LIFE CORPORATION
Financial Results Briefing
For the First Half of FY2022(First Six Months of the Fiscal Year Ending February 28, 2023)

October 12, 2022

LIFE CORPORATION

1. FY2022 First Half (H1)
performance overview―2―

LIFE CORPORATION

Key points for FY2022 H1 earnings
1. Net sales posted 100.2% YoY*
Net sales of existing stores posted 98.7% YoY*
*Results are compared using the figures before applying the “Accounting Standard
for Revenue Recognition”

2. Gross profit ratio posted 30.9%* (+0.3% YoY*)
Expansion of high-value-added products and delicatessens
Effective use of food process centers*Results are compared using the figures before applying the Accounting Standard for Revenue
Recognition

3. Ordinary profit posted ¥9.3 billion due toincreased selling, general and administrative
expenses (down ¥6.2 billion YoY)
Up ¥3.3 billion compared with FY2019, the period before
COVID-19―3―

LIFE CORPORATION

FY2022 H1 performance overview (consolidated)
Unit: Millions of yen

Operatingrevenue
OperatingprofitFY2021 H1

387,093
15,251

FY2022 H1

377,563
8,914

Ordinary profit

15,603

9,331

Profit10,782

6,412

Change
*1

–
*2

*2

*2

(41.6%)(40.2%)(40.5%)*1: Accounting treatment methods are different for comparative periods due to the application of the “Accounting Standard for Revenue
Recognition.” Accordingly, changes in operating revenue from the previous period are not stated.
*2: Accounting treatment methods are different for comparative periods due to the application of the “Accounting Standard for Revenue
Recognition.” However, changes from the previous period are stated because the effects on amounts are immaterial.

―4―

LIFE CORPORATION

Effects of the application of the “Accounting Standard for
Revenue Recognition”(Unit: Millions of yen)
FY2022 H1
Before the application

EffectAfter the application①

Operating revenue

387,817(10,254)

377,563②

Net sales

376,092(11,841)364,251③

Cost of sales

260,045(7,637)

252,407④

Gross profit

116,046(4,203)111,843⑤

Receipts fromoperating revenue

11,724+1,586

13,311⑥

Operating gross profit

127,771(2,616)125,155⑦

Selling, general andadministrative expenses

118,850(2,609)116,241⑧

Operating profit

8,921

(6)

8,914

(② + ⑤)* Major factors derive from the changes in accounting methods of, among others, rents for tenants, our point system, and transactions inwhich purchase of goods, etc. is recognized at the time of sales thereof (shoka shiire)* Effect on each profit item below operating profit to profit before income taxes is equivalent to the effect on operating profit―5―

LIFE CORPORATIONYoY changes before the application of the “AccountingStandard for Revenue Recognition”(Unit: Millions of yen)
FY2022 H1

FY2021 H1Change①

Operating revenue

387,817

387,093+724②

Net sales

376,092

375,382+709③

Cost of sales

260,045

260,368(322)④

Gross profit

116,046

115,014+1,032⑤

Receipts fromoperating revenue

11,724

11,710+14⑥

Operating gross profit

127,771

126,725+1,046⑦

Selling, general andadministrative expenses

118,850

111,473+7,377⑧

Operating profit

8,921

15,251(6,330)(② + ⑤)* Effect on each profit item below operating profit to profit before income taxes is equivalent to the effect on operating profit―6―

LIFE CORPORATION

Ordinary profit and profit trends (FY2022 H1)Third highest ordinary profit following FY2020 and FY2021 that showed(Unit: Billions of yen)growth in demand for eating at homeOrdinary profit
Profit18.0

Ordinary profit

Profit
17.3
15.6

16.0
14.0
11.7

12.0

10.7

10.0

9.3

8.0
5.6

6.0
4.0
2.0

6.1
5.1

4.7
3.6

3.5
1.9

6.4

5.9
4.9
3.8

3.7
2.5

2.4

2.9

0.0
13

14

15

16

17

18

*Figures after the application of the “Accounting Standard for Revenue Recognition”

―7―

19

20

21

*

22 (Fiscal year)

LIFE CORPORATION

Changes in demand for eating at home (industry trends)
Demand for eating at home soared during COVID-19, but is on a course to settle down.
Except for the data in the Osaka Region for May and August, the monthly net sales of ourexisting stores exceeded the figures of the statistics data (the Supermarket Statistics
Research) for the Tokyo Region and the Osaka Region in which we operate our stores.

