Suki” can mean love, like, favor, passionate about, crazy about, adore, etc. Basic management policies Under our vision of “transcending dichotomies between impact and profit,” the Group’s mission is to work together 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.” Co-creation not only within the Group, but also with our stakeholders, is key to achieving this. The Group considers our corporate value to be the harmony of the interests and happiness of all stakeholders, including customers, shareholders, investors, communities and society, and business partners, employees and future generations. We aim to increase our corporate value and realize our vision by promoting co-creation management that involves co-creation with our stakeholders. 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 ■Management Vision & Strategy Narrative 2031 The Group 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 Forward-Looking Investments—toward a new model centered on FinTech: a business that supports “Suki”. Through this transformation, we will realize our vision of “transcending dichotomies between impact and profit.”, and high growth coupled with high returns. This is on the premise that signs of deflation ending are now visible in Japan, and changes in consumer behavior are also beginning to emerge. In light of this situation, our group will promote changes in consumption and lifestyles based on “Suki”, thereby creating a social impact through a new economy driven by “Suki” which motivated by each individual’s “Suki”. Strategy narrative 2031 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 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 supports “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 accomplish 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 the Group, 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 encourage 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 the Group and participation in projects to contribute to the business development of the Group. (Exploratory domains) We are working to globalize our business that supports individual interests. 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 (Response to increased financial expenses due to rising interest rates) Installment and revolving fees are scheduled to change in October 2025, and an increase in revenue is expected. 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 (Capital policy) In the fiscal year ending March 31, 2031, our balance sheet is projected to expand to approximately ¥1.5 trillion. In terms of segments, 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 ¥30.0 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 have set our dividend on equity ratio (DOE) to 10%. The plan of capital allocation is to allocate the core operating cash flow of ¥350.0 billion over the next six years as follows: ¥90.0 billion for growth investments in existing businesses, ¥60.0 billion for forward-looking investments such as DX investments and business development, ¥30.0 billion for the acquisition of treasury shares for capital optimization, and ¥170.0 billion for shareholder returns. □ Capital allocation (Fiscal year ending March 2026 to fiscal year ending March 2031) (Shareholder returns) With respect to shareholder returns, the Group’s basic policy will be one of ongoing, appropriate profit sharing. 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. It will aim to realize ongoing, long-term dividend increases, targeting a dividend on equity ratio (DOE) of approximately 10%. Share buybacks are flexibly conducted as appropriate after comprehensively considering a range of factors including the optimal capital structure, financial conditions, and share price, for improving capital efficiency and enhancing shareholder interest. 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. 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 “transcending dichotomies between impact and profit.” In 2021, under the Group’s 2050 Vision, targets related to sustainability and well-being have been defined as “Impact.” Updating the initiatives that we have set in the 2050 Vision, “Impact” consists of three co-creation themes 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 formulated a new “Management Vision & Strategy Narrative 2031” and redefined our impact in three themes aimed at accomplishing an economy driven by “Suki.” “Work together with future generations to create the future,” “Create an economy driven by each individual’s ‘Suki,’” and “Create 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 have fomulated a new ‘Management Vision and Strategy Narrative 2031’ to 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. Work together with future generations to create the future We will take steps toward creating an eco-friendly and sustainable future by helping realize a carbon-neutral society and supporting future generations in creating businesses. Help realize a carbon-neutral society The medium- to long-term targets for reducing greenhouse gas emissions formulated in September 2019 were certified as “targeting 1.5°C” by the international initiative known as Science Based Targets (SBT). 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, from the level in the fiscal year ended March 31, 2017, achieve net-zero by reducing the total Group-wide Scope 1 and 2 emissions and Scope 3 emissions by 90%, and removing carbon from any residual emissions Achievement for the fiscal year ended March 31, 2025 A 73.7% reduction compared to the fiscal year ended March 31, 2017 A 56.5% reduction compared to the fiscal year ended March 31, 2017 Resulting in greenhouse gas emissions intensity *4 of 5.5, An 80% reduction in combined volume of Scope 1*1 and Scope 2*2 emissions A 35% reduction of Scope 3*3 emissions Reduction of 31,115 tons in combined emissions of Scope 1 (9,003 tons) and Scope 2 (22,112 tons) A reduction in Scope 3 (213,096 tons) 82.7% of the level in the previous fiscal 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, 2025 was 72.1%. *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) MARUI GROUP launched the Project for Promoting Shift to Renewable Energy with UPDATER, Inc. (previously Minna-denryoku, Inc). The Group will take action to reduce CO2 emissions together with its customers by offering services where its cardholders can easily apply for Minna-denryoku’s renewable energy Support future generations in creating businesses The 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 Development 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 the Group’s business development. Creating an economy driven by each individual's ‘Suki’ We will accelerate the realization of a society where individuals can empower themselves through supporting each person’s “Suki.” Consumption that expands for the benefit of others and society through “Suki” We will continue to expand our lineup of cards that allow users to support “Suki,” 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.. Financial empowerment that supports “Suki” The 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 “Suki. ” 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. ” The 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 organizational 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 organization where employees can demonstrate their creativity. By expanding businesses that utilize 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 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 for specific items once a year or more. Going forward, strategies and measures will be examined based on a myriad of factors. 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 introduced impact measurement and evaluation management with the aim of creating sustainable value through the creation of social and environmental impacts. 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 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 assist in rapidly achieving these impact-related KPIs, Group companies and divisions have formulated medium-term plans, and progress on these plans is monitored annually at progress report meetings for the management. In addition, through dialogue with stakeholders conducted every term and social experiments through our business, we identify impacts and work to improve them. 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 Response completed *2 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 Flood damage due to typhoons, torrential rains, 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 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 for specific items once a year or more. 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 the total emissions attributable to Scope 1 and Scope 2 as well as Scope 3 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, 2025. ESG Data Book( https://www.0101maruigroup.co.jp/sustainability/lib/databook.html ) (in Japanese) 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 aim to realize the happiness of each and every person in the 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. 1) 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.

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