LIFE CORPORATION

LIFE CORPORATION
Financial Results Briefing
for FY2021(Fiscal year ended February 28, 2022)

April 12, 2022

LIFE CORPORATION

1. Full-year FY2021 performance overview-2-

LIFE CORPORATION

Full-year FY2021 performance overview (consolidated)
Full-year FY2021

Operatingrevenue

759,146

768,335+1.2%

760,000

Operatingprofit27,38822,932(16.3%)

19,000Ordinary profit

28,156

23,695(15.8%)

20,000

Profit17,824

15,208(14.7%)

12,500-3-Change(Reference)
Full-year FY2021
Initial forecast

Full-year FY2020

Unit: Millions of yen

LIFE CORPORATION

Operating revenue/Ordinary profit trends■ Operating revenue was record high, ordinary profit was second highest level
Operating revenue(Billions of yen)

Operating revenue

Ordinary profit(Billions of yen)

Ordinary profit

40.0

900.0
800.0

759.1

700.0
630.0

677.7

653.0

698.7

768.3

714.7

30.0

28.1

585.8

600.0
519.9

23.6

534.9

500.0
20.0
400.0
14.5
12.9

300.0
200.0

12.8

12.5

12.8

10.9
7.3

10.0

7.7

100.0
0.0
Fiscal year

0.0
12

13

14

15

16

17
-4-

18

19

20

21

LIFE CORPORATION

Factors for change in operating profit (consolidated)(Unit: Millions of yen)

■ Increased personnel expenses in order to increase hiring activities for more
powerful sales capabilities
Increase inoperating grossprofit＋5,514

Increase in selling, general andadministrative expenses(9,970)

Increase in receipts

Increase in from operating
gross profit
revenue+5,060＋453

27,388

Increasein freight
costs
(974)

Decrease inpromotion
expenses+93
Increase in Increase inremodeling utilities Increase in
and repair expensesrent expenses(1,328)22,932
expenses(452)
Increase in
Increasein
Increase in(204)
personnel
depreciation otherexpenses
(950)
(650)
(5,502)

Increasedhiringactivities

Decrease in operating profit (4,456)
Full-year FY2021

Full-year FY2022-5-

LIFE CORPORATION

Investment results■ Strengthened renovations on existing stores. Conducted among most renovations on
target stores.
Completed center reorganization; can support up to 400 stores across Japan(Unit: Millions of yen)

Full-year FY2021

Major changes

New stores

7,179

Opened 8 new stores

Renovation

6,468

Strengthened renovations on existing stores;
major renovations on 32 stores

IT and digitalsystems

2,591

Expanded adoption of semi-self checkout
Introduction of electronic price tags, etc.

Others6,610

Tempozan PC Biogas power generation
Existing store facilities, etc.

Total

22,848-6-

LIFE CORPORATION

Consolidated cash flow

(Unit: Millions of yen)

Full-year FY2020

Full-year FY2021

ChangeCash flows
from operating activities

41,747(7,926)(49,673)

Cash flows
from investing activities(20,587)(20,303)+283

Cash flows
from financing activities(19,029)

22,695+41,725

14,943

9,409(5,533)

Cash and cash equivalents
at end of period-7-

LIFE CORPORATION

Consolidated balance sheet(Unit: Millions of yen, %)End-February, 2021

End-February, 2022

Change74,66874,480(0.3)

Cash and deposits

15,3439,809(36.1)

Inventories

23,38324,138+3.2

Accounts receivable - trade

5,524

8,133

+47.2

Accounts receivable - other

27,38328,544

+4.2

Other

3,033

3,854

+27.1

Non-current assets

193,638

195,748+1.1

Property, plant andequipment

147,452

150,490+2.1

Intangible assets

3,635

3,508

(3.5)

Investments and otherassets42,551

41,749(1.9)

