Ryohin Keikaku : MUJI REPORT2023 (For Printing)

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RYOHIN KEIKAKU CO., LTD.

About MUJI REPORT

This report is intended to lead to dialogue with stakeholders by presenting goals for medium- to long-term value creation, management policies, business conditions, and other financial and non-financial information based on the philosophy and mission of Ryohin Keikaku, which is aiming to help create "a truthful and sustainable life for all."

Information Resources

Financial Information

Non-Financial Information

MUJI REPORT

Information on medium- to long-term value creation

Securities Report	Consolidated	Investor Relations	Sustainability (website)
(Japanese only)	Financial Results	(website)	https://ryohin-keikaku.jp/eng/sustainability/
		https://ryohin-keikaku.jp/
		eng/ir/

Contents

Introduction

Enhancing Our Corporate Value

Our Philosophy	3
Our History	5
Toward "a Truthful and Sustainable Life
for All"	7
Financial and Non-Financial Highlights	9
Global Network	11
Message from the Chairman	13
The Value We Create	15
Ryohin Keikaku and Sustainability	17
Message from the President	19
Our Goals and How We Will Achieve Them	25
Feature 1: Overseas Growth Potential	27
Feature 2: Changes in Our People and Stores	29
Feature 3: An IT Strategy Aimed at Realizing
Comfortable Online Services	31
Feature 4: Strengthening Our Earning Power	35

Material Issue 2:

Address Local

Challenges and

Revitalize Regions

Material Issue 3:

Practice Business

Activities in Which Each

and Every Diverse

Individual Plays a

Leading Role

Material Issue 4: Realize Governance Aligned with Public Interest and People- Centered Management

Basic Information

Store Strategy	51
Interview with a General Manager	53
Sustainable Community Design	55
Human Resource Development	57
Initiatives for Diversity & Inclusion	59
Working toward "Public Interest and
People-Centered Management"	61
Directors and Corporate Auditors	63
Corporate Governance	65
Messages from Outside Officers	69
Message from an Outside Corporate

Business Strategies	Ryohin Keikaku's Business Strategies	37
Material Issue 1:	Ryohin Keikaku's Unique Product
Build a Sustainable and	Development	39
Circular Society That	Apparel	41
Coexists with Nature
Household Goods	42
	Food	43
	Overseas Product Development	44
	Supply Chain Management	45
	Raw Material Procurement	47
	Recovery and Recycling Initiatives	48
	Caring for the Environment	49
	Climate Change	50

Auditor	71
Risk Management and Compliance	72
11-Year Summary	75
ESG Data	77
Stock Information	79
Corporate Information	80

Scope of This Report Consolidated subsidiaries and consolidated companies of Ryohin Keikaku Co., Ltd.

Period Covered	Fiscal year ended August 2023 (September 1, 2022 to August 31, 2023)
	Note: Information outside this period is reported when it is appropriate to show past events and data or recent examples. In this report, amounts and number of
	shares that are less than one unit are rounded down, and all ratios and percentages are rounded to the nearest whole number.

Forward-Looking Statements

This report contains forward-looking statements and projections. These statements and projections are based on the Company's judgments at the time the report was produced, and include risks and uncertainties. Changes in various factors could cause actual results to differ materially from forward-looking statements and projections contained herein.

MUJI REPORT 2023 2

MUJI Tsubame

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Our Philosophy

Our Corporate Purpose

Our corporate purpose is to contribute to the creation of "a truthful and sustainable life for all through our products, services, stores and business activities; believing human society rich in heart, with balanced relationship between human, nature and artifacts."

Our Two Missions

1. To provide daily necessities and services with genuine quality and ethical value, at appropriate and affordable prices.
2. To have a positive impact on each region by operating stores that serve as community centers, sharing concerns and values with local residents and collaborating with them to tackle local issues.

Our Core Value

We make efforts to reduce our environmental burden and to respect individual human rights through our product development, services and actions. Through our core value of "contributing to society and people" our employees and associates will proactively respond to issues facing society and the Earth.

Our Management Policy

We will practice "public interest and people-centered management," where each of our employees and associates contribute to the public interest through our business activities and locally rooted stores, have a sense of ownership and take leading roles in the community.

Enhancing Our Corporate Value

Through our activities, we will create a highly profitable business structure, pay taxes properly and return profits to shareholders appropriately. Furthermore, we will strive to create long-term value for the Company by making a positive impact on society together with stakeholders.

