INTEGRATED REPORT 2022

Creating Happiness and Harmony in Our Communities

Editorial Policy

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Publication of the Integrated Report 202201

■ Range of the report

Although portions of this report were produced in cooperation with business partners in fields such as logistics,
food manufacturing and waste disposal, its focus is primarily on the business activities of Lawson, its franchise
stores and certain affiliated companies.

Executive Vice President, Member of the Board, and CFO

Lawson has been adopted as a constituent of the
ESG investment stock price index.
(As of the end of February 2022)

Its adoption accords to two selection indicators for ESG investments made by the Government Pension Investment Fund (GPIF).

■ Reporting period

The primary focus is on targets for fiscal 2021 (March
1, 2021 - February 28, 2022), but earlier and later activities are also discussed. See Lawson website for details:
http://lawson.jp/en/■ Future forecasts, projections and plans

This report’s coverage extends beyond current information and data for Lawson Group to future forecasts basedon its plans and perspectives at the time of publication.
These forecasts represent assumptions and viewpoints
arrived at based on information available as of the report’s
writing. The actual results may differ from the forecasts
due to various circumstances and external environmental
factors.

LAWSON INTEGRATED REPORT 2022

The MSCI Japan Empowering Women Index represents the performanceof companies that provide leadership in maintaining gender diversity
in their GICS® sector.

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Contents

Lawson is working to realize its Group philosophy, “Creating Happiness and Harmony in Our Communities,”
through the three promises of its business policy: “Superior taste,” “Human kindness,” and “Environmental (Machi) friendliness.” Currently, we are promoting 10 Lawson Group Sweeping Transformation Executive
Committee projects, Group company business activities, and SDG activities toward achieving the targets of
Lawson Group Challenge 2025 that was set for the year 2025, the 50th anniversary of Lawson.
In editing this report, our goal has been to create a communication tool that will help all stakeholders to gaina deeper understanding of Lawson’s initiatives to transform its business to address changes in the community
and in the lifestyles of the people living in it in the pursuit of long-term value creation with reference to the International Integrated Report Council (IIRC) International Integrate Reporting Framework. Looking ahead, we
will continue striving to enhance our disclosures and increase transparency in order to conduct constructive
dialogue with our stakeholders.

Masayuki Itonaga

Strategy for Creating
Happiness in Our Communities

The MSCI Japan ESG Select Leaders Index consists of companies withhigh Environmental, Social and Governance (ESG) performance selectedfrom its parent index, the MSCI Japan IMI Index, targeting 50% of themarket capitalization of each Global
Industry Classification Standard(GICS®) Sector of the parent index.

* THE INCLUSION OF LAWSON, INC. IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF LAWSON,
INC. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
* GICS® is the Global Industry Classification Standard, an industry classification system created jointly in 1999 by Standard and Poor’s Dow Jones Index Morgan Stanley Capital International.

About LAWSON!
Financial Highlights……………………………………
Non-financial Highlights………………………………
About LAWSON!………………………………………

2
3
4

Message from Top Management
Message from the President…………………………
Message from the CFO………………………………

10
14

Creating Happiness in Our Communities –Our Story
Our Journey Creating Happiness in Our Communities………
Management Capitals Cultivated with the Community………
Community Happiness Creation Process…………
Materiality for Creating Happiness in Our Communities………
Overview and Promotion of Challenge 2025………
Lawson Blue Challenge 2050!………………………

16
18
19
20
22
24

Strategy for Creating Happiness in Our
Communities
Strategy for Creating Happiness through the Three Promises:
Superior Taste…………………………………………
Strategy for Creating Happiness through the Three Promises:
Human Kindness………………………………………
Strategy for Creating Happiness through the Three Promises:
Environmental (Machi) Friendliness…………………

25
33
44

A Management Foundation for Creating
Happiness in Our Communities
Executives………………………………………………
Corporate Governance………………………………
Executive Officer Voices………………………………
Compliance and Risk Management…………………

47
49
54
55

Finance – Company Information
Eleven-Year Financial Summary……………………
Industry Trends and Sales/Store Related Data……
Corporate Information…………………………………

62
64
68

Financial Highlights
Net sales of all convenience
stores (Consolidated)

Message from Top
Management

About Lawson!

Operating income (Consolidated)

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

Profit attributable to owners of
the parent /Profit per share

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Gross operating revenues bysegment■ Profit attributable to owners of parent (left axis)

2,442.7 billion yen■ Profit per share (right axis)

47.0 billion yen

Profit attributable to ownersof the parent

17.9 billion yen
178 yenProfit per share(Billion yen)

2,800

2,283.6

2,424.5 2,506.9 2,349.7 2,442.7

2,100(Billion yen)(Billion yen)

80

40

65.8

60.7

47.0

30

40

20

700

20

10

2018

2019

2020

0

2021

2017

2018

2019

2020

(Fiscal year)

Total assets / Net assets(Consolidated)■ Domestic ■ Overseas(Stores)

15,7280

18,261

Overseas

(%)

2,000

15

10,000

Domestic

1,342.3

1,357.7

1,365.4

0108.6 billion yen

billion yen

02

Dividends and payout ratio■ Dividends (left axis)

6.6%
ROA 1.3%— Payout ratio (right axis)

150 yenPayout ratio 83.9%
Dividends

(yen)

300

1,337.2

1,000

255

(%)

172.7

255

200

2020

2021

(Fiscal year)

240

9.3
9.7

7.3

6.6

900.2

14,825
5,000

2019

2021

Seijo Ishii business

80.0

4,862
10

2018

2020

Overseas business

ROE(Billion yen)

1,500

2017

2019

— ROE — ROA

1,337.2 billion yen
Net assets 278.4 billion yen

15,0000

2018424.5 billion yen

62.9 billion yen

200

100

Return on equity (ROE)
Return on assets (ROA)

Total assets

19,68717.9 178
8.6 862017

Domestic convenience
store businessEntertainmentrelated business(Fiscal year)■ Total assets ■ Net assets

19,687 stores
17,015 17,516

2021

33.6 billion yen

300(Fiscal year)

Number of stores

20,00026.8 268 25.5 255
20.1 200

1,400

2017

400

62.9

60

40.8

0

(yen)

Financial services business

5
500

281.4

281.9

275.3

272.9

278.4

0

2017

2018

2019

2020

2021

(Fiscal year)

0

3.0

2017

2.3

2018

2019

0.6
2020

180

95.1

99.7

120

3.2
1.5

160

1.3

60

2021

0

(Fiscal year)

150

150

150

120

83.9

74.6

80
40

2017

2018

2019

2020

2021

0

(Fiscal year)

LAWSON INTEGRATED REPORT 2022

Non-financial Highlights
CO2 emissions per store*1

Packaging weight index of plastic
packaging items

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

Status of reduction in food loss
per store

Goals for fiscal 2030

Goals for fiscal 2030

Goals for fiscal 2030

CO2 emissions per store

Plastic for containers and packaging

Food loss per store

Reduction of

50% from fiscal 2013

30% from fiscal 2017

Reduction of(t-CO2)

(%)

100.0

100

101.8

Reduction of

80.7

70.7

A Management Foundation for Creating
Happiness in Our Communities

100.0

Finance –Company Information

Number of employees by segment

Financialservicesbusiness

Otherbusiness

169 136
Entertainmentrelated business

Domestic convenience
store business

5,218

1,152

100

75.3

70.0
80

50% from fiscal 2018

Base year

Base year(%)

Base year

120

Message from Top
Management

About Lawson!

75

75

50

50

25

25

50.0

50.9
40

Overseas business

Seijo Ishii business

0

03

2013

2021

2030 (Fiscal year*2)*1 CO2 emissions are calculated using the list of emissions coefficients by electricity provider (substitute values)*2 Calculated from April 1 to March 31 of the following year to coincide with the administrative fiscal year
Reduction of 30.5% in fiscal 2021 compared with fiscal 2013
(The figures have been changed due to the change in the coefficient.)

No. of female managers /Proportion of female managers
among all managers

148

Proportion of female managers
among all managers

148
131
10.7
75
26

50

8

240
Proportion of working mothers
among female employees 25.9%(Persons)

300

(%)

211

2005

2010

21.2

200

240
25.9

30

22.2
20

16.0 128
100

8.4

10

67

23

0.9
0

2015

2020

2021

(Fiscal year)

LAWSON INTEGRATED REPORT 2022

02030 (Fiscal year*)

Outside (independent) officers

15

5

2021

No. of working mothers /Proportion of working mothers
among female employees

7.0

2.8

2018

* Calculated from March to February of the following year tocoincide with the company’s fiscal year

(%)

10

0

* Calculated from March to February of the following year tocoincide with the company’s fiscal year

11.7
100

2030 (Fiscal year*)2021

No. of working mothers

11.7%(Persons)

150

2017

■ No. of working mothers (left axis)— Proportion of working mothers among female employees (right axis)■ No. of female managers (left axis)— Proportion of female managers among all managers (right axis)

No. of female managers

0

0

2005

2010

2015

2020

2021

(Fiscal year)

0

5

10

2,393

1,294

Female officers

510About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

FeatureAbout
LAWSON!
Q1
A1

In this feature, we will give simple explanations of three common
questions about some of Lawson Group’s positive features.
We hope that this will be an opportunity to rediscover the positive
features of Lawson Group.

Why does Lawson have the aim of being “new hubs ofrefreshment in every community?”04

For business opportunities!

Lawson Group was established in 1975. For almost 50 years,
we have taken the lead in the evolution of convenience stores
while supporting people’s lives and food culture. There have beenhuge changes in people’s lives and in food culture just in the 50
years. People’s consumption behavior is also rapidly changing
under the impact of the pandemic.
We view Lawson Group as being a “business that responds tochange.” One of Lawson Group’s greatest strengths is its ability
to perceive changes among people and changes in communities, including changing purchasing behavior, increasing healthconsciousness, and the greater awareness of environmental is-sues, and to convert those changes into business opportunities
with an understanding of the characteristics of the regions wherestores are located.
Lawson’s 14,656 stores nationwide, and the 6,117 franchise
store owners and approximately 180,000 crew members support “our communities” while Lawson Group has the support ofaround 10,000 employees.
This involves people’s lives, and as long as life continues tochange, the business opportunities for Lawson Group are limitless. Lawson Group accurately perceives business opportunities
in each region alongside its numerous members.

LAWSON INTEGRATED REPORT 2022

Q1

Why does Lawson have the aim ofbeing “new hubs of refreshment
in every community?”

A2

05

About Lawson!

Message from Top
Management

For society!

Ensuring safety and security is essential to supporting people’s lives and food culture.
In order to provide a “superior taste” to customers, safety andsecurity comes first, and we put all of our effort into the stablesupply of ingredients while also complying with safety-related
laws and ensuring quality management. For example, at Lawson,
we are expanding LAWSON Farm Corporation qualified to own
cropland nationwide in order to stably supply fruits and vegetables.
We are also preparing for large-scale disasters for the purposeof business continuation while also aiming to continue the operation of stores by promptly taking various disaster response
measures in order to fulfill our role as a lifeline for the community
when disasters occur.
As hubs of refreshment in every community, Lawson is earnestly confronting the issue of store waste, including food waste,plastic bottles and cardboard, and is engaging in the reductionof waste and accurate waste processing based on environmental
policies. The reduction of food loss is a particularly serious issue,
and we are putting great effort into reducing food loss through a
combination of waste control and recycling.

LAWSON INTEGRATED REPORT 2022

A3

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

It’s Lawson’s Mission!

Lawson Group is a corporate group that is expanding its business for the sake of the happiness of the community.
The motivation that drives us is the Group philosophy, “Creating Happiness and Harmony in Our Communities,” which will
always be our desire.
Based on this philosophy, Lawson Group has stated Three
Promises as its business policy. These promises of “superior
taste,” “human kindness” and “environmental (Machi) friendliness” are the basis of the Challenge 2025 medium-term management vision that we are now engaging in toward the year 2025,
and they form the base approach to the projects of the Sweeping
Transformation Executive Committee that was set up toward therealization of new forms of convenience.
While the business environment undergoes huge changes, wewill continue to be close beside the community and beside ourcustomers as we grow together based on the strong desire andmission for Lawson to change with the community for the “happiness of the community.”About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Q2

Can profit be made in such a challenging
business environment?

A

We are making “transformations” in response to
upheavals in the business environment!

In a bid to achieve growth in the post-COVID “new normal”
society, in September 2020, we established the Lawson Group
Sweeping Transformation Executive Committee and started initiatives to realize growth strategies for the entire Group.
This Committee is providing agile management based onstrong leadership centering on the business policy of the “Three
Promises” and with the President serving as a Committee member. As of fiscal 2022, the Committee has been promoting the following 10 updated projects, as well as Group company businessactivities and SDG promotional activities.

06

Lawson Group Sweeping Transformation Executive Committee
Daily sales
improvement

Pursuit ofideal store format

Daily sales
improvement

Machikado
Chubo in-store kitchens
Product
renewal
MUJI
introduction

Daily sales
improvement

Mid-to-long term

Customer-centric supply chain reform
Mid-to-long term

Vendor distribution reform

Group branding
Mid-to-long term

The No.1 recommendation acquiring

Mid-to-long term

Unified use of Group data
Daily sales
improvement

Mid-to-long term

Operating companies

Mid-to-long term

Work motivation reform

SDG promotion

LAWSON INTEGRATED REPORT 2022

Q2

Can profit be made in sucha challenging businessenvironment?

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Sweeping Transformation Executive Committee Main measures for fiscal 2022

Daily sales
improvement
projects

Projects
Pursuit of ideal store format

Remodel 3,500 stores

Machikado Chubo in-store kitchens

Introduce 1,300 stores, renew menus

Product renewal

Increased recognition of frozen foods, expanded andimproved product offering, response to health demand

MUJI introduction

Start of introduction of MUJI Products at approx. 5000
stores in the Kanto Koshinetsu region, National expansion
scheduled thereafter07
Mid-to-long term
Projects

Projects

LAWSON INTEGRATED REPORT 2022

Planning and major initiatives

Planning and major initiatives

Customer-centric supply chain reform

Additional trials of new semi-automatic ordering

Vendor distribution reform

Expansion of refrigerated distribution
Preparation toward POC for AI optimized delivery

Unified use of Group data

Expansion of deliverable services

Work motivation reform

Improved working environment

Group branding

Policies for penetration of Group Philosophy, etc.

The No.1 recommendation acquiring

Detailed customer evaluation analysis and improvement

Operating companies

Promotion of Group portfolio strategy

SDG promotion

Green Lawson (environmentally-friendly stores)
Reduction of CO2 emissions using solar power generation

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Q3

Why can Lawson say that it’s sustainable?

A1

Because we have a flexible corporate culturethat adapts to changes in communities!

Since its establishment, Lawson has responded proactively tochanges in society and developed new products and services.
We commenced 24-hour operation in 1977 in response to customer needs. In 1983, we started copying and printing services.
In 1998, we introduced the “Loppi” multimedia terminals to allstores in Japan. ATMs began to be installed in 2001.
We also started NATURAL LAWSON in 2001 and LAWSONSTORE 100 in 2005 for the expansion of business and businessareas. In 2011, we established Lawson HMV Entertainment (currently Lawson Entertainment). In 2014, we acquired Seijo Ishii
and United Entertainment Holdings. We opened Lawson Bank in
2018.

Finance –Company Information

To engage in the resolution of social issues, we opened thein-hospital convenience store Hospital LAWSON in 2000, established LAWSON Farm in 2010, and opened the first Care-focused
LAWSON in 2015 as an in-store nursing care center.
Lawson, which started as a handyman in the community, continues to remain close to changes in our communities and is now
a component of infrastructure in society.

08

LAWSON INTEGRATED REPORT 2022

Q3

Why can Lawson say thatit’s sustainable?

A2

09

About Lawson!

Message from Top
Management

Because we contributeto the realization of asustainable society!

At Lawson Group, we classify the material issues (materialities)
with respect to the value chain into six categories based on theThree Promises to customers enumerated in our business policy,
and in consideration of pertinent social issues and circumstances. In
fiscal 2021, material issues were selected and KPIs were set for themain Group companies. The entire Lawson Group will continue toengage in the resolution of social and environmental issues.
The SDGs Committee was established in March 2019 to tackle theSDGs, and the President was inaugurated as the CSO (Chief Sustainability Officer) in March 2021. The SDGs Promotion Department(current SDGs Promotion Office) was also established and began
operating as a full-time department.
In 2019, the “Lawson Blue Challenge 2050!” environmental vision
was formulated as a long-term target toward resolving environmental issues. In order to contribute through this vision to the ideal worldthat the Sustainable Development Goals (SDGs) aim to realize, wehave set and are engaging in the goals (KPIs) for 2030 and 2050
through our initiatives to address environmental issues, such as reducing CO2 emissions, reducing food loss, and reducing plastic incontainers and shopping bags.

LAWSON INTEGRATED REPORT 2022

A3

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Because we are
combining all of ourefforts!

Lawson Group is building positive relationships with various
stakeholders and we are combining our efforts to contribute to therealization of a sustainable society.
While providing “superior taste” to customers, we are offering
products that are safe and secure and healthy as we strive to increase customer satisfaction.
Employees, franchise store owners and crew members are colleagues that are essential to the sustainable growth of Lawson
Group. We will continue to put great effort into health and productivity management while also giving consideration to forming comfortable work environments. Diversity is also an important management
strategy, and Lawson has the aim of a strong franchise chain bygathering employees with widely varied values so that all employees
can fully demonstrate their potential.
Business partners and all local communities are important stakeholders that are essential to the sustainable growth of Lawson
Group. Furthermore, Lawson Group could not exist without the support of Mitsubishi Corporation as the major shareholder and as animportant business partner.
Lawson Group will continue to work toward sustainable growth
while combining the efforts the diverse stakeholders.

Message from the President

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Demonstrating Valueas a Business that
Responds to Change

Sadanobu Takemasu

10

President and CEO, Representative Director, Chairman of the Board

A renewed awareness that Lawson is a businessthat responds to change
Over the last few years, Lawson Group has gone through an unprecedented
era of upheaval.
The pandemic, which has continued for more than two years, has changed
people’s lifestyles and consumer behavior while also bringing an end to thelively consumption by inbound tourists. In other countries, the situation has
completely changed, with urban areas in China such as Shanghai being
placed under lockdown. The supply chain has also been thrown into disorderdue to the rise of geopolitical risks, while the sharp rise in raw material prices
and the drastic depreciation of the yen have caused a huge blow to the revenue environment.

We believe that Lawson Group is a business that responds to change. Since
its establishment, Lawson has responded proactively to changes in society,constantly identified customer needs, and developed new products and services. Even today, rather than halting our progress, we are constantly working
to respond to change. For example, in our main domestic convenience store
business, in order to respond to the shut-in demand during the pandemic
by making stores that are more suited to daily life, in addition to remodelingstores, we quickly concentrated on various measures such as the expansionof food delivery services and the development of “ghost restaurants.”
No matter what changes occur, we will propose and implement suitable
solutions as we take the lead in responding to change. This is what makes
Lawson Group “a business that responds to change” with a recognition ofwhat is of vital importance within the tumultuous business environment of thelast few years.

LAWSON INTEGRATED REPORT 2022

Message from the President
About Lawson!

Message from Top
Management

Lawson corporate culture and potentialities

11

The refusal to “balk at challenges” that are useful to communities is anattitude that is being maintained by the approximately 200,000 members of
Lawson Group, and this is what we feel defines the corporate culture, strong
points and the DNA handed down by our predecessors in Lawson Group.
Lawson Group’s challenge began more than 40 years ago in the era of thefounder, Isao Nakauchi. During the Great Hanshin-Awaji Earthquake of 1995,
the challenge was to respond to the directive to open the stores despite being unable to provide sufficient products. This experience was useful during
the Great East Japan Earthquake in 2011, and during the recent Kumamoto,Hokkaido, and West Japan disasters.
The deep desire to be useful to the community is still alive among the members of Lawson today. At the time of the temporary closure of all schools inJapan in March 2020 during the pandemic, some people expressed the desire to provide onigiri (rice balls) at no cost to after-school childcare facilities,
which quickly spread nationwide. As a result, we delivered around 600,000
onigiri to approximately 7,000 after-school childcare facilities nationwide.
This spirit of taking on challenges with the desire to help others is the driving force behind our response to change. There is a strong feeling that eachand every one of us has this attitude of taking on challenges in response tominor or major changes. Even during the pandemic, the desire to take onchallenges in response to change can be seen in the local initiatives of theLawson Group Sweeping Transformation Committee and the Medium-Term
Management Vision.

Group Philosophy

VisionCreating Happinessand Harmony in
Our Communities

Our goal is to become
the hub of refreshment
in every community.

LAWSON INTEGRATED REPORT 2022

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Aims and progress for the Lawson Group
Sweeping Transformation Committee
Although results have been impacted by the massive changes in the business environment in the last few years, the Lawson Group Sweeping Transformation Committee was established in September 2020 with the idea of
converting this difficult situation into a major opportunity. Reforms are being
carried out in all kinds of fields, including products, sales floors, increased
profitability, use of data and the SDGs.
First, the first half of the 2021 fiscal year was set as the deadline for considering the changing lifestyles of customers and forming ideas around the products and services Lawson Group should be providing, which then underwent
trial and implementation. Following the trials, implementation in actual stores
began from the second half of the 2021 fiscal year.
For example, in fiscal 2021, reforms suited to the business environment of
individual stores were carried out in 4,305 stores, and the in-store food preparation service Machikado Chubo was introduced at the same time. As of theend of February 2022, Machikado Chubo has been expanded to 8,359 stores.
Based on this 18-month initiative and its results, we want to make fiscal 2022 a year in which we further increase implementation and accuracy
through PDCA.
Two new projects by the Lawson Group Sweeping Transformation Committee starting in fiscal 2022 are the “MUJI introduction project” and the “theNo.1 recommendation acquiring project.”
The collaboration with Ryohin Keikaku Co., Ltd. that offers MUJI products already began two years ago with trial sales of MUJI products at Lawson stores. The next stage starting from May 2022 will be to expand sales
to around 5,000 stores in the Kanto Koshinetsu area, before spreading toSuperior
taste

Business Policy

Lawson’s Way (Action Guideline)

Three Promises

1. Create stores filled with the best
smile in town.
2. Speak out your ideas to take action.
3. Enjoy your challenge.
4. Value your friends to become one.
5. Act in good faith.

Humankindness

Environmental (Machi)
friendlinessMessage from the President
About Lawson!

Message from Top
Management

Japan as a whole. While Lawson has achieved a certain recognition for its
food product loyalty, there are still issues when it comes to daily necessities.
Introducing MUJI products will enhance the potential for Lawson to be selected as the place to purchase daily necessities. We will collaborate with PB
product development so that people will say, “I want Lawson socks, underwear and other clothes,” just as they do with food products.
Regarding the No.1 recommendation acquiring project, the aim is for as
many customers as possible to choose to purchase Lawson products. This
challenge started four years ago, but we are focusing our efforts on it this year
as a Sweeping Transformation Committee project.

Desire to achieve the performance indicators for
Challenge 2025
In the medium-term management vision Challenge 2025, the performanceindicators include ROE of 15% or higher and EPS of 500 yen or higher. Taking
into account the immediate harsh business environment, these are not indicators that can be easily achieved. However, by first of all quickly returning thecore domestic convenience store business to pre-COVID levels, and then by
setting a growth trajectory to achieve the indicators, we believe that capitalefficiency will increase and profits will be secured.
In the business environment in fiscal 2021, limitations and self-restraint weremore severely imposed on social activity than in fiscal 2020 by the repeatedplacing of restrictions and mitigation measures due to the intermittent declarations of state of emergency and pre-emergency statuses in response to thepandemic. In the domestic convenience store business, franchise store profits
were greater than those of fiscal 2020 as a result of efforts to increase sales
through initiatives in response to the changing lifestyles of customers during
COVID-19, as well as the optimization of store operations and cost reduction.
Since the start of fiscal 2022, there has been a reduction in the number of
infected persons, and consumer behavior brought about by the COVID-19
pandemic has started to change, showing that there is a recovery trend in themarket environment. With the Government showing signs of easing restrictions to allow foreign tourists coming into Japan, expectations are building
about the revival of the consumption by inbound tourists, which was a major
trend in pre-COVID consumption.
The strategic concept stated for fiscal 2022 is “community based × individ-

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Lawson Group Challenge 2025
In addition to sales and profit indicators, strategically select investment
opportunities from a tripartite perspective of the environment, society andcorporate governance in order to achieve sustainable growth.
Challenge 2025 performance indicators

ROE

15% or higher

EPS

500 yen or higher

ual customer and individual store-focused.”
In convenience stores until now, growth has been achieved through thesupport of customers for nationwide store development and increased costcompetitiveness through store standardization. However, now that the number of stores has increased to such an extent, it is essential for those stores
to become part of the daily lives of customers and to respond to everyday
demands in order to make further growth. With the complete change in thesituation due to the pandemic and the current need to purchase goods fordaily use at convenience stores, it is important to understand regional characteristics and to take root in the community in order to further respond to thosedemands and to become even more a part of daily life. From now on, eachstore will become rooted in the region with a view toward individual stores determining their own products and services. Forming the optimal store for eachand every customer is what this “community based × individual customer andindividual store-focused” is all about.
We are also making an effort to expand periphery businesses. The Seijo
Ishii business has seen positive results over the last two years by cleverly responding to the shut-in demand. The fact that Seijo Ishii has established itself
as a high-quality supermarket brand that differs from general food productsupermarkets is a huge strength, and we are considering expanding the Seijo
Ishii brand into EC and other countries in the future.
The business environment for the entertainment-related business has
been incredibly difficult over the last two years, but due to the provision ofhigh-added value services such as smartphone-based ticket services, wehave been able to build up a lean cost structure. The recovery and growthof the business is expected due to the allowance for limited admissions to

12

LAWSON INTEGRATED REPORT 2022

Message from the President
About Lawson!

13

live and sporting events and the recent easing ofcheering restrictions.
The financial services business reaches its fifth
year in 2022. The challenge has now reached a newstage as to how to provide the value of Lawson
Bank as a retail bank to customers in the future.
The future of our overseas business is of greatinterest. With regard to new stores in China, in particular, we have stated the target of opening 10,000
new stores by 2025, and the path to achieving thatis becoming clear. While most of the new stores in
China have been opened as Lawson wholly-owned
subsidiaries, in order for customers in China to thinkof these stores as “our Lawson” and to accelerate further growth, the perspective of “community
based × individual customer and individual store-focused ” is required. To that end, another option for
the future is to expand stores through cooperation
with local partners, including M&A.
By means of such initiatives, if we can reliably
increase the presence of the businesses in eachmarket, and make effective use of financing anddata, the targets of ROE of 15% or higher and EPSof 500 or higher by 2025 will be achievable.