Total assets

268,307270,229+0.7

170,747

159,929+6.3

42,79069,108+61.5

Total net assets

97,560110,299+13.1

Total liabilities and net assets

268,307270,229+0.7

Current assets

Total liabilities(Interest-bearing liabilities)-8-

LIFE CORPORATION

Profit/ROE trends■ ROE continued to maintain high levels.
20.0

Profit(Billions of yen)50.0 ROE
(%)

17.8

15.2

40.0

15.0

30.0
10.0

7.9

8.1
6.6

3.0
5.8

9.9

14.5

3.8

7.8

19.9
20.0

14.6

13.6

5.2
5.0

7.4

10.2

10.0
10.0

9.7
7.0

0.0
Fiscal year

0.0

12

13

14

15

16

17
-9-

18

19

20

21

LIFE CORPORATIONROIC (Return on invested capital)■ ROIC is set as important indicator; target set at 6% from 5th Medium-Term Plan
Operating profit was higher than targets again this fiscal year, clearing targets
14.0

(%)

11.5

12.0

8.9

10.0

8.0

6.0
6.0

5.7

6.2

5.6

6.3
Company targets: 6%

4.0

2.0

0.0
Fiscal year

15

16

17

18
- 10 -

1920

21

LIFE CORPORATION

Key points for full-year FY2021 earnings

1. 18 consecutive years of sales growth(Operating revenue: 768,335 million yen)

2. Second highest ordinary profit(Ordinary profit: 23,695 million yen)

3. Record high renovation investments(Renovation investments: 6,468 million yen)

- 11 -

LIFE CORPORATION

Key points for full-year FY2021 earnings■ Causes for surpassing initial forecasts

1. Ongoing growth in demand for eating at home
2. New store openings and store renovations
going ahead smoothly
3. Results of measures to improve gross profit
ratio- 12 -

LIFE CORPORATION

Existing store net sales, number of customers andaverage sale per customer vs. FY2020 (monthly)■ Compared with FY2020, both the number of customers and average sale per
customer seem to be in line...

(%)

120.0

Number of customers
110.0

Net sales

100.0

Average sale per customer

90.0

80.0

Declaration of a stateof emergency
March

April

May

Declaration of a stateof emergency
June

July

Declaration of a stateof emergency

August September October November December January- 13 -

February

LIFE CORPORATION

Existing store net sales, number of customers andaverage sale per customer vs. FY2019 (monthly)■ Compared with FY2019, frequency of visiting stores was down and people
continued to buy in bulk

(%)

120.0

Average sale per customer

110.0

Net sales

100.0

Number of customers

90.0

80.0

Declaration of a stateof emergency
March

April

May

Declaration of a stateof emergency
June

July

Declaration of a stateof emergency

August September October November December January- 14 -

February

LIFE CORPORATION(Reference) Existing store net sales, number of customers andaverage sale per customer (trends by period)
Existing store net sales, number of customers
and average sale per customer vs. FY2020

Existing store net sales, number of customers andaverage sale per customer vs. FY2019(%)

FY2021/1Q

FY2021/2Q

FY2021/3Q

FY2021/4Q

Net sales

96.0

100.6

101.6

99.3

Number ofcustomers

101.1

102.6

100.9

Average sale
per customer

95.0

98.0

100.6

(%)

FY2021/1Q

FY2021/2Q

FY2021/3Q

FY2021/4Q

Net sales

105.9

107.3

103.3

101.7

98.1

Number ofcustomers

95.3

96.1

94.4

92.2

101.3

Average sale
per customer

111.1

111.5

109.4

110.3

First half

Second halfFirst half

Second half

Net sales

98.2

100.4

Net sales

106.5

102.5

Number ofcustomers

101.8

99.5

Number ofcustomers

95.7

93.3

Average sale
per customer

96.5

100.9

Average sale
per customer

111.4

109.8

Full year

Full year

Net sales

99.3

Net sales

104.6

Number ofcustomers

100.7

Number ofcustomers

94.6

Average sale
per customer

98.6

Average sale
per customer

110.5- 15 -

LIFE CORPORATIONNet sales/gross profit ratio by division■ Total gross profit ratio increased mainly because sales recovered in delicatessen
Net sales

