October 11, 2023

LIFE CORPORATION
Financial Results Briefing
For the First Half of FY2023(First Six Months of the Fiscal Year Ending February 29, 2024)

LIFE CORPORATION

Key points for FY2023 H1 earnings[Higher Sales and Profit](1) Operating revenue exceeded ¥400 billion
for the first time(2) Gross profit ratio +0.4P, SG&A ratio (0.3)P(3) Net sales/ordinary profit ratio 3.3%
Successful start of the 7th Medium-Term Plan―2―

LIFE CORPORATION

1. FY2023 First Half (H1) performanceoverview
2. Our Strengths
3. Initiatives of the 7th Medium-Term
Plan
4. Enhancement of information
disclosure
5. Full-year forecast for FY2023―3―

LIFE CORPORATION

1. FY2023 First Half (H1)
performance overview―4―

LIFE CORPORATION

FY2023 H1 performance overview (consolidated)(Unit: Millions of yen, %)Item

FY2022 H1

FY2023 H1ChangeOperatingrevenue

377,563

400,148+6.0%

Net sales

364,251385,663+5.9%

Operatingprofit

8,914

12,410+39.2%

Ordinary profit

9,331

12,851+37.7%

Profit6,412

8,534+33.1%―5―

LIFE CORPORATION

Operating revenue trends (H1)••

Operating revenue exceeded ¥400 billion for the first time
New stores (11 stores in FY2022, 6 stores in FY2023 H1) and growth ofexisting stores (YoY net sales 102.6%) contributed to this(Unit: store)(Unit: Billions of yen)

400.0

Operating revenue

400.1

Number of stores at end of H1
386.7

348.0

350.0

353.3

377.5 *302

335.4

280

281

310.7

274300
290

291

323.6

300.0

387.0

310

275

270

269
286.6
244

261

260

264

250
250
240

250.0

1415161718

19202122* Application of “Accounting Standard for Revenue Recognition” from FY2022 (operating revenue before application: ¥387.8 billion)―6―23(Fiscal year)

LIFE CORPORATIONNet sales/gross profit ratio (by division)••

Sales increased mainly in the Process and Daily Department and Delicatessen and Lifestyle
Products
Growth in unique products and appropriate price settings, etc. resulted in gross profit ratio +0.4P
Net sales

Gross profit ratio(Unit: Millions of yen, %)(Unit: %, P)

FY2023 H1
Department
FoodAll storesvs. FY2022

FY2023 H1
Existingstoresvs. FY2022

Gross profitratio

Change340,393

106.0

102.631.3+0.4

AgriculturalProduce

49,510

103.7

100.5

29.2±0.0

MarineProducts

29,676

104.0

100.3

32.5

+0.9

Meat Products

42,392

104.7

101.2

30.1

+0.2

Delicatessen

45,315

106.5

102.6

55.1

(0.1)

Process andDaily

173,498

107.2

104.0

25.7

+0.7

Lifestyle Products

33,541

105.4

102.9

26.5

+0.2

Apparel

11,728

103.9

102.0

39.0(0.8)

385,663

105.9

102.6

31.1

+0.4

Total

―7―

LIFE CORPORATION

SG&A [Net sales/SG&A ratio]•Smaller size leaflets by using online leaflets, and reducing in-store displays to focus onproducts, and optimizing consumables resulted in SG&A (0.3)P YoY(Unit: Millions of yen)

SG&A

140,000
120,000

104,668

108,451(Unit: %)Net sales/SG&A ratio

111,473

116,241

121,93233.0

100,000
80,00060,000

35.0

31.9

31.6

31.0

30.5

40,000

29.7

29.0

28.9

20,000

27.0

0

19

20

21―8―2223 (Fiscal year)

LIFE CORPORATION

SG&A [personnel expenses]•New hires, pay rises and higher hourly wage to attract skilled personnel, etc. led topersonnel expenses +¥3.06 billion (YoY 105.5%). Yet the personnel expenses tosales ratio decreased to 15.1%(Unit: Millions of yen)