Sustainability initiatives
The world is facing various problems. For example, one familiar problem is “food loss.” While children are suffering from starvation, a huge amountof food around the world is being thrown away. Climate change is another serious issue. With regard
to these problems, if we do not take the initiative
to make changes in our actions, the value of thecompany will diminish, and it will be difficult for

LAWSON INTEGRATED REPORT 2022

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

ESG-focused management

Environment• Reduce food waste• Eliminate plastics• Reduce CO2 emissions

Social• Diversity• Contribute to local
communities• Supply chain
management

Governance• Ensure transparent, equitable
management• At least 1/3 outside directors• Set up a Nomination andRemuneration Committee
comprising a majority of
independent officers

business to continue. In May 2022, we signed the
UN Global Compact to commit ourselves to proactive efforts to resolve medium- to long-term issues
in environment and society. Lawson Group presents solutions for the social issues we are facing,and puts them into practice. Ultimately, this effort
will be utilized in the Lawson Group businesses,
which is a cycle we need to create. We want to be
the force that drives these activities forward.
In order to continue being that kind of company,
solid governance is required. Two of the five members of the Board of Directors of Lawson are independent outside directors, and all of the outside
directors and outside auditors are women. Taking
into account the characteristics of the business, it
is incredibly important to promote diversity. Also,
the most important thing in transactions with theprimary shareholder, Mitsubishi Corporation, will
always be “For the Lawson.” This approach is also
seen as the founding principle of governance.

Aiming to be a Group
recommended by all kinds ofstakeholders
We believe that the era of significant change willcontinue. In this sense, there is a strong feelingthat we are going through a momentous era.
Lawson Group wants to be a store and a company whose continued presence is required bothin communities and in society. We will make uncompromising and earnest efforts toward being
useful to society.
Ahead of the growth of Lawson Group stands theaffluence of society and the realization of the environmental vision, “Lawson Blue Challenge 2050!”
which was published with the aim of achieving thetargets for 2030 and 2050. As a Group that conducts “business that responds to change,” our aim
is to be recommended by all kinds of stakeholders
including customers, shareholders, investors, society, and the Earth itself.

Message from the CFO

Promptly Reforming
the Profit Structure

Masayuki Itonaga
Executive Vice President,
Member of the Board,
and CFOFirst of all, raising Lawson Group’s earning
power to pre-COVID levels is my first mission as
the new CFO. Despite the increasingly difficult
external environment, the goal we are aiming foris to promptly support each of the projects of the
Sweeping Transformation Committee based on
the medium-term management vision.

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Storyin reforms to the profit structure in a way that issuited to the new environment.
Among these reforms, the most important challenge is to take measures so that customers cometo stores. Having plentiful contact with customers
and grasping the needs of customers will lead toincreased profits. This is exactly what will enable us
to form convenience stores that are useful to customers and that are part of the social infrastructure.

Immediate businessenvironment and fiscal 2021
results
Following on from fiscal 2020, fiscal 2021 wasa year in which the ongoing COVID-19 pandemic
continued to have a huge impact, including changes in customer lifestyles and purchasing behavior.
Within this situation, Lawson Group remained beside customers and society as a “hub of refreshment in every community,” rising resolutely to meetthe challenge. Operating income in fiscal 2021 was

Aspirations as the new CFO
Consolidated results for fiscal 2021 (to February 2022)

I was appointed as the Lawson Group CFO in
May 2022.
With the ongoing pandemic, the convenience
store industry continues to be in a difficult environment. Also, customer lifestyles continue to undergo huge changes, and the “new normal” will
become the standard for life in the future. Under
these circumstances, the challenge I face as the
CFO is first of all to raise earning power to preCOVID levels. To that end, we will promptly engage

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

47.0 billion yen and net income attributable to owners of the parent reached 17.9 billion yen.
In the domestic convenience store business,there were positive trends in frozen foods and other areas as a result of engaging in store remodelingand product reform, including the development ofinnovative menus. There were also strong sales ofbento (boxed meals) and counter fast foods, withparticularly favorable results for boxed meals fromthe in-store food preparation service “Machikado
Chubo.” Sales in existing stores in the domestic
Lawson business were 101.1% YoY. While sales
grew due to efforts such as store remodeling andproduct reform, expenditure also increased due tostore remodeling for the future, which led to segment profit of 28.3 billion yen in the domestic convenience store business.
In the entertainment-related business, there wasa recovery in ticket handling by Lawson Entertainment with more concerts and sports events being
held. Also, viewer numbers and sales recovered
with the increased flow of people at UNITED CINEMAS. As a result, segment profit was 2.2 billion yen.
In the Seijo Ishii business, due to the successful
response to the shut-in demand and the favorable
Segment profit(Billion yen)
Fiscal 2020

Fiscal 2021

YoY

(Billion yen)
Fiscal 2020

Fiscal 2021

YoY

28.7

28.3

-0.3

Gross operating revenue

666.0

698.3

+32.3

Domestic convenience store
business

Operating income

40.8

47.0

+6.2

Seijo Ishii business

10.3

11.2

+0.9

Ordinary income

37.6

47.5

+9.9

Entertainment-related business

-0.2

2.2

+2.5

Financial services business

1.7

2.9

+1.2

Overseas business

0.8

2.3

+1.5

Other business

-0.4

-0.1

+0.3

Total

40.8

47.0

+6.2

Profit attributable to owners of
the parent

8.6

17.9

+9.2

14

LAWSON INTEGRATED REPORT 2022

Message from the CFO
About Lawson!

transition in dishes and desserts produced in thecompany’s central kitchens, segment profit was
11.2 billion yen.
Regarding the overseas business, segment
profit was 2.3 billion yen due to the increase in thenumber of stores in China, in particular.
Net income attributable to owners of the parent came to 17.9 billion yen, with some positives
and some negatives in each segment of Lawson
Group.

15

Medium-term management
vision and Sweeping
Transformation Committee
initiatives
At Lawson Group, the medium-term management vision “Lawson Group Challenge 2025” wasset with a view toward the 50th anniversary in 2025
and the aim is to realize the Group Philosophy of“Creating Happiness and Harmony in Our Communities.” In order to keep up with changes in people’s lifestyles caused by the COVID-19 pandemic,
the Sweeping Transformation Committee was established in order to take on various challenges.
Regarding projects for transforming profit structures, the situation is progressing as planned forthe moment. In fiscal 2022, in addition to implementing additional trials toward introducing newsemi-automatic ordering system in the “customer-centric supply chain reform project,” we arecontinuing to engage in AI-based store delivery
diagram optimization in the “vendor distribution
reform project.” In the “Unified use of Group data
project,” in addition to effectively using acquired

LAWSON INTEGRATED REPORT 2022

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Group data in Lawson Group marketing measures,
we are implementing external sales of marketingmeasures using this data. These projects are medium-to long- term initiatives that will produce effects through to 2025.
On the other hand, emphasis is being placedon returns to shareholders by raising capital efficiency while maintaining financial soundness. The
performance indicators are set as ROE (return on
equity) of 15% or higher and EPS (earnings per
share) of 500 yen or higher, but we recognize that
there is still a long way to go to achieving the target performance indicators, as the ROE in fiscal
2021 was 6.6% and EPS was 178 yen. From now
on, in addition to steadily promoting the measuresin each Sweeping Transformation Committee project, the aim is to achieve the targets of Challenge
2025 through a business portfolio strategy that isbased on the policies of increasing corporate value, balancing growth investment and returns toshareholders, and the growth of individual Group
companies and the growth of Lawson Group as awhole.
For the promotion of the business portfolio strategy, investment will be concentrated on the domestic convenience store business, which is thecore business area, with growth and capital profitability as the criteria for judgment. Also, in addition
to continued investment in the growth of Group
companies, appropriate capital policies will beconsidered with a view toward industry reorganization and M&A.
With a basic policy for dividends to being a stable lower limit of 150 yen per share per annum
while ensuring the necessary internal reserves for
future business expansion, we aim for a consolidated payout ratio of 50%.

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Sustainability initiatives
Lawson Group has announced ESG-focusedmanagement, and is taking strategic decisions
from the three perspectives of environment, society and corporate governance with regard to
the implementation of investment in sustainablegrowth. We are also promoting initiatives in response to environmental issues including reducing
CO2 emissions, reducing food loss, and reducing
plastic container packaging and shopping bags
toward the achievement of the targets for 2030
and 2050 that are stated in our environmental vision, Lawson Blue Challenge 2050! The reductionof food loss, in particular, is of social significance,
and the optimization of order numbers and thelimitation of waste disposal due to clearance salemeasures will lead to increased profits.
From the perspective of human capital, noting
the importance of investing in personnel, we arepromoting measures that enable employees totake on new challenges, including the provision of
a 100 million yen budget for the “100 Million Yen
Challenge.” By raising the level of unity as a Group,
and increasing motivation and shared understanding among Lawson Group employees in the medium-to long- term, we aim to create an environmentthat produces new products and services.
Furthermore, as an initiative to raise corporate
value in the future, we are also putting effort into DX(digital transformation). Specifically, we are holding
digital strategy meetings that are attended by executive staff including the president as we strive toimplement discussions about measures relating todigital structural reform and the training of IT human capital.

Our Journey Creating
Happiness in Our Communities

Message from Top
Management

About Lawson!

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

Lawson’s responsiveness to change, carrying on an unbroken line

Launched “Lawson Ticket” service

1996
Opened the first overseas store in Shanghai, China

1997

Introduced “Loppi” multimedia
terminals to all stores

1986

1977
Started 24-hour/day operations

2000

1991

Opened first convenience store insidea hospital, “Hospital LAWSON”

Started third-party bill settlement
services for the payment of
telephone and water bills

1983

2000
Formed a business alliance with
Mitsubishi Corporation

Started copying andprinting services

Contribution to solving social issues

Started the challenges to reduce food waste, plastic use, and CO2 emissions

1992

1997

 pened Station Park Waseda
Oexperimental environment andwelfare store
Established the LAWSON Green
Town Fund (currently “LAWSONGreen Fund”)

2000 tarted the food waste recyclingS
systemFirst convenience store to introduce
low-environmental pollution delivery
vehicles using CNG

Started Mt. Fuji forest improvement
project

First

in
Industry

1995
Collected donations for rescue
work after the Great HanshinAwaji Earthquake1998
ISO 14001 certification(Shifted to the operation under a voluntary environmental management system in December 2019)

Commencement of the Shinkansen service to Hakata

16

Lawson as social infrastructure

Handyman in the community

1975

in
Industry

1998

Started third-party bill settlement services for thepayment of electricity and gas bills

Opened the first LAWSON store in Sakurazuka,
Toyonaka, OsakaFirst

Realized Lawson’s presencein all 47 prefectures of Japan1989

Launched “KARAAGEKUN Fried Chicken”

Finance –Company Information

1996

Since its establishment, Lawson has responded proactively to changes in society, regularly identified customer
needs, and developed new products and services.
Lawson, which started as a handyman in the community, is now a component of infrastructure in the society.
To ensure its position as an essential part of the community that provides support for residents, Lawson isdetermined to continue pursuing and advancing the “hub of refreshment in every community” from the customer’s
perspective.

1975

A Management Foundation for Creating
Happiness in Our Communities

1983

Sea of Japan Earthquake

1989 Era name change(from Showa to Heisei)
Introduction of consumption tax

1991

Gulf War/Collapse ofJapan’s bubble economy

1995

Great HanshinAwaji Earthquake

1999
Stopped including chopsticks, spoons, and forks inboxed meals

1997
Consumption tax increase: 3% to 5%

LAWSON INTEGRATED REPORT 2022

Our Journey Creating Happinessin Our Communities

Message from Top
Management

About Lawson!

Creating Happiness in Our
Communities – Our Story

2014
2010

Started automated teller machine (ATM) service

Launched the Coalition Loyalty
Program Ponta

Established a joint ATM management company “Lawson ATM
Networks, Inc.”

2010

2019

2004

2015

Established Lawson HMVEntertainment, Inc. (currently
Lawson Entertainment, Inc.)

2005
Opened the first “LAWSONSTORE 100” store

2020
Started demonstration
experiment of “LAWSON Fujitsu
Shinkawasaki TS cash registerfree store”

Opened first “Care-focused
LAWSON” with nursing careconsultation desks for seniors

2011

Started Yu-Pack; Japan Post’s
domestic parcel delivery service

Introduction of Delivery
service Started tie-up with
Uber Eats

Introduction of POS
cash registers with
automatic change
dispensers

Acquired United Entertainment Holdings Co., Ltd. via
Lawson HMV Entertainment, Inc.

Established the
LAWSON Farm

Established “post boxes” in
LAWSON stores nationwide

17

Introduction of
the LAWSON
smartphone cash
register system

2018

2003

Start of renovations for ideal store format(Sweeping Transformation Executive
Committee measures)

2018
Acquired supermarket chain SEIJO ISHII CO., LTD.

UNITED CINEMAS

Opened first “NATURALLAWSON” store

Finance –Company Information

2021

Lawson Bank Launchedthe operation of Lawson
Bank, Inc.

2014

2001

A Management Foundation for Creating
Happiness in Our Communities

2018

Seijo Ishii

2001

Strategy for Creating
Happiness in Our Communities

2019

2017

Started the operation of fully
customer-operated new-type POS
cash registers

Nationwide rollout of one ofChina’s largest settlement
First
services, “Alipay”

2011
Started operation of Machikado
Chubo in-store kitcheninIndustry

Building stores meeting community needs

Started health and diversity initiatives

Full-scale initiatives for SDGs

2011
 et up “Support Dreams Fund”
S(Scholarship Program forvictims of the Great East Japan
Earthquake)
Introduction of MACHI café
in-store freshly brewed coffee
using Rainforest Alliancecertified beans

2007
Started “Bring YourOwn Bag campaign”

2006
Started recycling waste oil in all stores
Launched school afforestation projects

2003First Comprehensive regional agreement withmunicipal government (Wakayama Prefecture)O pened the first store offering prescription
medicines

2005

The Kyoto Protocol took effect

LAWSON INTEGRATED REPORT 2022

2008
Opened first eco-friendly model storeSet own action targets for reducing CO2
emissions

2008

Great Recession

2011.3.11

Great East Japan Earthquake

2019

2015
Selected for the 2015 Health &Productivity Stock Selection(fourth time in total 2015–2017, 2021)

2014

Established the “SDGs Committee” for the promotion of
the SDGs
Formulated the “Lawson Blue Challenge 2050!”
environmental vision.
Phased in paper cold drink cups for the in-store freshly
brewed coffee service “MACHI café”.

Selected as a Nadeshiko Brand

2017(sixth time in total: 2014–2018, 2021)

Set up the “Support Dreams Fund” (Scholarship Program for children
from single-parent families)2012
Launched bran bread that contains grain husks
 tarted mobile sales of food products and dailyS
necessities

2014

Consumption tax
increase: 5% to 8%

2015

Obtained the Resilience Certification

2016

2022

Implementation of Ukraine Emergency Support
Donation activities and provision of food support
for Ukrainian refugees

2016

Adoption of the SDGs The Paris Agreement took effect2021
Start of specialclasses for
hospital schools

2019

Consumption tax
increase: 8% to 10%

2020

Spread of COVID-19

Management Capitals Cultivatedwith the Community

About Lawson!

Message from Top
Management

Under its unique customer-oriented business model characterized by “responsiveness to the needs of everyday life,” “advanced store productivity”
and “small commercial area-based manufacturing and retailing,” Lawson will
utilize a variety of management capitals cultivated with the community to realize sustainable growth for the company and the creation of value for society.

Creating Happiness in Our
Communities – Our Story

Diverse store formats and functions that respond to the needs of everyday
life and realize small commercial area-based manufacturing and retailing
Domestic convenience store business
NATURAL LAWSONLAWSON STORE 100
Hospital LAWSON

14,656 stores
136 stores
669 stores
337 stores

Stores with nursing careconsultation desks for seniors

22 stores

Stores that sell over-the-counter
pharmaceuticals

280 stores

Seijo Ishii Business

169 stores

HMV
UNITED CINEMAS

4,862 stores

Lawson online members*
Approximately 24 million people

391.4 billion yen

Employees, who are the most important capital for realizing happiness inour communities and advanced store productivity

10,362 people

Selection as a Health andProductivity Management Brand
Certified Health & Productivity
Management Organization
Nadeshiko Brand Selection

4 times
6 times

18

6 times

Social and Relationship Capital
Customers involved in the happiness of our communities

Membership base for enhancing customer satisfaction and digitaltechnology for realizing high-level of store productivity

Ponta membership
Approximately 106.22 million people

Interest-bearing debt

Human Capital

55 stores
387 screensIntellectual CapitalGroup ID

265.3 billion yen

Financial Services Business 13,547 Lawson ATMs
Overseas Business

Finance –Company Information

Stable financial foundation enabling a flexible response to changes in thecommunity

Consolidated employeesEntertainment-related business

A Management Foundation for Creating
Happiness in Our Communities

Financial Capital

Shareholders’ equity

Operating Capital

Strategy for Creating
Happiness in Our Communities

Total number of visitors to Lawson stores per day (domestic)

Digital technology
Self checkout registers

All stores

LAWSON Smartphone Checkout service

108 stores* Lawson online members is a membership service offering access to Lawson Group services such as HMV and “L-Tike.”

Approximately 1,000 million

Natural Capital
Food resources for remaining close beside our customers
Established

17 LAWSON Farms

LAWSON INTEGRATED REPORT 2022

Community Happiness
Creation Processss

Promise ❶Superior taste

Oversea
s bu
sin
e

Input

OutputProviding a comfortableworking environment and job
satisfaction for those working
at Lawson, and promoting
the health and supporting theactivity of all people.

Promise ❷HumankindnessAllcustomers Promise ❸Environmental(Machi)friendlinessCoexisting synergistically with
communities by serving as part of thesocial infrastructure, and engaging
in sustainable environmental
conservation activities toward therealization of a carbon-free society.

Customers involved in the happinessof our communities

Natural Capital
Food resources for remaining close
beside our customers

LAWSON INTEGRATED REPORT 2022

bu

er
vic

te
la
-re

d

ls

ia

Social and
Relationship Capitalnc

Employees, who are the most important capital for realizing happiness inour communities and advanced store
productivityaFin

Human Capital

sin
es

s

Stable financial foundation enablinga flexible response to changes in thecommunity

Providing safety/security-oriented, overwhelmingly high value-added products and services
that are friendly to society and the environment.

iness

Financial Capital

Finance –Company Information

Creating Happinessand Harmony in Our
Communities

bu s

19

A Management Foundation for Creating
Happiness in Our Communities

Group Philosophy

ii
Ish
ijo
Se

Membership base for enhancing customer satisfaction and digital technology for realizing high-level of store
productivity

Strategy for Creating
Happiness in Our Communities

onvenience store bus
stic c
ines
e
m
s
Do

Operating CapitalIntellectual Capital

Creating Happiness in Our
Communities – Our Story

Business modelManagement
Capitals Cultivatedwith the Community

Diverse store formats and functions
that respond to the needs of everyday
life and realize small commercial area-based manufacturing and retailing

Message from Top
Management

About Lawson!

es

bu
sine

ss

nt
me
n
i
a
rt
Ente

A Management Foundation for Creating Happiness in Our Communities
Spirit of challenge

DigitalCorporate Governance● Products andservices in line withcustomer opinions● Sustainable joint

business withfranchise stores

Response to material issues through the Three Promises and commitment to the SDGs

Job satisfaction

Value offered by“new hubs ofrefreshment in every
community”

Data● Reduction of CO2

emissions, use ofplastics and foodloss

Message from Top
Management

Lawson Group’s approach to contributing to the SDGs
Lawson Group believes that striving to realize the Three Promises to become the hub of refreshment in every community based on its Group Philosophy, “Creating Happiness and Harmony in Our Communities,” ultimately
promotes the Sustainable Development Goals (SDGs). With this in mind, we
are working proactively to solve social issues.
Establishing systems for contributing to the SDGs and implementing
PDCA cycles
Aiming to realize a sustainable society through our business activities, wehave been working to establish systems for solving social issues and implementing PDCA cycles for them, including the establishment of an SDGs Committee in March 2019.
From March 1, 2021, the Company established the position of Chief Sustainability Officer (CSO), with the president, CEO, and representative director
appointed to the position to further strengthen initiatives. In responding to theissues, the SDGs Committee identifies material issues that align with the Three
Promises, and periodically shares the progress of the entire Group, while eachdivision conducts self-directed initiatives in its own business activities.
Furthermore, we have established working groups under the SDGs Committee to strengthen our initiatives on key issues that require a quick response;
namely, CO2 emissions reduction, food waste reduction, plastic reduction,
supply chain expansion, and information disclosure.
Identification of material issues (materiality)
We classify our activities with respect to Lawson’s value chain into six categories based on the Three Promises to customers enumerated in our business
policy, and in consideration of pertinent social issues and circumstances. We
make decisions from the customer’s point of view, with the primary emphasison the safety and security of retailers and on social infrastructure initiatives forthe retail industry.

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

SDGs Committee Organization
Board of Directors

Audit & Supervisory Board

CSO (President and CEO)Management meeting

SDGs Committee

Secretariat
SDGs Promotion OfficeWorking groups(Held on a quarterly basis: All Division Directors)

CO2 emissions reduction
SDGs Promotion Group Meeting

Food waste reduction(Held on a quarterly basis: General Managers and higher)

Supply chain expansion
Information disclosure

Plastic reduction task force

Impacts of identified social issues
Large

Contribution to the Sustainable Development
Goals (SDGs)

Creating Happiness in Our
Communities – Our Story

Job satisfaction reform istribution of safeDand secure products evelopment of a stableD
supply chain

Impact on Lawson (impact level)

About Lawson!

 rogress of technologicalP
innovation
Changing role of the family in society
Deterioration of ecosystems

Large-scale disasterIntensified climate change

ComplianceDeclining birthrate

Food loss

Declining labor force

Super-aging society

Issues of 24-hour operations
Plastic waste issues

 iversity of humanD
resources

Decline and depopulation
in local communities

20

 assive use of naturalM
resources
Increasing health consciousness
Water pollution/shortage

Superior taste
Human kindness
Environmental (Machi) friendlinessMediumMateriality for Creating
Happiness in Our Communities

MediumIncreasing economic
inequality
Sustainable primary industry(agriculture, forestry, and fisheries sector)

Impact on Society (impact level)

Large

Steps to identifying material issues
STEP

1

STEP

2
STEP

3
STEP

4

In order to find issues with heavy impacts on the environment, society and economy, and then identify Lawson’s own material issues, we categorized our business activities into value chain phases,
such as raw materials procurement, manufacturing, and distribution and confirmed what initiative
was helpful toward achieving each target or goal of the SDGs by clarifying social issues in every
phase.
From the social issues identified in the feedback or questionnaire results from stakeholders such as
customers, franchise stores, shareholders, and institutional investors, we selected the issues withheavy impacts on society.
Cross-checking the social issues identified through stakeholder feedback with those impacting
heavily on Lawson, we prioritized those necessary for us to become “the hub of refreshment in every community.”
We linked Lawson’s initiatives for the specified social issues to the Three Promises, and decided ourmaterial issues.

LAWSON INTEGRATED REPORT 2022

Materiality for Creating Happiness in Our
Communities

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Target Setting (material issues)
Business policy

Superior
taste

Applicable SDGs

Material issues (materiality)

Providing Safety/Securityoriented, Overwhelmingly High
Value-Added Products andServices that are Friendly toSociety and the Environment
Supporting Health Promotion for
All People Through Products andStores21

Humankindness

Providing Comfortable Work
Environments Leading to Job
Satisfaction

Major initiatives and services• Providing high value-added private brand products• Deployment of Machikado Chubo in-store kitchens• Planning and developing locally produced products• Development of products with consideration for• Promotion of health promotion partnerships with local

health-based on the 10 themes• Creation of a pharmaceutical product sales system• Expansion of NATURAL LAWSON and HealthCare
LAWSON• Creating a comfortable work environment for use by

all kinds of people• Training and retention of store crews• Continuation of FC owner support system• Promoting the Management Owner system for
multiple-store management
single-parent families

Environmental(Machi)friendliness

LAWSON INTEGRATED REPORT 2022

futures (school afforestation activities, the “Dream
classes,” etc.)• Creation of an environment to support children’s
learning• Donation of products to facilities that require foodand other supportconsideration for society (human rights, etc.) and theenvironment• Conducting fair trade with suppliers

governments• Supporting and subsidizing health initiatives forowners and crew

• Promotion of health and productivity management(mental healthcare, exercise promotion, etc.)• Enhancing communication with franchise stores• Creating an environment where all kinds of humancapital can be active• Promotion of job satisfaction reforms using DX, etc.
• Development and expanded use of leave formaternity, childcare, nursing, long-term care, etc.

• Deployment of “Care-focused LAWSON for Senior

Citizens” program (support for long-term care),regional revitalization events• Promoting Safety Station (SS) activities (community
watch service for women, children, and seniors)• Expansion of mobile sales and delivery services• Government certificate issuance services

delivery pick-up services• Promotion of Lawson Bank ATM services• Collaboration with national and local governments to• Online product dispatch, returns, and in-store• CO2 reduction: Promoting energy efficient stores andSustainable Environmental
Conservation Activities Toward
the Realization of a Carbon-Free
Societycustomer opinions• Developing and operating a supply chain with

• Promoting fund-raising programs for children’s

Coexisting Synergistically with
Communities by Serving as Partof the Social Infrastructure• Development of products and services in line withfor local consumption, and spontaneously utilizing
domestic ingredients• Developing and selling products under considerationof society and the environment• Maintaining Scholarship program for children from

Supporting Women and Seniors
as well as Children’s Growth• Deployment of LAWSON Farm agricultural products

offices (Introducing and operating energy efficientequipment)• CO2 reduction: Utilizing and spreading renewableenergy• CO2 reduction: Efficiency enhancement of distribution
and promotion of changeover to environment-friendly
trucks• Reduction of food loss: promotion of selling out
stock, selling by weight, development of productswith long best-before date

• Executing comprehensive regional agreements withthe local governments, promotion of partnerships
support stricken areas in the event of disaster• Reduction of plastic waste: Reduction in amount ofplastic used for containers, packaging, and sales
promotion materials, etc.
• Reduction of use of natural materials such as copy
paper, etc.
• Sustainable use of resources with consideration forbiodiversity

New hubs of refreshment in every community

Lawson Group Sweeping
Transformation Executive
Committee
Anticipate new needs
Respond to changing new normal changes

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

By strategically selecting investment targets from the three perspectives of environment, social andcorporate governance, the aim is to achieve the performance indicators through a business portfolio
strategy based on increasing corporate value, balancing growth investment and returns to shareholders,the growth of individual Group companies and the growth of Lawson Group as a whole.