Gross profit ratio(Unit: Millions of yen, %)Full-year FY2021
Department

FY2020Full-year

YoY(Unit: %)Full-year FY2021
Comparedwithexisting

FY2020Full-year

Change636,177

647,426

101.8

99.6

31.1

31.4

+0.4

Agricultural
produce

98,563

98,578

100.0

98.0

28.8

29.5

+0.7

Marine products

57,70059,063

102.4

100.1

32.3

32.3

±0.0

Meat products

83,262

83,448

100.2

98.0

31.1

31.0

(0.1)

Delicatessen

75,257

81,992

109.0

106.1

54.7

54.9

+0.2

Process andgroceries

321,393324,343

100.9

99.0

26.0

26.0

±0.0

Lifestyle products

66,97164,823

96.8

95.9

26.9

26.7

(0.2)

Apparel

23,51623,150

98.4

99.0

38.8

39.4

+0.5

Others

9,680

9,680

100.0

102.0

10.3

10.2

(0.1)

736,346

745,080

101.2

99.3

30.6

31.0

+0.3

Food products

Total- 16 -

LIFE CORPORATION

Initiatives to improve gross profit ratio■ Improved gross profit ratio through product development for appealing original
products and utilization of the food process centers%
32.0■ Private brand product development ■ Food process centers initiatives
Holds food process centers for agricultural produce,
marine products, meat products, and delicatessen
Realizes stable quality and product supply

Developed four private brand products
to respond to various customer needs

31.0

30.6

30.0

29.5
28.8

29.0

27.7

28.0

27.9

■ Strengthen Delicatessen

28.1

Develop delicious delicatessen products
by focusing on ingredients, recipes andfreshness

27.3
27.0

31.0

26.8

26.9

12

13

26.0
Fiscal year

14

15

16
- 17 -

17

18

19

20

21

LIFE CORPORATION

2. Realize a sustainable and flourishingsociety- 18 -

LIFE CORPORATION

Revision of corporate philosophy
Revised corporate philosophy to meet the changing times while
inheriting the ideas from the founding
Through “reliable management with noble
aspirations”
contribute to improving societal development

Through “reliable management with noble
aspirations”
contribute towards the realization of asustainable and flourishing society- 19 -

Richnessof things

Richnessof heart

LIFE CORPORATION

BIO-RAL businessBusiness composed of 4 concepts: Organic, Local, Healthy and Sustainability
Contribute to the realization of a sustainable and flourishing society through our main businessof product manufacturing and sales

Gentle on the Earth,gentle on People

By designing, manufacturing, and selling
products that don’t use pesticides, chemicalfertilizers, and food additives as much as
possible, BIO-RAL supports the healthyliving of people and aims to realize theenvironmentally-friendly and sustainable
world envisioned in SDGs.

- 20 -

LIFE CORPORATION

BIO-RAL business
Opened new stores, the second in both Osaka Region and Tokyo Region in FY2021; plans to open
new stores in FY2022 as well
Proactively introduced BIO-RAL corners in existing stores and expanded the business
Opened Shimokitazawa Ekimae Store in February 2022

Opened EKI MARCHE OSAKA Store in October 2021

BIO-RAL corners at existing stores- 21 -

LIFE CORPORATION

BIO-RAL business
Strengthened development of private brand products to achieve a lineup of approximately 200 items

BIO-RAL business (stores + private brand products)
net sales grew to approximately ¥4.0 billion; aim for ¥10 billion in short-term- 22 -

LIFE CORPORATION

Sustainability promotion activities■ Bio-gas power generation

Invested approximately ¥900 million into the Tempozan Food Process Center and newly established
one of the largest bio-gas power generation facilities in Japan as a retail business.
By utilizing the remaining food residues generated by the Food Process Center, this initiative aims to
reduce food residues and generate power.