(Unit: %)Personnel expenses

70,00060,00050,00047,89950,689Personnel expenses to sales ratio

52,80755,27658,33319.0

17.0

40,00030,00020,00015.2

10,000

13.5
14.0

15.1

15.0

14.1

0

13.0

1920

21
―9―22

23 (Fiscal year)

LIFE CORPORATION

Factors of changes in operating profit (H1)
Increase in operating gross profit

Increase in SG&A+ 9,188(5,691)(Unit: Millions of yen)

Increase in receipts fromoperating revenueIncrease ingross profit+1,172+8,015
Increase in
Increase inutilities
expenses rent expenses

(826)

(627)
Increase inpersonnelexpenses(3,056)

8,914

Increase indepreciation(291)

12,410
Increase inothers(888)

Increase in operating profit +3,496

FY2022 H1

FY2023 H1― 10 ―

LIFE CORPORATION

Consolidated balance sheet••

Interest-bearing liabilities ¥(19,432) million
Retained earnings increased, with equity ratio of 46.1%(Unit: Millions of yen)

End-February, 2023

End-August, 2023

ChangeCash and deposits

9,727Inventories

26,061

Accounts receivable - trade

9,209

Accounts receivable - other

29,664

Others5,826

Non-current assets

200,319

78,6208,087
27,144
10,80527,9884,594
201,053

155,880

155,778(102)

Intangible assets

3,218

4,005

+786

Investments and other assets

41,22041,270+49

280,810(1,136)122,002279,673
150,728
54,738
128,945

280,810279,673

Current assets

Property, plant and equipment

Total assets
Total liabilities(Interest-bearing liabilities)
Total net assets
Total liabilities and net assets

80,490158,80774,170― 11 ―(1,870)(1,639)+1,082+1,595(1,676)(1,231)+733(8,079)(19,432)+6,942(1,136)

LIFE CORPORATION

Consolidated cash flow•

Cash flows from operating activities increased and repayments of interest-bearing
liabilities resulted in a decrease in cash flows from financing activities(Unit: Millions of yen)

FY2022 H1

FY2023 H1ChangeCash flows fromoperating activities

18,03728,517+10,480

Cash flows frominvesting activities(14,689)(8,557)+6,132

Cash flows fromfinancing activities(5,881)(21,599)(15,718)

Cash andcash equivalents at
the end of the period

6,875

7,687

+812

― 12 ―

LIFE CORPORATION

2. Our Strengths― 13 ―

LIFE CORPORATION

Creating stores based on customer feedback(analysis of local needs)••

Customer characteristics separated into 9 categories for each store, to analyze purchasing
trends and preferences
Based on around 100,000 notes of customer feedback obtained with surveys and sales data
proposed strategies were created for each individual store, and discussed with headquarters
before implementation

Customer Characteristics

123456789Store AStore B
Store CStore layouts, product lineup, and better prices wereachieved to suit local needs― 14 ―

LIFE CORPORATION

Creating stores based on customer feedback(layout, product lineup)• Store intentions were implemented before renovations, to change the store layout[Before][After]Oizumigakuen EkimaeStore•••

Delicatessen area
before renovation― 15 ―

Delicatessen area wasmoved to the 2F area
directly connected to thestation, increasing sales
by around 1.6-foldOpened a face-to-faceyakitori and tempurasection
Set up a hand-made sidedish section made withingredients from the Meat
Products and Marine
Products Departments

LIFE CORPORATIONStore development (new stores)••

New stores opened as planned: 6 stores (Tokyo region: 4 stores, Osaka region: 2 stores)
Total stores in Tokyo and Osaka regions: 302 stores

March Takarazuka Nakayamadera StoreMarch BIO-RAL PARCO_ya Ueno Store

April Central Square LaLaport Kadoma Store

June Umejima Ekimae Store― 16 ―April Kawasaki Tsukagoshi Store

June BIO-RAL Ariake Garden StoreLIFE CORPORATIONStore development (renovation of existing stores)••

