ラクーンホールディングス（3031） – Notice Concerning Formulation of Mid-term Management Plan (Fiscal Year Ending April 30, 2023 to Fiscal Year Ending April 30, 2025)

(For Translation Purposes Only) June 10, 2022 Raccoon Holdings, Inc. 1-14-14 Nihonbashi-Kakigaracho, Chuo-ku Tokyo President: Isao Ogata, Representative Director (Code: 3031, Tokyo Stock Exchange Prime Market) Contact: Satoshi Konno Executive Vice President and Director (Tel: +81-3-5652-1711) Notice Concerning Formulation of Mid-term Management Plan (Fiscal Year Ending April 30, 2023 to Fiscal Year Ending April 30, 2025) Raccoon Holdings, Inc. (“Raccoon”) has formulated a new Mid-term Management Plan for the three-year period of the fiscal year ending April 30, 2023 to the fiscal year ending April 30, 2025. Outline of the Mid-term Management Plan (Fiscal Year Ending April 30, 2023 to Fiscal Year Ending April 30, 2025) 1. Theme of the Mid-term Management Plan From breadth to depth: sustainable business growth by improving LTV 2. Mid-term Management Targets for Key Indices • Aim for growth in all businesses, with a target growth rate of +17.8% CAGR • Aim to improve operating income margin while investing in growth against a backdrop of a high marginal income ratio • Conduct assertive shareholder returns with a goal of 27% ROE Fiscal year ended April 30, 2022 (results) Fiscal year ending April 30, 2025 (planned) (in millions of yen) Growth rate Net sales Operating income Operating income margin ROE 4,767 1,127 23.6% 7.7% *1 (13.7% excluding extraordinary losses) 7,800 2,600 33.3% 27.0% CAGR +17.8% CAGR +32.1% +9.7pt +19.3pt (+13.3pt) *1 Temporary decline in ROE due to impairment of investment securities and goodwill * Please see the attached material for details on the Mid-term Management Plan. * A video discussing the Mid-term Management Plan will be posted on the Company’s website at a later date. Mid-term Management PlanFY 4/2023 (ending April 30, 2023) to FY 4/2025 (ending April 30, 2025)June 10, 2022グループ全体Executive Summary1. Further Expanding MarketAs companies both within and outside Japan reevaluate the importance of DX, the Company projects that the EC Business and the Financial Business will expand further.The Company will create sales gains across all businesses by riding this large wave.2. Expanding Market ShareCOVID-19 has greatly increased the number of customer contacts. The Company will expand market share, improving LTV by ensuring that customer contacts are not transitory and yield continued use.3. Improving MarginWe will strive for balanced growth that will allow more investment into our businesses on the back of high marginal income ratios while improving operating margin.(C) 2022 RACCOON HOLDINGS, Inc.2グループ全体About Raccoon Group(C) 2022 RACCOON HOLDINGS, Inc.3グループ全体Group OverallValue Created to DateFounded in 1993 with 1 million yen, the Company has continued to grow by pioneering new and efficient distribution systems as an alternative to the “information,” “settlement,” and “logistics” functions of wholesalers.E-Commerce BusinessFinancial BusinessExcess inventory salesBtoB marketplaceInter-company credit settlementOnline Receivables GuaranteeRent liability guaranteeFoundedFirst in industryService starts in May 2009 as SD PaymentListedListed on the Tokyo Stock ExchangeFY 4/1993FY 4/1998FY 4/2002FY 4/2006FY 4/2010FY 4/2017FY 4/2020Net sales* Figures for FY 4/2013 and earlier have been recalculated for reference purposes to conform to current net sales calculations(C) 2022 RACCOON HOLDINGS, Inc.4グループ全体Group OverallSignificance of Raccoon Group’s ExistenceRaccoon Group Corporate PhilosophyMaking corporate activities more efficient and convenientCreate business infrastructure for SMEs that allows even small new companies to succeed in the shortest possible time by making the right effortsBuying companies(retail stores, etc.)Issues for SMEsRACCOON’s servicesStockingPaymentSalesAccountingClose store to attend exhibitions & wholesalersStrict conditions such as advance paymentUnable to conduct nationwide salesManual invoicing and payment managementRisk of nonpayment by business partnersWholesale transactions with 3,000 companies onlineCombined credit settlement for multiple companies at onceBranch out to small regional