MUJI REPORT 2023 4

Introduction

Our History

Ryohin Keikaku's "Grand Strategy" is to realize "a truthful and sustainable life for all." Our "Grand Strategy" defines who we are-being useful to people and society. Of course, as a business enterprise, profit is also important, but our top priority is this "Grand Strategy." Ryohin Keikaku has been working since its founding to make a contribution wherever it can help with social issues and people's concerns. This approach has led to the Ryohin Keikaku of today.

1980-20002001-2015

Our Perspective

Redefining the value of goods

The relationship between life and goods

We aimed to minimize unnecessary elements and create products that are truly useful to consumers from the perspective of selection of materials, streamlining of processes and simplification of packaging.

We sought to give customers a feeling of rational satisfaction, expressed not with "This is what I really want," but with "This will do."

Products with simplicity

Products that fit all life occasions

Evolution of

Our Products

Evolution of Our	New store openings both in
Stores and Services	Japan and overseas	Launch of flagship stores and new services

History of Ryohin Keikaku

1980

Seiyu Co., Ltd., a Japanese retail company, established Mujirushi Ryohin (MUJI) as its private brand

1983

First directly managed store, MUJI Aoyama, opened in Japan

1986

Production and procurement started outside Japan

1989

Ryohin Keikaku Co., Ltd. established

1991

Began business outside Japan (First store in U.K. and first store in Hong Kong opened)

1995

MUJI Tsunan Campsite opened

2000

Listed on the first section of the Tokyo Stock Exchange* MUJI.net Co., Ltd. established (currently MUJI HOUSE Co., Ltd.)

• Now listed on the Tokyo Stock Exchange Prime Market

2001

MUJI Yurakucho, a flagship store for information dissemination, opened

2005

MUJI (Shanghai) Company Limited established

2006

Business transfer from IDÉE Co., Ltd.

2007

First store in U.S. opened

2010

Began MUJI x JICA Project Kyrgyz

2011

Found MUJI Aoyama opened

2012

Muji Retail (Thailand) Co., Ltd. established

2013

Joined UN Global Compact

Launched MUJI passport smartphone app

2014

MUJI Sino-Ocean Taikoo Li Chengdu opened

2015

Began ReMUJI initiative for reuse and recycling of fabric items

5 MUJI REPORT 2023

Introduction

2016-2020	2021-
A truthful and sustainable life	"A truthful and sustainable life for all," and beyond

By providing functional, streamlined products that help simplify and beautify people's lives based on our concept of "conscience and creativity," we have contributed to solving social issues with proposals for peaceful, relaxed living.

We offer affordable products that are not only essential and useful but also beneficial for the environment, producers and local communities. We will also evolve our efforts to help address local challenges, and contribute to the harmonious coexistence and development of daily life, culture and the environment together with local communities.

Products for organizing people's life

Products in harmony with society

Expansion of services close to daily life

Creation of platforms for realizing a better society

2016

Entered the market in India as the first Japanese retailer there

2017

Number of MUJI stores surpassed 400 both in Japan and overseas

2018

Began sales of frozen food

2019

MUJI Ginza and MUJI HOTEL GINZA opened

2021

New start under our "Second Founding"

Started monthly furniture rental service

Opened Healthcare Center

2022

Opened MUJI Hiroshima Alpark

Started sales of MUJI products in Lawson convenience stores nationwide and through CO-OP Sapporo's Todock home delivery system

2023

FY2023/8

Operating revenue

JPY 581.4 billion

Operating profit

JPY 33.1 billion

2020

Established production management base in Vietnam Launched MUJI passport Pay service

Expanded range of plastic products collected Reopened MUJI Shinjuku Yasukuni-Dori as a specialty clothing store

The graph in the background shows operating revenue.

MUJI REPORT 2023 6

Introduction

Toward "a Truthful and Sustainable Life for All"

The scope of our activities has greatly expanded since the creation of MUJI 43 years ago, but our core philosophy has remained the same. We envision a future where "a truthful and sustainable life for all" is a reality. We will provide various products based on our concept of "conscience and creativity," and help solve social issues through our businesses and services.