Major renovations at 2 stores, with larger sales areas and face-to-face sections, etc.
Installed many new sections etc. at existing stores[Major renovations][New sections]

April Oizumigakuen Ekimae StoreBreeze garden section(apparel: accessories section)

June Kema StoreRye bread section(in-store bakery)― 17 ―

LIFE CORPORATION

Product strategy (unique products)••

The commitment to the quality of ingredients and production methods was rated high, winning 2awards for “Delicious Items General Election*”
Products catering to customer needs are rated highly, like fresh salad made by hand in-store■ “2nd All-Japan Supermarket Delicious Items
General Election”■Fresh salad made in-store[Awarded in the Delicatessen Category]

Delicious with flying fish stock!
Chunky beef croquette

Inhouse processed meat
steamed dumplings(made with Satsuma Herb
Mochi Pork)(Osaka Region)

Wide range of the highly popular in-store hand-made salad

Run by Locoguide Inc., which operates the “Tokubai” leaflet and shopping information service― 18 ―

LIFE CORPORATION

Products strategy (economical price of products)• Increased exposure of PB products (Smile LIFE and Star Select) that areeconomically priced to meet the broad needs of customers• Available at great value prices that differ to products listed in ordinary leaflets■ Increased exposure of reasonably priced
PB products■Everyday Low Price (EDLP) pricing strategy
for standard products

EDLP leaflet(Tokyo Region)― 19 ―EDLP leaflet(Osaka Region)

LIFE CORPORATION

Product strategy (PB products)• Major growth in reasonably priced PB products (Smile LIFE and Star Select) and BIO-RAL• Won two awards in the “2nd All-Japan Supermarket Delicious Items General Election”■ Winning products[Commitment toQuality Category]Special Award[Sweets Category]Awarded prize

BIO-RAL
Potato chips madewithout chemicalseasoning
lightly salted flavor
Private brand name

LIFE PREMIUM
Milk cream puff
(Tokyo Region)

Net sales(Unit: Millions of yen)

YoY (%)

Sales composition(%)

Number of items

Smile Life

23,057104.5

6.0799LIFE PREMIUM

3,692

99.3

1.0160

BIO-RAL

3,344

137.3

0.9

331

Star select

6,059

110.0

1.6211

Total

36,151107.2

9.4

1,501― 20 ―

LIFE CORPORATION

Online supermarkets• Net sales ¥9.3 billion (YoY 139.9%)• Simultaneously expanded areas, enhanced delivery quality and optimized costs■ Online supermarket net sales trends■ Initiatives(Unit: Billions of yen)

[Growth in net sales]

9.3

10.0
8.0

•
•
•

6.7

6.0

4.4

[Cost optimizations]

4.0
2.0

1.4

•

2.3

•

0.0

1920

21

Increased delivery areas
Promoted use
Enhanced customer service likedelivery quality

2223(Fiscal year)― 21 ―

More efficient deliveries by leveraging
network of dominant storesMore efficient picking workLIFE CORPORATION

Infrastructure functions that assist sales (process center)• [“Ultra” thinly sliced meat] by introducing special equipment, and [Single hot pot]
using our own ingredients significantly contributed to product appeal■ “Ultra” thinly sliced meat

■ LIFE’s unique[Single hot pot (Osaka Region)]•••Cut thinly at 1.2 mm for a fluffy texture
and soft taste
Ideal for hot pots and shabu-shabu dishes•― 22 ―

Made using fresh meat and vegetables
processed at our centers
In-house produced soup matches
perfectly with ingredients

LIFE CORPORATION

Sales-related indicators for existing stores••

Unit price increased due to increased sales of value-added products andappropriate price settings, contributing to increased net sales
All stores in the Osaka Region closed for one day when Typhoon Lan (seventhnamed storm) struck (in August), so the number of customers YoY was 99.8%
Number of customers
YoY