storesFreed from invoicing workExpand business partners with no risk of nonpaymentSelling companies(manufacturers, etc.)Credit management(C) 2022 RACCOON HOLDINGS, Inc.5Group OverallRaccoon Group’s StrengthsProvide BtoB services suited to the times based on an understanding of customers and the industry and through use of proprietary data foundationsDeep understanding of the newest customer needs, business practices and industry knowledgeUnderstanding customersUtilizing technologyPower to utilize technology suited to the times3 StrengthsData assetsData not found with competitors such as user data, credit data, transaction data, proprietary research, etc.(C) 2022 RACCOON HOLDINGS, Inc.6グループ全体Group OverallBusinessesE-Commerce BusinessFinancial BusinessDomestic inter-company marketplaceCross Border EC for international companiesInter-company credit settlementOnline Receivables GuaranteeObligation Guarantee for Rental PropertiesAnnual buying customers44,000 businessesNumber of suppliers3,000 companiesAnnual gross merchandise value21.6 billion yenAnnual value of transactions34.7 billion yenguarantee balance30.6 billion yenActual guarantee balance7.5 billion yenScale of Businesses (FY 4/2022)(C) 2022 RACCOON HOLDINGS, Inc.7グループ全体Group OverallFuture Vision & Position of the Mid-Term Management PlanAchieve No.1 in existing businesses & create new future No.1 businesses• Growth in each business due to increase in new customers despite effects of COVID-19• Focus investment into existing businesses during Mid-Term Management Plan period to take advantage of newly acquired customer baseBusiness Creation PeriodCOVID-19Mid-Term PlanPeriodFuture VisionCustomer expansionthrough DX opportunitiesImprove customerLTV* * Lifetime ValueCreation of businessFY 4/2020FY 4/2022FY 4/2025Creating business infrastructure that allows small new companies to succeed in the shortest possible time(C) 2022 RACCOON HOLDINGS, Inc.8No.1 in market for existingbusinessesCreation of new No.1businessesグループ全体Mid-term Management Plan Summary(C) 2022 RACCOON HOLDINGS, Inc.9グループ全体Group OverallTheme of the Mid-term Management PlanFrom Breadth to DepthSustainable business growth by improving LTVWe will strive for sustainable business growth by concentrating investment into existing businesses and increasing LTV to develop the increased membership in the midst of COVID-19 into a solid customer base.(C) 2022 RACCOON HOLDINGS, Inc.10グループ全体Group OverallMid-term Business Targets for Key IndicesSales growth in all businesses. Operating income growth of CAGR+27% by improving margin• Aim to improve operating income margin while investing in growth against backdrop of high marginal income ratio (over 70%)• Assertive shareholder returns with a goal of 25% ROEFiscal year ended April 30, 2022(results)Fiscal year ending April 30, 2025(planned)Growth rateBreakdownof net salesUnit: million yen7.7 billion yenNet salesOperating incomeOperating income margin4,789 million yen1,126million yen➡➡7,700 million yen2,310 million yenCAGR +17%CAGR +27%23.5% ➡30.0% +6.5ptFinancial BusinessROE6.7%*1(13.6% excluding extraordinary losses)➡25.0%+18.3pt(+11.4pt)ECBusiness*1 Temporary decline in ROE due to impairment of investment securities and goodwill(C) 2022 RACCOON HOLDINGS, Inc.(C) 2022 RACCOON HOLDINGS, Inc.CAGR+17%4.7 billionyen38%Compositionratio4278145992,95062%Compositionratio6051,51198640%Compositionratio60%Compositionratio4,598Fiscal year ended April 30, 2022 (results)Fiscal year ending April 30, 2025 (planned)11グループ全体Group OverallProfit Structure that Increases Operating MarginProfit structure in which net sales and SG&A expenses are not in proportion and operating income margin tends to increase•Increase in SG&A expenses such as labor costs are not linked to sales and show moderate rise due to systemization• Plans to increase operating income margin while making aggressive investment for growth during the Mid-Term Management Plan period9,0008,0007,0006,0005,000Operating income margin4,0003,000Net sales2,0001,000SG&A0To operating income margin of 30%30%25%20%15%10%5%0%Mid-term Management Plan period(C) 2022 RACCOON HOLDINGS, Inc.12グループ全体Group OverallContinuously Growing MarketBoth businesses have low penetration rate despite large market, but expansion