Reduction in food residues
Approximately

4,380 tons a year

Generated power volume
Approximately

700,000 kWh a year

(Powers approximately 160 households)- 23 -

LIFE CORPORATION

Sustainability promotion activities■ ZEB (Net Zero Energy Building) certification

Acquired ZEB certification (ZEB Ready) as a building that realizes energy-saving for the first time at
the Toyosu Store in FY2022. Also, plan to acquire ZEB certification at the Yokohama Hananokichobuilding.

Yokohama Hananokicho building

Toyosu Store- 24 -

LIFE CORPORATION

Sustainability promotion activities■ Implemented renewable energy

From April 2022, procured all electricity from renewable energy at the Tokyo Headquarters, Osaka
Headquarters and neighboring Central Square Nishi-miyahara Store.

Reduced CO2
Approximately

1,300 tons a year

■ Solar power generation
Set up solar power generation facilities at 15 locations at stores and Food Process Center in orderto generate power

Generated power volume
Approximately

1.4 million kWh a year

(Powers approximately 320 households)- 25 -

LIFE CORPORATION

Sustainability promotion activities■ Introduced environmentally-friendly cutlery■ Activities to educate on food and food loss

Switched from plastic to paper/wood straws andspoons provided at stores

Held education sessions teaching the importance offood at elementary schools and nursery schools

Reduction of plastic straws/spoons

Food education sessions

Approximately(

17 million pieces

25,099 students
at 322 schools in FY2021

Reached

30 tons) a year
- 26 -

LIFE CORPORATION

3. FY2021/FY2022 initiatives
Differentiating ourselves from the competition- 27 -

LIFE CORPORATION

Differentiating ourselves from the competition by:■ Strengthening development of original products■ Proactively investing in new stores and renovations■ Expanding online supermarkets■ Promoting card business■ Utilizing digital technology- 28 -

LIFE CORPORATION

Strengthening development of private brandStrengthen development of four private brand products
Brand nameResults(millions of yen)

YoY

Number of items

Sales
composition

Smile Life

43,381

102.1

800

5.8

LIFE PREMIUM

8,124

104.7

153

1.1

BIO-RAL

2,900

160.3

189

0.4

start select

10,823

94.6

207

1.5

65,228

103.6

1,349

8.8

Total

Popular products raved about on TV!

High acclaim from top chef on TV
ranking corner(TBS “LOVE it!”/”SATURDAY PLUS”)■ Meat sauce category
No. 1■ Grilled meat sauce flavor category No. 1■ Yogurt category
No. 2■ Frozen pizza categoryNo. 2- 29 -

LIFE CORPORATION

Strengthening development of original products
Develop highly fresh and high added-value products that utilize food process centers

Hot pot set

Chicken meatballs with collagen

Bento boxes/salads- 30 -

Miso-marinated silver salmon using
BIO-RAL’s long-fermented no-foodadditive organic miso

LIFE CORPORATION

Proactively investing in new stores and renovations
Opened 8 new stores, including stores in large commercial facilities, small urban stores, and BIORALMarch 2021
Higashinippori Store

April 2021
Mizonokuchi Store

September 2021
Shijo karasuma Store
September 2021
Hongo 3-chome Ekimae Store

November 2021
SEVEN PARK Amami Store

October 2021
EKI MARCHE OSAKA Store

December 2021
HIRAKATA T-SITE Store

February 2022
Shimokitazawa Ekimae Store- 31 -

Utilize own food process centers and satellitedelicatessen centers, to realize strong productcapabilities and full lineups even in small urban
storesLIFE CORPORATION

Proactively investing in new stores and renovations
Performed 32 large-scale renovations to create Life-style stores that meet customer needs<Major renovations> Opened online supermarkets
 Implemented BIO-RAL corner Implemented semi-self checkouts Enhanced lineup that meets regional needs and highdemand for eating at home
Converted to energy-saving and highly-efficient frozen cases
Communications environment in stores, etc.