99.8%
Net sales YoY

102.6%

Number of purchases YoY

97.0%
Sales per customer YoY

102.9%
Unit price YoY

106.0%― 23 ―

LIFE CORPORATION

3. Initiatives of the 7th Medium-Term Plan

― 24 ―

LIFE CORPORATION

Investment in employees•

Moving ahead with workplace development with the aim of becoming a company that helps
achieve employee growth, including level-specific training and increasing use of educational
tools using videos. A Smile Workshop is planned to be held in October to share success stories
of initiatives taken voluntarily by employees during the first half

[Level-specific training][Extensive educational videos]

Skills training tool can be viewed easily at stores
Store training class(for store managers)

2nd year training(Marine Products Department,company-wide)― 25 ―

LIFE CORPORATION

Breaking away from the homogeneouscompetition (development of BIO-RAL brand)• Opened BIO-RAL Ariake Garden Store in June
• The large BIO-RAL cafe is attached to the store, with menus of items made using
products on sale, giving customers the opportunity to experience the BIO-RAL outlook[Choice of Deli Plate]・Menus using products
on sale[Shop]

・Largest product lineup
in Tokyo Region, witharound 5,000 items
available

Large 50-seat BIO-RAL cafe attached to store― 26 ―

LIFE CORPORATION

Breaking away from the homogeneouscompetition (updated LIFE app for customers)• The LIFE app is a key tool to achieve business model reform, and was updated at theend of July
• In addition to better usability, it provides more accurate marketing based on purchasingdata[Active monthly users]

Approx. 650,000
as of end of August[Features](1) Provides better information based oncustomer’s purchasing behavior(2) Includes a scanless coupon function― 27 ―

LIFE CORPORATION

Breaking away from the homogeneous competition(increased use of online leaflets and social media)• Released online leaflets to diversity ways customers can obtain information, andran a campaign to collect customer feedback■ Online-only leaflets■ Distribute information via social media

Online-only
BIO-RAL NEWSFacebook
BIO-RAL five fundamental seasonings
Feedback campaign― 28 ―

LIFE CORPORATION

Contribution towards the realization of asustainable and flourishing society (environment)• Development of product using pineapple cores generated at our plant• Plastic bottles for PB products changed to recycled plastic bottles[Food upcycling][Bottle to Bottle]

Pineapple cores that had been “food residue”
is being upcycled as dried fruit― 29 ―

5 million PB tea and water products
are sold every year, and recycled
PET resin is used for the plasticbottles

LIFE CORPORATION

Contribution towards the realization of asustainable and flourishing society (society)• Increased donations to children’s cafeterias help with social contribution in local
communities and reduces food waste• Held “LIFE Sustainability Tours” to learn about energy-saving initiatives and resource
recycling[Increasing products donations to children’s[LIFE Sustainability Tour]
cafeterias]― 30 ―

LIFE CORPORATION

Contribution towards the realization of asustainable and flourishing society (society)••

Began initiatives from May to increase efficiency between our distribution centers andstores, to deal with the ‘logistics 2024 problem’
Revised delivery system with highest priority on store operations[Initiatives implemented between LIFE distribution centers and stores] Increased turnover efficiency of trucks→ reduce number of trucks andequalization of volume

 Reduced standby time

→ reduce driver working hours

LIFE distribution centerStore― 31 ―

LIFE CORPORATION

Contribution towards the realization of asustainable and flourishing society (society)••Launched Tokyo Region Supermarket Logistics Study Group in March
Began initiatives for sustainable logistics at 6 supermarkets in the Tokyo Region[Supply Chain Innovation Award 2023][Initiatives]
Implemented with each company’s distribution
center and manufacturers, etc.
•

Revise order time of standard products•

Ensure sufficient lead time for orders anddeliveries of bargain products•

Alleviate delivery deadlines (adopt 1/2 rule)•Streamline operations with logistics BMS

Manufacturers, etc.