is predicted• Increase in companies preparing for digital shift and credit concerns due to COVID-19• Upward trend is expected to continue, increase in future penetration rates predicted as a resultE-Commerce BusinessFinancial BusinessWholesale EC ratio5.1%Old transactions methods (sales/phone/FAX) remain; BtoB EC ratio is low (5.1%) compared to BtoC (22.2%)Receivables guarantee penetration rate1.0%Majority of BtoB companies conduct account receivable transactions, but awareness of receivables guarantee services is low, 1.0% penetration rateApparel & goods wholesale market38trillion yenDigitalization to increase BtoB transaction efficiency continues, increase in EC ratio to BtoC levels predictedBtoB accountreceivable balance182trillion yenAwareness rose due to credit concerns during COVID-19 & work DX, rise in penetration rate will continueResults amid COVID-192019→2022Buyingcustomers2.1xNumber of suppliers 2.2xGMV1.9xResults amid COVID-192019→2022Paid transaction volume1.6xReceivablesguarantee balance2.3xRent guarantee balance1.3x(C) 2022 RACCOON HOLDINGS, Inc.13グループ全体Group OverallOver-all View of Mid-Term Management PlanThemeSustainable growth by improving LTVE-Commerce BusinessFinancial Business1DomesticECImprove value of transactions per customerRealizing the ability to purchase wanted products at a low priceBusiness Strategy2InternationalECCategory specialization Changing strategies from by country to by category5Rentguarantee3PaidIncrease transaction value per member companyStrengthen functions to meet efficiency needs4URIHOIncrease number of registered companiesStrengthen important adoption criteria for companiesPromotion of bilateral contract productsExpand to landlords/ property management companiesBusiness FoundationEnhancing our 3 strengthsUnderstanding customers, utilizing technology and growth of data foundationIncreasing development resourcesDoubling potential developmental resources(C) 2022 RACCOON HOLDINGS, Inc.14グループ全体Business Strategy(C) 2022 RACCOON HOLDINGS, Inc.15グループ全体1DomesticImprove value of transactions per customer2InternationalCategory specialization strategyEC Business:DomesticSUPER DELIVERY (SD)BtoB marketplace for wholesale transactions between manufacturers, retailers and service industry, etc.(C) 2022 RACCOON HOLDINGS, Inc.46%Net sales composition: FY 4/2022(ended April 30, 2022)16EC Business: DomesticEC事業 国内Summary of Business Structure and EnvironmentPursuing sales growth by increasing value of transactions per customer backed by growing market due to the progression of digital shiftBusiness StructureBusiness EnvironmentOutlookWholesale market scaleDomestic market is levelValue of transactions per buying customer××Gross merchandise value (GMV)EC ratioIncrease due to digital shiftPriorityShare among customersValue of transactions perbuying customer is levelAim for rise in proportion of purchases from SDFluctuating revenueNet sales×No. of buying customers×Take rate+Fixed revenue(C) 2022 RACCOON HOLDINGS, Inc.Increase due to digital shiftShift due to change in registration plan feesCurrent plans have free basic fee +10~15% commissionTake rate increasing,while fixed revenue is decreasing17EC Business: DomesticEC事業 国内Target Market (EC Wholesale for Small Enterprises)EC ratio of in-house EC and malls combined in 5.1% for BtoB wholesale, with more potential for growth• With the digital shift, BtoB’s EC ratio estimated to grow 20+%, on par with BtoC• The EC wholesale market is expected to grow into a 1 trillion yen marketCurrent EC WholesaleMarket Size *1Apparel & general goods wholesale marketPercentage forsmall enterprises(4 persons or less)Wholesale EC ratio38trillion yen×13%×5.1%250.0 billion yenDriver of Market Growth: EC ratioBtoB wholesale means of sale *2Outlook for EC ratio and the marketExhibitionordersEDIPhone, e-mail, FAXEC5.1%In-personsalesEC ratio20+%EC wholesale marketto 1 trillion yenReference: BtoC EC ratio *3 forApparel & goods 22.2%（ 2020 ）*1 Wholesale market size: Market size calculated based on amount of purchased good by retail trade industry, from 2020 Economic Conditions Survey, 2016 Economic Census, Basic Survey on Commercial and Manufacturing Structure and Activities (all by the Ministry of Economy, Trade and Industry); “small” pertains