Medium-Term Management Plan

Accelerated Pursuit of New Growth

Earnings Growth Scenario

In fiscal 2017, the year ended February 28, 2018, we brought forward the closures of underperforming stores and the recognition of impairment losses to address future concerns. Consequently, we expect to have significantly lower impairment loss risk from fiscal 2018 onward. Taking into account contributions to earnings from new revenue-generating businesses, the Group is targeting ¥60.0 billion for profit for the year attributable to owners of the parent in fiscal 2020, the medium-term management plan's final year.

Fiscal 2018 Priority Measures

In fiscal 2018, the year ending February 28, 2019, with Accelerated Pursuit of New Growth as our goal, we will concentrate on establishing foundations for medium-tolong-term growth while beginning preparations for the creation of new revenue-generating businesses. Therefore, the majority of investment in fiscal 2018 will focus on the CVS business. Given that the investment needed for management integration will have ended, starting from fiscal 2019 we plan to pursue a basic policy of keeping investment within the scope of operating cash flows.

Total investment for FY2018 ¥140.0 billion

  Amount
Breakdown of investment by measure Reinforcement of store foundations ¥105.0 billion
Enhancement of product competitiveness ¥12.0 billion
Improvement of store operating procedures ¥20.0 billion
Development of earnings foundations in financial and peripheral e-commerce operations ¥3.0 billion + α
Breakdown of investment by segment CVS business, HD, new ¥127.0 billion
GMS business ¥13.0 billion
  CVS GMS
Reinforcement of store foundations
  • Complete brand conversion
  • Advance B&S initiatives
  • Renovate existing stores and improve facilities
  • Open high-quality stores, etc.
  • Develop UD Retail business
  • Renovate existing stores and improve facilities
  • Open high-quality stores, etc.
Enhancement of product
competitiveness
  • Improve quality of ready-to-eat items and conduct capital investments
  • Introduce new coffee machines, etc.
  • Advance side dish project
    (develop products through team merchandising, renovate sales floors), etc.
Improvement of store operating procedures
  • Enhance operational efficiency
  • (introduce new store facilities, etc.)
  • Invest in new systems
    (introduce new registers, etc.)
Development of earnings foundations in financial and peripheral e-commerce operations
  • Advance initiatives in the Company's financial operations
  • Develop customer database
  • Improve convenience and enable smartphone compatibility for point services

Interest-Bearing Liabilities and the D/E Ratio

As we will continue actively investing from fiscal 2019 onward, we expect interest-bearing liabilities to remain around ¥500.0 billion. However, we aim to improve the D/E ratio to approximately 0.7 times by accumulating shareholders' equity through earnings growth.

Dividend Policy

Targeting a consolidated payout ratio of 40%, we will distribute profits to shareholders on a stable and continuous basis commensurate with our consolidated operating performance.