Challenge 2025 performance indicators

ESG-focused management

15% or higher
EPS 500 yen or higher

Environment

ROE• Reduce food waste• Eliminate plastics• Reduce CO2 emissions

3.2%
6.6%
86 yen 178 yen

22

Fiscal 2025
Seijo Ishii

Fiscal 2022

DomesticCVS

tDa

vic e sGrowth investment,
industry reorganizationand M&A

ia l

c

ser

Domestic
CVS

Maximizing thevalue of theLawson brandan

Maximizing thevalue of theLawson brandConcentrated growthinvestment as the driver ofcore business and growthEentainmdert
nt relateE

Determined growth andcapital profitability as
criteria for judgement

Fin

nc

ial

Seijo Ishiinainme td
ert
nt relate

Fina

Pursuing new ways to provide convenience with “new hubs ofrefreshment in every community”
Under Challenge 2025, which was established with a view toward Lawson’s
50th anniversary in 2025, we aim to realize the Group Philosophy, “Creating
Happiness and Harmony in Our Communities” by becoming the No. 1 recommended store for our customers, communities, and colleagues and creating“new hubs of refreshment in every community,” as we pursue new ways toprovide convenience. In our pursuit of new ways to provide convenience, weestablished the Lawson Group Sweeping Transformation Executive Committee
in September 2020, and we have conducted a range of initiatives to fulfill ourbusiness policy comprising Three Promises: “Superior taste,” “Human Kindness” and “Environmental (Machi) friendliness.” As of May 2022, the Committee
has formed 10 projects, as well as Group company business activities and SDG
promotional activities, and the President himself serves as a Committee Chair.
In addition to these initiatives, under Challenge 2025 we will also strategically select investment targets from the three perspectives of environment, society, and corporate governance while aiming to achieve the 2025 performance• Ensure transparent, equitable
management• At least 1/3 outside directors• Set up a Nomination andRemuneration Committee
comprising a majority of
independent officers• Diversity• Contribute to
local communities• Supply chain
management

a

EPS

7.3%
200 yenOverseas

ROE

GovernanceSocialResults
Fiscal 2019 Fiscal 2020 Fiscal 2021

Utilize IT-invested next-generation systems

Strategy for Creating
Happiness in Our Communities

ser

t

a

New convenience

About Lawson!

Overseas

Overview and Promotion of
Challenge 2025

vic e sDaindicators through a business portfolio strategy based on increasing corporate
value, balancing growth investment and returns to shareholders, the growth ofindividual Group companies and the growth of Lawson Group as a whole.
LAWSON INTEGRATED REPORT 2022

Overview and Promotion of Challenge 2025
About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Milestones for the Lawson Group Sweeping Transformation Executive Committee
Committee chair: Sadanobu Takemasu, President and CEO, Representative Director, Chairman of the Board and CSO*
Pursuit of ideal store format
project

Transforming
store displays
P.25

23

Transforming
profit structures
P.28

Transforming
work motivation
P.33

Operatingcompanies
P.28

SDG promotion
P.43

Create stores where people
come to purposely shop for
essential daily goods thatsatisfy new lifestyles andvalues.

Improve profitability offranchise stores, HQ, andoperating companies byreviewing costs and striving
to increase revenue.

Continually reform work
motivating factors for all
franchise store, HQ andGroup Company employees.

FY2025

Realize a new
CVS model

Realize a new formof convenience

Reform store displays, newfittings
Introduce into more stores,
renew menus

Product renewal project

Expand daily & frozen foods anddelicatessen products

MUJI introduction projectIntroduction of MUJI Products

The No.1 recommendationacquiring project

Improve product and service level

Customer-centric supply
chain reform project

Design optimal supply chainVendor distribution reformproject

Improve vendor productivity, quality

Unified use of Group data
project

Infrastructure building

Work motivation reform project

FY2023-FY2024

Launch new system in 2024
Strengthen profitability throughstructural reform of vendors

Ensure lean Grouptransformation andsolid profit sources

Make profitable

Policies to support challenges and improvement of store crew satisfaction

Strengthen external communications

Improve satisfaction
working for Lawson
Group

Group branding project

Enhance brand penetration

Seek to provide new valuethat horizontally combines
the Group’s overall strengths.

Operating companies

Accelerate China store openings, consider new financial services, develop
post-COVID entertainment strategy, etc.

Growth of all operationcompanies

Contribution to the
Sustainable Development
Goals (SDGs)

SDG promotion

Reduction of CO2 emissions, use of plastics and food loss, etc.

Realization of a sustainable
society through businessactivities*CSO: Chief Sustainability Officer

LAWSON INTEGRATED REPORT 2022

Machikado Chubo in-store
kitchens project

FY2022

Lawson Blue
Challenge 2050!

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Toward achieving Lawson Blue Challenge 2050!
Lawson Group is pursuing efforts to achieve the KPIs we determined for social and environmental aspects in 2025, our 50th anniversary of our founding, and2030, target year of the SDGs, as target years. Furthermore, Lawson Group also formulated its environmental vision, Lawson Blue Challenge 2050!, aiming to realize a carbon-free society by 2050 and ensure an abundant, blue planet for the future.
In order to contribute to the ideal world that the Sustainable Development Goals (SDGs) aim to realize, we will continue our initiatives to address environmental
issues, such as reducing CO2 emissions, reducing food waste, and reducing plastic in containers and shopping bags, as we take on difficult challenges to achieve
our goals (the KPIs) for 2025, 2030, and 2050.

Form environmental vision, set long-term goals,
take on challenges to achieve a Carbon-free Society in 2050.

CO2

Reducing CO2
emissions
Food waste
reduction

2025

2030

50th anniversary

SDG targets

CO2 emissions
per store
2013 levels

2018 levels

Plastic for containers
and packaging2017 levels

Environmental vision

Reduce by

Reduce by

Reduce by

Reduce by

15%
25%

Reduce by15%

Lawson Blue Challenge 2050!
—Save our blue planet!—

100%

Reduce by

100%

50%

Containers and packagingof Lawson’s original
products
Eco-friendly materials

Plastic shopping bags

24

Reduce by

50%

Plastic for containers andpackaging

Reducing plastic

2050

Reduce by30%

50% usedContainers and packaging of
Lawson’s original products
Eco-friendly materials

100% used

Reduce by100%

LAWSON INTEGRATED REPORT 2022

Strategy for Creating Happiness through the Three Promises
About Lawson!

Superior Taste

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Domestic Convenience Store BusinessTransforming store displays

Machikado Chubo in-store kitchens project

Initiatives to date25

The Machikado Chubo in-store kitchen concept
developed from our in-store preparation initiative,
which Lawson has been promoting since 2004.
With the support of customers, we have expanded
the number of stores to reach the largest scale inJapan for retail stores with in-store kitchens while
training for personnel that work in food preparation, improving kitchen facilities, and cooperatingwith the owners of participating stores.

Overview of Fiscal 2021
In order to meet the needs for take-out and deliveries during the pandemic in fiscal 2021, the development of Machikado Chubo stores was accelerated.
In some stores in the Kanto area, Lawson is offering products with in-store preparation that can evenbe used with delivery services such as Uber Eats.

Also, despite the many behavioral restrictions
during this year, there was a favorable transition
due to sales of local products in each area and dueto the response to customer needs in each region.

Strategies under Challenge 2025
Lawson will conduct various initiatives to expand Machikado Chubo in-store kitchens and provide products that will satisfy customers.
We will develop products that are appealing tocustomers, such as collaboration products withspecialty restaurants and leading restaurant chains
and the development of local products that meetthe different dietary needs of each region.
Since Machikado Chubo in-store kitchens enable us to manage the number of items producedin each store, they contribute to reducing foodlosses due to overproduction.
We will continue to promote the development of“ghost restaurants.”

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Delivery service
In August 2019, Lawson became the first convenience store in Japan to commence the introduction of Uber Eats. With the increasing demand fordeliveries due to the COVID-19 pandemic, 2,903
stores were offering delivery services as of the endof February 2022.

Ghost restaurants using in-store kitchens
A trial run of “ghost restaurants” for the delivery of food prepared using in-store kitchensbegan in the Tokyo area in November 2021 anda delivery-specific menu has been developed.
From now on, further developments will bemade toward introducing this service to 100
stores in the Kanto area by the end of February
2023, and to 1,000 stores nationwide by fiscal
2025.

Delivery-specific menu item
(Chicken over rice)

Number of stores with kitchen facilities

End of fiscal
2020

Thick Pork Cutlet Sandwich(Made with sauce produced by the
Tonkatsu Maisen)

LAWSON INTEGRATED REPORT 2022

Pork Loin Cutlet Curry

Pork Rice Bowl

End of fiscal
2021

6,493 stores

8,359 stores

Strategy for Creating Happiness through the Three Promises
About Lawson!

Superior Taste

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Domestic Convenience Store BusinessTransforming store displays

Pursuit of ideal store format project

Overview of Fiscal 2021

Strategies under Challenge 2025

In fiscal 2021, amid changes in customers’ lifestyles due to the spread of
COVID-19 infections, we refurbished 4,305 stores, resulting in improved daily
sales at the existing stores we refurbished.
Specific details of the refurbishment included leveraging the instant preparation and service capabilities of our Machikado Chubo in-store kitchens toenable differentiation with products such as boxed meals, sandwiches and fast
foods responsive to the demand for three daily meals, breakfast, lunch anddinner. We optimized individual stores by increasing the number of frozen foods
and daily foods by adding more fixtures, based on close observation of thedifferent needs and purchasing behavior of customers in each location. In addition, we actively introduced delivery and online payment services to encourage
new customers to visit our stores by offering new ways to use convenience
stores. We also promoted store self-service in response to the increasing customer preference for a contactless shopping experience and in preparation for
long-term labor shortages by introducing the use of self-checkout system fixtures for sales of individually packaged over-the-counter fast food. As well as
making it easier for customers to move around the store as they select items tobuy, the use of round cases for multi-faceted display also served to present thesales floor transformation to the customer visually.

In fiscal 2022, we plan to refurbish approximately 3,500 stores. Together
with the stores refurbished to date, we plan to complete the refurbishmentof approximately half of all our stores. In selecting stores to refurbish, we willconduct a detailed analysis of the knowledge and data obtained from storesthat have been refurbished in the past. In addition to quantitative informationsuch as daytime and nighttime commercial area populations, customer demographics and store usage, we also consider the condition of the store’s
hardware and management, and the owner’s management capabilities, as
important factors.
Over the course of their history, convenience stores have continued to respond flexibly to the changing needs of the times, making the most of theiradvantages as a small store. Amid the major changes to the environment
triggered by the pandemic, we will continue moving toward the realization ofa new convenience store model.

Flatbed freezer

Self-service fixtures for sales of counter fast foodRound case26

Self-checkout system

LAWSON INTEGRATED REPORT 2022

Strategy for Creating Happiness through the Three Promises
About Lawson!

Superior Taste

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Domestic Convenience Store BusinessTransforming store displays

27

Product renewal projectTransforming store displays

MUJI introduction project

Overview of Fiscal 2021

Background of the introduction

The product renewal project undertaken by the Sweeping Transformation
Executive Committee to respond to the new normal is yielding positive results.
We gained customer support by developing products responsive to change,such as Machikado Chubo products carefully prepared in the in-store kitchen,
and frozen foods that appeal to customers with new value unique to convenience stores, including desserts and sashimi. We also developed new products based on the “Because it’s Lawson” theme, resulting in many hit products unique to Lawson, such as Gateau au Chocolat dessert, the Crispy Fried
Chicken fast food item, and boxed meals featuring prolonged freshness andchilled storage.

The aim of Ryohin Keikaku is to create a “simple, pleasant life and society,”
while LAWSON’s is “Creating happiness and harmony in our communities.”
In keeping with these philosophies, in June 2020, we began an experimental
sales program to introduce MUJI products at LAWSON stores.
In the future, we intend to expand our efforts to be even more useful tolocal residents and to contribute to local revitalization by jointly developing
private-brand products and services.

Strategies under Challenge 2025
As we work toward Challenge 2025, we will take our commitment to “Superior taste,” “Human kindness,” and “Environmental (Machi) friendliness” toeven higher levels. In particular, to achieve “superior taste,” we are reviewing
our product development process and establishing thoroughly customer-driven product development. Under our community-based policy, in 2022, wewill develop area-specific products that promptly respond to the needs andchanges unique to each region.
Regarding health, which will become an even more important theme in the future, we will revamp our Health Product Development Guidelines to further promote product development that meets the changing needs of our customers.

Gateau au Chocolat

LAWSON INTEGRATED REPORT 2022

Four types of macaron

Red sea bream sashimi

Strategies under Challenge 2025
Product renewal is an important project within the theme of transforming
store displays promoted by the Sweeping Transformation Executive Committee. In daily necessities, we will turn our attention to improving sales floor
efficiency, continuing to consolidate existing products while taking steps tointroduce MUJI products. MUJI products will be available at LAWSON storesnationwide by the end of2023. By implementing thesemeasures, Lawson aims toacquire a new customer baseand expand spending per
customer by increasing thenumber of purchase items. In
this way, we will achieve thetargets of Challenge 2025.

Strategy for Creating Happiness through the Three Promises
About Lawson!

Superior Taste

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Domestic Convenience Store BusinessTransforming profit structures

Transforming profit structures
Unified use of Group data project

Customer-centric supply chain reform project

Using data to increasecustomer satisfaction

Supply chain optimization andmeasures to counter food loss

Lawson has been using its POS data and coalition
loyalty program member data for commercial area
analysis, store management support and productdevelopment in order to meet customers’ various needs
in greater detail. Through our unified use of Group data
project, we are expanding the scope of data we analyze
to include that owned by Lawson Group companies
and external data so that we can further deepen our
understanding of our customers. We are also working
to expand services using this data. We will further
improve customer satisfaction by delivering informationthat meets the needs and tastes of each individual
customer (information on special product and service
offers, recommendations, etc.) at the appropriate timeand in the appropriate manner.

Under the customer-centric supply chain reformproject, we are addressing food loss, which is one of
Lawson’s target social issues. We use AI to predict
demand for each product based on individual store
data such as weather and sales, then work to optimize
the entire supply chain by making product ordering
recommendations based on the predictions.
We have been working to increase ordering accuracy
at stores using the semi-automatic ordering system
introduced in 2015, which uses AI to recommend ordervolumes based on store sales capabilities. Now we will
increase accuracy using the latest AI technology andaim to completely sell all of the purchased products.
Previously, discounted sales of products nearing theirsell-by date were heavily dependent on the level ofexperience at the store. Now, we will use AI to makerecommendations on the amount and period of the
discounts based on the inventory status of each store
on the day in an effort to more effectively completely
sell out of products.
We also intend to expand the application ofcustomer-centric demand prediction beyond increasingordering accuracy and discounted sales. By optimizing
the entire supply chain, including optimizationof logistics aspects such as store deliveries andproduction control at our manufacturing plants, we will
work to reduce food loss.

Proposals with individually tailored content and delivery
methods using Lawson’s data and position information(Internal)
Past purchase data	Past coupon issuanceand usage data
(By medium)	Attribute data (External)
Position information
Web browsing history	Weather information, etc.

SnacksSmartphone

Analyze dataassociated withindividuals to offer
proposals that meettheir needs
Desserts

Real stores

LAWSON STORE 100

Overview of Fiscal 2021
We have implemented a range of measures in response to changes in the business environment due
to the spread of COVID-19 infections. These include
strengthening the categories of daily foods and threefresh foods that meet the demand for eating at home.
We also expanded the frozen food product lineup andintroduced new merchandise to meet stocking needs,
while introducing delivery services.
In the summer, the store concept was renewed to“Menu-Support Convenience Store.” By offering recipe recommendations and shopping suggestions, we
responded to the needs of customers who have a hardtime coming up with daily menus. In addition, we aggressively strengthened our private brand product lineup and promoted brand strategies to encourage purposeful purchases reminiscent of LAWSON STORE100,
as we worked to realize Menu-Support Convenience
Stores that maximize the advantages of small stores inan environment that continues to change.

28

Strategies under Challenge 2025
As a convenience store responsive to customer lifestyles with strengths in fresh produce and daily foods,
we will refine our ability to support the daily lives of people by focusing on seasonal suggestions, communication with customers, and by providing safety and security on the sales floor. While keeping abreast of macro
consumption trends such as the aging of the population and the increase in single-person households, we
aim to accelerate individual store management andincrease market share within commercial areas together with franchise stores by utilizing customer segment
data, which we have been working on since fiscal 2020.

LAWSON INTEGRATED REPORT 2022

Strategy for Creating Happiness through the Three Promises
Superior Taste

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Seijo Ishii Business
Seijo Ishii

29

Overview of Fiscal 2021

Strategies under Challenge 2025

Based on the management philosophy of “quality food for a quality life,”
Seijo Ishii has differentiated itself from its competitors and is providing customers with high-quality, safe and reliable foods with its unique businessmodel of “vertical integration of food,” in which all of its processes—from importing, logistics, and manufacturing to wholesaling, retail sales, and restaurant operations—are carried out in-house.
In response to environmental changes caused by the COVID-19 pandemic
in fiscal 2021, in-house dishes and sweets produced in the central kitchensof Seijo Ishii continued to undergo a favorable transition due to the development of various measures. A wide range of store formats were also developed
along roads, in stations and in commercial facilities, leading to a total of 201
stores as of the end of the fiscal year, including direct management stores,
franchise stores, and restaurants.

Seijo Ishii will start operating the Yamato No. 3 central kitchen plant in July
2022 as it advances toward expanding its store network with a view to the
future and develops new core products.
To expand the store network while also strategically opening new stores
outside of Kanto region where approximately 70% of stores are located, we
will cater to the new lifestyles that emerge after the pandemic by strengthening e-commerce and promoting last-mile business initiatives using delivery
services such as Uber Eats. Specifically, in terms of last-mile initiatives andbusiness expansion, Seijo Ishii online sales began in March 2022 on Amazon.
co.jp in partnership with Amazon. This means that more than 4,000 products
selected by Seijo Ishii (as of the end of May 2022) can now be delivered in as
little as two hours.
Based on the basic policy of “obsessing over all processes of product creation to offer products that achieve customer satisfaction,” we will continue
to achieve sustainable growth through the power of products, stores and personnel while looking toward various potentialities.

95th anniversary in 2022
In 2022, Seijo Ishii reached its 95th anniversary.
“Q” for Quality. With the theme of delivering the highest level of quality that meets
customer expectations in “five” categories,
namely, products, stores, sales promotions,central kitchens, and SDGs, we will be saying “Thank you” to customers for the entire year by promising to provide the qualitythat Seijo Ishii is known for.

*Amazon and Amazon.co.jp are trademarks of Amazon.com, Inc. and its affiliates.

Store locations
Chubu
regionKansairegion2 stores36 stores
ChugokuregionKanto
region

1 store201 stores*

142 stores

As of end of February 2022

Yamato No. 3 central kitchen (Yamato City, Kanagawa Prefecture)

LAWSON INTEGRATED REPORT 2022

Tohokuregion

20 stores*Total for direct management stores, franchise
stores and Le Bar à Vin52

Strategy for Creating Happiness through the Three Promises
About Lawson!

Superior Taste

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Entertainment-related business
Lawson Entertainment

UNITED CINEMAS

Overview of Fiscal 2021

Strategies under Challenge 2025

During the current fiscal year, the recovery of the entertainment market
came to a standstill amid repeated imposition and easing of restrictions onsocial activities due to the impact of the spread of COVID-19 infections.
Amid this environment, we were able to realize an increase in profit in theentertainment-related business by seizing opportunities presented by changes in the market.
In the Lawson Entertainment ticketing business, while the number of events
that attract customers with infection prevention measures is on the rise, wehave been working to meet the market needs of this new normal, which includes the live event livestream business, contactless electronic ticketing, andsales of socially-distanced seating. We have also been expanding our productlineup to meet local demand associated with the COVID-19 pandemic, including handling of our Go To Eat meal coupons and
Go To Travel regional promotion coupons.
In the merchandise sales business, we also expanded the number of products handled in our
growing e-commerce business, strengthened our
logistics infrastructure, diversified our sales methods using live commerce, and moved online fororganized events. In the cinema complex businessof UNITED CINEMAS, we worked to improve theater occupancy rates by refining customer service,
which has become No. 1 in the industry based on
thorough safety and security measures at our theaters, and further diversified revenue sources by
Selling roll cakes through live
strengthening merchandise sales.
commerce

The entertainment-related business is much the same as our convenience
store business in that it provides an infrastructure for daily life. Our primary
mission is to continue to respond to the needs of the community, providing
a social infrastructure that remains close beside the communities and close
beside our customers whatever the business environment may be.
In fiscal 2022, the second year of Challenge 2025, we aim to return to thepre-COVID fiscal 2019 level of profit by achieving quantitative results throughour adaptation to new-normal market conditions, which we have been working relentlessly to achieve. In some months of fiscal 2022, the volume of transactions in the ticket business exceeded the level of fiscal 2019, and we are
feeling a solid response to the recovery toward a growth trajectory.
The spread of COVID-19 infections has accelerated the preexisting trend
toward digitalization, and has also brought about changes in customers’
awareness, values, and lifestyle consumption behavior. For our business, we
believe that the key to achieving sustainable growth is to continue to respondto these market changes by viewing them as opportunities.
In the ticket and merchandise sales business, we will work with LAWSON
stores to refine our business in the domain of physical commerce while also
strengthening our business in the digital domain. By organically linking these areas, wewill provide products and services in the optimal form our customers require. In the cinema
complex business, we plan to further improve
the profitability of the Group as a whole by increasing theater occupancy rates and diversifying revenue sources through the use of differFLEXOUND Pulse™, a new chair for movie
entiated services and new screening methods.
theaters

30

LAWSON INTEGRATED REPORT 2022

Strategy for Creating Happiness through the Three Promises
Superior Taste

Financial Services Business
Lawson Bank

Overview of Fiscal 2021

31

As a member of Lawson Group, Lawson Bank
aims to become the bank closest to customers
by providing new financial products and services
that they find truly useful. In fiscal 2021, the fourthyear since the opening of the bank, although
the impact of the spread of COVID-19 infections
continued to be felt, the Bank worked hard onits mainstay ATM operations and other businessincluding functions and services utilizing the ATM
infrastructure and systems, as well as banking
services such as deposits and credit cards. We
also strived to keep operating costs under control
and these efforts resulted in steady performance.
In particular, we have been working to expand
services so that customers will find them moreconvenient. These efforts include expanding andimproving services that enhance the “last mileof money” function of ATMs, such as recharging
payment apps using ATM infrastructure andsystems, ATM deposit services for sales proceedsfrom stores, and overseas remittance card
services.

Strategies under Challenge 2025
Looking toward fiscal 2022, although there arefactors that will put downward pressure on ATM
usage due to the spread of cashless payments,
we expect a certain amount of recovery in ATM
LAWSON INTEGRATED REPORT 2022

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

The community-based Lawson Bank ATM network
Through Lawson Bank ATMs at locations including LAWSON stores in 47 prefectures,customers can use their cash cards at partner financial institutions and other financial
institutions nationwide for transactions, as well as for cash advances using many credit
cards and loan cards. In fiscal 2021, we also initiated direct partnerships with 247 credit
unions nationwide. The Bank will work to expand its ATM network in coordination with
Lawson's stores strategy.

Numbers of Lawson
Bank ATMs installed(end of March 2022)

13,542
Chugoku

934

Numbersof ATMs
by region

Chubu

2,103

Hokkaido

654

Kyushu1,334

Tohoku

1,154
Kanto

4,178

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Expansion of partners for immediateaccount settlement services(As of April 2022: 5 payment services,
14 financial institutions)See available financial institutions here (Japanese only)
https://www.lawsonbank.jp/product/charge/#anc03

Launched Lawson Bank ATM Stamp Cards
to collect stamps redeemable for Ponta
points(From September 2021)
Launched Suitto, an e-money recharge
application that allows customers toeasily link their bank accounts ande-money on the app(From March 2022)* Suitto is a registered trademark of Lawson Bank, Inc.
* Mobile Suica is a registered trademark of East Japan Railway Company.
See available financial institutions here (Japanese only)
https://www.lawsonbank.jp/lp/suitto_suica/#anc05

Number of partner
financial institutions(end of March 2022)

Shikoku

611

Kinki

2,318

Okinawa

256

378

companies* The JA Bank and JF Marine Bank are considered each as an institution depending on businesscategories.
* au PAY and WebMoney prepaid card (including Lite) are considered each as an institution
depending on service categories.

usage numbers due to the recovery of humanflow associated with the recovery from COVID-19
and the future increase in inbound traffic. We
believe that the needs of our customers for ATM
services remain firm, and will strive to meet thoseneeds by adding value, strengthening the “lastmile of money” function of ATMs for customers,
and properly fulfilling the role of ATMs as social
infrastructure. The digitalization of industry andthe economy, the diversification of our customers'
values and needs, and other accelerating changes
in the environment surrounding us will continue
to drive changes in the services required. Ourstrengths include our unique position between

Enhanced credit card point rewards for more savings at Lawson(from March 2022)

the financial and distribution industries, with a
network of more than 13,500 ATMs, a base offinancial institutions and customers who use theseATMs, the Lawson Group stores and owners,
and our ability to utilize a database of more than
100 million Ponta members. As a convenience
store group bank rooted in day-to-day life within
our local communities, we will further strengthen
integrated management with the Group while
adopting the customer's perspective in providing
new services. Together with LAWSON, we will
strive to bring “Creating Happiness and Harmony
in Our Communities,” which is a group philosophy.

Strategy for Creating Happiness through the Three Promises
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Communities – Our Story

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Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Expansion in China

Overseas Business
China

Our Expansion in China
Lawson entered Shanghai in 1996, becoming the first Japanese convenience store to introduce the modern convenience store model to China.
During the 2000s, there was sluggish growth in the number of stores amidsoaring rents and intensifying competition. In the 2010s, however, we reconfigured our basic strategy for China and established a system for developing
our own expertise and IT and core infrastructure that adapt to local culture
and changes in economic conditions. We then advanced our business expansion by sharing our accumulated expertise with our subsidiaries and area
licensees. As a result, we have gained strong levels of recognition and brandreputation in various regions, recording roughly 1200% growth in our net sales
and the number of our stores over the last ten years.

Overview of Fiscal 2021
In fiscal 2021, despite the impact of the COVID-19 pandemic, including sporadic behavioral restrictions primarily in the second half of the year, the numberof stores increased by 1,210 due to the development of various measures,such as enhanced delivery services and live commerce. As a result, there wasa year-on-year increase in both sales and operating income. Also, in a consumer survey in the second half of 2021, there was an overwhelming increasein brand power, including becoming the “No. 1 CVS that people want to use”
in each region where Lawson is present. In addition, initiatives have been promoted in connection to post-COVID market needs and SDGs, including opening modern new stores in July 2021 along with Matsushita Electric (China)
Co., Ltd. that feature digital signage for displaying information about the latest
energy-saving and low-CO2 facilities and products/advertisements, as well as
the provision of books for children in poverty in various regions.