to “less than 4 employees”*2 Means of sale: Based on the sales proportion by wholesale means of sale in in “BtoB-EC Market: Current Situation & Future Prospects 2022” (survey by Impress Corporation). EC includes in-house EC, BtoB malls and wholesale *3 BtoC EC ratio: Calculated by the Company based on BtoC EC ratio for relevant genres in “FY2020 E-Commerce Market Survey ” (Ministry of Economy, Trade and Industry)purchases through BtoC malls(C) 2022 RACCOON HOLDINGS, Inc.18EC Business: DomesticEC事業 国内Business Conditions of Super Delivery (Domestic)• Steady increase in number of buying customers as a result of expanding needs due to COVID-19 and aggressive investment into advertising• Average sale per customer remains level when excluding special demand for masks, etc. due to COVID-19, however there is much potential for expanding purchases from SDNumber of Buying CustomersValue of Transactions per CustomerNumber of buying customersBoth new and repeat customers increased in the midst of COVID-19Value of transactions per customerLevel trend continuesPurchasing ratio by SD customersAt 20%, there is growth potentialNew customersRepeat customersRetail tradeOtherSD20%Other than retail tradeOther ECsWholesale storesManufacturers(C) 2022 RACCOON HOLDINGS, Inc.* Survey for SD members (conducted FY 4/2022, n=602）19EC Business: DomesticEC事業 国内Priority MeasuresIncrease rate of SD purchases by customers and aim to improve value of transactions per customer• Double promotional investment and use points systems and coupons to increase value of transactions per buying customer• Assign a merchandiser (MD) for each product category to increase in-demand products• Utilize AI based on behavioral data to promote website personalizationResponding to Cost NeedsRealize low costs through promotional investmentResponding to Product NeedsFind products you wantIncrease return rate of points programDistribute shipping coupons to increase new purchasesIncrease in-demand products by assigning MDsPersonalizing websiteTOP 5 Customer Needs Requests to improve SDCostneedsShippingSales/campaignsProduct prices32%19%17%ProductneedsProduct findabilityProduct information15%14%(C) 2022 RACCOON HOLDINGS, Inc.* Based on survey of SD members (conducted 4/2022, n=929）20グループ全体EC Business: International1DomesticImprove value of transactions per customer2 InternationalCategory specialization strategySD exportBtoB marketplace for hassle-free, risk-free wholesale transactions between manufacturers and international businesses(C) 2022 RACCOON HOLDINGS, Inc.16%Net sales composition: FY 4/2022(ended April 30, 2022)21EC Business:EC事業 海外InternationalBusiness Structure and Strategic Priority MeasuresThe Company implemented a category strategy to increase buying customers and SD ratio one category at a timeBusiness StructureBusiness EnvironmentOutlookGlobal trade market×Ratio of exports from Japan×PrioritySD market shareValue of transactions per buying customer×PriorityNo. of buying customersRepeated increase/decrease in multi-year cyclesVarying increase/decrease by categoryDiffers by categoryIncrease share starting from stronger categoriesUpward trend of borderlessEC usersdue to travel restrictionsAffected by change in business registration planGross merchandise value(GMV)×Take rateTake rate is increasing, fixed revenue on downward trend22Fluctuating revenueNet sales+Fixed revenue(C) 2022 RACCOON HOLDINGS, Inc.EC Business:EC事業 海外InternationalTarget MarketJapan’s export market is 1.4 trillion yen, even when only accounting for products handled on SD• The Company previously strategized by country, but will shift to a categoric strategy in • Become No.1 one category at a time, aiming to become the future No.1 service in exportsconsideration of country risksTarget Market forSD International *1Export market size of global consumer goodsExport market size of consumer goods from JapanRatio of current SD item categories856trillion yen×2.8%×5.8%1.4 trillion yenStrategy by Category to increase SD’s ShareExport amount by category *2Other general goodsBooksDishes andkitchen areaElectronicsStationary/crafts1.4trillion yenHealth &cosmeticsFashionFurnitureHobby, leisure and sportsRoadmap to increase SD’s shareNo.1 in exports from JapanNo.1 in exports in many categoriesNo.1 in exports in specific categories*1 Export market size: Calculated by the value of Consumer Goods exports in 2019 from WITS (World Integrated Trade Solution). Converted at 130 yen to the U.S. dollar.