Renovated Kyodo Store
BeforeAfter- 32 -

Expand and install BIO-RAL corners
for food/lifestyle products

LIFE CORPORATION

Proactively investing in new stores and renovations
In FY2022, plans to open the Central Square Yebisu Garden Place Store as a flagship,
along with 11 new stores, primarily large stores■ Central Square Yebisu Garden Place Store (opens on April 15)■ Horikawa Kitayama Store(opens on April 27)■ Kameido Clock Store(opens on April 28)- 33 -■ Toyosu StoreLIFE CORPORATION

Expanding online supermarkets
Conduct app development and systems development for online supermarkets to improve
convenience and enhance store work efficiency■ NPS® Benchmarks 2021
■ Developed online supermarket
Claimed top spot two years in a row
app/systems
The Company received
positive reviews for bothproducts (richness of lineup,
freshness of fresh foodproducts) and services (highquality distribution, including
delivery staff service andpackaging) to claim the top
spot for the second
consecutive year

■ Established LIFE HOME DELIVERY
In order to achieve stable distribution and highquality services, the Company established LIFEHOME DELIVERY as a joint venture with the
Maguchi Group and began operations from June
In the midst of a serious logistics crisis, theCompany prepared distribution functions itself
to achieve an important role that connect last miledelivery- 34 -

LIFE CORPORATION

Expanding online supermarkets
Increased speed and expanded service area of Life’s Amazon online supermarket■ Current service areas
Osaka
Prefecture
End-February,
2021

4 cities(21 wards ofOsaka City)

End-February,2022

23 cities(23 wards ofOsaka City)

Kyoto
Prefecture

3 cities

Hyogo
Prefecture

6 cities

Tokyo

Kanagawa
Prefecture

23 wards/
4 cities

2 cities

23 wards/13
cities

8 cities[Osaka Region Service Area][Tokyo Region Service Area]

September 2019 toFebruary 2021
March 2021 to
February 2022

September 2019 toFebruary 2021
March 2021 to
February 2022

SaitamaPrefecture

Chiba
Prefecture

5 cities

13 cities*Service area for each prefecture is only certain areas- 35 -

LIFE CORPORATION

Expanding online supermarkets
After opening locations and expanding capacity of existing stores, FY2021 net sales ended roughly inline with forecasts at approximately ¥9.6 billion. In FY2022, the Company will further expand capacity
and achieve ¥20 billion in net sales while aiming for ¥100 billion in net sales by FY2030¥100 billion■ Online supermarket net sales trends(Total of Life online sales from Life online supermarkets and Amazon)¥20 billion¥9.6 billion¥5.3 billion¥1.9 billion¥2.4 billion

2017

2018

¥3.1 billion

2019

2020
- 36 -

2021

2022 (forecast) 2030 (forecast)LIFE CORPORATION

Promoting card business
Aimed for ongoing use and creating regular customers by strengthening entrance and use of thecompany credit card, the LC JCB Card.
This is the most valuable card for customers looking to earn Life Points.
There are also merits to the Company as it reduces the handling fees from other company credit cards.

■ Plans to promote membership and useof LC JCB Card

■ Number of members

Maximized and strengthened LC JCB Card membershippromotion plans through FY2021

Company credit card
LC JCB Card

E-money membership card
LaCuCaApproximately 4.9 million people(+340,000 persons YoY)

■ Ratio of cashless payment (as of February 2022)

56.1% (+2.9% YoY)
- 37 -

LIFE CORPORATION

Utilizing digital technology
Utilized digital technology to execute marketing suited to each customer. Also improved efficiency of
employee working environment, used generated free time for customer service and sales display
building, and further enhanced the service level of stores■ One to One marketing■ Implemented POS
Provide coupons and information that suits each Life cart experiments
memberSalad¥30 off

Bento box
¥50 off

BIO-RAL
products 5%
OFF

By registering products while
shopping, significantly shrink thewaiting time at the register andimprove efficiency of cashiering■ Expanded categories that support
AI ordering■ Expanded electronic
price tags

Used for groceries until now, but expanded toother categories

Plans to implement in all stores in Tokyo Region in FY2022.
Reduces work to create and replace price tags daily;
significantly improves work efficiency- 38 -

LIFE CORPORATION

New supermarket...