Net sales (left axis)(Millions of yuan)

Number of stores (right axis)(Stores)

12,5005,000

10,000

4,000

7,500

3,000

5,000

2,000

2,500

1,000

Net sales in FY2021

9,306

million yuan

Number of stores in FY2021

0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(Fiscal year)

0

4,466

stores

Accounting Period of Overseas
Business
January to December

Strategies under Challenge 2025
We are targeting 6,000 stores by fiscal 2022 and 10,000 stores by fiscal
2025. Based on training for management personnel, we have in place a system of accumulated expertise, IT, and core infrastructure that enables us tomaximize growth of stores in each region in accordance with our China basic strategy and to accelerate regional expansion. Given the relatively small
number of stores per capita in
Store Distribution in China
comparison to Japan, for example, and the large number of local
NumberFormatRegionof stores
convenience stores in each reShanghai and surrounding areas
gion, there is a huge potential for
2,375(Shanghai, Zhejiang, Jiangsu)
area licensing and there are many
Chongqing and surrounding areas
628
opportunities for M&A, including(Chongqing, Sichuan)
Subsidiaries
Liaoning
the acquisition of the manage487(including Shenyang, Dalian)ment rights of two companies
Beijing and surrounding areas
356
in December 2021 and January(Beijing, Tianjin, Hebei)
Guangdong (including Shenzhen)
202022. China is a vast country
Hubei (including Wuhan)552
where cultural and economic levAnhui (including Hefei)
194
Area
els vary between regions. We will
licensing Hunan (including Changsha)
121
therefore start with our Chinese
Hainan (including Haikou)
110
subsidiaries that operate in each
Total
4,843
cultural zone as we aggressively
expand our business in China.
As of end of May 2022

32

LAWSON INTEGRATED REPORT 2022

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Communities – Our Story

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A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Companywide
Transforming work motivation

33

Work motivation reform projectTransforming work motivation

Group branding project

Overview of Fiscal 2021

Overview of Fiscal 2021

The objective of the Work motivation reform project is to stimulate thegrowth of our Group by fostering personal development and a sense ofachievement among our employees, empowering them to take initiative in
addressing challenges while the Group’s diverse human resources have asense of trust and solidarity with people they work with. It is being carriedout by inviting employees from all over the country to participate voluntarily,
with each employee formulating specific plans aimed at revitalizing
communication and improving work efficiency.
In fiscal 2021, we partially changed the Individual Performance Evaluation
system to create a system that encourages autonomous improvements andacceptance of challenges. We implemented measures that contribute toimproving work satisfaction, such as implementing projects selected throughthe 100 Million Yen Challenge, an in-house system that solicits ideas for new
challenges to be taken on within a budget set at 100 million yen. We also
created opportunities to foster awareness of diversity and coexistence byholding the Lawson Lively Salon (cross-departmental exchange meeting), an
online salon for exchanging questions and opinions that is organized acrossdepartments, positions, and age ranges.

The Group branding project is aimed at contributing through our brandto achievement of the 2025 goal of being the No. 1 recommendation by all
customers. As a first initiative, we set out to define the strengths of Lawson
Group in order to build a strong brand that would differentiate us from ourcompetitors. We conducted consumer surveys and employee workshops,
and defined the value of the Lawson Group’s existence as a “challenger
that aspires to be useful to everyone.” In everyday life, as in times of
emergency, our Group philosophy is “Creating
Happiness and Harmony in Our Communities,”
and this expresses the desire of Lawson Group
employees, who act to realize that philosophy.
In FY2021, with the aim of increasing loyalty andsharing the awareness of being a “challenger that
aspires to be useful to everyone,” we launched anintergroup information-sharing website, provided
video livestreaming, conducted training, and held Branded book and neck lanyard, designed to raise shared awareness amongsocial events.
Group employees

Strategies under Challenge 2025
In fiscal 2022, we aim to continue fostering and improving employee job
satisfaction through the genuine implementation of Lawson’s Way in its true
sense so that we can grow and expand Lawson Group. We will promote
the development of a comfortable and diverse labor environment thatserves as the foundation for job satisfaction. We are developing a variety ofmeasures aimed at linking a greater sense of job satisfaction to the growth
and achievements of our employees. In this way we can move forward to
realize our Group philosophy, “Creating Happiness and Harmony in Our
Communities.”

LAWSON INTEGRATED REPORT 2022

Strategies under Challenge 2025
In fiscal 2022, we will continue to foster asense of unity as a group and develop initiatives
to increase employee motivation and a common
awareness, with the aim of realizing our groupphilosophy. In coordination with marketingpromotions, we also aim to build our brandby communicating with customers about theongoing challenges that Lawson Group isundertaking for society and the community.

Strategy for Creating Happiness through the Three Promises
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About Lawson!

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Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Informationelective leadership training to support young women in their career and life planning. By fiscal 2030, we aim to achieve a 30% ratio of female managers, and we arealso taking step to develop female management candidates in our Next-Generation
Development Committee, which aims to develop the next generation of leaders forsenior management roles from among our general managers.
In 2014, Lawson introduced the short-term childcare leave system, in hopes ofinspiring active male participation in child-rearing and housework leading to efficient, highly productive work styles among both men and women.
To promote active roles for diverse human resources, we established a remote
work system and introduced an active full-time senior employee system, raising our
employee retirement age to 65. These measures will help transform Lawson into a
company whose employees can continue working with satisfaction.

Diversity and human resource development

Promotion of diversity and realization of a work/
life balance
Lawson promotes diversity with the aim of assembling employees with widely
varied values who join together and perform to their full potential to strengthen its
franchise chain further. We have constructed systems for promoting diversity andinclusion under the direction of the President, established a special subsidiary to
promote employment of people with disabilities, developed childcare facilities in our
workplaces, and prepared opportunities for conducting labor management consultations with a focus on improving operating efficiency and work environments.
In recruiting activities, we disregard gender, nationality, age, school, and origin,focusing instead on individual suitability, motivation, and ability. In our regular recruitment, since 2005 we have targeted a 50-50 ratio of male and female recruits,
and from 2008 we have made a continued effort to recruit non-Japanese employees.
In our desire to retain our female employees over the long-term, we have introduced such programs as career development training, childcare leave training, andHuman resource development
Guided by our Group philosophy, we operate a developmental personnel system
and are training personnel with the aim of encouraging every employee to think
and act on their own initiative using two evaluation systems: the Employee Behavior and Skill Level Evaluation, which evaluates the employee behaviors (processes)that produce positive results; and the Performance Evaluation, which assesses theresults of the behavior.

34

Sustainable Corporate GrowthDiversity Promotion System

Proportion of eligible male employees taking childcare leave
Corporate philosophy

No. of male leave takers (left axis)
Proportion of eligible male employees taking childcare leave (right axis)

President(Persons)
91

160
80

Marketing Strategy Division

Human Resources Division
Diversity Promotion Officer

120

Marketing Team

Diversity Team

80

92

94

96

(%)
100

80

70

75

Fiscal year mission

Personnel capable of thinking andacting on their own initiative
Individuals

Superiors

Capable of thinking
and acting on theirown initiative

Training employees

50

Developmental personnel system
Genki Leader Committee
Operating under the President’s direction, the Human Resources Division takes responsibility for system design, operations and appointments, while the Marketing Strategy
Division seeks to create new value from ideas generated by female employees.

40

0

16

25

23

93

94

109

111

133

117

89

2014

2015

2016

2017

2018

2019

2020

2021

Action Guidelines
Lawson’s Way

0(Fiscal year)

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A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Companywide
Working environment and health and productivity management

35

Working environment

Health and productivity management

We have established a labor-management consultation forum that emphasizes thorough discussions aimed at improving employees’ operational efficiency and work environment. We are continuing our efforts to create a comfortable workplace, working
to improve the work environment through employee participation in areas such asreforms to our organizational culture and the use of systems. In each area, both laborand management conduct self-checks of the work environment before holding discussions to identify problems at an early stage and resolve them quickly.
We ensure that the 5S Methodology of “Sort, Set, Shine, Standardize, and Sustain”
is fully implemented by our franchise stores in accordance with procedures clearlyspecified in our operation manuals. We also hold safety management meetings Company-wide to raise awareness concerning driving safety among store supervisors andothers whose jobs involve driving. When a serious work-related accident occurs, weinvestigate and analyze the cause and share our findings internally with the aim ofpreventing recurrence. Also, in the area of work environment improvement, we focus
on employee care such mental health monitoring activities as presentation of improvement points and stress check results for the various departments.

As a company that contributes to customers’ overall health, Lawson places paramount importance on the health of its employees as well as the owners and crewsof franchise stores. We announced a health declaration to this end in 2013. With the
President serving as Chief Sustainability Officer (CSO) and Chairman of Health andWellness Promotion Committee, we have recently established a system to promotehealth management and lead efforts to reinforce and direct health initiatives and healthmanagement for the Company and its customers.
Since September 2018, we have been working to strengthen group-wide healthpromotion measures in cooperation with the Lawson Group Health Promotion Office,a body operating under the direct supervision of the President, the Human Resources
Division, the labor union, and the Lawson Health Insurance Society. Promoting thehealth of its franchise owners is another important concern for Lawson. The various
health preservation programs provided through the Lawson Owner Welfare Association (see page 41) include a subsidy plan for medical examinations and operation of ahealth support desk. For the sixth consecutive year, the Company was selected as oneof the “Health and Productivity Management Outstanding Organizations 2022 (largescale corporate sector),” an award that honors corporations for excellence in healthmanagement, based on our efforts to address local health issues.

Health and Productivity Management Promotion System
CSO (President)

Assistant CSO(Chairman, Lawson Health
Insurance Society)(Supervising industrial physician)Health and Wellness
Promotion Committee

LAWSON INTEGRATED REPORT 2022

Human Resources
Division

Lawson Group Health
Promotion OfficeLawson Health
Insurance Society

Conducting interviews with industrial physicians and publichealth nurses to support employee healthStrategy for Creating Happiness through the Three Promises
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Companywide

Strategy for Creating
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Happiness in Our Communities

Finance –Company Information

Creating imaginative opportunities for children
to visualize work

Social Initiatives

Together with our customers,
30th Anniversary of donation activities
In September 2022, Lawson will celebrate the 30th anniversaryof its placement of donation boxes in its stores, the first
convenience store company to do so.
With the warm support and cooperation of everyone, we havereceived a total of approximately 10.8 billion yen since September
1992 (as of the end of February 2022) through in-store donation
boxes, Loppi donation via multimedia terminals in stores, anddonations using Ponta points and d-points.

Donation box next to a
store register

Lawson Group conducts social contribution activities to realize the concept of“aiming to create a better future for children.” As part of these, we have established
Lawson Group’s “Happiness in Communities” Fundraising, which supports donations
and activities for three organizations. We also pursue activities such as measures
to prevent COVID-19 infections and acceptance of donations for support inemergencies such as earthquakes and torrential rains when needed.

In cooperation with local governments, we arecontinuing our initiative to collaborate with high school
students in developing products using local ingredients. In
January 2022, Lawson received the Judging Committee’s
Encouragement Award from the Ministry of Education,
Culture, Sports, Science and Technology in its 2021
Awards for Companies Promoting Hands-on Youth*1
Activities, in particular recognition of our efforts in the
Tohoku region. As one way to help create an environment
in which children can grow up healthy, we have set up a*2
LAWSON Experience Store in Sendai City’s Student City .
The program is designed to enable elementary school
students to learn about their relationship with society, how
the economy works, what money is, what work is, etc.,
and to develop social independence through experience.
Furthermore, since fiscal 2017, we have been cooperating*3
with Corporate Intern Work , a program in which juniorhigh and high school students work as corporate interns tosolve problems through classes. In fiscal 2021, we helped
the program provide learning experiences for approximately
1,100 junior high and high school students at 27 schools.

Products developed jointly withstudents of Akita Prefectural Kanaashi Agricultural High School

Judging Committee’s Encouragement Award certificate

36

Student City

*1 In 2020, joint development of products with students in the Tohoku region was conducted six times*2 A registered trademark of Junior Achievement Japan (the Japanese headquarters of Junior Achievement, the world’s largest
economic education organization)*3 Managed by Twice Research Institute Co., Ltd.

The Lawson Group’s “Happiness in
Communities” Fundraising donation point
・Lawson Green Fund
 (Organization receiving donations: The National Land Afforestation Promotion Organization)

Video produced under the theme of “making children smile”
With opportunities for extracurricular activities and work experience decreasing due to the COVID-19 pandemic, three videos were produced withthe hope of bringing smiles to children’s faces. We designed the program
to encourage students to have fun at a familiar convenience store near theirschool or home, such as by learning about the SDGs through examples ofour main products: onigiri rice balls, Kara-age-kun, and MACHI café.

・Support Dreams Fund (Scholarship program for children from single-parent families) (Organization receiving
donation: National Federation of Single Parents and Children’s Welfare Associations in Japan)
・“Dream Classes” Fund
 (Organization receiving donations: Japan Football Association)
Please visit the following web page for details.
https://www.lawson.jp/en/csr/fund/Creating Happiness in Our
Communities – Our Story

Katsuju Festival - Forest Classroom for Children
and Parents (Mothers) , an environmental education program using the Lawson Green Fund

Please visit the following web page for details (Japanese only).
https://www.lawson.co.jp/company/activity/topics/detail_jin/1449212_9112.html

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Creating Happiness in Our
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product sales is to reach 500 billion yen in 2025,
and roughly 30% of total SKU count.
*The protein content of “ KARAAGE-KUN Fried Chicken” (5 pieces) is approximately 14g.

Health initiatives

Healthful product sales trends

Initiatives on healthful foods

500(Billion yen)

500
400

37

The Lawson Group is developing a range of initiatives in response to increasing health awarenessamong customers. In 2001 we launched NATURALLAWSON, which has served as a laboratory fordeveloping health-conscious products that havebeen sold at LAWSON stores nationwide.
Sales of these healthful products represented
roughly 20% of our total food products in fiscal
2015, growing significantly to around 30% of total
food products in fiscal 2019, as they found strong
support among customers. We worked to expand
them even further in fiscal 2021 through such measures as the launch of sugar-conscious products
in staple foods categories including rice and noodles. Lawson offers approximately 3,000 healthfulproducts (including national brand products) ina wide range of categories, from dietary staples
and famous KARAAGE-KUN Fried Chicken* toconfections and drinks. Our target for healthful
Reinforcement of 3 themes

300

300

330

360

200

200
100

2015

0

2017

2021

Performance Performance Performance

Goal for2022

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

under the theme of “stay healthy while eating what
you like.” We are therefore strengthening threethemes subject to particularly strong customer demand: the desire to consume fiber, the desire tocontrol sugar intake, and the desire to consume
protein. In addition, the packaging of healthfulproducts, which has differed by category, is being
updated in phases starting from April 2022, withprotein, dietary fiber, sugar content, etc. listed on
the front of the package, and the designs unified tomake them easier to understand.

Goal for2025

LAWSON Farm
Product development targeting deliciousness
and health
In product development, we set 10 healththemes based on our own standards, and arecreating products that allow for the intake of essential nutrients such as vegetables and protein,while controlling sugar and salt content. Since thespread of COVID-19 infections, customers’ awareness of health and food has changed, and there
is a growing demand not only to cut calories andsugar for dieting, but also to actively consume protein and dietary fiber to maintain health.
Our aim from fiscal 2022 is to offer “tastier food”

In order to ensure a stable supplyof farm produce to Lawson Group
stores, we have established LAWSON Farm, a corporation eligible forfarmland ownership with member farms, at 17 locations
nationwide (as of May 2022). LAWSON Farm employs
the Nakashima method of farming, which involves conducting soil diagnoses to develop ideal soil for growing
crops before planting and supplies appropriate nutrition according to the growing conditions to produce
healthy, delicious vegetables and fruits.
Please visit the following web page for details (Japanese only).
https://www.lawson.co.jp/company/activity/social/community/collaboration/#farm

History of initiatives for healthful food

Stay healthy while eating what you like.
More fiber

Low carbs

Protein fortification

Products that show crucial dietaryfiber content at a glance

Use of bran (grain husks) tocontrol carbohydrate intake

Tasty, easy-to-get protein
in products

From 2012

From 2015

From 2018

From 2020

From 2021

From 2022

Low-carb

Dietary fiber

Vegetables

Vegetables

Low salt

Low-carb

Oil

Protein & dietary fiber

Bran bread

Onigiri rice ballswith sticky barley

Smoothie series*1

Motto! Yasai (“morevegetables”) series

Curry featuring the umami ofsalt-conscious ingredients

Expand to dietarystaples

Products made with medium
chain triglyceride (MCT) oil*2

Meeting multiple
needs*1 Packaging changed in FY2022.
*2 Medium chain fatty acids are found in coconut and other palm plants. These oils are characterized by fatty acid chains about half the length of those in common vegetable oils, whichfacilitates digestion and absorption, making them more readily converted into energy after eating.

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Domestic Convenience Store Business
Health initiatives

Strategy for Creating
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Grilled chicken with miso
and malt

Finance –Company Information

Health-care focused stores and stores sellingover-the-counter pharmaceuticals

with Uber Eats*As of the end of May 2022
Fixtures for sales byweightSalad bowl with MCToil dressing
Note: Products shown are examples. Sales may bediscontinued.

Care-focused LAWSON stores with nursing careconsultation desks for seniors
In order to meet the needs of a super-aging society, Care-focused LAWSON stores offer consultations by counselors such ascare managers at permanent nursing care consultation desks andproducts that support seniors and their families. At community
salons, which serve as regional bases for communities and allow multi-generational interaction, we hold events in collaboration
with local governments and private companies on themes suchas health promotion and preventive care, providing local residents
with healthy places to visit, where they can stop by casually.

A Management Foundation for Creating
Happiness in Our Communities

We are expanding the number of stores that sell over-the-counter pharmaceuticals
and prescription drugs through partnerships with dispensing pharmacies and drug
store chains, and training of registered sales personnel. We also continue to open
healthcare-focused stores offering a wider assortment of cosmetics and daily necessities than ordinary LAWSON stores. At some stores equipped with drug-dispensing pharmacies, we are trialing online drug administration guidance and receipt ofprescriptions. In addition, from February 2021, westarted the first deliveries of pharmaceutical products using Uber Eats in Japan at some of our stores
handling over-the-counter pharmaceuticals. This
service handles 57 types* of Type-2 and Type-3
OTC drugs including cold medicines, eye drops,
and stomach medicines. The service meets theneeds of customers who want to purchase medicine
without going outside.
Handling of over-the-counter (OTC) drugs

NATURAL LAWSONNATURAL LAWSON, which operates 134
stores nationwide (as of the end of May 2022)
as a nearby store supporting “beautiful, healthy
and comfortable lifestyles,” has been focusing
on “supporting health and beauty,” “seasonality,” and “safety and reliability.” In doing so, it
offers a unique and carefully selected lineup ofenvironmentally friendly daily products such asdetergents and cosmetics and food productsthat are delicious and healthy while also offering great value. In addition, as part of our initiatives to reduce the amount of plastic used, we
have launched sales by weight of detergent,
hand soap, shampoo, and other products, aswell as dried fruits and nuts in some stores.

Creating Happiness in Our
Communities – Our Story

38

Hospital LAWSON (in-hospital) convenience stores
Lawson has responded to the needs of hospital patients for convenience stores byproceeding to open Hospital LAWSON convenience stores in hospitals, and is now
No. 1 for the number of convenience stores in hospitals. Besides regular products andservices, Hospital LAWSON stores feature a lineup of products designated by hospitals. We also cooperate with individual hospitals in developing customized stores andservices such as hospital wagon sales. Recognizing the hospital as a community in
its own right, we seek the daily happiness of every hospital patient by giving carefulconsideration to their detailed needs.
Ratio of stores in hospitals by convenience store chain*
LAWSON45%
Other chains55%*Research by Lawson (as of theend of April, 2022)

Nursing care consultation
desk

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Domestic Convenience Store BusinessSupport for franchise storesSupporting franchise store management andreinforcing trust

39

Lawson’s closest, most strategic partners are the franchise owners andstore crews who serve customers on the forefront in communities throughout Japan. Strengthening the trust between franchise stores and Lawson,
while aiming for stores to serve as “hubs of refreshment in every community”
which are essential for customers and their local areas, are crucial to realize
the Group’s Corporate Philosophy, “Creating Happiness and Harmony in Our
Communities.” Lawson is using digital technology to reduce the need for staff
and labor in store operations, while headquarters contributes by supporting
franchise store recruitment activities and optimizing their benefit packages,
as well as by reinforcing various initiatives and systems to encourage soundstore management through clear, open communication.
Furthermore, Lawson has a strong focus on increasing franchise store profits, and to ensure that every Lawson employee works more responsibly thanever before to achieve this, from fiscal 2020, the Company’s overall management target was changed from sales to franchise store profits, and the key
performance indicator (KPI) for employee bonuses was changed to franchise
store profits. In the midst of the COVID-19 pandemic, we are supporting efforts to increase franchise store profits by assisting with product assortments
and other measures to improve sales.
Regional society
Abundant
product
lineupSocialcontribution
activities

Franchise
stores
New services
development

Joint business operations

Environmental
activities

LAWSON INTEGRATED REPORT 2022

LawsonHeadquarters

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

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Finance –Company Information

Recommending and supporting multiple store operations
Lawson recommends, moreover, that its franchise owners operate morethan one store. This enables them to spread the risk posed by the emergenceof new competing stores, so that they can maintain stable management while
expanding their business more easily than when operating a single store. A
key aspect of multiple store operations is the development of store managers
who can be relied upon to manage store operations in place of the owner.
From fiscal 2020, Lawson has started the support for store manager training,in which Lawson trainers visit individual stores to provide on-the-job training(OJT) to develop the skills of store managers at franchise stores. As of the endof February 2022, the multiple store ratio stood at 77.6%, while the multiple
store ownership ratio was 47.0%.
Multiple store ownership ratio

Multiple store ratio(As of the end of February 2022)
Excluding LAWSON STORE 100
(%)
50

42.3

44.7

44.8

45.5

47.0

Single store

22.4%
Multiplestores25

77.6 %

0

2017

2018

2019

2020

2021

(Fiscal year)

Management Owner (MO) system
Lawson has established the Management Owner (MO) system to support
franchise owners who open additional stores based on a reinforced partnership with the Company. The MO system is making a substantial contribution
to the progress of LAWSON chain as a whole, not only by enhancing thebrand image of LAWSON chain through development of model stores andsales floors, but also by providing a platform for MOs to exchange opinions
or propose improved work procedures to headquarters management personnel as representatives of the franchise stores in their region. As of the end of
February 2022, there were approximately 200 MOs operating stores in various
regions of Japan.

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Multiple store ownership and the Management Owner (MO) system
Role of the Management Owner (MO) in

business management

Multiple stores

Average No. of stores managed:
Average No. of SCs:

Multiple storesSingle store
Average number
Approx.
of owner crew

15

Owner + 1 store manager
Average number of crewat 2 stores
Approx.

30

Owner + 3 store managers
Average number of crewat 4 stores
Approx.

60

3

11 /

SC

SC

(store consultant)(store consultant)

Making rounds and providing
guidance to individual stores

Making rounds and providing
guidance to individual storesConsiderations when entering a franchise contract
In matching new aspiring franchisees with franchise contracts, we generally
take care to present them with existing properties including current sales andprofitability status so that they can feel reassured in concluding franchise contracts and getting involved in store operations. Meanwhile, upon confirming
their intention to undertake management, we proceed with contract signingand opening of the new property. Furthermore, from fiscal 2020 we created a
new 5-year contract package as an option for those who feel less confident
about signing up for the existing 10-year franchise contract.
Safe management by stores with visible performance results
Existing
storesExisting
storesChange in the
direct store
management
forma

Older
franchise
stores (storeswith expiringcontracts)

Pre-existing
management
base

Start of new
franchisestore
management

Confirmation of the candidate’s intention to undertake management
before completing a new property contract

Headquarters
Existing franchise storesSelection of new store Confirmation of intention toproperty candidates
undertake management

Headquarters
New property
contract

Opening

Communication to build strong partnerships with franchise stores
Lawson has established a number of opportunities aimed at strengthening
its partnerships with franchise stores by enabling members of the Board of Directors, including the President, to communicate directly with franchise stores. We place
special value on feedback from our franchise
stores, which operate in direct contact withcustomers, and seek to achieve mutual consideration and mutual prosperity with themthrough close communication.

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Lawson Seminars (convened twice annually for all franchise stores)
The President and other members of Headquarters management share theCompany’s policies and directions with the franchise owners by providingthem with detailed explanations of future business strategies, and informing
them of product development planning in conformance with the policies.
Area meetings (convened monthly at branch offices throughout Japan)
Franchise stores from the same areas gather to share details of sales activities planned for the following month as well as of their past successes, orto exchange opinions with the aim of helping individual stores improve their
management capabilities.
Lawson Owner Welfare Association board meetings (2 times/year)
Meetings of Headquarters executive officers and representatives selectedfrom among franchise owners in each area convene twice a year. A meeting
hosted by Headquarters for exchange of opinions is held on the same day,attended by the President and Headquarters management, to provide a venue
for joint consideration of a range of issues.
MO General Assembly (1 time/year)/MO Executive Committee meeting(2 times/year)
Lawson’s management owners meet regularly with headquarters management to exchange opinions as representatives of their regional franchise
stores in accordance with Lawson’s Group-wide practice of participation in
management.

40

Lawson Owner Hotline (as needed/available to all franchise stores)
In July 2019, Lawson established a system of both internal and external
telephone consultation contacts (in law offices) to enhance communication
with franchise owners.
Since fiscal 2020, these communication venues have been changed to an
online system in efforts to prevent COVID-19 infections, among other measures.
We also provide for direct communication with the President (as needed)
and conduct questionnaire surveys at member stores (once a year).

Lawson Seminars

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Support amid worker shortages with digital innovation
LAWSON has introduced various systems to improve the efficiency of store
operations in order to address the recent labor shortage problem. This reduces the burden on stores and helps them become more efficient.

Supporting work style reforms
Owner support system
From September 2020, we deployed around 60 Lawson staff at eight offices nationwide to support franchise store owners in taking leave.

Automatic change-dispensing POS registers
Adopted at all stores in fiscal 2018. Non-Japanese and seniors can easily operate the system, greatly reducing the workload of
cashiers, who no longer have to confirm the money re- Service available
three languages
ceived or make change. Since cash cannot be taken in inChinese(simplified)Vietnamese Nepaleseor out, this has led to a reduction in robberies.