*2 Export amount by category: Estimated value calculated as the ratio of export value excluding “Export to affiliates” out of “Value of goods exported international” in “Ministry of Economy, Trade and Industry Basic Survey of Japanese Business Structure and Activities” (2021)(C) 2022 RACCOON HOLDINGS, Inc.23EC Business:EC事業 海外InternationalPriority MeasuresFirst, strive for No.1 in exports from Japan in specific product categories• Expand range of “Japan brands” through cooperation with local governments• Adopt DeepL for translation to display the correct language for each country• Realize low prices and shipping costs through promotional investment and cooperation with international logistics companiesStrengthening specific categoriesShow the world the attractiveness of Japanese productsResponding to need for low pricesBecoming a low-price, easy-to-use website“Japan Brand”Cooperation with local governmentsImprove translation accuracyAdopt DeepLReduce shipping costsCooperation with international logistics companiesDoubling promotional investmentUse of points/couponsTop 5 Criteria by international Customers for Selecting SuppliersReliabilityLow purchase priceLow shipping costs79%73%70%Fast delivery timeMany product types58%53%(C) 2022 RACCOON HOLDINGS, Inc.* Based on survey of SD international members (conducted FY 4/2022, n=210）24EC EC事業Business:Domestic +InternationalMain KPIsGMV Growth target of +20% CAGR• Continue advertising investment and expanding range of products to maintain growth of buying customers• Aim for improving value of transactions per buying customer by realizing low cost of sales promotion, etc.• GMV growth rate is higher for International, gradually expanding International share within SDFY 4/2022(results)FY 4/2025(plan)CAGRGross Merchandise Value (GMV)21,687 million yen ➡ 37,500 million yen +20%Domestic16,033 million yen ➡26,500 million yen+19%International5,654 million yen ➡11,000 million yen+25%Buying customers26,294 stores(Q4)➡ 40,000 stores(Q4)+15%221,389 yen (Q4)➡257,000 yen(Q4)+5%Value of transactions per customer(C) 2022 RACCOON HOLDINGS, Inc.Gross Merchandise Value (GMV)International26%International29%21.6billionyen37.5billionyenDomestic74%Domestic71%FY 4/2022(results)FY 4/2025(planned)25グループ全体Financial Business: PaidPaid3PaidIncrease transaction value per member company4URIHOIncrease number of registered companies5 RentguaranteePromotion of bilateral contract productsA deferred payment service between enterprises that can eliminate the time and energy used to collect bills and the risk of uncollected bills12%(C) 2022 RACCOON HOLDINGS, Inc.Net sales composition: FY 4/2022(ended April 30, 2022)26Financial Business:Paidフィナンシャル事業PaidBusiness Structure & Strategic Priority MeasuresThe Company already has No.1 in shares of registered companies. We will continue to strengthen our position as the value of transactions by member companies continues to rise. Business StructureMarket & Business EnvironmentOutlookNumber of enterprises usingBtoB credit settlementNo. of SMEsengaged in accts receivable transactions×Penetration rateof BtoB credit settlement Number of member companiesPriority×PaidMarket sharePriority×Value of transactions by member companyLevel trendPenetration rate growingdue to Act on Book & Record Keeping throughElectronic Methods and need to adapt to DXCurrently No.1 in shares of registered companiesContinue acquiring member companiesValue of transactions by member companies on the riseStrengthen company membership with potential high-value transactionsGuarantee rate of industry companies fallingdue to automation andcompetition with other companiesControl risk by advanced screeningfor performance-related expenses whichaccount for the majority of cost of salesNet salesTrans-action volumeTransaction volume of customers guaranteed by Paid×Guarantee rateCost of sales(C) 2022 RACCOON HOLDINGS, Inc.27Financial Business:Paidフィナンシャル事業PaidMarket & Business EnvironmentInter-company accounts receivable transactions among small and medium