IZUMI CO., LTD.

IZUMI CO., LTD.

3-3-1 Futabanosato, Higashi-ku, Hiroshima, 732-8555, Japan

IR Information https://www.izumi.co.jp/corp/e_ir/

you me

Turning dreams into reality.

About the Izumi Group Philosophy

Aiming to be top in every community by providing "new value" and "new community building."

Since its establishment, the Izumi Group has strived to be the top store in the region and has promoted the development of stores that cater to customer convenience, comfort, and enjoyment. Considering each of our stores as one town, we offer a variety of products and services in various places, including our large "Youme Town" shopping centers ("Youme" is a play on words, meaning "You & Me" in English and "Dream" in Japanese). In the future, we hope to move beyond the concept of "stores" for a new kind of "community building." We will work to make our stores community hubs and centers of community revitalization.

4dreams

Management Philosophy

Izumi's DNA

Filling our employees with pride and joy as we continue contributing to communities and our customers' lives

Innovation

The Izumi Group has dreams.They are the four dreams that have grown together with Youme Town: communities, customers, tenants, and employees. We want to provide "the products new to the region" and "the best products in the region," while connecting and supporting everyone there.This creates new value through surprises and excitement.We will become the top store in the region while connecting broadly and deeply with communities, customers, tenants, and employees. Our dreams will never stop growing larger.

Contents

Editorial Policy

This describes the Izumi Group's management strategies for medium-tolong-term value creation and our business activities.

We hope that this report will enable you to deepen your understanding of the activities of the Group, which aims to become the top store in the region, and would like to hear your honest feedback.

Reporting Period

March 1, 2021 - February 28, 2022

(including some activities after March 2022)

Reference Guidelines

• International Integrated Reporting Council (IIRC), International Integrated Reporting Framework
• GRI Sustainability Reporting Standards
• Ministry of Economy, Trade and Industry, Guidance for Collaborative Value Creation

Date of Publication

October 2022

Customers

About the Izumi Group

4 Communities

Four Dreams

dreams

Tenants

Employees

Striving to create new value to achieve our four dreams.

We will contribute to building more vibrant communities and provide a positive impact on the economy by creating employment opportunities and improving access to shopping districts.

We will lead the way to making customers' lives more convenient and comfortable by providing high-quality products and services.

We will promote local employment opportunities by opening stores through a strategy of securing dominance. We believe that local economies will become enriched by revitalizing communities through local production for local consumption activities in cooperation with the government, shopping districts, and NPOs, by serving as a lifeline for communities in the event of disasters, and other ways.

In order to carefully meet the needs of customers, we have adopted a system that allows us to offer a lineup of high value-added products comparable to that of department stores, and to elaborate plans and operations for each store. We are also focusing on enhancing safety and security by making all of our stores accessible and installing AEDs.

We have organized a career plan that respects the independence of employees and an education system that meets their different levels and goals. It is an environment where employees can set their own future careers and take the next step. In addition, the Izumi Group has introduced a system where income is determined according to each employee's responsibilities and authority rather than their position. We are building a system that allows all of our employees to be active and thrive.

For Youme Town, the locations of directly-managed sales floors and tenants are mixed and arranged by industry sector. Besides jointly implementing sales promotions and improving in-store access, we also support tenants with their recruitment activities, and are working to ensure that the Izumi Group and tenants can coexist and have shared prosperity.

About the Izumi Group History

This shows our growth trajectory as

we have continued to dream big for more than half a century.

Operating revenue

2008 Youme Town Hiroshima

Izumi returns to its roots in Hiroshima

Izumi promoted the establishment of a model of stores for children, parents, and grandparents in anticipation of the declining birthrate and aging population. By leveraging the know-how cultivated in Kyushu, the aim was to improve quality in all aspects, such as facilities, services, and products.

*1 The Accounting Standard for Revenue Recognition was applied from the beginning of the fiscal year ending February 28, 2023. Operating revenue would be 697,100 million yen if this accounting standard was not applied.

Fiscal year ending

Feb. 28, 2023 (forecast)

697,100million yen

(454,300million yen)*1

Fiscal year ended

Feb. 28, 2022

676,800

million yen

2017

LECT opens with themes of culture, food, and living

The opened shopping center seamlessly connects three areas with a wealth of books and smart lifestyle proposals: a food zone with Izumi consisting of restaurants, a food court, and food supermarket; a living zone with the new home improvement center Cainz offering different lifestyles; and T-SITE with the element of culture.