One-time personnel recruiting service “matchbox”
Provided by our affiliate company Lawson Staff Co., Ltd.
for LAWSON stores throughout Japan, this service was introduced in April 2021. Stores can advertise online for people to fill open shifts, and registered job seekers can apply
to stores that suit their conditions, allowing stores to selectpersonnel. The service has been put to highly effective use
by franchise store owners seeking to find workers for shifts
during times when they are short staffed, or to fill sudden
absences.

Time required to complete transactions
and inspect cash registers

41

Message from Top
Management

1.5 person hour saved!

Semi-automatic ordering / planned orders
In semi-automatic ordering, AI automatically calculates the optimal productassortment for each store and the number of orders for each product basedon individual store data, and in planned ordering, replenishment orders areautomatically placed when product inventory falls below a certain level. Daily
ordering operations can be performed quickly and accurately, while at thesame time reducing waste and sales opportunity losses.
Time required for ordering

2.0 person hours saved!

Tablets
Adopted at all stores in 2017. Even inexperienced store crews can work smoothly by
sharing work schedules that visually present
the “When?” “Who?” “What?” and “How?”of customer service, merchandise display,cleaning, and other tasks. Recommendations
for counter food assortments and the item
production numbers are also displayed basedon store data.

LAWSON INTEGRATED REPORT 2022

Promoting the use of learning tools for novice store
crew members
We have created a learning tool called “Starting Work at
Lawson” that contains all the operations that need to belearned by new crew members (part time) when starting thejob. This tool enables them to quickly learn about things
such as basic store rules and how to serve customers at
the register. We have held Human Resource Development
Courses for franchise store owners, store managers andcrew leaders who need to train crew members. we also
take care to provide easy-to-understand visual training videos and training
tools for non-Japanese crew members, including explanations of Japaneseculture, to ensure that store crew members can feel at ease and enjoy working
at the same store for a long time.
Lawson Owner Welfare Association
For a monthly membership fee of 1,000 yen per store, this organization provides franchise stores with menus of benefits that embody the three core principles of “comfort,” “health” and “peace of mind.” The wide range of benefit
packages includes various allowances, mutual aid and compensation for franchise owner members and their families, as well as for store crew members.

Strategy for Creating Happiness through the Three Promises
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Initiatives for respect for human rights
Lawson Group Human Rights Policy & Promotion System
In June 2021, we established Lawson Group Human Rights Policy as our
top-level basic policy on human rights to promote SDGs and ESG-based
management. To advance this policy, each department, under the supervisionof the CRO, takes initiative to promote respect for human rights in their respective activities. The progress of initiatives in each department is regularly
reviewed by the Compliance & Risk Management Committee, chaired by theCRO.

Stakeholder relations
Initiatives with suppliers
In order to gain the support of our business partners for the various policies
of Lawson Group, we send them written information informing them of ourpolicies. We also request their cooperation with surveys to check on the status of their sustainability efforts.
Numbers of group policy guidelines and survey requests
Product Division

Construction
DivisionManagement
Division, etc.

Group policy guideline documents sent

662 companies

228 companies

232 companies

Questionnaire survey requests

466 companies

253 companies

140 companies

Full text of the Lawson Group Human Rights Policy
https://www.lawson.jp/en/csr/human_rights/

Human rights due diligenceLawson conducts human rights due diligence to identify and remedy any
negative human rights impacts that might arise from its business activities.
If Lawson is found to have caused or been involved in any negative impact
on human rights, we will work to remedy the situation. In addition, the resultsof human rights due diligence will be regularly evaluated and, if inadequate,
corrected.
Human rights education and awareness-raising
LAWSON provides education and promotes awareness so that all people
involved in its business activities understand the importance of respect forhuman rights and promote efforts to respect human rights.
Consultation service for human rights issues
A consultation service contact point for Lawson employees has been established and is in operation, providing consultation and receiving internalreports regarding compliance and risk management issues, including humanrights violations.

42

Consultation services for each stakeholder
We have established and are operating various contact points to receiveand handle consultations and reports on a wide range of human rights issues.
These include the Supplier Hotline for suppliers, the Crew Hotline for store
crews, and the Owner Hotline for franchise store owners.
Stakeholder engagement
Since May 2022, we have been participating in the Stakeholder Engagement Program sponsored by the Japan Committee of the Caux Round Table for business leaders. Based on the issues and opinions raised by NPOs/
NGOs, experts, academics and others, we will apply these activities to ourefforts to promote respect for human rights.
We also provide opportunities for dialogue on human rights with our major business partners, calling for their understanding and support of Lawson
Group Human Rights Policy and sharing the status of our efforts to respecthuman rights.

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Strategy for Creating Happiness through the Three Promises
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Companywide
Developing and operating a supply chain with consideration for society (human rights, etc.) and the environment
In order to meet our customers’ demands for high-quality products andservices made in an appropriate environment, and in accordance with theLawson Group Transaction and Procurement Policy, we cooperate with our
suppliers and other stakeholders to improve the lives of those involved in
the production and processing of raw materials. At the same time, we takenatural resources and the global environment into consideration as we aim
to realize a sustainable supply chain.

43

Respecting human rights and the naturalenvironment by using coffee beans from
Rainforest Alliance Certified farms
For our MACHI café in-store freshly brewed coffee service, we use only
coffee beans from Rainforest Alliance Certified farms*. This certification isawarded to farms that use sustainable farming methods to meet rigorous
environmental, social and economic standards.
At the Ipanema plantation in Brazil, where we procure our coffee beans,
we are working to improve the working environment for plantation workers
and support the education of the children. We are also working to protect thelush greenery by creating a nature conservation area within the plantation.
For example, 200 honeybee hives have been set up to promote pollination of

For more information:ra.orgWe provide a comfortable working environment for workers

LAWSON INTEGRATED REPORT 2022

Specially-designed cups drawn by artists with disabilities

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Finance –Company Information

various native plants and increase biodiversity.
In addition, the cups used to serve coffee were, for a specified period,
designed by artists with disabilities. This initiative is the culmination of an
idea selected from Lawson’s internal open competition project.
*Not applicable to the single origin or decaffeinated series.

Caring for forests by handlingforest-certified products
FSC ® certification and PEFC certification
implement mechanisms by which forests canbe utilized while solving problems that threaten
them, such as deforestation and illegal logging.
Lawson endorses these forest certifications
and is developing and marketing paper products
and paper containers and packaging made fromcertified lumber.
We use FSC ® -certified and PEFC-certified
products, which are made from wood produced
from properly managed forests, recycled
re s o u rc e s , a n d o t h e r r a w m a t e r i a l s f ro mcontrolled sources, for our original paper cups
and beverage cartons.
We will continue our efforts to handle products
and procure raw materials that are sustainable
and socially and environmentally friendly.

Lawson has signed the United Nations Global Compact and will contributeto the development of a sustainable society by supporting and practicing theten principles in four areas consisting of human rights, labour, environment andanti-corruption.
Under our Group philosophy, we will earnestly consider what we can dofor our customers, our communities and the Planet and actively take on thechallenge of resolving medium- and long-term issues involving the environmentand society.

Primary products with forest certification

Environmentallyfriendly paper
cups

PEFC/31-44-1452
Promoting
Sustainable Forest
Management
www.sgec-pefcj.jp

Strategy for Creating Happiness through the Three Promises
About Lawson!

Environmental (Machi) FriendlinessCompanywide

Goal for2030 (KPI)

Reduce byCreating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

Goal for2030 (KPI)

30% v.2017 levels

Efforts to reduce the amountof plastic usage
Experimental inter-industry reuse of coffee
cups
Beginning in April 2022, we participated in anexperiment to provide cups that can be reused
repeatedly at MACHI café, an in-store freshly
brewed coffee service, at some LAWSON and
NATURAL LAWSON stores in Tokyo.
The system provides reusable cups at participating stores to those who wish to use them,and the cups can be returned at any participating store.

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Management

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Finance –Company Information

Food loss per store
Reduction by

50% from 2018 level

Reduced food loss

Conceptual imageof a return box
Service conceptual image

Donating the surplus stock of original products on a regular basis
Since August 2019, we have been regularly donating original confectionery
and processed foods that are past their dates for delivery to our stores, aswell as Christmas cakes, osechi traditional New Year’s holiday dishes, daily
necessities, and various other types of products. In fiscal 2021, we provided
a total of approximately 2.4 million products to households in need, children’s
cafeterias, orphanages, and other facilities.

Adoption of plastic spoons and forks with slottedhandles, wooden spoon option
From April 2022, we began phasing in spoons andforks with slots opened in the handles and shorter
lengths to reduce the amount of plastic used. This is
expected to reduce annual plastic use by approximately
67 tons. Wooden spoons are also being used on a trial
basis in some areas so that stores may have that option
available in the future.
Original PET bottled beverage labels reduced tohalf-size
A total of six original PET bottled beverage products
have been switched to half labels, reducing the amountof plastic used for labels by approximately 50%. Thisis expected to reduce the amount of plastic usage byapproximately 100 tons per year.

Use of AI to optimize product order quantities
In order to ensure that the stores have the products that customers want
and to prevent wasteful disposal, a semi-automatic ordering system has been
introduced, which uses AI to ensure that the optimal number of products isordered.
In addition, discount stickers are utilized to offer sales discounts on readymade food products with short expiration dates, fast food prepared in thestore, and products from the Machikado Chubo kitchen.

Maindonationrecipients

Before thechangeAfter thechangeFood Bank Japan Promotion Group,
Kodomo-Takushoku Ouen Dan,
Shinagawa ward (Shiawase Shokutaku
Jigyo), Kyoto Prefecture (Kyoto Food
Center), WeSupport Family, Save theChildren, etc.

44

Kodomo-Takushoku (homemeal delivery for children)

We are also experimenting with new support measures such as online distribution of free vouchers for Kodomo-Takushoku users that can be redeemed
for boxed meals picked up at the store.
In fiscal 2022, we will expand the scope of our support to include Ukrainianevacuees, and we are also promoting efforts to link food loss reduction to theresolution of other social issues.
LAWSON INTEGRATED REPORT 2022

Strategy for Creating Happiness through the Three Promises
Environmental (Machi) Friendliness

About Lawson!

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Management

Companywide
CO2 emissions reduction

CO2 emissions reduction
Lawson has set itself the goal of reducing CO2 emissions per store by 50%
compared to 2013 levels by 2030. To achieve this target, we are working to
reduce electricity consumption in store facilities, with initiatives such as introducing energy-saving refrigeration systems and solar power generationequipment, and promoting the “Ten Energy-saving Rules” in stores.

Introduction of CO2 refrigeration systems

45

Lawson started installing highly energy-efficient non-chlorofluocarbonic(CO2 refrigerant) freezing and refrigerating systems in 2010. Approximately
4,700 stores have installed the systems (as of the end of March 2022). Thesesystems use CO2 refrigerants whose impact on global warming is said to besmaller than that of CFCs, and therefore can materially reduce greenhousegas emissions. Also, they are very energy-efficient.

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CO2 emissions per store
Reduction by

50% from 2013 level

Implementation of “Ten Energy-saving Rules” at
the stores
Lawson has established the “Ten Energy-saving Rules” to improve the operational efficiency of in-store refrigeration and air conditioning systems, and reduce
the total amount of electricity used. Based on these rules, we perform maintenanceduties such as adjusting the set temperature, and cleaning filters at each store.
1. Clean refrigerator and air conditioner filters once a week
2. Keep air conditioner temperature settings at 27°C in summer, 18°C in winter, and OFF in
spring and autumn
3. Minimize the time for which doors to walk-in and storage freezers and refrigerators are
opened while moving products in and out
4. Keep the area around outdoor units of refrigerators and air conditioners neat and tidy
5. Restock summer products that are frozen in-store from stocks that have been refrigerated
6. Restock hot drinks with products that have been stored at room temperature
7. Do not overfill storage freezers and refrigerators
8. Turn off lighting and air conditioning in back rooms and storage areas when no one ispresent
9. Arrange products so that they do not disturb the air curtain on open cases
10. Minimize the number of times storage freezers and refrigerators are opened

Submitted a letter of commitment to obtain
science-based targets (SBT) certification
To accelerate our efforts to combat climate change, we submitted a commitment
letter in June 2022 to obtain SBT certification, which certifies that LAWSON Group’s
greenhouse gas reduction targets are consistent with the Paris Agreement.
We will continue to take on the challenge of achieving higher goals to realize a decarbonized society. We will also seek to reduce climate change risks and seize opportunities in our business activities.
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Environmental (Machi) FriendlinessMessage from Top
Management

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Companywide

Goal for2030 (KPI)

CO2 emissions reduction

Supplying renewable energy through one of Japan’s top
domestic off-site power purchase agreements (PPAs)* toapproximately 3,600 LAWSON stores
We reached an agreement with Mitsubishi Corporation to study collaboration
on supplying renewable energy to LAWSON stores in order to realize a decarbonized society and to ensure a blue and abundant global environment for the
future. The plan calls for supplying renewable energy from Mitsubishi’s new solar
power generation facilities to approximately 3,600 LAWSON stores (including
some in the Kanto Koshin region, as well as Gifu, Shizuoka, Aichi, and Mie prefectures).
Having begun installing solar power generation equipment in 2012, we havecompleted installation in approximately 2,000 of our stores. To further promote
the use of renewable energy, we will gradually introduce off-site PPAs, in which
renewable energy generated by solar power plants off store premises will besent to our stores, starting in fiscal 2022.
The scale of the solar power generation facilities is expected to be approximately 45 MW, which is equivalent to the electricity consumption of approximately 9,000 ordinary households. According to calculations, the equivalent of a
19,000t reduction in CO2 emissions can be expected.
* In a power purchase agreement (PPA), a renewable energy power plant is constructed in a remote location and the renewableelectric energy from the plant is supplied via the power transmission and distribution network over an extended period.

■Off-site PPA system (conceptual image)Power generation
Power generation company(Mitsubishi Corporation subsidiary)
Renewable energy
Electric power retailer
development(Solar)Approx. 500 locations

Strategy for Creating
Happiness in Our Communities

Electricity flow
Renewable electricity

Conventional electricity

Electric accessCompany
accessing electricity

LAWSON store

A Management Foundation for Creating
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Finance –Company Information

CO2 emissions per store
Reduction by

50% from 2013 level

CO2 emissions generated by our supply chain for fiscal 2021*
CO2 emissions in total Approx. 5,462.3 thousand tons
Method of calculating greenhouse gas emissions in the supply chain
Calculated from the Database of Emissions per Base Unit Ver.3.2, for calculating greenhouse gas
emissions of organizations through the supply chain.
Scope/category
Scope 1
(Direct emissions)
Scope 2
(Indirect emissions)

Gasoline consumption of company vehicles

4.2

Category 2

Electricity consumption of the Headquarters, regional offices, branches,and stores
Raw materials purchased (Private and national brand products, plastic
shopping bags, etc.)
Buildings, furniture and fixtures etc., and information system hardware

Category 3

Electricity consumption associated with procurement of electric power

146.9

Category 4

Energy consumption of the delivery centers

139.2

Category 5

In-store waste, and industrial waste due to store closures and remodeling

20.9

Category 6

Business trips of Lawson Headquarters’ employees

0.8Category 7

Commuting by Lawson Headquarters employees

1.51.5

Category 12

Disposal of containers, chopsticks, and plastic shopping bags

22.7
5,462.3

Category 1

Scope3(Other indirectemissions)

Emissions(kt-CO2)

Emissions covered

Total

1,027.5
4,010.5
88.2

46

*D
 oes not cover all of Lawson’s supply chain.
Scope 2 includes electricity consumption by stores from 2020.

Reducing CO2 emissions from delivery trucks
We aim to improve the efficiency of our nationwide logistics network and reduce our environmental impact. Since 2020, we have beenworking to improve the efficiency of our timetables by using AI to create delivery schedules
automatically. In addition to this, we are also
working to reduce CO2 emissions by experimenting with and verifying new technologies,
such as fuel cell trucks and electric trucks.
LAWSON INTEGRATED REPORT 2022

Executives

Message from Top
Management

About Lawson!

Member of the Board

Sadanobu Takemasu

47

Satoko Suzuki

Independent
officer2

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Finance –Company Information

Corporate auditors

Masayuki Itonaga

Miki Iwamura

1

2

4

5

Independent
officer

Syuichi Imagawa

Jun Miyazaki

Eiko Tsujiyama

3

Kiyotaka Kikuchi

Yuko Gomi● Profile1

Creating Happiness in Our
Communities – Our Story

Independent
officer

Keiko Yoshida

1

2

4

5

Independent
officer3

Independent
officer● ProfileYears as a Member of the Board: 8
President and CEO, Representative Director, Chairman of the Board,
and CSO
Born in 1969, 52 years old. Appointed Senior Executive Vice President, Representative Director in 2014. Appointed President andCEO, Representative Director in 2016. Mr. Takemasu has led theentire Group with a focus on the domestic convenience store business, as well as contributed to the improvement of corporate value and the achievement of sustainable corporate management as
President and CEO, Representative Director, Chairman of the Board,
and CSO* of Lawson, Inc.
*CSO: Chief Sustainability Officer
Years as a Member of the Board: 0
Executive Vice President, Member of the Board, and CFO
Born in 1967, 55 years old. Through his duties at Mitsubishi Corporation and secondment at overseas companies, for example, Mr.
Itonaga has gained extensive knowledge across all areas of management with a focus on financial affairs and accounting. He has
also gained a deep knowledge of all areas of corporate management from serving as the Representative Director and President of
Mitsubishi Corporation Financial and Management Services (Japan)
Ltd., a subsidiary of Mitsubishi Corporation.

3

Years as a Member of the Board: 4
Member of the Board (outside)
The Lead Independent Director
Born in 1965, 56 years old. Ms. Iwamura has been proactively making suggestions and disseminating information on workstyle reforms
and the promotion of women’s advancement in the workplace. She
also has deep insight into management, marketing, and brand reinforcement using digital big data through her work in marketing in the
Asia Pacific and Japan region for a global IT company.

4Years as a Member of the Board: 2
Member of the Board (outside)
Born in 1977, 44 years old. Ms. Suzuki has served as a member ofpublic and private committees related to “hospitality management”
and “globalization of the service industry.” She has published many
papers, presented at academic conferences and received awards.
In addition, she has a wealth of academic knowledge on consumer
behavior, marketing and brand management.

5

Years as a Member of the Board: 1
Members of the Board
Born in 1966, 55 years old. Mr. Kikuchi has deep knowledge on the
consumer industry field, mainly in the food industry, through his duties at Mitsubishi Corporation as well as his secondment to a meat
processing manufacturer.

1

Years as Corporate Auditor: 2Standing Corporate Auditor
Born in 1958, 63 years old. Mr. Imagawa has expertise in complianceand risk management, as well as convenience store operations andthe franchise business based on experience acquired as manager incharge of the Store Operation Division, Product and Logistics Division, branch manager, vice president of CVS Operations Company
in Japan, and CR and Human Resources Executive Officer.

3

Years as Corporate Auditor: 11
Corporate Auditor (outside)
Born in 1947, 74 years old. Ms. Tsujiyama has in-depth knowledgeof corporate finance and accounting having served as a member ofthe Business Accounting Council of the Japanese Financial Services
Agency as well as serving as chairman for the National Tax Councilof the Japanese National Tax Agency, and as an honorary professor(accounting) as an academic and certified public accountant.

2

Years as Corporate Auditor: 1Standing Corporate Auditor
Born in 1955, 66 years old. Mr. Miyazaki has expertise in convenience store operations and the franchise business, as well as
extensive insight into compliance and risk management, having
been responsible for the Group’s public relations strategy, humanresource strategy, compliance and risk management, and promotion of health and productivity management in his role as the manager in charge of Corporate Communications, Compliance & Risk
Management, Human Resources (deputy in charge), Deputy CSO(Healthcare), and Chairman of Lawson Health Insurance Society.

4Years as Corporate Auditor: 3
Corporate Auditor (outside)
Born in 1972, 50 years old. Ms. Gomi has extensive business experience and broad insight based on her wealth of experience incorporate legal affairs and risk management as an attorney, as well
as serving as a Legal Advisor (part time) for the Minister’s Secretariatof the Cabinet Office.

5

Years as Corporate Auditor: 2
Corporate Auditor (outside)
Born in 1954, 68 years old. As a certified public accountant, Ms.
Yoshida is a representative of an accounting firm and has a deep
knowledge of tax affairs, accounting and management.

Senior Vice Presidents as of May 25, 2022
Senior Executive Managing Officer
Executive Managing Officer
Executive Managing Officer

Masakatsu Gonai
Yuichi Wada
Motonobu Miyake

LAWSON INTEGRATED REPORT 2022

Executive Managing Officer
Executive Vice President
Executive Vice President

Hitoshi Fujii
Akihito Watanabe
Tatsushi Sato

Executive Vice President
Executive Vice President
Executive Vice President

Hiroyuki Karasawa
Tatsuya Murase
Suguru Kawabata

Executive Vice President
Senior Vice President
Senior Vice President

Kazuhiro Wakui
Yasuhiko Hirokane
Satoshi Kumagai

Senior Vice President
Senior Vice President
Senior Vice President

Miwako Tate
Takeji Hino
Tomoki Takanishi

Senior Vice President
Senior Vice President
Senior Vice President

Katsuaki Sakai
Gyo Katsuta
Noboru Kakiuchi

Senior Vice President
Senior Vice President

Hiroyuki Oki
Hiroko Otani(Excluding Board members’ additional posts)

Executives
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About Lawson!

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
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Finance –Company Information

Members of the Board and Corporate Auditors (as of May 25, 2022)

Name

Position

Nomination andNumberCompensation
Outside Independentof years
Advisory
Officers
officerin current
Committee*The double circle, ◎,position

Main area of experience and expertise
Responsibilities and concurrent positions

Corporate
management

indicates the chairperson.

Corporatefinance/accounting

Legal affairs/
compliance Marketing
and risk

IT/DX

Globalexperience

Franchise
and retailbusiness●●●

Member of the Board
Sadanobu
Takemasu

President and CEO,
Representative
Director, Chairmanof the Board

8

CSO

●

Masayuki
Itonaga

Executive Vice
President, Memberof the Board

0

CFO

●

Miki
IwamuraMember of theBoard
The Lead
Independent
Director

4

Google Japan LLC Vice President,
Asia-Pacific, Japan (Marketing)●

SatokoSuzukiMember of the
Board

2

Associate Professor, Hitotsubashi
University Business School, School ofInternational Corporate Strategy

Kiyotaka
KikuchiMember of the
Board

1

Executive Vice President, Group CEO,
Consumer Industry Group (Concurrently)
Division COO, Retail Div., Mitsubishi
Corporation

○
○

○
○

○
○
○

●
●

●
●
●

●

●

●

●
●

●

●

●

48

Corporate Auditor
ShuichiImagawa

Standing Corporate
Auditor

2

—

●

●

●

Jun
MiyazakiStanding Corporate
Auditor

1

—

●

●

●

Eiko
Tsujiyama

Corporate Auditor

○

○

◎

11

Professor Emeritus and Auditor, Waseda
University

Yuko Gomi

Corporate Auditor

○

○

○

3

Lawyer (Partner), T. Kunihiro & Co.
Attorneys-at-Law

Keiko
YoshidaCorporate Auditor

○

○

○

2

Representative, C.P.A., Shiba Accounting
Service Office●●●

LAWSON INTEGRATED REPORT 2022

Corporate Governance
Characteristics of Corporate
Governance49

We believe that continuous improvement in the value weoffer stakeholders contributes to the enhancement of Lawson’s corporate value. Accordingly, we strive not only tocomply with laws, regulations and social norms, but also toreinforce our corporate governance by improving the soundness and transparency of management through honest andconsiderate behavior based on high ethical standards basedon the Group Philosophy and the Lawson Corporate Conduct Charter and the Lawson Code of Ethics.
It also requires active disclosure in accordance with the“Basic Principles Concerning Information Disclosure.” Lawson selects people with different specialties and experienceas candidates for membership of the Board to assure diversity on the Board of Directors and enable appropriate
decision-making and supervision. In addition to the independence standards determined by Tokyo Stock Exchange,
Inc., Lawson has established its own Judgment Criteria Regarding Independence as a basis for selecting several independent officers (one third or more for members of theBoard) for purposes of ensuring management transparency
and fairness. Moreover, by introducing the Executive Officer
System, we have divided management and supervision frombusiness execution to enable quick decision-making andbusiness execution. It should be noted with respect to thecorporate auditors that we elect candidates for the positionof corporate auditor based on their possession of the extensive financial, accounting, risk management and/or legal
expertise and experience required to fulfill auditors’ duties.
Recognizing that the succession plan for the CEO and President is an important managerial issue, in order to raise thelevel of procedural objectivity, timeliness and transparency,
discussions shall be held by the Nomination and Compensation Advisory Committee, which is a consultative body to

LAWSON INTEGRATED REPORT 2022

Message from Top
Management

About Lawson!

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

the Board of Directors composed solely of part-time officers(five out of a total of six of whom are independent officers),
and the Representative Director and President shall present to this Committee the qualities and attributes required of
the CEO of the Company and the method of nominating the
successor, and shall gain its approval.

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Lawson’s efforts related to the Corporate Governance
Code (“CG Code”) are also published in various reports, including corporate governance reports, convocation notices
for general meetings of shareholders, and securities reports.
Please visit the following site to see the content of disclosure
items related to the individual rules in the CG Code.

Corporate Governance CodeFor details of the Corporate Governance:
https://www.lawson.jp/en/csr/governance/

Five general principles
1. Securing rights and equality of shareholders
2. Appropriate collaboration with stakeholders other thanshareholders
3. Ensuring appropriate information disclosure and transparency
4. Board of Directors’ responsibilities
5. Dialog with shareholders

Details of major corporate governance measures implemented since 2000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Members of the Board(persons)
Outside members of theBoard (persons)

18

20
2

8

9

3

5

4
1

1

2002 – Compensation Advisory Committee established.
Ensuring transparencyof Board members’
compensation

8

9

3

Of which independent
officers (persons)Female members of theBoard (persons)

*1

7

7

3*2

5

2
2

5
2

3

2

3

2

2014 – N omination and Compensation
Advisory Committee established.

2005 – Board members’ retirement benefit system abolished.
2005 – Share-based stock compensation options for members of the Board introduced.
2012 – Corporate auditors’ retirement benefit system abolished.

Ratio of shares held by
Mitsubishi Corporation(major movements)

2001 Mitsubishi Corporation becomes largest shareholder.

April 2015

February 2017

33.4%

50.1%

*1 The number of members of the Board is as of the close of the General Meeting of Shareholders each year, except for 2014, when there were nine members of the Board up to
July 31 and eight members after August 1.
*2 The reduction in the number of outside members of the Board in 2017 was because two no longer satisfied the requirements of outside members of the Board due to the increasein the ratio of shares held by Mitsubishi Corporation.