enterprises (SMEs) are large at 116 trillion yen with large potential for growth• We lead the industry in member companies with a 48% share of the market• Value of transactions per member company are high and growing in certain business types with a high proportion of Paid customersInter-company accounts receivable transaction volume by SMEs*1(2020)Market share of member companies for BtoB credit settlement*2(September 2021)Value of transactions by member companies on PaidOther transactions53 trillion yenAccounts receivable transactions116 trillion yenCompany C6％Company B20％Company A26％Companiesusing such servicesNo.1Paid48% shareCertain business typesOther business typesQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4FY 4/2020 FY 4/2021 FY 4/2022*1 The Company’s estimated invoiced payment amount out of annual inter-company transactions of small and medium enterprises, based on data from “Basic Survey on Small and Medium Enterprises” (Small and Medium Enterprise Agency) on accounts receivable and notes receivable, accounting for annual turnover of receivables (Payment Terms Improvement Committee Report), private final consumption expenditure (Cabinet Office) and cashless payment rates (Ministry of Economy, Trade and Industry), etc.*2 Japan Marketing Research Organization(C) 2022 RACCOON HOLDINGS, Inc.28Financial Business:Paidフィナンシャル事業PaidPriority MeasuresIncrease transaction value per member company by capturing certain business types, aim for No.1 in transaction volume in such segments• Strengthen functions to meet efficiency needs such as screening pass rates, speed, efficiency effects and guarantee limit to attract companies with high LTVStrengthen functions to meet customers’ efficiency & DX needsScreeningautomation２ days 10 minutesAverage for certain eligible companiesScreeningpass rate+10%Certain eligible companiesEfficiencyfunctionsReduce screening documents, simplify registration informationExpand flexibility ofGuarantee limitCertain business typesTop 5 Criteria to Increase Usage Amount on PaidHigh screening pass rateFast screening resultsHigh efficiency/ DX effects43%Reasonable usage fees30%High approved amount29%34%30%* Based on survey of Paid users and service termination survey (conducted 4/2022, n=185)(C) 2022 RACCOON HOLDINGS, Inc.29Financial Business:Paidフィナンシャル事業PaidMain KPIsAim for +18% CAGR growth in net sales based on growth of transaction volume• Improve transaction volume and net sales by targeting registration of certain business types with a high value of transactions per member companyFY 4/2022(results)FY 4/2025(planned)CAGRTransaction volume(Member companies ✕Value of transactions per member company）Net sales25,600million yen598million yen➡➡42,128million yen985million yen+18%+18%* Transactions within the Group are omitted(C) 2022 RACCOON HOLDINGS, Inc.30グループ全体Financial Business: URIHO3PaidIncrease transaction value per member company4URIHOIncrease number of registered companies5 RentGuaranteePromotion of bilateral contract productsURIHOOnline receivables guarantee servicefor non-payment by business partners(C) 2022 RACCOON HOLDINGS, Inc.17%Net sales composition: FY 4/2022(ended April 30, 2022)31Financial Business:URIHOフィナンシャル事業URIHOIntegrating Brand Name for Accounts Receivables Guarantee ServicesT&G Accounts Receivables Guarantee integrated brand name into “URIHO” in May 2022iFxed-rate systemexisting transactionsCommon to new& Plan A9,800 yen/month, 10 million yen total guaranteePlan B29,800 yen/month, 30 million yen total guaranteePlan C99,800 yen/month, 70 million yen total guaranteetransactionsystemPer iFxed-rate transactionstransactionsNew Current Sales guarantee2% of the invoice amount, guaranteed for the invoice amountN/A for new contractsThreshold guarantee59,800 yen/month, 30 million yen total guarantee*Continued availability for currently subscribed customersBrand nameintegrated*(C) 2022 RACCOON HOLDINGS, Inc.32From May 31, 2022* Changed service name ofFinancial Business:URIHOフィナンシャル事業URIHOBusiness Structure and Strategic Priority MeasuresBtoB account receivable guarantee penetration rate is expected to grow; we will capture these needs through proactive contract acquisitionBusiness StructureMarket & Business EnvironmentOutlookRegistered