■ Existing store net sales in FY2022 H1 (YoY)(Unit: %)The Company
Supermarket Statistics Research (Tokyo Region)
Supermarket Statistics Research (Osaka Region)

103
102
101
100
99
98
97
96
95
94
3

4

5

6
―8―

7

8

(Month)LIFE CORPORATION

Changes in demand for eating at home (trends in numberof customers and average sale per customer)
Soaring demand for eating at home is on a course to settle down. The number ofcustomers falls below the FY2021 level, but an average sale per customer remains flat
■ Net sales, number of customers, and average sale per customer in existing(Unit: %)stores during FY2022 H1 (YoY)106

Net sales

104

Number of customers

Average sale per customer

102

100

98

96

94
3

4

5

6
―9―

7

8

(Month)LIFE CORPORATION

Changes in demand for eating at home (trends in unit priceand number of items purchased)
The number of items purchased per shopping falls below the FY2021 level, but unit priceremains relatively high due to the expansion of value-added products and revision of prices.
An average sale per customer remains flat.
■ Average sale per customer, unit price, and number of items purchased in(Unit: %)existing stores during FY2022 H1 (YoY)106

Average sale per customer

Unit price

Number of items purchased

104

102

100

98

96

94
3

4

5

6
― 10 ―

7

8(Month)LIFE CORPORATION

Reference: Factors of changes in operating profit during
FY2022 H1 (on a basis before the application of the
Accounting Standard for Revenue Recognition)
Increase inoperating gross profit andreceipts from operating revenue

Increase in selling, general andadministrative expenses＋1,046(Unit: Millions of yen)

(7,376)

Increase in
Increase inoperating gross receipts from operating
revenue
profit＋1,032＋14

15,251

Increase in
freight costs Increase inpromotion(358)
expenses(812)

Increase inremodelingand repair Increase in
expenses utilities
Increase in(187)
expenses rent expenses(1,643)(706)
Increase inpersonnel Increase in Increase indepreciation otherexpenses
(418)
(372)
(2,877)

8,921

Decrease in operating profit (6,330)

FY2021 H1

FY2022 H1― 11 ―

LIFE CORPORATION

Reference: Trends in selling, general and administrative
expenses during FY2022 H1(on a basis before the application of the Accounting Standard for Revenue Recognition)

Selling, general and administrative expenses shows an increasing trend due to growthinvestment and changes in the social environment■ Breakdown of selling, general and administrative expenses(Unit: Millions of yen)
140,000
Depreciation

Personnel expenses

118,850

120,000
100,000

Non-personnel expenses

95,2096,012

100,626
6,213

80,000104,668
6,313

108,451

111,473

6,405

6,907

7,326

55,68545,49647,89950,68952,80746,433

48,91650,45551,35651,75855,839

17

18

19

20

21

22

42,76360,00040,00020,0000― 12 ―(Fiscal year)

LIFE CORPORATION

Trends in utilities expenses (FY2022 H1)Utilities expenses increased by ¥1.6 billion from FY2021 mainly due to soaring electricity
rates■ Breakdown of utilities expenses(Unit: Millions of yen)

7,000
Gas rates

Water rates

Electricity rates

5,868
266

6,000
5,000
4,000

4,507
178

502

4,751
194

530

4,839
208

531

575

4,332
169

538

4,225
169

553

3,000

5,026
2,000

3,826

4,026

4,099

17

18

19

3,624

3,501

20

21

1,000
0

― 13 ―

22(Fiscal year)

LIFE CORPORATIONNet sales/gross profit ratio by division*1

Purchase prices soared due to soaring raw material expenses, but gross profit ratio
increased by 0.3%
Net sales(Unit: Millions of yen, %)Gross profit ratio(Unit: Millions of yen, %)FY2022 H1
Department

All storesvs. FY2021

FY2022 H1Existing stores

Changevs. FY2021

vs. FY2019

Difference
from FY2021

Difference
from FY2019

Food products

327,135

100.2

98.4

106.2

31.3

+0.3

+1.9

Produce

51,154

102.9

101.1

112.2

29.1

+0.2

+2.3

Seafood

28,854

97.1

95.2

106.7

32.2

(0.4)

+2.8

Meat

40,821

98.5

96.6

108.0

30.5

(0.4)

+1.9

Delicatessen

42,911

104.4

101.9

107.5

55.5

+0.3

+1.8

Groceries*2

163,394

99.3

97.7

103.8

25.6

+0.2

+1.3

Lifestyle products

32,370

100.1

100.1

102.3

26.9

+0.3

+2.1

Apparel

11,429

98.9

100.8

88.1

40.1

+0.8

+1.8

Others

5,157

105.0

106.8

105.5

9.9

(0.3)

±0

376,092

100.2

98.7

105.2

30.9

+0.3

+1.9

Total

*1 FY2022 results show the figures before the application of the “Accounting Standard for Revenue Recognition”*2 Groceries: including dairy and frozen― 14 ―

LIFE CORPORATION

Trends in gross profit ratio (FY2022 H1)Gross profit ratio improved due to the development of unique products, including BIORAL and delicatessens, and the effective use of process centers
%
32.0
*