Corporate Governance
Message from Top
Management

About Lawson!

Corporate Governance System
Equipped with an agile decision-making process, Lawson
has moved quickly to construct a highly transparent and independent corporate governance system. Independent officers
who are considered to have no conflict of interest with the general shareholders have been appointed to comprise at least one
third of the members of the Board. Moreover, five women havebeen appointed to the positions of member of the Board or
corporate auditor with a view to promoting diversity with thecomposition of the executive officers taken into consideration.
They are contributing to reinforcing the corporate governancesystem from various perspectives. Following the voluntary establishment of the Nomination and Compensation Advisory
Committee to express its opinion on the candidates for the positions of member of the Board and representative director on
the Board of Directors, meanwhile, independent officers havebeen selected to fill five of six positions as Committee members, thus creating a system where opinions can be expressed

Creating Happiness in Our
Communities – Our Story

with a high degree of independence. Going forward, we willcontinue our efforts to ensure management transparency andindependence, and to improve corporate value to meet the expectations of all our stakeholders.

Special circumstances with the potential
to seriously impact corporate governance
Mitsubishi Corporation, our parent company, currently holds
50.2% of Lawson’s voting rights (50,150,000 shares). Lawson has a business alliance with Mitsubishi Corporation, but
Lawson’s internal organizations make independent decisions
regarding management and business activities in general, ensuring Lawson’s independence as a listed company conducting
business operations.
In addition, in the business alliance agreements concluded
with Mitsubishi Corporation, it has agreed to conduct a business alliance that respects Lawson’s independence and auton-

General Meeting of Shareholders

Special Committee
Outside directors: 2
Outside corporate auditors: 3(5 of whom are independent
directors)

Appointment and dismissal
Consult
ProposeConsult
ProposeAppointment, dismissaland supervision

Operational Organization
Financial Reporting
Internal Control Committee
SDGs Committee
Compliance & Risk
Management Committee
Information Security
Management Committee

Appointment and dismissal

Board of Directors
Outside directors: 2(2 of whom are independent directors)
In-house directors: 3
Total: 5

Auditing

Appointment and dismissal

Audit & Supervisory Board
Outside corporate auditors: 3(3 of whom are independent directors)
In-house corporate auditors: 2
Total: 5

Discussion
and reporting

Auditing
Dismissal

Certified public accountant

Accounting auditing
Auditing

President
Management meeting
Internal Audit Office
Corporate divisions

Division and Company
Investment and management

Subsidiaries and Affiliates

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

omy. We recognize that our independence is ensured by ourparent company.
As an independent listed company, Lawson determines theterms and conditions of transactions after comparing and examining the prices offered by other companies, prevailing market prices, etc., even in the transactions with Mitsubishi Corporation, Lawson’s parent company, and its group companies,
just like in transactions in general, in order not to bring disadvantage to minority shareholders.
Also, a Special Committee may be established at any time todeliberate and review material transactions or actions that involve a conflict of interest between Mitsubishi Corporation andminority shareholders. The Committee, comprising five members including the head of the Committee who are independent
outside directors and independent outside corporate auditorsthat are independent from the parent company, is a system forreviewing the necessity, rationality, validity and fairness of thematerial transactions or actions based on the high level of independence, and for reporting to the Board of Directors.

50

Operation status of the Boardof Directors

Corporate Governance System (As of May 26, 2022)

Nomination and Compensation
Advisory Committee
Non-executive directors or part-timeoutside corporate auditors: 6 (5 ofwhom are independent directors)

Strategy for Creating
Happiness in Our Communities

Comments

Lawyers

The Company’s Board of Directors is made up of five members of the Board, including three males and two females, twoof whom are independent members of the Board. The Boardof Directors not only decides important management matterssuch as issues stipulated by laws and regulations and the Articles of Incorporation, but also monitors the conduct of business operations by its members of the Board. The Board met
15 times in fiscal 2021. Furthermore, the Company has adopted
an executive officer system and entrusts authority to executive
officers to expedite business execution. Moreover, the Company holds management meetings as a supplementary decision-making body to the Board of Directors. The management
meeting comprises personnel who are generally of executive
managing officer level or above and members designated by
the President and CEO (and met 15 times in fiscal 2021).
LAWSON INTEGRATED REPORT 2022

Corporate Governance
About Lawson!

Status of committees

51

The Company has established and operates various committees. These include the SDGs Committee, which conducts
a companywide response to the SDGs; the Compliance & Risk
Management Committee, which supervises the complianceand risk management system; the Information Security Committee, which supervises the information security maintenanceand management system; and the Financial Reporting Internal
Control Committee, which supervises the maintenance and effectiveness evaluation of internal controls over financial reporting; as well as Lawson Group Sweeping Transformation Executive Committee, which promotes companywide strategies forachieving Challenge 2025; the Digital Transformation Promotion Committee, which examines and promotes digital transformation; and the Health Hub Promotion Committee, which plansand proposes strategies for enabling the entire Lawson Groupto function as a community health hub.

Policy on nomination andstandards for appointment andindependence of candidates
for member of the Board
Lawson has established criteria for appointing officers andfor making judgments regarding independence. The voluntarily established Nomination and Compensation Advisory Committee serves as an advisory body, moreover, that expresses
its opinion to the Board of Directors regarding nominations ofcandidates for the positions of member of the Board and representative director. It should be noted with respect to candidates
for corporate auditor that they are individuals with the financial,accounting, risk management and/or legal experience and expertise required to fulfill the duties of corporate auditors whose
candidacy is approved by the Audit & Supervisory Board.

LAWSON INTEGRATED REPORT 2022

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information<Appointment criteria for officers>Persons whose views resonate deeply with Lawson Group’s
Corporate Philosophy, “Creating Happiness and Harmony in
Our Communities.”
Persons who can contribute to sustainable growth of Lawson
Group and enhance its corporate value.
Persons with good mental and physical health that will notinterfere with pursuit of their corporate duties.
Respected persons with dignity and high ethical standards
who comply conscientiously with laws and regulations.
Persons capable of making objective judgments, and endowed with excellent foresight and insight.
Persons possessed of a wealth of experience and expertise incorporate management or specialized fields.
Persons who are able to ensure sufficient time to conduct
their duties.
Persons to whom none of the grounds for disqualification
specified in the Companies Act.
As concerns independent officers, persons in compliancewith the Judgment Criteria Regarding Independence stipulated by Lawson.

such as attorneys who receive money and assets other than
executive compensation from Lawson Group, and whose remuneration from Lawson Group has amounted to 5 million
yen or more annually for the past two years.
Major shareholders of Lawson (in cases in which the major
shareholder in question is a corporation, the corporation’s
business executors).
Close relatives of the business executors of Lawson Group.
Close relatives of non-business executing members of theBoard or accounting advisors of Lawson Group (in the case ofoutside corporate auditors).
Outside members of the board and outside corporate auditors
whose tenure at the time of reappointment exceeds 8 years
and 12 years, respectively, in the aggregate.
People to whom none of the above evaluation criteria for independence apply are considered for outside officer candidates.
Note that even a person who fits any of the above criteria canbe selected as a candidate for independent outside officer if theBoard of Directors determines that said person is virtually independent. In such case, the reason is explained and disclosed at
the time of the candidate’s appointment as outside officer.

<Judgment criteria regarding independence>A major business partner of Lawson Group or its businessexecutors: A group of business partners that provides products or services to Lawson Group, where the amount of thegroup’s transactions with Lawson Group in the previous business year exceeds 2% of the consolidated sales of the group.
A major business partner of Lawson Group or its business executors: A group of business partners to which Lawson Group
provides products or services, where the amount of Lawson
Group’s transactions with the group in the previous businessyear exceeds 2% of the consolidated sales (gross operating
revenues) of Lawson Group.
Consultants, accounting experts and legal experts who havereceived large sums of money and other assets other than
executive compensation from Lawson Group: Consultants,
accounting specialists such as CPAs and legal specialists

Succession planning for chief
executive officers
Lawson recognizes that the succession plan of the President and CEO is a key management issue; thus, acting as anadvisory body to the Board of Directors in order to augment
the impartiality, timeliness, and transparency of the process,discussions are carried out among members of the Nomination and Compensation Advisory Committee, comprised only
from part-time officers (five members out of the total six are
independent officers), which determines the qualifications andattributes required as Lawson’s chief executive officer as described below. Then the method of developing and nominating
the successor is presented to the committee by the President
and CEO, Representative Director, for approval.

Corporate Governance
About Lawson!

1. Ability to respond to change and power to create change
2. Strong leadership
3. High-level communication skills
4. Broad perspectives for viewing the Group as a whole andstrong commitment to governance
5. High ethical standards
The attributes for the successor do not specify whether theyneed to be from inside or outside of the Company. When selecting successors, multiple candidates are presented to theNomination and Compensation Advisory Committee.

Support systems for outside
members of the Board andoutside corporate auditors
The Board of Directors Secretariat is established to conduct
administrative tasks for the Board of Directors, communicate
with the outside members of the Board, and submit reports
each time an incident accident occurs. The Corporate Auditors
Office with two full-time staff members is established to support the corporate auditors in their duties, conduct administrative tasks for the Audit & Supervisory Board, and communicate
with the outside corporate auditors.
Outside officers are provided with opportunities to acquireessential knowledge concerning the operations, finances, organization, etc., of the Company. Furthermore, to enable themto deepen their understanding of the Group’s business, they are
given the opportunity to participate in key events such as conferences to announce Company policy and to tour Group-related facilities. In order for independent outside officers to actively
contribute to discussions at the Board of Directors’ meetings,
the Company is set to hold meetings to exchange opinions with
only independent outside officers at least once a year.

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Officers’ Compensation

Details of Board members’ compensation

Basic policy
Lawson’s policy is to design its remuneration system in amanner that links Board members’ compensation with returns toshareholders, while retaining its function as an incentive for enhancement of corporate value, continuous growth and improvement of corporate performance and ensuring a sufficient andappropriate level of remuneration to reward individual membersof the Board for the duties they perform. The base compensation includes a variable compensation component linked to theCompany’s performance, moreover, as well as a fixed compensation component. In order to more clearly reflect the contribution of Board members to improving shareholder value, variable
compensation operates in tandem with indicators such as EPS(earnings per share) and SDG targets (CO2 emissions reduction
rate, etc.). Share based stock options—share price-linked compensation—are also incorporated as part of the remuneration tostrengthen the linkage with returns to shareholders.

A

A + B = Board members’ compensation
A Base compensation

Consisting of: fixed compensation (about 60%) + variable compensation (about 40%)
Fixed compensation: An amount commensurate with the position determined based on internal rules
Variable compensation: U sing performance-linked compensation that combines performance
evaluation for EPS (earnings per share) for each term and an evaluation of
SDGs targets (CO2 emissions reduction rate, etc.) (in order for Board member
compensation to operate in line with shareholder profits)
B Share-price linked compensation

Stock options offered through allocation of shares(Recognized as compensation linked to medium- and long-term
improvement in corporate value)
Exercise price per share: 1 yen
Number of shares allocated: Determined according to the number of shares allocated in accordance with
the Board member’s position and the rate of achievement of the EPS target.
Exercise period: Exercisable only within a predetermined period after leaving the Company (Not exercisable during tenure in office)

Board members’ compensation paid by Lawson consists ofbase compensation through cash payments and B shareprice linked compensation through stock option allocations.
Note that no performance-based variable compensation is paid
to part-time members of the Board, because they serve therepresentative directors and Board of Directors in a specialized
supervisory and advisory capacity.
Details of corporate auditors’ compensation
Corporate auditors’ compensation is determined according
to a basic policy of paying compensation at a sufficient andappropriate level in consideration of the duties performed byindividual corporate auditors. It comprises base compensation(fixed compensation) paid in cash. The amount is determinedthrough consultation with the corporate auditors, with consideration given to such factors as full-time or part-time status andshare of the auditing work, within a range approved by the General Meeting of Shareholders.

52Disclosure method for officers’ compensation
Total amounts of officers’ compensation are listed in the
Company’s securities reports and business reports.
Details of officers’ compensation (fiscal 2021)
Total compensation, total amounts by type of compensation and numberof eligible officers per company officer category
Category

Total
compensation(Millions of yen)
Total by type of compensation
NumberFixed
Variable
Stock of eligible
compensation compensation options officers

Members of the Board

258

135

53

69

9

(of which outside
members of the Board)

(35)

(30)

(—)

(5)

(3)

Corporate auditors

84

84

—

—

6

(of which outside
corporate auditors)

(36)

(36)

(—)

(—)

(3)

Total

342

219

53

69

15

(Note) There were seven members of the Board and five corporate auditors as of theend of February 2022.

LAWSON INTEGRATED REPORT 2022

Corporate Governance
About Lawson!

Assessment of the Board of
Directors’ effectiveness53

In order to further enforce the effectiveness and functions of the Board of Directors, the Company conducts
a “self-assessment on the effectiveness of the Board of
Directors,” mainly consisting of a document survey to
be completed by all members of the Board and corporate auditors. Responses to the survey for 2021 were
submitted by all members of the Board and corporate
auditors, and compiled and analyzed by an external organization. As a result, it was observed that the current
Board of Directors of the Company is enforcing effectiveness through its role in the resolution of importantmanagement matters and the appropriate monitoringof business execution, and these results were sharedand discussed at the meeting of the Board of Directors. Moreover, in the above survey, in order to further
reinforce effectiveness, constructive opinions were discussed at the meeting of the Board of Directors. Moving forward, we will endeavor to make improvements tofurther enhance the effectiveness of the Board of DirecSelf-assessment on the effectiveness of the Board of
Directors
Conducted annuallyTarget: All members of the Board andcorporate auditors

Examinationin writing/interviews

Promotion of
improvements

Aggregation
and analysis

Sharing anddiscussion in
the Board of
Directors

LAWSON INTEGRATED REPORT 2022

 pproximately once everyAthree years an outsideorganization is used toensure objectivity

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

tors, as well as ensure that the opinions discussed areconsidered. We will use an external organization about
once in three years in order to ensure the objectivity of
the results of the analysis of the self-assessment.

Status of internal control
system development
The construction and maintenance of an internal control system is considered an important issue for management to ensure healthy, sustainable business growth. In
accordance with the provisions of the Financial Instruments and Exchange Act, in addition to the Companies
Act and Ordinance for Enforcement of the Companies
Act, a Basic Policy for Maintaining the Internal Control
System is determined each fiscal year.
These policies are subject to frequent revision in accordance with changes in the business environment inorder to ensure the effectiveness, efficiency and appropriateness of business. Efforts to develop an effective,
rational internal control system contribute to maintaining
and increasing corporate value.
Link for information about the internal control system
https://www.lawson.jp/en/csr/governance/

Strengthening Group
governanceLawson and Lawson Group have established the following systems to strengthen their initiatives for ensuring the correctness of business operations.
(1) Systems for reporting to the Company on matterspertaining to the execution of duties by the subsid-

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

iary’s members of the board, etc., and systems for
ensuring that the performance of duties by membersof the board, etc., of subsidiaries is efficient.
(2) Rules and other systems for risk management by thesubsidiary and systems for ensuring that the subsidiary’s members of the board, etc., and employees execute their duties in conformity with laws, ordinances, and the articles of incorporation.
(3) Systems reporting immediately to the parent company upon recognition of a situation that could harm
Lawson and its affiliated companies.
Furthermore, Lawson has designated a complianceand risk management officer at its major affiliated companies and maintains a system that can respond swiftly
if an incident were to occur.

Policy on strategically held
sharesLawson sometimes holds listed shares strategicallyfor the purposes of raising its value over the medium
to long term, but we endeavor to keep such holdings to
the minimum required. When acquiring such holdings,
we perform a detailed investigation for each individual
issue to ascertain whether the purpose of holding is appropriate, whether the benefits and risks associated withholding are commensurate with the cost of capital, etc.
Furthermore, each year the Board of Directors reviews
the appropriateness of holdings, and as of the end of
February 2022, we held two different listed stocks. From
time to time we review the reasons for these strategic
shareholdings, taking into account, for example, theirimpact on increasing our corporate value. Furthermore,when acquiring or disposing of listed shares, we ensurecompliance with insider trading rules.

Executive Officer Voices

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Expectations from strategic
initiatives for sustainable growth

Lawson’s governancethat ensures management
independence and autonomy

Satoko Suzuki

Kiyotaka Kikuchi
Member of the Board

Member of the Board (outside)

Executive Vice President, Group CEO, Consumer

Associate Professor, Hitotsubashi University BusinessIndustry Group (Concurrently) Division COO, Retail

School, School of International Corporate Strategy

Two years have passed since I was appointed as a Member of the Board(outside) at Lawson. During this time, while speaking with Officers and Executives, I have truly felt that Lawson is an ambitious organization that excels at
communication.
The Board of Directors has a good balance between the ratios of each gender, with members that have specialist knowledge in a variety of fields, so thatcheck functions operate from multiple perspectives. President Takemasu, whois the Chairman of the Board, takes a single direction after listening closely toeveryone’s opinions, which is why Lawson’s governance works so well.
From the perspective of a Member of the Board (outside), I sometimes haveto make critical observations, such as where Lawson is falling short and where
it needs improvement. For example, I think that executives need to improvetheir capacity to think strategically about goals in the short term and in the
mid-to-long term. Also, with regard to branding and marketing communications, which is my specialist field, I feel that we must make further enhancements toward marketing with a view to the post-COVID era.
For the sustainable growth of Lawson in the future, I believe there are threeissues that must be tackled. The first is to quickly establish mainstay businessfounded on areas other than convenience stores. The second is to constructdistinctive stores and services in a business area that is known for market
saturation and homogeneity. The third is to embed systems and an organizational culture that is both independent and unified.
With regard to the third point, in particular, while enhancing community-based store management, it is necessary for local employees to work independently and to construct an organization that raises personnel of thatkind. I expect a lot from this area because Lawson has many employees thatare well-tuned to regional customers and partner businesses, and the warm
corporate culture is geared toward community-based initiatives.

Div., Mitsubishi Corporation

I was recently appointed as a Member of the Board, and I have been deriving the challenges for the Board of Directors and proposing improvements
based on what I have been told when conducting one-on-one interviews with
the Members of the Board. I believe that the Lawson Board of Directors has become more effective through the free and open exchange of opinions from individual perspectives based on the opinions and experiences of each member.
As listed companies, Mitsubishi Corporation and Lawson both esteem independence and autonomy. As a member of the parent company, and as a
Member of the Board at Lawson, I have a strong awareness of the commission
I have received from the shareholders. In discussions at the Board of Directors,
we always have in mind the diverse perspectives of stakeholders and that thepolicies should provide job satisfaction to the owners of franchise stores andemployees.
Lawson has stated the strategic concept of “community-based x individual
customer and individual store-focused” An important point is how the ownersof franchise stores and store managers can offer services suited to individual
customers and how they can construct positive relationships. That is why Lawson is working on advanced product development and manufacturing functions
that are suited to changing consumer needs and the enhancement of consumer-oriented functions that comprehensively combine real stores with digital features such as apps. I hope that Lawson will get even closer to regional needs inthe future and take the lead in next-generation retail business.
Having expounded the integrated promotion of EX*1 and DX*2 in its medium-term management plan, Mitsubishi Corporation is creating a next-generation community that will contribute to regional stimulation founded on renewable energy. Lawson, which is rooted in the community and has close contact
with customers, is part of the important social infrastructure, and the mutual
connection between Lawson and Mitsubishi Corporation will be strengthened
even more from now on.

54*1 Energy transformation*2 Digital transformation

LAWSON INTEGRATED REPORT 2022

Internal Control

55

Basic policy regarding the internal control system
The business of Lawson Group encompasses a widerange of operations, from the core business of convenience stores to high-end supermarkets and entertainment-related business, to financial, e-commerce, andconsulting services. We operate a large number of LAWSON stores, covering every prefecture in Japan and several markets overseas, each of which offers a wide variety of products and services. As such, we are not only
required to observe various laws and regulations but
must also assess the diverse range of possible risks andimplement the appropriate countermeasures. In light ofthese characteristics, Lawson has established the “Basic Policy for Maintaining the Internal Control System”
to support its efforts to achieve healthy, sustainablegrowth. We are promoting maintenance of our internal
control system based on this policy, while responding tochanges in our management environment, conducting
periodical reviews of the policy itself, and endeavoring
to maintain and enhance an effective, practical internal
control system.
The main revisions of the aforementioned Basic Policy implemented in fiscal 2022 are described below:
 esponding to risks of violations of human rights
R
Based on social conditions regarding human rights,
and in recognition of the fact that the risk of humanrights violations is something to be taken seriously,
Lawson has stated that the Consultation/Whistleblower Hotline shall cover matters relating to human rights,
and has been promoting initiatives such as due diligencemeasures regarding human rights.

Message from Top
Management

About Lawson!

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

 esponding to the revised Whistleblower
R
Protection Act
In response to the revised Whistleblower Protection Act (enacted June 1, 2022) that obligated the provision of whistleblower systems and those engaged inwhistleblowing, we have specified the operation of a

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Consultation/Whistleblower Hotline that can be usedsafely by ensuring the privacy of matters that can identify
the whistleblower.

Summary of Lawson’s internal control system (as of June 1, 2022)

Audit &
Supervisory Board
Corporate auditors

Internal control audits/regular meetings

Board of Directors
President and CEO

Reports on important issues

CRO*1
Compliance & Risk Management
Committee Meeting
Mutual understanding/information exchange

Compliance and Risk Management

 isk Management SubcommitteeRSafety Measures Subcommittee
Intellectual Property/Free Gift
Labeling Measures
Subcommittee
Overseas Business-related
Compliance Subcommittee

Legal Dept.
Risk and Information
Security Management
Dept.

Information Security Committee Meeting
Emergency System Measures Headquarters
Internal Audit OfficeInternal
Control
Audit

CR Manager*2(each division, office, area
and company)

SupportAffiliated companies
Lawson Group Compliance & Risk Management Meeting

Close
communications

Franchise
stores*1 C
 ROs (Chief Compliance and Risk Officer): The executive with overall responsibility for the legal compliance and risk management system and framework in the Lawson Group*2 CR (Compliance and Risk Management): Persons responsible for the development and implementation of a framework for identifying misconduct and problems concerning legal
compliance and preventing risks from arising in the group where they belong, to support the CRO

LAWSON INTEGRATED REPORT 2022

Compliance and Risk Management
About Lawson!

Compliance and Risk
Management System
Lawson has established a compliance and risk
management framework so that all employees cantake action based on the Corporate Conduct Charterand the Lawson Code of Ethics.
Management organization

Emergency preparedness
and response

Review and improvement of
measures

Verification of progress/monitoringof implemented measures

Establishment ofcontacts for
consultations
Departmental
enlightenment activities
conducted by leaders

Conduct of duties basedon behavioral standards(implementing measures)

Formulation of compliance andrisk management measures by
the respective departments

Behavioral standards formulation (including
the Group Philosophy, Code of Ethics, others)

Post-emergency review

Education, training, practiceFormulation of behavioral standards
In addition to the Lawson Code of Ethics that is
the foundation of our work, we have enacted Lawson
Group Human Rights Policy and Lawson Group Purchasing Policy, which have been organized into Lawson Group C&R Handbook issued to all employees inorder to raise awareness.
 ull implementation of education and trainingF
Lawson conducts compliance and risk management
training for all its employees each year for the purpose

Message from Top
Management

Creating Happiness in Our
Communities – Our Storyof improving their ethical awareness and risk response
capabilities. It has developed a training system to support structured, systematic learning, moreover, thatbegins with training of newly recruited employees andextends to training of newly appointed management
personnel and specialized occupational training aswell as compliance training for management members
provided by outside instructors.
 stablishing and raising awareness of theE
Consultation/Whistleblower Hotline
In addition to Human Resources Department personnel who specialize in consulting concerning sexual
harassment and abuse of power and legal personnel
who provide consultations on legal matters, Lawson
has established consultation contacts to receive internal notifications and provide consultations concerningcompliance and risk management issues, including
human rights violations, illicit trade/corruption andlabor issues. Besides establishing the Lawson Group
Outside Consultation/Whistleblower Hotline involving
law firms and other external organizations, Lawson isendeavoring to quickly ascertain and make corrections
to problems by preparing a point of contact for consultations from business partners’ employees, store crew
members and franchise owners.
 einforced operational management andRmonitoring
Lawson has established the Legal Department tosupervise compliance and the Risk and Information
Security Management Department to supervise risk
management under the CRO’s direction. These departments cooperatively serve as cross-departmental secretariats for the Compliance & Risk Management Committee Meeting and manage the progress of measures
implemented in these areas by individual departments

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

throughout the Group to promote an effective compliance risk management system. Besides awareness surveys involving all the employees, monitoring activities
include ongoing questionnaires among business partners concerning such matters as delivery of merchandise to stores and store construction as part of efforts toreview and improve the compliance systems.
 nhanced cooperation among Group companies
E
Company issues are shared at meetings attended byCompliance and Risk Management officers from eachGroup company to back up the countermeasures taken. In addition to a variety of training, employee awareness surveys and business partner questionnaires arealso conducted together in an effort to reinforce Groupwide Compliance and Risk Management Systems.
Improvement of the information security
framework
Having enacted the Lawson Group Privacy Policy,
management systems have been put in place under
the direction of the CRO for the protection of personal information. To ensure that the details of the Privacy
Policy are enforced, the Company publishes potential
mistakes and complaints that may arise at the stores,
accompanied by practical responses to them, in various manuals produced for the stores in an effort to raiseawareness. In addition to compiling matters that require
observation in the Lawson Office Security Rules, headquarters employees are tested periodically to ensurethat these measures are being reliably implemented.

56

For details of the Compliance and Risk Management System, please visit the following web page.
Please visit the following web page for details.
https://www.lawson.jp/en/csr/governance/compliance/
https://www.lawson.jp/en/csr/governance/risk/

LAWSON INTEGRATED REPORT 2022

Compliance and Risk Management
About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Business risks
Main risk factors

Risk related to changes in
economic conditions

Interest rate fluctuation

Frequency: Medium

Impact: Low•

Fluctuation in exchange rates

Frequency: Medium

Impact: Low•

Raw materials procurement

Frequency: Medium

Impact: MediumC hanges in business activity due to factors such as consumer trends, changing competition situation,and requests to stay at home

Frequency: Medium

Impact: High•F ood safety and hygiene management and labelling

Frequency: HighImpact: Medium•

M&As and business alliances

Frequency: Medium

Impact: Medium•

Inability to recover receivables

Frequency: Medium

Impact: Medium•Impairment of property, plant and equipment

Frequency: Medium

Impact: Medium•

Risks related to businessactivities

57

Risks related to the franchise
store business

Risks related to the banking
business

Impact: HighFrequency: Medium

Impact: Medium

Frequency: Medium

Impact: Medium

Frequency: Medium

Impact: High elay in responding to environmental changes such as rapid expansion in cashless settlements andD
sharp decrease in cash circulation

Frequency: Medium

Impact: High hysical damage to facilities such as stores or vendors’ plants, or disruption of product deliveries, duePto the occurrence of natural disasters such as earthquakes, tsunamis, floods, storm surges, typhoons,and blizzards

Frequency: Low

Impact: High•T emporary store closures or major changes in corporate activities, social activities, and consumer
behavior due to the spread of infectious disease or related state or emergency declaration

Frequency: Low

Impact: High•Climate change

Frequency: Low

Impact: Medium•

Information technology (IT) system trouble

Frequency: Medium

Impact: Medium• uality issues with products or services, incidents or accidents occurring at stores, etc., brand valueQdecrease due to misconduct, etc., by Group executives or franchise stores, and sales downturn, etc.