enterprisesguarantee balancetotal balance of obligations guaranteed by URIHONet sales×Guarantee amount×RatesCost of sales(C) 2022 RACCOON HOLDINGS, Inc.No. of Enterprisesusing BtoB account receivables guaranteesNo. of SMEsconducting accounts receivable transactions×BtoB accounts receivable guaranteepenetration ratePriority×URIHOMarket shareLevel trendDue to increase in IT companies that conduct many transactions and the diversification of risks,penetration rate is risingAssertive expansion of customer baseto meet the growing needs of a growing marketBy capturing need for robust guarantees, Guarantee amount on the riseRate for industry companies fallingdue to automation andcompetition with other companiesControl risk by advanced screeningfor performance-related expenses whichaccount for the majority of cost of sales33Financial Business:URIHOフィナンシャル事業URIHOMarket EnvironmentBoth the Japan and global market is growing due to an increase in IT enterprises that conduct many transactions and the diversification of risk• Japan’s BtoB account receivable guarantee penetration rate is small at 1% with great growth potential• With URIHO’s guarantee balance at 1% of the market, there is significant room for market share expansionGlobal transaction credit insurance premium market projection*1(million USD)CAGR +8.6%18,1409,390Domestic BtoB account receivables transactions*2(2020)BtoB accounts receivable guarantee penetration rate1.0%(1.9 trillion yen)Domestic BtoB account receivables companies guarantee balance*3(2020)URIHO1.0% (18.9 billion yen) BtoB accountsreceivable balance182trillion yenGuarantee balanceof leading companies1.9trillion yen20192027* 1 Allied Market Research, “Trade Credit Insurance Market 2020-2027”cashless payment rates (Ministry of Economy, Trade and Industry), etc. (C) 2022 RACCOON HOLDINGS, Inc.* 2 Estimated by the Company based on data on bills and accounts receivable from the “Financial Statements Statistics of Corporations by Industry” (Ministry of Finance), private final consumption expenditure (Cabinet Office) and * 3 Estimated by the Company based on the Nikkei, “Total obligation of major accounts receivable guarantee companies” (December 11, 2020) and the General Insurance Association of Japan, “Statistics by line.”34Financial Business:URIHOフィナンシャル事業URIHOPriority MeasuresAim for No.1 in contracts by capturing increasing needs by market growth• Strengthening screening pass rate, guarantee limit and screening speed to become the service of choice when starting• Improve customer satisfaction by providing risk informationStrengthening Important Starting CriteriaScreeningpass rate+10%Certain eligible companiesGuarantee limitIncrease limit forsole proprietors, etc.Certain eligible companiesScreeningautomation1.5 days0.5 daysAverage for certaineligible companiesProvide riskinformationStrengthen functionsTop 5 purchasing criteriaScope, content of guaranteeProviding risk informationGuarantee rateScreening speedProviding reminder functions69%69%68%65%63%TOP 4 gaps in URIHOsatisfaction and importanceURIHOURIHOorder-made planScope, content of guaranteeGuarantee rateGuarantee limitScreening pass rate-14pt-14pt-5pt-4pt* Based on survey for BtoB accounts receivable guarantee users(conducted 4/2022, n=301)* Based on survey for guarantee service users(conducted 4/2022, n=33)(C) 2022 RACCOON HOLDINGS, Inc.35Financial Business:URIHOフィナンシャル事業URIHOMain KPIsAim for growth of +32% CAGR for guarantee balance and +23% CAGR for net sales• Increase guarantee balance by adding more member companies, leading to growth in net salesFY 4/2022(results)FY 4/2025(planned)CAGRGuarantee balance(Number of member companies X Guarantee amount)Net sales30,755million yen814million yen➡➡70,000million yen1,511million yen+32%+23%(C) 2022 RACCOON HOLDINGS, Inc.36グループ全体FinancialBusiness :Rent Guarantee3 PaidIncrease transaction value per member company4URIHOIncrease number of registered companies5RentGuaranteePromotion of bilateral contract productsRaccoon RENTRent guarantee service to prevent risk of delinquent rent for residential and business rental properties9%Details omitted as business accounts for less than 10% of net sales(C) 2022 RACCOON HOLDINGS, Inc.Net sales composition: FY 4/2022(ended April 30, 2022)37グループ全体Investment & Shareholder Return Policy(C) 2022 RACCOON HOLDINGS, Inc.38Investment & Shareholder Return PolicyInvestment & Shareholder Returns PolicyThe Company’s policy is to actively offer shareholder returns while securing funds for investment in future growth.Operatingcash flowApprox. 