“SUPERMARKET 4.0”
from Central Square Yebisu Garden Place Store- 39 -

LIFE CORPORATION

Evolution of our supermarket
SUPERMARKET

SUPERMARKET

SUPERMARKET

1.0

2.0

3.0

Self service method(1953-)

Online supermarkets(2000s-)Expand organic products(2010s-)Kinokuniya opened first self
service supermarket in Japanin Aoyama in 1953

In the 2000s, major supermarkets
and grocery stores entered the field
on online supermarkets- 40 -In the 2010s, the age oforganic products began after
the “Organic Equivalency
Arrangement” was agreed
upon regarding organic
products in Japan and the US

LIFE CORPORATION

Evolution of our supermarket
SUPERMARKET

4.0
Brick and mortar stores, online supermarkets, and organic products
lead to newly shaped supermarkets that connect seamlessly and cross borders- 41 -

LIFE CORPORATION“SUPERMARKET 4.0”
First next-generation supermarkets in Japanthat fuse two formats of Central Square and BIO-RAL: brick and mortar
stores and online stores
Providing a rich food experience while supporting people’s healthand creating a fun and convenient shopping environment.
Yebisu Garden Place Store will realize a new type of supermarket that canbe continuously chosen by people in many regions
by expanding use need and life scenes.

- 42 -

LIFE CORPORATION

4. Full-year forecast for FY2022- 43 -

LIFE CORPORATION

Medium-Term Plan
■ 6th Medium-Term Plan (FY2018-)
Net sales¥800 billion

Ordinary profit

The store is the star

¥20 billion
Investin people

Investin stores

in products

Online supermarkets

Card business

Infrastructure

strategy

strategy

strategy

InvestProgress exceeded forecasts, however some issues remain due to
COVID-19...
FY2022 is positioned as the “year of completion”
for the 6th Medium-Term Plan

Start new Medium-Term Plan from FY2023- 44 -

LIFE CORPORATION

Full-year forecast for FY2022 (consolidated)■ Achieve ¥20 billion in ordinary profit target as the year of completion of 6th MediumTerm Management Plan
Unit:
Millions of yen

Full-year FY2019

Full-year FY2020

Full-year FY2021

Full-year FY2022

Operatingrevenue

714,684

759,146

768,335

Operatingprofit13,87927,388

Ordinary profit

14,558(Reference)
Medium-Term Plan
Ordinary profit targets

ProfitChangeVs. Full-year
FY2019Vs. Full-year
FY2021

770,000**

22,932

23,200+67.2%+1.2%

28,156

23,69524,000+64.9%+1.3%

13,20015,50020,00020,0007,834

17,824

15,20815,500+97.9%+1.9%*Life Corporation has applied the revised “Accounting Standard for Revenue Recognition,” etc. from the beginning of FY2022.
Forecasts are made based on these standards.
However, change is not included due to different assumptions in calculation methods for operating revenue. Operating revenue is
expected to decrease by approximately ¥22.0 billion.

- 45 -

LIFE CORPORATION

Investment plan
■ In FY2022, open many large stores and increase investments in new stores
Also proactively invest in systems and strengthen sales capabilities(Unit: Millions of yen)

Full-year FY2021

Full-year FY2022

Major changes

New stores

7,179

16,500Open 11 new stores

Renovation

6,468

2,400

11 major store renovations

IT and digitalsystems

2,591

6,500

Expand use of electronic price tags,
etc.

Others

6,610

4,100

Existing store facilities, etc.

Total

22,84829,500- 46 -

LIFE CORPORATION