60th anniversary of Izumi's founding

As Izumi approaches the 60th anniversary of its founding, we have reviewed our management philosophy.

1946-

Early times after founding

In 1946, former president Yoshimasa Yamanishi started a small stall outside in the burned-out city of Hiroshima. While starting out selling dried persimmons, he steered toward the wholesale business a year later due to increasing demand for clothing, and decided to expand into retail in 1959.

1961-

Growing years

At a time when face-to-face sales were the norm, he opened a self-service supermarket where customers would get products themselves and bring them to cash registers. The Company's stock was listed on the Second Section of the Osaka Securities Exchange, and on the Hiroshima Securities Exchange in 1978.

1980-

Growth phase

While laying its foundations in Hiroshima, the Company expanded its fields of business by building regional dominance in Okayama and Yamaguchi prefectures in the Setouchi region. In addition, after initiatives such as entering the new business category of fashion building development, introducing information technology, and being at the forefront of hiring women in the industry, the Company's stock was listed on the First Section of the Tokyo Stock Exchange in 1987.

1990-

Rapid growth years

With the cooperation of local governments and residents, the Company opened Youme Town shopping centers to revitalize communities.

Betting on its future, it also expanded into Kyushu, aiming for cooperation and shared prosperity with local communities throughout western Japan.

2000-

Innovative years

The Company strengthened profitability through mergers and acquisitions to expand into Kumamoto Prefecture, and promoted various formats of store development that suited local characteristics and conditions. Izumi celebrated the 50th anniversary of its founding in 2011, and began the challenge to become a "one trillion yen company" in the next 100 years.

2012-

New stage

Izumi is working to expand its products and services, including by opening the new type of shopping center called LECT, forming a business alliance with Seven & i Holdings, and creating its own manufacturing brand "zehi."

Retail Business

We sell clothing, food, and household goods through shopping centers, general merchandising stores (GMS), supermarkets, and other formats.

Izumi Group's Share of Food Sector*1*2 Share by Major Area*2

Shopping Centers

Youme Town is a large commercial facility where children, parents, and grandparents can have a pleasant time together. It combines Izumi's directly managed stores with trendy tenants to provide a variety of products, services, and experiences.

Neighborhood Shopping Centers

With our directly operated supermarket serving as the anchor store, our malls with large parking lots are one-stop shopping environments that offer home improvement centers, electronics retailers, drug stores, restaurants, and more.

• IZUMI CO., LTD. (our company)

Consolidated subsidiaries

• Youme Mart Kumamoto Co., Ltd.
• Youme Mart Kitakyushu Co., Ltd.
• Yours Co., Ltd.
• Dailymart Co., Ltd.

*1 Prefectures in the Chugoku, Shikoku, and Kyushu regions where Izumi Group stores are located

*2 Covers major Group companies

(Reference) 2020/2021 Food Supermarket Yearbook

12.0% Kumamoto 7.3%

Prefecture

16.8%

Food Supermarkets

They are closely connected to consumers' daily lives and support their dietary lifestyles. With a focus on food, the product lineup of these stores is closely in tune with regional tastes.

Facilities for spending time leisurely

Based on the themes of "culture, food, and living," this mall provides enjoyable experiences that include not only shopping, but also hands-on events.

Retail-peripheral Businesses

We are engaged in credit handling services, store facility management services, and businesses that complement our retail business such as food and beverages.

Credit card operations

We are involved in a wide range of businesses, including the credit card business (Youme Card), e-money business (Yumeca), travel business, and life insurance agent business.

Facility management, construction, security, and cleaning services

In addition to facility management, construction, security and cleaning services, we are also involved in the designated management of museums, sports centers, cultural centers, and other facilities throughout western Japan.

Consolidated subsidiaries

•You-me Card Co., Ltd.

•Izumi Techno Co., Ltd.

•Izumi Food Service Co., Ltd.

•Youme Delica Co., Ltd.

Restaurant operations

We manage a variety of food and beverage businesses, with a focus on food courts in Izumi stores. In addition to directly managed stores, we are also involved in managing franchise stores.

Other Businesses

In addition to our original wholesale business, we are also engaged in the real estate leasing business.

Consolidated subsidiaries

• Yamanishi Co., Ltd.
• Izumi Real Estate Co., Ltd.