4.0 billion yen*Cumulative total during period of Mid-term Management Plan(Fiscal year ending April 30, 2023 to fiscal year ending April 30, 2025)Future growth investmentsActive investment into business foundations for each serviceShareholderreturnsDividendsDividend payout ratio45~50％Share repurchasesFlexible execution depending on share price(C) 2022 RACCOON HOLDINGS, Inc.39Investment & Shareholder Return PolicyInvestment for Future GrowthBusiness is still in growth phase; increasing investments while balancing profit growth• Invest into sales promotion to increase customer LTV as well as continued increase in • Invest into environmental development and human capital for acquisition, retainment of advertising investmentdevelopment resourcesInvestment categoriesCosts to attract customersSales promotion costsDevelopment resource enhancement costsInvestment DetailsContinue investing a certain percentage into advertising in line with sales increase(advertising/promotion costs)Increase points system & coupons for improving LTV(advertising/promotion costs)Invest into hiring and environment development, training(labor costs, etc.)(C) 2022 RACCOON HOLDINGS, Inc.AmountFY 4/2022 → FY 4/2025Plans for future growth investments against backdrop of high marginal income ratioRise in operating income margin expected1.5×2.0x2.1x¥5,000¥4,000¥3,000¥2,000¥1,000¥030.0%2,31023.5%1,12635%30%25%20%15%10%5%0%FY 4/2022(results)FY 4/2025(planned)Operating incomeOperating income margin* unit: million yen40グループ全体ESG Information(C) 2022 RACCOON HOLDINGS, Inc.41ESG InformationBasic Sustainability PolicyCorporate PhilosophyMaking corporate activities more efficient and convenientProviding business infrastructure to support a wide range of transactionsBasic PolicySolving social issues through businessWe will strive to improve corporate value by appropriately managing and minimizing risks inherent in our business operations and maximizing business opportunitiesFurthermore, we will contribute to the realization of asustainable global environment and society together with our stakeholders(C) 2022 RACCOON HOLDINGS, Inc.42ESG Information5 Priority ThemesIdentify materiality (important issues) to conduct specific actions and formulate KPIsEnvironmentSocialGovernanceEstablishment of Pleasant Work Environment• Diverse work styles• Ensuring occupational health and safety• Respect for employees’ human rightsEngagement with Communities/Society• Volunteering• Joining industry associationsFair Business Practices• Compliance• Corporate governance• Risk management• Assuring a reliable business infrastructureSolving Social Issues Through Business• Actions for climate change• Fair & equitable trading environment• Regional revitalization• Sustainable consumptionPromotion of Diversity• Graduate, mid-career & foreign national employee ratios• Maternity and childcare leave acquisition rates• Gender ratio of managers, etc.(C) 2022 RACCOON HOLDINGS, Inc.43グループ全体Conclusion1. Further Expanding MarketPenetration of DX to increase wholesale EC ratio (5%) and receivables guarantees (1%), resulting in forecast market growth of several times2. Expanding Market ShareIn addition to expansion in number of customers, improve LTV (value per customer and repeat purchase ratio) to plan for net sales growth of CAGR+17%3. Improving MarginWhile increasing investment in each business that is in the growth phase, plan to improve operating profit margin to 30% (+6.5pt) and grow operating income by CAGR+27%(C) 2022 RACCOON HOLDINGS, Inc.44グループ全体Regarding handling of this materialForward-looking statements contained in this document are based on current information and are subject to change due to macroeconomic trends, market conditions, trends in industries pertaining to the Company, and other internal and external factors. The Company makes no representation or warranty as to the accuracy or completeness of the information contained herein. (C) 2022 RACCOON HOLDINGS, Inc.45