Mid-term Management Plan

FY2022-FY2024

H2O RETAILING CORPORATION

Contents

. Background of the mid-term

management plan

. Realization of the Group's Vision . Long-term business plan for 2030

. Position of mid-term management plan for 2030

. Corporate Strategy

  1. Challenges for new business model
  2. Promotion of IT / Digitization
  3. Alliance partners
  4. Challenges for new market

Ⅵ.Business Strategy

  1. Department store
  2. Supermarket
  3. Shopping Center
  4. Others
  5. Forecast by segment

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. Sustainability Management . Group head office functions

  1. IT/HR/Panning Management
  2. BPR
  3. Head office relocation

. Human Resources Strategy . Investment plan

. Financial and Capital Planning

  1. Asset Efficiency
  2. Debt reduction

. Targets and KPI

  1. Operating profit
  2. ROE/ROIC
  3. Shareholder Returns and Dividend Policy
  4. Targets and KPI

1

. Background of the mid-term management plan

- Awareness of changes accelerated by COVID-19 -

  • Rapid digitalization

New lifestyles among a wide range of generations and situation

    • Build a business style that integrates offline and online (OMO style)
  • Transition to a networked society
    • direct connections to consumers and business partners

Easier and more active online access and communication Rise of a younger generation of digital and social natives Expansion of D2C business where manufacturers sell directly

    • Business model transformation based on direct communication with customers
  • Decline in advantages of urban locations

Decrease in the number of commuters due to the shift to telework Increase in the interest in the area where they live

Increase in the frequency of use of nearby stores due to reduced areas of activity

  • reduce dependence on department stores
    • Diversify revenue sources and restructure the Group's profit structure

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2

. Realization of the Group's Vision

the Group's Vision

Strength of the Group

To be a customer's lifestyle partner to

Trust, network and connection with

enrich their hearts through offering

×

customers and local communities

"fun, happy and tasty" experiences,

contributing to the future of the local

Strong brand loyalty and various

community, children and our planet.

touchpoints with customers

  • The "strategy for market dominance in the Kansai region," the keystone of the Group
  • Sustainability management to deepen relationships
    with stakeholders, especially local communities and residents.

Through these two strategies,

we aim to achieve both the No. 1 mindshare and the No. 1 market share.

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3

. Long-term business plan for 2030

to become a "Communication Retailer"

Approach Strategies

Develop direct communication with customers and deepen relationship

Market

●Target

●KPI in 2030 Active customer

EC related

the rich

small mass

business

mass

New

Ningbo

●Development

The rich

IT, digital, OMO

Hankyu

(Ningbo

Customer database

Connections with locals

Zhejiang)

10 millions of people OP 30-35 billion

  • Dept. over ¥15 bn.

Food

over ¥10bn.

SC

¥3bn.

Ningbo and

¥3bn.

Zhejiang

Customer Service

ROE 6-7

¥3bn.

Customer

contents

into

(High-end, Japan)

B2B business

strategy for market dominance

in the Kansai region

Food

contents

Existing

0

(Food)

Shopping Department

Customer

(Kansai Center

store

Service

area)

partnership with

Home delivery

Lawson, Inc

Osaka pref.

Rebuild Department store business Make Food business as second core

  • Challenges for new market

Success of Ningbo Hankyu business Expand business into Ningbo and Zhejiang prefecturethe richEC

working together with Hankyu Main store

  • Challenges for new business model

1Kansai region × Online × Service Service contents development Digital and Real stores

Networking with alliance members

2Develop B2B business

Build and utilize customer database platform

Existing

New Business model

(Store Commerce)

(Service Commerce)(Database business)

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4

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H2O Retailing Corporation published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 05:02:11 UTC.