Frequency: HighImpact: Medium

Changes in various laws and regulations related to store development, store operation, hygiene
management, trading, and environmental protection, etc., and changes in government guidelines inareas where stores are opened• Cancellation of a large number of franchise agreements due to deterioration of trust with franchise
store owners• Impact of misconduct at a franchise store on the brand image of the entire chain and the Group’s
performance and financial position• Administrative measures such as stoppage of operations due to improper implementation of laws
and regulations applicable to Lawson Bank, Inc. or guidance from the supervisory agency. Restrictionof products and services development due to new establishment, changes, or removal of laws andregulations, and guidance from the supervisory agency•

Suppress the impact of interest rate fluctuations by monitoring market trends, diversifying fund procurement
sources and lending periods, and using procurement at fixed interest rates.

•

Mitigate the impact of exchange rate fluctuations by diversifying the contract volume and timing for products
and raw materials, etc., procured overseas.

•

Secure substitute materials and multiple procurement channels from different production areas for the same materials.

Respond to changes by pursuing ideal store formats, including stronger merchandising and product lineups.
Promote infection prevention in stores and remote working for the Company’s employees.
• Work with suppliers to ensure rigorous application of quality management, hygiene management, and expiry
date management, as well as appropriate labeling, from the production process through to delivery and sales.
•••

Conduct adequate study such as third-party surveys, etc., when acquiring shares or entering businessalliances, etc., and formulate accurate business plans and clear standards for withdrawal when making adecision.

•

Conduct credit investigation of new business partners as necessary and implement thorough receivables
management.

•Establish and test accurate investment profitability hypotheses when acquiring property, plant and equipment.

• onduct information security measures and thoroughly promote information security measures and Lawson
C
Group Privacy Policy inside the Group.

•Constantly gather and analyze information about legal and regulatory revisions, etc., and respond beforehand.

• rovide sufficient information and appropriate support through daily communication with franchise stores toPprevent misconduct incidents, etc., and build partnerships with franchise stores by conducting various initiatives
for continued stable store operations.

•

Compliance with laws and regulations through compliance training, etc., at Lawson Bank, Inc.

• espond to environmental changes by sharing information through regular communication between Lawson
R
Bank, Inc. and the Company, and examination of synergy creation.

•F ormulate business continuity plans (BCPs) and established business continuity management (BCM) structure.
Ensure effectiveness of the Disaster Relief Manual and the BCP Manual by conducting disaster drills three times
a year, and partially transfer risk by taking out insurance.

•

•

•

Risks related to disasters,
climate change, and trouble,etc.

Handling of personal information

Frequency: Medium•

Risks related to laws andregulations, etc.

Response measures to risk, etc.

Risk details•••L awson Group Sweeping Transformation Executive Committee will lead our challenge to respond to the newnormal by anticipating new needs.

•

 nalysis of risks and opportunities, ascertainment of impacts on business strategy, and examination of climateAchange mitigation and adaptation measures.

•Implement multifaceted countermeasures for cyber security, including technical, process/personnel, andphysical aspects, as well as training in preparation for problems that may arise.

•Prevent issues from arising through compliance/risk management training.

* Low frequency refers to a probability of the maximum conceivable risk event occurring once in 10 or more years. High impact indicates a maximum conceivable damage impact of 10 billion yen or more.
* The above data is based on our determination as of May 25, 2022. It does not necessarily cover all of the risks related to the Group’s business, and it also contains some uncertainty. Actual results may be different.

LAWSON INTEGRATED REPORT 2022

Compliance and Risk Management

Compliance and Risk Management
About Lawson!

Response to TCFD
In determining the Group’s material issues (materialities), we consider climate change, which is becoming
more severe year by year, to be an extremely important
issue. As the core company of Lawson Group, Lawson
endorsed the Task Force on Climate-related Financial
Disclosures (TCFD) in April 2020. We are following the
TCFD recommendations to promote disclosure of information on governance, strategy, risk management, andmetrics and targets.

58

GovernanceLawson created the SDGs Committee in March 2019,
aiming to help realize a sustainable society through its
business activities. The committee meets four times ayear and is under the direct supervision of the president
and CEO, representative director. Its members are madeup of all division managers up to the rank of director.
The committee has declared its intention to engage in“sustainable environment preservation activities toward
a carbon-free society,” in order to realize “Environmental(Machi) friendliness.” The committee formulates implementation plans, manages progress toward achieving
its targets (KPIs), and reports on a regular basis to theBoard of Directors regarding the status of initiatives on
climate change and other issues.
A working group has been established under the
SDGs Committee, tasked with promoting the disclosureof information related to climate change. Personnel incharge of departments and accounting, who undertake
business strategies, and personnel in charge of IR, areamong those who promote disclosure of information
related to governance, strategy, risk management, andmetrics and targets, as recommended by the TCFD. The
working group analyzes risks and opportunities related

LAWSON INTEGRATED REPORT 2022

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

to climate, grasps their impact on business strategy and revises the strategy, and examines various countermeasures
for mitigating and adapting to climate change. The working
group will also lead efforts to strengthen disclosure of theresults of these examinations.
From March 1, 2021, the Company established the position of Chief Sustainability Officer (CSO), with the president,CEO, and representative director appointed to the position,
as we further strengthen our efforts to reduce greenhousegas (GHG) emissions and address other environmental issues in our business activities.
(1) Identification of risks and opportunities
Risks and opportunities associated with climate change
include those associated with the transition to a low carbon
economy, such as regulations on GHG emissions, and those
associated with the physical changes caused by climatechange, such as weather disasters of increased intensity.

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Organizational structure
Board of Directors

Audit & Supervisory Board

CSO (President and CEO)Management Committee

SDGs Committee(Held on a quarterly basis:
All Division Directors)

Secretariat(SDGs Promotion Office)

TCFD Working Group
Roles of the working group
Analysis of risks and opportunities related to climate change
Ascertainment of impacts on business strategy
Examination of climate change mitigation and adaptation
measures
Disclosure of information regarding climate change-related
initiatives

Decrease in transport cost due to increased efficiency in logistics
Introduction and increase of carbon pricing
Strengthening of GHG emissions regulations

Transition risk

Physical risks

Opportunities

Increase in electricity prices

Timing of
emergence orrealization

Increase in store operation costs due to introduction of carbon prices

Medium term

Increase in costs of raw material procurement and manufacturing due to introduction of carbon prices

Medium term

Increase in energy cost due to increase in electricity prices

Medium term

Increase in costs of raw material procurement and manufacturing due to increase in electricity prices

Medium term

Strengthening of fluorocarbon regulations

Increase in investment cost for non-fluorocarbon equipment, etc., in stores

Short term

Strengthening of plastic regulations

Increase in procurement cost for substitute raw materials compliant with plastic restrictions

Medium term

Changes in consumer lifestyles and preferences

Degradation of brand image due to delayed response to environmental awarenessMedium term

Increased severity of weather disasters

Damage due to flooding in stores, decrease in sales due to suspension of operations

Short term

Average temperature increase

Increase in electricity usage at stores, distribution centers, etc.

Long term

Introduction and increase of carbon pricing

Decrease in raw material procurement costs due to increased efficiency in suppliers’ businessprocesses and facilities

Medium term

Decrease in transport cost due to increased efficiency in logistics

Medium term

Technological development in renewable energy

Decrease in energy cost due to installation of reduced-cost solar cells

Long term

Changes in consumer lifestyles and preferences

Increase in sales due to development of environmentally conscious products and services

Medium term

Average temperature increase

Increase in sales due to development of products and services tailored to changes in customer
preferences due to higher temperatures

Short term

About Lawson!

Lawson recognizes that these risks and opportunities will emerge at different times. In the tablebelow, they are organized into short term (less than
3 years), medium term (3–10 years), and long-term(10 years and above) perspectives.
(2) Scenario analysis
We are conducting scenario analysis for the entire Group regarding the impacts on business ofrisks and opportunities. To begin, we have started
scenario analysis on the following analysis targets.
Target businesses

Domestic convenience store business

Scope of analysis

Lawson and franchise stores

Reporting period

2030, 2050

Analysis target

Impact on stores of the increase in store operation costs
due to carbon price introduction, increase in energy cost
due to increased electricity prices, and increased intensityof weather disasters
IEA WEO 2019, SDS STEPS (2°C), CPS (4°C)

Referenced scenarios

IPCC Fifth Assessment Report, RCP2.6 (2°C),
RCP8.5 (4°C)

Carbon prices and energy cost
We conducted a scenario analysis of the casewhere Lawson conducts initiatives to save energy,
which it is implementing as a material issue, andthe case where it does not conduct the initiatives,
taking into account the future carbon prices, electricity sector emissions, and projected electricity
prices. We also conducted an analysis of the procurement cost of the renewable energy needed toachieve 100% reduction in CO2 emissions per store
by 2050, which Lawson has set as an initiative forpromoting the SDGs. The result of this analysis indicates that if a carbon price of $100 to $140 per tonof CO2 were introduced to keep the increase in tem-

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perature below 2°C at both 2030 and 2050, eventaking into consideration a decrease in emissions
factors for the electricity sector due to decarbonization, the Company will experience a certain amountof financial impact if it does not take measures toreduce energy consumption.
On the other hand, if the company has taken
steps to save energy, it will be able to reduce not
only the store operation cost due to introduction ofcarbon prices, but also electricity charges, allowing
the financial impact to be controlled within a tolerable range. Furthermore, to achieve a 100% reduction in CO2 emissions per store by 2050, we must
not only promote energy saving, but also procure
renewable energy. We found that although the fluctuation in procurement prices causes a small variation in the impact amount, the financial impact canbe controlled within a tolerable range.
Weather disasters
Our analysis results shows that the financial impact of increased flood damage under both the 2°C
and 4°C scenarios through to 2050 is limited andwithin a tolerable range. On the other hand, an analysis by region showed that there are some cases
where stores are located in areas with high risk ofwater damage. We will therefore examine further disaster prevention countermeasures going forward.
(3) Policy and initiatives going forward basedon analysis results
Lawson has identified climate change-relatedrisks and opportunities, and conducted analysis of
their impact on business based on the 2°C and 4°C
scenarios. This initiative has only just started, andwe will continue to further enhance and examine thecontent of the initiative going forward.

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
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Finance –Company Information

Metrics and targets
In consideration of social issues and conditions,
we have set KPIs related to social and environmental matters for 2025, the 50th anniversary of theCompany’s founding, and for 2030, the target yearof the SDGs, and we are working to achieve them.
Furthermore, in an effort to contribute to the formation of a decarbonized society and the vision of
the SDGs, we have taken on the challenge of evenhigher targets (reducing CO2 emissions, reducing
food waste, reducing plastic) in our environmental
vision, Lawson Blue Challenge 2050! – “Save ourblue planet!”
KPIs
Reduced CO2 emissions
2025

Reduce CO2 emissions per store by 15% compared to2013 levels

2030

50% reduction of the same

2050

100% reduction of the same

59

Food waste reduction
2025

Reduce food waste by 25% v. 2018 levels

2030

50% reduction of the same

2050

100% reduction of the same

Reducing plastic
2025

Reduce plastic for containers and packaging by 15% v.
2017 levels
30% reduction of the same2030

Use 50% eco-friendly materials for plastics used inoriginal product containers and packaging
Reduce plastic shopping bags by 100%2050

Use 100% eco-friendly materials for plastics used inoriginal product containers and packaging
See the following for details:
https://www.lawson.jp/en/csr/tcfd/

LAWSON INTEGRATED REPORT 2022

Compliance and Risk Management
About Lawson!

Responses to emergencies
Lawson places particular emphasis on “foodsafety and hygiene management,” “information
security,” “disaster relief” and “crime prevention,”and it has prepared a structure for responding toemergencies and resolving problems rapidly.
Meetings of the Compliance & Risk Management Committee and the Information Security
Committee as well as of the four subcommittees
are convened under ordinary circumstances to assess risks and to formulate and promote measures
to avoid them and prevent their occurrence.
When major risks occur, a task force is set upthat strives to promptly resolve problems and minimize damage. Once the problems have been resolved, the Company analyzes the factors contributing to the occurrence and reviews and improves
the relevant measures to prevent any recurrence.
We are reinforcing our emergency response capabilities, moreover, through efforts such as for-“Resilience Certification”
Lawson is certified as an enterprise that contributes to the building of national resilience against
disasters.
In accordance with the “Guidelines relating tocertification of groups contributing to the buildingof national resilience against disasters” established by the National Resilience
Promotion Office, Cabinet Secretariat in February 2016, Lawson
was recognized by the Association for Resilience Japan as thefirst convenience store to contribute to the building of national resilience against disasters.

Message from Top
Management

Creating Happiness in Our
Communities – Our Storymulating the Business Continuity Plan (BCP) and
implementing disaster mitigation measures. Our
aim is to institute a business continuity (BC) framework that prevents interruption of important business activities, even when emergencies involving
serious damage occur.

Assuring continuity of business
operations
Fundamental policies and objectives formaintaining BC
Interruption of important business activities shallbe avoided, even when emergency situations involving serious damage occur, while maintaining apriority on securing people’s safety and wellbeing.
Even if business operations are unavoidably interrupted, critical functions shall be resumed quickly
in order to avoid undermining our customers’ satisfaction or corporate value.
Three main goals for maintaining BC ulfilling Lawson’s mission as a “communityF
lifeline”
We will endeavor to ensure uninterrupted provision of products and services to customers bykeeping stores open whenever possible.
Continuation of the franchise businessWe will determine specific periods and methods
for resuming operations and maintain the requisite
level of franchise headquarters operations.
Securing appropriate earnings
We have implemented measures in consideration of the impact emergencies could exert on
earnings and of social conditions in order to secure an appropriate level of earnings necessary to
the Company’s survival.

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Practical procedures are compiled in the BCP,
and we are pursuing efforts to establish a BC
framework in line with the BCP, and to sustain andenhance it, as important issues for management.
Mechanism for enhancing BC capabilities
Activities conducted to improve response capabilities are essential for sustaining a corporate
climate adapted to responding sensitively to avariety of crises. Lawson is continually reviewing
such business components as “hardware” factors involving office buildings and lifelines, “software” factors involving its BCP and manuals, and“skills” factors involving employees and franchise
stores. The Company uses its findings to implement improvements in crisis response capabilities
throughout the Group.
Formulation of the BCP Guidelines
In the event of a major incident impacting theheadquarters operations, to ensure the continuance of important business activities as the franchise headquarters, we have formulated the “BCP
manual” defining the organization’s standard of
conduct. The BCP Guidelines describes businessprocedures in the case of a major earthquake in
the Kanto area or a pandemic caused by an infectious disease, for example.

Disaster relief manual

60

BCP manual

LAWSON INTEGRATED REPORT 2022

Compliance and Risk Management
About Lawson!

Disaster preparedness and response

61

Lawson has formulated the “Disaster Relief Manual”
defining the approach toward disaster relief and the standard of conduct of the organization and its employees inthe event of a disaster. There are different versions of themanual, “Concept of Operations,” “Initial Actions,” and “Response and Recovery Actions,” in which the response rules
and procedures for measures according to the disaster level
for all employees and the entire organization are described.
When large-scale disasters occur, our first priority is toconfirm the safety of Lawson employees and our franchiseowners and crews. Lawson conducts Companywide training
three times a year in which participants acquire experiencein implementing a variety of measures, including responding by telephone, email and disaster message dialing andapplying the safety check system. This prepares every individual to respond smoothly should emergencies arise.
Manuals elucidating the requisite disaster preparedness andresponses are distributed to the stores.
When disasters occur, disaster relief headquarters are
set up immediately in three locations in the affected area:
headquarters, regional offices and local sites. Lawson takes
advantage of a Disaster Information Map System designed
to enable personnel to confirm the disaster situation in real-time and implement support measures for shops, factories and delivery centers, so that stores in the disaster area
can be reopened for business at an early date. Headquarters
and franchise stores are preparing for evacuations by notifying employees after jointly confirming possible hazards andshelters.
Disaster Information Map
System
A comprehensive Disaster
Information Map System for
mapping disaster informationin real time. The information
is monitored and collected 24
hours a day, 365 days a year.

LAWSON INTEGRATED REPORT 2022

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Management

Creating Happiness in Our
Communities – Our Story

Cooperation with local governments
at times of disaster
In its capacity as a community lifeline, Lawson is making
progress toward concluding agreements with local governments concerning cooperation in the provision of goods andassistance to stranded commuters in times of disaster.
<Entities concluding agreements on provision of goodsin times of disasters*>
Local governments: 47 prefectures, 24 cities and wards
Mass transit systems: 11
Electric power companies: 4
Others: Tokyo Fire Department and Japan Ground Self-Defense Force, fuel companies<Entities concluding agreements on assistance tostranded commuters*>
Local governments: 43 prefectures, 10 ordinance designated cities* As of March 1, 2022

Appointment to the designated public institution basedon the Disaster Countermeasures Basic Act
As of July 1, 2017, Lawson was appointed a designatedpublic institution by the Prime Minister based on Article two,
Item five of the Disaster Countermeasures Basic Act.
During times of normal operation, the Company formulates disaster prevention work plans, conducts disaster drills
and stockpiles goods and materials in preparation for playing an important role in disaster prevention, emergency response and restoration. In so doing, it works closely with therelevant government and municipal offices.

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

crime prevention in mind, in ways such as greeting customers in a cheerful and spirited manner. Our headquarters iscooperating with the police and the Japan Franchise Association in efforts to prevent crimes against the convenience
store industry as a whole.
Actions taken as crime prevention measures
1. Promotion of security camera installation
Digital security cameras with detailed imaging are installed at every store to discourage potential perpetratorsfrom committing crimes and to support investigations that
may lead to the arrest of perpetrators in the unlikely event an
incident should occur.
2. Creation of an environment for store crew education
Reminders to raise awareness of crime prevention are
distributed for display on POS cash registers and store
computers, and crime prevention DVDs are also delivered tostores for use in educating their store crew members. Various tools and manuals, such as crime prevention self-checklists, have also been prepared.
3. Enhancing guidance provision during patrols
In addition to the regular store patrols, we also provide
crime prevention support for stores during late-night andcrime prevention patrols to raise awareness together withfranchise stores.
4. Conducting crime prevention drills
Employees are trained under police direction in methodsof responding to robberies, including throwing of anti-crimecolor paintballs and, more recently, training for special fraud
prevention.

Crime prevention at stores
We conduct education to ensure that store personnel act
with the highest priority placed on personal safety and with

A DVD on measures to prevent
robberies and other crimes

A crime prevention self-check list

Finance - Company Information

Message from Top
Management

About Lawson!

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Eleven-Year Financial Summary(Unit: Millions of yen)

2021

(Fiscal year)

2020

2019

2018

2017

For the year:
Gross operating revenue¥

291,802¥

288,480¥

314,260¥

302,136¥

289,232  Net sales		292,237

		

275,945		

302,843		

288,579		

264,734   Other operating revenue		114,331		

101,576

		

113,132		

109,931		

103,357

Total gross operating revenue		698,371		

666,001		

730,236		

700,647		

657,324

Operating income		

47,096

		

40,876

		

62,943

		

60,781

		

65,820

Profit attributable to owners of the parent		17,900

		

8,689

		

20,108

		

25,585

		

26,828Net cash provided by operating activities		

146,644		

227,954		

202,703

		

128,594		

113,938

Net cash used in investing activities		(51,781)		

(29,983)		

(49,074)

		

(81,017)		

(91,209)

Net cash used in (provided by) financing activities		(109,516)		

(140,642)

		(163,910)

		

277,937

		

(61,238)

Capital expenditures		86,351

		

48,837

		

90,726

		

140,071		

140,495

Depreciation and amortization*2

		

79,942

		

80,778

		

79,183

		

66,844

		

58,601

Total assets¥

1,337,245¥

1,365,430¥

1,357,732¥

1,342,329¥

900,256

Net assets

		

278,473		

272,931		

275,347

		

281,982		

281,446

Shareholders’ equity ratio

		

20.4%

		

19.6%

		

20.0%

		

20.6%

		

30.6%

Cash and cash equivalents		

388,444		

401,136		

343,583		

354,236

		

30,120Total number of stores in Japan		

14,656

		

14,476

		

14,444

		

14,659		

13,992

Number of employees (full-time)		

10,362

		

10,385

		

10,572

		

10,395

		

10,028268   Income from franchised stores

At year-end:62

Per share data:
¥

178

¥

86

¥

200

¥

255

¥

Annual dividends (yen/U.S. dollars*1)

		

150

		

150

		

150

		

255

		

255

Payout ratio

		

83.9%

		

172.7%

		

74.6%

		

99.7%

		

95.1%

Return on equity (ROE)

		

6.6%

		

3.2%

		

7.3%

		

9.3%

		

9.7%

Return on assets (ROA)

		

1.3%

		

0.6%

		

1.5%

		

2.3%

		

3.0%

Profit (yen/U.S. dollars*1)

Financial data:

Net sales of all stores (Domestic convenience store business):
Net sales by store format*3*4¥

2,182,725¥

2,132,618¥

2,296,838¥

2,233,739¥

2,069,609

		29,256

		33,200		

48,162

		

51,569		

91,075  Processed foods

		1,190,886

		

1,156,760

		

1,237,391

		

1,202,619

		

1,138,966  Fast foods

		

480,260

		

462,497		

546,542		

544,530

		

509,415  Daily foods

		343,668		

343,772		

351,442		

329,545		

314,481  Non-food products		

197,166		

202,788		

209,624

		

208,612

		

197,821Net sales of all stores¥

2,211,981¥

2,165,818¥

2,345,000¥

2,285,308¥

2,160,684

		

1.2%

		

1.2%

		

1.9%

		

2.0%

		

2.4%

  Franchise stores   Directly managed stores
Net sales by product category*3*4

Ratio of operating income to net sales of all stores*1. The U.S. dollar amounts represent the Japanese yen exchange rate against the US dollar as of February 28, 2022 ($1 = 115.55 yen).
*2. These figures include amortization of intangible assets.
*3. These figures include sales reported by franchise stores and are unaudited.
*4. Net sales for the fiscal years 2016, 2017, 2018, and 2019 represent sales by stores operated by Lawson, Inc. as well as those by Lawson Sanin, Inc.

LAWSON INTEGRATED REPORT 2022

Finance - Company Information
Message from Top
Management

About Lawson!

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities(Unit: Millions of yen)

2016

63

2015

2014

2013

2012

Finance –Company Information(Unit: Thousands of U.S. dollars*1)

2021

2011

¥

275,312¥261,681¥247,681¥242,078¥

230,002¥

215,573$

2,525,340

		

254,169

		

227,606		

174,044		

168,159

		

192,942		

208,063		

2,529,096

		

101,806

		

94,165

		

76,188

		

75,009		

64,500		

55,320		

989,450		

631,288		

583,452

		

497,913

		

485,247		

487,445		

478,957

		

6,043,886

		

73,772

		

72,541

		

70,482

		

68,126

		66,246

		

61,769		

407,581		

36,400		

31,381

		32,686

		

37,965

		

33,182

		

24,885

		

154,911

		

99,864

		

112,205		

110,567

		

81,503

		

85,188

		

86,356

		

1,269,104

		

(76,227)

		

(68,657)

		

(100,434)

		

(47,924)

		

(54,196)		

(52,912)		

(448,135)

		

(25,638)		

(50,201)		

(3,289)(39,650)

		

(31,979)		

(27,544)		(947,780)

		

119,784		

106,747

		

141,251

		

84,032

		

77,361

		

74,572

		

747,304		

56,199		

49,293

		

41,826

		

47,888

		

43,886

		

37,845

		

691,839¥866,577¥

803,212¥764,614¥620,992¥

579,809¥531,453$

11,572,878

		285,995

		

272,997		

263,797		

250,497		

230,181		

214,662		

2,409,987

		

31.7%

		

32.9%

		

33.5%

		

39.5%

		

39.1%

		

39.7%

		

67,692

		

69,793

		

76,754

		

68,759		

72,766

		

73,670		

3,361,696

		13,111

		

12,395

		

12,276

		

11,606

		

11,130		

10,457

		

9,403

		

8,377

		

7,606

		

6,336

		

6,404

		

6,475

¥

363

¥

314

¥

327

¥

380

¥

332

¥

249

$

1.55

		

250

		

245

		

240

		

220

		

200

		

180

		

1.30

		

68.7%

		

78.1%

		

73.4%

		

57.9%

		

60.2%

		

72.2%

		

13.5%

		

12.0%

		

13.0%

		

16.1%

		

15.2%

		

12.0%

		

4.4%

		

4.0%

		

4.7%

		

6.3%

		

6.0%

		

4.9%

¥

1,958,550¥

1,880,395¥

1,827,779¥

1,810,418¥

1,747,915¥

1,651,433$

18,889,875

		84,736

		

79,872

		

105,019

		

126,873		

156,339

		

173,820

		

253,189		

1,073,044

		

1,033,448

		

1,034,355

		

1,060,455

		

1,063,120

		

1,022,378

		

10,306,067

		481,267		

463,431		

429,212		

408,672		

372,706		

345,226

		

4,156,296

		294,141		

276,885		

277,210

		

275,437		

271,920		

263,101		

2,974,193

		

194,833

		

186,498		

192,020

		

192,726

		

196,506

		

194,546

		

1,706,326¥

2,043,287¥

1,960,266¥

1,932,798¥

1,937,292¥

1,904,254¥

1,825,253$

19,143,064

		

2.8%

		

2.9%

		

3.2%

		

3.5%

		

3.5%

		

3.4%

LAWSON INTEGRATED REPORT 2022

Finance - Company Information
Message from Top
Management

About Lawson!