A store with all lifestyle essentials

Local comm

Organization of lo local businesses a

Apparel

Household goods Food products

Events and workshops

Fresh food

Circularity: Collaborating with custom recycling and waste reduction

MUJI CYCLE (page 48)

ReMUJI (page 48)

Services that support daily life: Enhancing customers' well-being

Mobile sales

Healthcare Centers (page 56) MUJI SUPPORT (page 52)

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Introduction

munity centers	Platforms for realizing "a truthful
	and sustainable life for all"

cal resources: Collaboration with and sales of local products

Community Market events	Development of local products
(page 55)	exclusive to the area

Rental of stall space inside MUJI	Café&Meal (local production
stores at shopping arcades	for local consumption)
Store opening support for local
business owners

Space design business: Designing residences and spaces that reflect MUJI's value

Residential design

Public spaces

Renovation

Revival projects for regional areas: Highlighting local traditions and utilizing local resources

Revitalization of shopping	Store openings at roadside	Revitalization of housing complexes
arcades	rest areas	and renovation projects

mers in product

Mottainai Market (page 48)

Repurposing of abandoned	Revitalization of unused houses
school buildings

Accommodation business: Managing facilities and facilitating local experiences

Shokoku Ryohin (Sales of local products)

MUJI BASE (page 56)

MUJI HOTEL

Campsites

Community engagement: Developing activities and collaborating with local governments, entrepreneurs and producers

ITSUMO MOSHIMO (page 56) Satoyama landscape	Art events
conservation​	MUJI REPORT 2023 8

Introduction

Financial and Non-Financial Highlights

Operating Revenue

(Billion JPY)

600				581.4
500			496.1
	453.6
438.7
400
300
200	179.3
100
0
2020/2	2020/8	2021/8	2022/8	2023/8

Operating Profit/

Operating Profit Ratio

(Billion JPY)					（%）
50						15
			42.4
40						12
36.3
				32.7	33.1
30			9.4			9
8.3
				6.6
20					5.7	6
10						3
0	0.8	0.5				0
2020/2	2020/8	2021/8	2022/8	2023/8

Net Assets/ROE

(Billion JPY)				（%）
320					40
				267.4
240			244.8		30
	214.8
208.4
	182.9
160					20
		17.3
11.8			10.8		10
80				8.7
0					0
(80)	(8.8)				(10)
2020/2	2020/8	2021/8	2022/8	2023/8

Operating profit (Left scale)		Operating profit ratio (Right scale)			Net assets (Left scale)		ROE (Right scale)

Total Assets/ROA

(Billion JPY)				（%）
500				25
				453.7
400		393.3	399.3	20
	343.9
306.5
300				15
12.8	12.3
200			9.4	10
				8.5
100				5
0	0.2			0
2020/2	2020/8	2021/8	2022/8	2023/8

Dividends per Share/

Dividend Payout Ratio

(JPY)				47.9	（%）
50				50
41.1			42.9
	40.0		40.0
40			40
		40.0
36.4
30		31.8			30
20					20
10					10
	5.0
0					0
2020/2	2020/8	2021/8	2022/8	2023/8

Number of Stores (Total) in Japan and Overseas

Includes licensed stores, Cafe&Meal MUJI and IDÉE

1,500
					1,251
1,200			1,068	1,136
	1,033	1,029
900					654
				604
	556	550	571
600
300					597
477	479	497	532
0	2020/2	2020/8	2021/8	2022/8	2023/8

Total assets (Left scale) ROA (Right scale)

Dividends per share (Left scale)		Dividend payout ratio (Right scale)		Number of stores		Number of stores
Note: The dividend payout ratio for FY2020/8 is not presented		overseas		in Japan

as the Company recognized net loss per share.

Cash Flow

(Billion JPY)

90
60		63.7	61.4			56.5
30
24.4				23.3
0		(1.7)	(13.5)	(16.6)
		(22.1)
(31.4)	(4.2)	(15.1)			(11.2)
(30)
(11.4)
(60)
					(58.6)
(90)
2020/2	2020/8	2021/8	2022/8	2023/8

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Capital Investment and

Depreciation

(Billion JPY) 30.0
30
				26.3
25				24.8
			22.0
20		18.9 18.9	17.6
17.6
15
10	10.3
9.0
5
0
2020/2	2020/8	2021/8	2022/8	2023/8
Capital Investment	Depreciation

Operating Revenue by Product Category

Parentheses indicate percentage of total

(Billion JPY)

600					23.9
					（4.1%）
			20.7		74.8
500				（12.9%）
18.2		（4.2%）
	（4.0%）		59.9
400	54.5		（12.1%）
（12.0%）			260.0
			232.7		（44.7%）
300
211.8		（46.9%）
	（46.7%）
200
					222.5
			182.7		（38.3%）
100	169.0		（36.8%）
	（37.3%）
0	2021/8	2022/8	2023/8

Apparel		Household goods

Food products Other

Note: Due to the change in fiscal year, 2020/8 covers the six-month period from March 1 to August 31, 2020.

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