Takashimaya : Financial Results for Third Quarter of the Fiscal Year Ending February 29, 2024 presentation

Financial Results for the Third Quarter of the Fiscal Year Ending February 29, 2024 (FY2023)

December 25, 2023

Takashimaya Co., Ltd.

Agenda

1. Financial Results for Q3 of FY Ending Feb 2024 (FY2023)

1. Forecasts for FY Ending Feb 2024 (FY2023)

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I	Financial Results for
Q3 of FY Ending Feb 2024 (FY2023)

1. Key Points of Q3 Performance
2. Consolidated Performance
3. Performance of Domestic Department Store Segment
4. Performance of Key Subsidiaries (Domestic)
5. Performance of Key Subsidiaries (Overseas)

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1. Key Points of Q3 Performance

• On a consolidated basis, all profit categories outperformed previous year and the assumptions compared to October targets, resulting in record highs.
• Domestic department stores recorded a significant increase in operating profit. In addition to growth in net sales from domestic customers and inbound travelers, trends of gross margin ratio improvement and cost-optimization program benefits continued.
• Group companies also recorded increased revenue and profit.
  In Japan, Toshin Development Co., Ltd., overseas, the two companies in Singapore drove performance.

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2. Consolidated Performance

• Total operating revenue was firm in Japan and overseas, reaching a level that outperformed 2019
• SG&A to total operating revenue ratio improved by controlling increases in SG&A expenses
• Profit categories outperformed assumptions compared to October targets, resulting in record highs

* We apply the Accounting Standard for Revenue Recognition from FY2022. As such, operating revenue based on recording methods applied through

FY2021 are indicated as total operating revenue.

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3-1. Performance of Domestic Department Store Segment

• Total operating revenue increased thanks to increased sales among domestic customers and inbound travelers, exceeding 2019
• Maintained SG&A expenses to levels largely unchanged from previous FY through the continued promoting of the cost-optimization program
• Operating profit increased significantly, which greatly contributed to consolidated performance

• We apply the Accounting Standard for Revenue Recognition from FY2022. As such, operating revenue and sales based on recording methods applied through FY2021 are indicated as total operating revenue and total sales, respectively.

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3-2. Domestic Department Stores (In-Store): Sales Trends

• Total net sales resulted in double-digit growth YoY and outperforming 2019 and 2018
• Net sales to domestic customers were firm, with Q3 cumulative results outperforming each FY
• Firm trend of gradual growth, especially compared to 2018, which was prior to both COVID-19 and the consumption tax rate hike

○Total net sales and net sales to domestic customers trends *Compared to previous year, FY2019 and FY2018 (existing stores)

Total net sales

+15.0%	YoY	Change from FY2019	Change from FY2018

Net sales from domestic customers (excludes inbound travelers)

+15.0%			YoY				Change from FY2019		Change from FY2018

		+10.8%	+11.3%
	+9.8%
+10.0%			+10.8%
		+5.4%	+9.4%
+5.0%

Q3 cumulative (Mar.-Nov.)

+11%

+5%

+6%

	+7.6%
+10.0%
+4.0%	+5.2%
+4.9%

		+3.9%
+5.0%	+3.1%	+4.4%

Q3 cumulative (Mar.-Nov.)

+4%

+4%

+5%

+0.1%+4.4%

+0.0%

(0.1%)

(5.0%)

Q1 (Mar.-May) Q2 (Jun.-Aug.) Q3 (Sep.-Nov.)

+3.0%

+2.4%

+0.0%

(5.0%)

Q1 (Mar.-May) Q2 (Jun.-Aug.) Q3 (Sep.-Nov.)

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3-3. Domestic Department Stores (In-Store):

Trends in net sales by product and gross margin ratio

• Double-digitgrowth for fashion despite impact of high temperatures, with growth rate expanding as temperatures drop
• Growth rate for high-ticket items exceeding fashion as well as continued improvement in gross margin ratio
• Advanced initiatives to improve gross margin ratio such as increasing net sales from retail priced products

○Product-specific sales trends *YoY comparison		○Gross margin ratio trends (Q3 cumulative Mar.-Nov.)

Effect of inbound

travelers

Impact of high temperatures

Drop in temperatures,

+20.0% since November 15

Peak for year-end gifts, +2.8% since November 15

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3-4. Domestic Department Stores: SG&A

• Increased by ¥3.7bn YoY on investments towards increasing base pay and making the department stores more profitable, including by adding new events
• Steadily implemented cost-optimization program to achieve reductions of ¥3.3bn from the previous year
• Kept to a slight increase, a total of ¥0.4bn, SG&A to total operating revenue ratio improved

Increased	Increased
by 3.7	by 1.6

* We apply the Accounting Standard for Revenue Recognition from FY2022.

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4. Performance of Key Subsidiaries (Domestic)

• Toshin Development recorded increased revenue and profit thanks to increased rent revenue and efforts to rein in costs
• TFP revenues increased thanks to transaction volume growth but profit decreased slightly due to forward-looking investments
• Other group companies performed steadily, on par with assumptions

• Figures indicate a comparison with FY2019 and change from FY2019 with Toshin Development Co., Ltd. figures representing the combined total with T & T Co., Ltd., Takashimaya Space Create Co., Ltd. figures representing the combined total with Takashimaya Space Create Tohoku Co., Ltd., and Takashimaya Financial Partners Co., Ltd. figures representing the combined total for Takashimaya Credit Co., Ltd. and Takashimaya

Insurance Co., Ltd.

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