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Industry Trends and Sales/Store Related Data
Industry Trends
In 2021 (January-December), the convenience store industry saw strong sales of fresh
foods, desserts, frozen foods, and alcoholic beverages as a result of a reinforcement of
product assortments responding to changes in purchasing behavior due to demand factors
associated with the COVID-19 pandemic, such as one-stop shopping, daily use, and stayat-home demand. As a result, total annual industry sales increased 1.0% year on year to
11,760.0 billion yen, and net sales at existing stores increased 0.6% year on year. The total
number of stores as of the end of December was 56,352, which was roughly the same level
as the previous year.** For annual sales and the total number of stores, we referred to the “Current Survey of Commerce” issued by the Ministry of
Economy, Trade and Industry. For the increase/decrease ratio in existing store sales, we referred to the “Convenience Store
Statistics Investigation Annual Report" issued by the Japan Franchise Association.

Number of convenience stores(Stores)

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

Number of
56,352convenience stores

56,54256,502

56,57456,37455,63654,50552,72550,23447,801

43,373(Calendar year)

Source: “Current Survey of Commerce,” Ministry of Economy, Trade and Industry

Non-consolidated operating results(Millions of yen)

Retail industry market size and convenience store share*1(Fiscal year)

2021(Billions of yen)(Calendar year)

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

Total retail industry
150,462 146,457 145,047 144,965 142,514 139,877 140,666 141,219 138,897 137,585 135,157
annual sales*2
Convenience store
sector annual
sales*2

11,760Convenience store
share

7.8%

11,642 12,184 11,978 11,745 11,445 10,995 10,423
7.9%

8.4%

8.3%

8.2%

8.1%

7.8%

7.3%

9,872
7.1%

9,477
6.9%

8,774
6.5%

Source: “Current Survey of Commerce,” Ministry of Economy, Trade and Industry*1. The figures above reflect the revision of the figures in 2004 and onwards that the Ministry of Economy, Trade and Industry
compiled in March 2013.
*2. Annual sales amounts of the retail industry and the convenience store sector are on a calendar-year basis.

The net sales of all stores among the top three chains in the convenience store industry*1(Billions of yen)

As apercentage
of allconvenience
stores

2020

2019

2018

2017

Net sales of allconvenience
stores2,211,981

Gross operating
revenue

355,10216.1%

354,825 16.4%

390,811 17.0%

385,678 17.2%

372,891 17.6%

Gross operating
profit333,784

15.1%

330,600 15.3%

356,385 15.5%

348,491 15.6%

335,792 15.9%

Selling,
general andadministrative
expenses

307,91313.9%

304,449 14.1%

311,660 13.6%

302,779 13.5%

284,771 13.5%

Advertising andpromotional
expenses

10,929

0.5%

9,800

0.5%

14,1120.6%

13,363

0.6%

12,546

0.6%

Personnel
expenses

44,1842.0%

44,845

2.1%

46,2612.0%

45,9032.0%

44,7222.1%

100.0% 2,165,818 100.0% 2,296,156 100.0% 2,236,125 100.0% 2,110,454 100.0%

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

Rents

181,260

8.2%

180,7098.3%

181,194

7.9%

172,5747.7%

160,243

7.6%

LAWSON

2,442

2,349

2,506

2,424

2,283

2,157

2,049

1,961

1,945

1,907

1,826

Seven-ElevenJapan

71,5393.2%

69,094

3.2%

70,091

3.1%

70,9393.1%

67,260

3.2%

4,953

4,871

5,010

4,899

4,678

4,516

4,291

4,008

3,781

3,508

3,281

Other SG&A
expenses
Operating income

25,8701.2%

26,1501.2%

44,725

1.9%

45,711

2.0%

51,021

2.4%

FamilyMart*2

2,842

2,764

2,965

2,983

3,016

3,009

2,006

1,860

1,722

1,585

1,535

Ordinary income

34,278

1.5%

33,7001.6%

45,9622.0%

51,4432.3%

50,508

2.4%

Profit13,4700.6%

15,8940.7%

15,4860.7%

31,002

1.4%

19,417

0.9%(Fiscal year)

Total of the top
three chains

10,237

9,984

10,482

10,306

9,977

9,682

8,346

7,829

7,448

7,000

6,642

Total market shareof the top threechains

87.0% 85.8%

86.0%

86.0%

84.9%

84.6%

75.9%

75.1%

75.4%

73.9%

75.7%

64

Source: Data published by each company*1. The figures for the top three chains are on a fiscal-year basis, while the total market share of the top three chains is the proportion in convenience store sector annual sales on a calendar-year basis.
*2. In September 2016, Circle K Sunkus and FamilyMart merged and in November 2018, brand integration of approximately 5,000
stores was completed.

LAWSON INTEGRATED REPORT 2022

Finance - Company Information
About Lawson!

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Management

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Happiness in Our Communities

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

Management Policies for Fiscal 2021

Overview of Merchandise and Services

In FY2021, the Group worked together to promote thorough countermeasures against
COVID-19 infection and to respond to demand amid the new normal. Specifically, we haverefurbished our stores and renewed our product lineups throughout our domestic convenience store business in response to changes in the business environment. This was done
under Lawson Group Sweeping Transformation Executive Committee launched in September 2020 to realize “Challenge 2025,” which was formulated for 2025, the 50th anniversaryof Lawson’s establishment. In addition, the entire Lawson Group worked to resolve medium- and long-term issues for sustainable growth, to capture new profit-earning opportunities, and to enhance job satisfaction.

Sales grew for fresh foods, frozen foods, daily foods, room-temperature Japanese andWestern sweets, and alcoholic beverages, for which we have been expanding our productassortments as part of our efforts to support customers in their daily lives. For frozen foodsin particular, sales were strong due to the development of new innovative menu items suchas frozen desserts and the phased expansion of the menu starting in November 2021, in
addition to grasping the stocking needs for ingredients and prepared foods. In the riceproducts category, the boxed meal series, which was renewed in March of the same year
for longer freshness and chilling, sold well throughout the year, and the Kinshari Onigiri riceball series and renewed standard rice ball products also sold well. In addition, original products continued to be a hit, such as the new dessert product Gateau au Chocolat launched in
September of the same year, and Crispy Fried Chicken counter fast food product launchedin October of the same year, both of which were well received. Products offered throughthe Machikado Chubo in-store cooking service were well received as customers had fewer
opportunities to dine out. These products included those with established popularity suchas the Thick Pork Cutlet Sandwich, as well as products created in collaboration with restaurant companies. The latter meet local demand by offering the delicious taste of specialty
restaurants within the local rice ball series.
Lawson Group was the first convenience store operator to introduce food delivery
services, including Uber Eats, which was among five companies whose services wereadopted, in addition to the DEMAE-CAN portal service in February 2022. As a result, thetotal number of stores offering the food delivery services of all six providers reached 2,903
in 45 prefectures as of the end of February 2022. In addition, over-the-counter drugs areavailable through Uber Eats at 71 stores in 14 prefectures.

Overview of Domestic Convenience Store Business

65

Creating Happiness in Our
Communities – Our Story

In fiscal 2021, while the number of people infected with COVID-19 increased, vaccination by local governments and occupational vaccinations progressed, although states of
emergency were declared in many areas and priority measures were applied to prevent the
spread of the virus. In the first half of the year, a range of social activities were restricted andvoluntary restraints were implemented. In the second half of the year, the number of people
infected with COVID-19 declined after October 2021, and the state of emergency declaration and priority measures to prevent the spread of the virus were lifted nationwide, restrictions on social activities eased, and human flow recovered. Since January 2022, however,
the rapid spread of the Omicron variant has again led to a downward trend in human flow.
Under these circumstances, Lawson responded to changes in customers’ lifestyles by
expanding its lineup of daily-use products, such as frozen foods and daily necessities,
and by refurbishing individual stores to better respond to customer demand, in line withthe business environment of each individual store. The Company refurbished 2,636 storesin the fourth quarter and completed a total of 4,305 store refurbishments in fiscal 2021. In
addition, the introduction of Machikado Chubo, an in-store cooking service that was being
promoted in conjunction with store refurbishing, expanded to 8,359 stores as of the end of
February 2022.
On the sales front, we are implementing measures to realize our three commitments: “Superior taste,” “Human kindness,” and “Environmental (Machi) friendliness.” Our aim is for
Lawson to be supported by all customers. We are further strengthening our merchandisingof tasty and health-conscious products that only Lawson can offer. In addition to this, weare also working to ensure that we provide courteous customer service while promoting environmental initiatives, such as reducing food waste, plastic usage, and CO2 emissions. In
our efforts to reduce food waste, we conducted an AI-based discount sale recommendation
service. To reduce CO2 emissions, we conducted an AI-based demonstration experiment to
optimize the store delivery scheme. And to reduce plastic use, we conducted sales of foodproducts by weight at NATURAL LAWSON stores.

LAWSON INTEGRATED REPORT 2022

Overview of Store Operations
In store operations, we focused on reinforcing adherence to the Three Essential Practices,which emphasize (1) serving customers courteously; (2) providing a quality product offering that meets community needs; and (3) keeping our stores and communities clean. We
expanded our product lineups to meet the changing lifestyles and values of consumers as
we continued our efforts to increase sales while meeting the needs of our customers. These
included efforts to improve the profitability of franchise stores by increasing the efficiency ofstore operations and reducing waste loss and utility costs.

Finance - Company Information
About Lawson!

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Management

Overview of Store Development

Creating Happiness in Our
Communities – Our Story

Strategy for Creating
Happiness in Our Communities* The numbers of openings and closings and the total number of stores in Japan include the number of stores operated by
Lawson, Inc., and stores operated by Lawson Kochi, Inc., Lawson Minamikyushu, Inc., and Lawson Okinawa, Inc. which areequity-method affiliates.

Finance –Company Information

Number of stores in the convenience store business in Japan(Stores)
2021

2020

2019

2018

2017

14,656483
303
180

14,476373341
32

14,444
554
769
–215

14,659
1,067
400
667

13,992
1,250
369
881

(Fiscal year)

The Group continued to prioritize profitability in store openings.
In fiscal 2021, the total number of LAWSON, NATURAL LAWSON, and LAWSON STORE
100 stores opened in Japan was 483, while the number of these stores that closed was 303.
This brought our total number of stores in Japan to 14,656 as of the end of February 2022.*
Based on the joint business agreement signed with POPLAR Co., Ltd. in September 2020,
we converted 122 stores from its brand to the LAWSON-POPLAR and LAWSON brands infiscal 2021. In addition, based on the comprehensive business alliance agreement signed in
May 2021 with H2O Retailing Corp., we converted 97 of the station kiosks and convenience
stores operated by its group company, Asnas Co., Ltd. to LAWSON stores.
In our effort to build a convenience store model that caters to an aging population andrising health consciousness, we are continuing to expand healthcare-focused stores thatoffer over-the-counter drugs and prescription drugs in partnership with dispensing pharmacies and drugstore chains, as well as a larger product lineup of cosmetics and daily necessities than regular LAWSON stores. Including these healthcare-focused stores, the numberof stores handling over-the-counter drugs totaled 280 as of the end of February 2022 (ofwhich 49 stores were Pharmacy LAWSON stores equipped with dispensing pharmacies). In
addition, the number of Care-focused LAWSON stores with nursing care counters reached
22 as of the end of February 2022. Furthermore, we have also been expanding our chain of
Hospital LAWSON stores, which are in-hospital convenience stores that offer an enhanced
lineup of products such as medical hygiene products and nursing care-related supplies, inaddition to standard convenience store products and services. The number of these storesreached 337 as of the end of February 2022. Using the expertise we have developed byoperating in-hospital LAWSON stores, we will continue to support the lives of all peopleinteracting with hospitals.
In July 2021, NATURAL LAWSON marked its 20th anniversary as a nearby store supported by customers for facilitating “beautiful, healthy and comfortable” lifestyles. With ameticulously curated lineup of food products made from healthy ingredients, and environmentally friendly detergents and cosmetics, NATURAL LAWSON offers merchandise with
its own unique value. In addition, LAWSON STORE100 is a “Menu-Support Convenience
Store” that offers a wide range of reliably safe, high-quality vegetables and fruits with afocus on freshness, and products closely related to daily life, to support customers’ day-today dietary lifestyles. It serves a wide range of customers from children to senior citizens,with a focus on single person and homemaker customers. As of the end of February 2022,
the number of NATURAL LAWSON stores was 136, and the number of LAWSON STORE
100 stores was 669.

A Management Foundation for Creating
Happiness in Our Communities

Number of stores
Openings
Closings
Net increase (decrease)* Includes the numbers of stores operated by Lawson Kochi, Inc., Lawson Minamikyushu, Inc., and Lawson Okinawa, Inc.

Number of convenience stores in Japan(Fiscal year)

Lawson, Inc.
Directly managed stores
LAWSON
NATURAL LAWSON

Net
increase(decrease)in the term

2021

2020

2019

storesshare

storesstoresshare

stores

201
10

1.4%
0.1%

-20
-8

221
18

1,956
1,277
9,817
126
669
14,056

13.3%
8.7%
67.0%
0.9%
4.6%
95.9%

170
-43
73
1
-10
163

1,786
1,320
9,744
125
679
13,893

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

5
280
285

0.0%
1.9%
2.0%

6
132
138

0.0%
0.9%
0.9%

2
-3
-1

4
135
139

0.0%
0.9%
1.0%

5
134
139

0.0%
0.9%
1.0%

2
200
202

0.0%
1.4%
1.4%

—
3
3

2
197
199

0.0%
1.4%
1.4%

3
192
195

0.0%
1.3%
1.4%

3
257
260

0.0%
1.8%
1.8%

—
15
15

3
242
245

0.0%
1.7%
1.7%

5
234
239

0.0%
1.6%
1.7%

14,656 100.0%

180

14,476

1.5%
0.1%

share

263
22

1.8%
0.2%

12.3%
1,794
9.1%
1,342
67.3%
9,300
0.9%
123
4.7%
742
96.0% 13,586

12.4%
9.3%
64.4%
0.9%
5.1%
94.1%

Franchise stores
Type B
Type G
Type CNATURAL LAWSONLAWSON STORE 100
Subtotal
Lawson Sanin, Inc.
Directly managed storesFranchise stores
Subtotal
Lawson Kochi, Inc.
Directly managed storesFranchise stores
Subtotal
Lawson Minamikyushu, Inc.
Directly managed storesFranchise stores
Subtotal
Lawson Okinawa, Inc.
Directly managed storesFranchise stores
Subtotal
Total number of convenience
stores in Japan66

100.0% 14,444 100.0%

LAWSON INTEGRATED REPORT 2022

Finance - Company Information
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Management

About Lawson!

Overview of Businesses in Figures

Strategy for Creating
Happiness in Our Communities

Category

Net sales of all LAWSON stores (consolidated) in fiscal 2021 were 2,442.7 billion
yen (down 4.0% from the previous year). Store sales in the domestic convenience
store business increased due to the various measures implemented by Lawson Group
Sweeping Transformation Executive Committee, as well as the expansion of the number of stores in China.
Domestic sales at existing stores (non-consolidated) in fiscal 2021 are calculated
based on store management by Lawson Group Sweeping Transformation Executive
Committee. As a result of product renewal initiatives such as the development ofinnovative menus, there were positive trends in frozen foods and daily food products. Bento (boxed meals) and counter fast foods performed well, with particularly
favorable results for bento and sandwiches from the Machikado Chubo in-store foodpreparation service, which grew in popularity, contributing to sales. As a result, existing-store sales in the domestic Lawson business increased 1.1% year on year. The
number of customers decreased by 1.3% year on year, while average spend per customer increased by 2.5% year on year.
Existing store sales, customer count and average spend per customer year on year.*1
2021

2020

2019

2018

2017

2016

101.1%

92.7%

100.1%

99.5%

99.9%

99.8%

(Fiscal year)

Net sales at existing stores (year on year)
Average number of customers

98.7%

85.8%

98.4%

97.7%

98.7%

99.0%

Average spending per customer

102.5%

108.0%

101.7%

101.8%

101.3%

100.8%*1 The total of LAWSON and NATURAL LAWSON operated by Lawson, Inc.

Sales by product category (Consolidated, total net sales in Japan)*2(Billions of yen)

2020

2021

2019

2018

2017

Fast foods(share)

470.4

22.3%

452.8

22.1%

523.3

24.1%

520.4

24.7%

484.9

24.5%

Daily foods(share)

312.9

14.9%

309.3

15.1%

307.3

14.2%

283.9

13.5%

268.0

13.5%

Processed foods(share)Included cigarettes(share)Non-food products(share)Total

1,135.3

53.9% 1,096.3

53.4% 1,143.6

52.7% 1,107.3

52.6% 1,043.0

52.7%

601.1

28.6%

559.6

27.3%

559.1

25.8%

532.9

25.3%

498.6

25.2%

186.7

8.9%

192.1

9.4%

195.7

9.0%

194.2

9.2%

182.9

9.3%

100.0% 1,979.0

100.0%

2,105.4

100.0% 2,050.6

100.0% 2,170.0*2 The total of LAWSON and NATURAL LAWSON operated by Lawson, Inc.

LAWSON INTEGRATED REPORT 2022

Finance –Company Information

Details

Fast foods

Rice dishes, noodles, sandwiches, delicatessen items, fast foods, etc.

Daily foods

Bakery items, desserts, ice cream, fresh foods, etc.

Processed foods

Soft drinks, alcoholic beverages, cigarettes, processed foods,
confectionery, etc.

Non-food products

Daily necessities, books, magazines, etc.

Gross profit margin by product category
The gross profit margin was 30.7%, mainly due to an increase in the sales share of cigarettes, a low-margin product, despite an increase in the sales share of fast food.
Gross profit margin by product category (Non-consolidated)*3
2021

2020

2019

2018

2017

Fast foods

39.6%

39.2%

38.9%

38.2%

38.3%

Daily foods

34.6%

34.6%

34.3%

34.0%

33.9%

Processed foods

22.7%

23.2%

23.8%

23.9%

24.0%

Non-food products*4

49.9%

49.7%

50.5%

50.3%

50.1%

Gross profit margin

30.7%

31.0%

31.3%

31.2%

31.3%

2019

2018

2017

(Fiscal year)

Third-party bill settlement services (Non-consolidated)*5(Fiscal year)(Fiscal year)

A Management Foundation for Creating
Happiness in Our Communities

Product categories

Overview of sales

67

Creating Happiness in Our
Communities – Our Story

100.0% 2,105.9

2021

2020

Bill settlements (billions of yen)

2,442

2,465

2,498

2,412

2,263

Number of transactions (millions)

204.6

211.2

214.6

215.2

208.6

*3. The total of LAWSON and NATURAL LAWSON operated by Lawson, Inc.
*4. Gross profit margin of non-food products is calculated including commission income.
*5. The total of LAWSON, NATURAL LAWSON and LAWSON STORE 100 operated by Lawson, Inc.

Corporate Information

About Lawson!

Message from Top
Management

Creating Happiness in Our
Communities – Our Story

Corporate Data As of February 28, 2022
Company name
Headquarters

East Tower, Gate City Ohsaki, 11-2,
Osaki 1-chome, Shinagawa-ku,
Tokyo 141-8643, Japan

President and CEO,
Sadanobu Takemasu
Representative Director,
Chairman of the Board
April 15, 1975

Capital stock¥58,506.644 million

Number of employees

10,362 (consolidated)

Business
activities

Franchise chain development of LAWSON, NATURAL LAWSON,LAWSON STORE 100, etc.

Net sales for all
stores2,442.7 billion yen (consolidated)

Category

Domestic
convenience store
business

Number of stores 19,687 stores
Operating areas

All 47 prefectures in Japan, China (Shanghai and surrounding area,
Chongqing and surrounding area, Shenyang, Dalian, Beijing andsurrounding area, Wuhan, Hefei, Changsha, Haikou, etc.), Thailand,
Indonesia, Philippines, Hawaii

Notes 1: Net sales for all stores is the sum of total sales by the domestic convenience store business, overseas business and Seijo Ishii stores (consolidated
subsidiaries only).
For the Seijo Ishii business, only the total for its Company-operated stores is included.
2: Among the total number of stores, the number of domestic stores comprises LAWSON, NATURAL LAWSON and LAWSON STORE 100 stores operatedby Lawson Inc.; LAWSON stores operated by Lawson Okinawa Inc., Lawson Minamikyushu Inc. and Lawson Kochi Inc.; and Seijo Ishii stores operated
by SEIJO ISHII, CO., LTD.
The number of overseas stores represents the total number of LAWSON brand stores managed by operating companies in the respective regions.

Entertainmentrelated business

409,300,000

Shares issued

100,300,000

Shareholders

31,941Name of company

Finance –Company Information

Consolidation status

Lawson, Inc.
Lawson Store 100, Inc.
SCI, Inc.
Lawson urbanworks, Inc.
Lawson Okinawa, Inc.
Lawson Minamikyushu, Inc.
Lawson Kochi, Inc.
Lawson Entertainment, Inc.
United Cinemas Co., Ltd.

Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Equity-method affiliate
Equity-method affiliate
Equity-method affiliate
Consolidated subsidiary(Consolidated subsidiary of
Lawson Entertainment, Inc.)
Consolidated subsidiary

Financial Services
Lawson Bank, Inc.
Business
Consulting business BestPractice, Inc.
Overseas business
Lawson (China) Holdings, Inc.
Shanghai Lawson, Inc.

Consolidated subsidiary
Consolidated subsidiary(Consolidated subsidiary of
Lawson (China) Holdings, Inc.)(Consolidated subsidiary of
Lawson (China) Holdings, Inc.)(Consolidated subsidiary of
Lawson (China) Holdings, Inc.)(Consolidated subsidiary of
Lawson (China) Holdings, Inc.)
Consolidated subsidiary
Consolidated subsidiary

Chongqing Lawson, Inc.
Dalian Lawson, Inc.

Share Information As of February 28, 2022
Authorized shares

A Management Foundation for Creating
Happiness in Our Communities

Main Lawson Group Companies As of February 28, 2022

Lawson, Inc.

Established

Strategy for Creating
Happiness in Our Communities

Beijing Lawson, Inc.

Major shareholders (Top 10)
Shareholder name

Number of Percentages
shares heldof total(Thousands) shares held

Seijo Ishii business

Saha Lawson Co., Ltd.
SEIJO ISHII CO., LTD.

Stock exchange listings Tokyo Stock Exchange (1st Section)

1. Mitsubishi Corporation

50,15050.1

Stock transfer agent

The Master Trust Bank of Japan,
2.
Ltd. (Trust account)

7,176

7.2

Custody Bank of Japan, Ltd.
(Trust account)

2,174

2.2

4. KDDI Corporation

2,110

2.1

LAWSON

93.5

93.7

82.5

74.6

74.3

5. NTT DOCOMO, INC.

2,092

2.1

TOPIX total return

117.6

109.3

105.3

133.1

137.6

6. Japan Securities Finance Co., Ltd.

1,522

1.5

STATE STREET BANK WEST
7.
CLIENT - TREATY 505234

1,456

1.5

8. Employee stockholding association

877

0.9

9. BNYM TREATY DTT 15

869

0.9

10. SMBC Nikko Securities Inc.

797

0.8

Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo,
Japan

Distribution of shareholders by type
Financial institutions

Other domestic entities

14.5%

55.0%

Securities companies

2.8%

Individuals, others

8.7%

Foreign entities Treasury stock

18.8%

0.2%

3.

68

Total shareholder return (TSR)*T he above percentages of total shares held were calculated after excluding
228,807 treasury stocks.

February 2018 February 2019 February 2020 February 2021 February 2022

Lawson Inc. was certified as a DX-Certified
Operator under the Digital Transformation(DX) Certification system provided by the
Ministry of Economy, Trade and Industry on
August 1, 2021

LAWSON INTEGRATED REPORT 2022

Corporate Information
About Lawson!

Store Network As of February 28, 2022
Total number of stores(domestic and overseas total)*
19,687 stores

14,825 stores

4,862 stores

Shenyang 150 stores

Hefei 175 stores

Number of domestic stores

14,825 stores

Chengdu 39 stores

A Management Foundation for Creating
Happiness in Our Communities

Finance –Company Information

A convenience store that believes its fundamental role is “Creating Happiness andHarmony in Our Communities” and operates in various store formats to suit each
community’s characteristics.

A nearby store supporting “beautiful,healthy and comfortable” lifestyles basedon the concept of “making the most of every day”.

Operating company

Lawson, Inc.

Operating company

Based on the concept of a “Menu-Support
Convenience Store,” these stores offer daily
meals centered on ingredients such as fresh
food items. We have also developed the
100 Yen series mainly comprising original
products.

A lifestyle supermarket for people who areparticular about food, providing food fromaround the world at reasonable prices.
Operating company

SEIJO ISHII CO., LTD.

Operating company

Lawson Store 100, Inc.

Chongqing 450 stores

Shanghai 2,349 stores

Changsha 117 stores

Wuhan 526 stores

Haikou 100 stores
Thailand 166 stores

Strategy for Creating
Happiness in Our Communities

Lawson, Inc.
Lawson Okinawa, Inc.
Lawson Minamikyushu, Inc.
Lawson Kochi, Inc.
Lawson urbanworks, Inc.

Dalian 311 stores

69

Creating Happiness in Our
Communities – Our Story

Main Businesses and Services As of February 28, 2022

Number of domestic stores Number of overseas stores

Beijing 343 stores

Message from Top
Management

The farms are located nationwide, producing fresh fruit and vegetables for Lawson
Group stores.
Operating company

LAWSON Farm, a corporation eligible for farmland ownership in respective locations

Philippines 69 stores Hawaii 2 stores

Provision of ticket sales services for a fullrange of entertainment, including musical &sports events, theaters, leisure facilities andcinemas, planning and sales of entertainment tours, sales of domestic tours, andplanning and agency services for fan clubs,
event planning & production (sponsorshippromotions, investment promotions) andothers.
Operating company

Lawson Entertainment, Inc.

A company selling music and movie CDs &DVDs, books and related goods (throughstores & e-commerce) as well as planningand producing events and museum exhibitions in stores.

Indonesia 65 stores* The number of domestic stores represents the total number of LAWSON, NATURAL LAWSON and LAWSON STORE
100 stores operated by Lawson, Inc.; LAWSON stores operated by Lawson Okinawa, Inc., Lawson Minamikyushu,
Inc., and Lawson Kochi, Inc.; and Seijo Ishii stores operated by SEIJO ISHII, CO., LTD. The number of overseas stores
represents the total number of LAWSON brand stores managed by operating companies in the respective regions.

Operating company

Operating company

Lawson Entertainment, Inc.

United Cinemas Co., Ltd.

A bank that provides financial services suchas savings accounts and credit cards, aswell as ATM services for cash cards issued
by financial institutions throughout Japan at
the ATMs in LAWSON stores, etc. The bankhas also launched a service that enables
you to charge your smartphone apps withcash at the ATMs.
Operating company

Lawson Bank, Inc.

LAWSON INTEGRATED REPORT 2022

Operation of cinema complexes (multiplex
movie theaters) offering not only film entertainment but also such enriching experiences as 4DX® (experiential viewing) and various contents other than movies.