Each company’s distribution center― 32 ―Received Excellence AwardLIFE CORPORATION

Contribution towards the realization of asustainable and flourishing society (diversity)• Received two awards at “FY2022 Disabled Person Evaluations and Commemoration” runby the Osaka Career Support & Talent Enhancement Plaza• The ratio of female managers was 10%, with the aim of reaching 20% by FY2030
Received certificates of appreciation with “Award forContributing to Human Resources Development and Training”
and “Award for Employment Matching”[Ratio of female managers]

10.3% as of end of August[Percentage of male employees
taking childcare-related leave]

86.6% First half results[Ratio of employees with disabilities]

3.4% as of end of August― 33 ―

LIFE CORPORATION

Energy-saving initiatives (electronic shelf labels)•

Contributed significantly to increased productivity. Began efforts to install labels at allstores in the Osaka Region.

[Installation progress]
 Completed at almost all stores in the Tokyo Region
 After a trial in the Osaka Region, installation is planned at around30 stores in H2→ subsequently planned to be installed at all stores[Effects]
 Reduces effort for changing POP (reduces POP for 10,000 ormore items per store)
 Reduces expenses related to POP paper and promotional materials
 System linkage assists with stocking and expiry date management― 34 ―

LIFE CORPORATION

Energy-saving initiatives (AI ordering)•

Shift to 2nd phase of AI ordering. Gradually expand to the Fresh Produce Department(some categories)[Installation progress]• Used in the Food Department (daily food) of all stores in FY2021• Will begin trial in the Fresh Produce Departments from FY2023,
based on data accumulated from installation• [Effects]• Daily food: reduces ordering time (400,000 hours/year → 200,000hours/year)• Fresh Produce Departments: aiming to reduce ordering time by 100,000hours/year→ use the part of saved time to increase profitability and enhance sales
area levels― 35 ―

LIFE CORPORATION

4. Enhancement of information disclosure― 36 ―

LIFE CORPORATION

Publish Integrated Report 2023
• “Integrated Report 2023” was released in August• Includes more non-financial information, like providing details of local focusedmanagement used at stores― 37 ―

LIFE CORPORATION

7th Medium-Term Plan and Video Message by President• Video on company strengths and the 7th Medium-Term Plan released bymanagement in August― 38 ―

LIFE CORPORATION

5. Full-year forecast for FY2023― 39 ―

LIFE CORPORATION

Full-year forecast for FY2023 (consolidated)•No change in forecast, after factoring in the increase in personnel expenses andrelocation of Tokyo Headquarters(Unit: Millions of yen, %)Full-year FY2022

Full-year FY2023

Amount ofChange

Rate ofChange

Operating revenue

765,426

801,000+35,574+4.6

Net sales

738,494

772,000+33,506+4.5

Operating profit

19,14819,800+652+3.4

Ordinary profit

20,01520,500+485+2.4

Profit13,327

13,500+173+1.3― 40 ―

LIFE CORPORATION

Relocation of Tokyo Headquarters••The Tokyo Headquarters will be (planned) relocated to Shinagawa Ward in February 2024
The move maintains the convenient access by public transport, and will improve working styleefficiency and productivity[Planned relocation site]

Shinagawa Seaside TS Tower― 41 ―

LIFE CORPORATION

Investment plan
• Revise investment timing of IT and digital systems(Unit: Millions of yen)

FY2023 H1

Full-year FY2023 (plan)
PlanInitial plan

ChangeNotes

New stores

5,276

6 new stores, etc.

10,8008,700+2,100

New stores after FY2024, etc.
(new stores in FY2023 are asplanned)

Renovations

1,078

2 major store
renovations

2,900

2,600+300

ーIT and digitalsystems

1,725

Expanding use ofelectrical price tags
Cash registerrelated equipment,etc.

5,400

6,400(1,000)

Revision of investment timing,
etc.

Process center

546

Production facilities,
etc.

1,100

1,000+100ー

856

Existing store
facilities, etc.

3,600

3,700(100)ー

23,80022,400+1,400

Others(expensive equipment,
major repairs, etc.)

Total

9,481

― 42 ―

LIFE CORPORATION― 43 ―