31.0
30.3

30.6

30.9

30.0
29.0
29.0
28.0
27.0

27.6
26.8

26.9

13

14

27.8

27.8

16

17

28.1

26.0
15

18

19

20

21

*Results are compared using the figures before the application of the “Accounting Standard for Revenue Recognition”― 15 ―

22(Fiscal year)

LIFE CORPORATION

Consolidated balance sheet(Unit: Millions of yen, %)End-February, 2022

End-August, 2022

74,48073,103(1.8)

Cash and deposits

9,809

7,275

(25.8)

Inventories

24,13824,527+1.6

Accounts receivable - trade

8,133

10,126+24.5

Accounts receivable - other

28,54426,020

(8.8)

Other

3,854

5,153

+33.7

Non-current assets

195,748

200,104+2.2

150,490

155,391+3.3

Intangible assets

3,508

3,405

(2.9)

Investments and other assets

41,74941,307(1.1)

270,229

273,208+1.1

159,929

158,225(1.1)

69,10865,964(4.5)

110,299

114,983+4.2

270,229

273,208+1.1

Current assets

Property, plant and equipment

Total assets
Total liabilities(Interest-bearing liabilities)

Total net assets
Total liabilities and net assets― 16 ―

ChangeLIFE CORPORATION

Consolidated cash flow
FY2020 H1(Unit: Millions of yen)

FY2021 H1

FY2022 H1ChangeCash flows
from operating
activities

2,053(10,252)

18,037+28,289

Cash flows
from investing
activities(12,606)(11,211)(14,689)(3,478)Cash flows
from financing
activities

13,99015,129(5,881)(21,010)

Cash and cash
equivalents
at end of period

16,250

8,608

6,875

(1,733)**The decrease in operating cash flows results mainly from the settlement of liabilities in FY2021 H1 for the purchasing of products and other activities, whichwere pending because the last day of FY2020 fell under the holiday of financial institutions― 17 ―

LIFE CORPORATION

2. Full-year forecast for FY2022― 18 ―

LIFE CORPORATION

Changes in the external environment■ Soaring electricity rates• Electricity rates increase higher than expected due to a surge
in resource prices■ Soaring procurement prices• Procurement prices soar due to an increase in global raw
material prices■ Increasing personnel expenses• Intensifying recruitment competition across industries■ Increasing logistics expenses• An increase in fuel expenses and a lack of workers■ Soaring construction expenses• A surge in construction material expenses and a lack ofworkers― 19 ―

LIFE CORPORATION

Revisions to full-year forecast for FY2022 (consolidated)
We revised our full-year forecasts because the impact of changes in the external
environment exceeds our initial assumptions significantly(Unit: Millions of yen, %)Previously announced
forecast

Revised forecast

ChangeChangeOperatingrevenue

770,000

763,000(7,000)(0.9)

Operatingprofit23,20017,000(6,200)(26.7)

Ordinary
profit24,00018,000(6,000)(25.0)

Profit15,50011,500(4,000)(25.8)*The “Accounting Standard for Revenue Recognition” has been applied since the beginning of FY2022, and our forecasts are
based on this standard and others.
― 20 ―

LIFE CORPORATIONDividends per share for FY2022
No dividend forecasts are changed accompanying these revisions to earnings forecasts,
and interim dividends and year-end dividends are scheduled to be paid as planned(Unit: yen)

70
Commemorative
dividends

10

50

25
Year-end
Interim

12.5

25
12.5

30

30

30

15

15

15

15

25
12.5

12.5

12.5

12.5

15

15

15

15

12

13

14

15

16

17

18

35
30

40
30

70 (Planned)

25
20

20

19

25

20

30

21

35

22
(Fiscal year)― 21 ―

LIFE CORPORATION

Investment plan

(Unit: Millions of yen)

Full-year FY2022 (plan)

FY2022 H1Initial plan

ChangeNew stores

9,828Open 6 newstores, etc.

17,60016,500+1,100

11 new stores (plan)

Renovation

831

Renovation for 3
stores

1,200

2,400

(1,200)

Revision of renovationplans, etc.

IT and digitalsystems

1,301

Expand the useof electronic pricetags and POS
carts, etc.

Revision to the plan of
introducing electronic
price tags, etc.

Other

Total

3,500

6,500

(3,000)

1,337

3,900

4,100

(200)

13,297

26,20029,500(3,300)― 22 ―

LIFE CORPORATION

3. FY2022 initiatives
Differentiating ourselves from thehomogeneous competition― 23 ―

LIFE CORPORATION

Initiatives to differentiate ourselves from thehomogeneous competition■ Pursuing unique products■ Investing in new stores■ Expanding online supermarkets― 24 ―

LIFE CORPORATION

Pursuing unique products (BIO-RAL business)
Opened the BIO-RAL Shinjuku Marui Store in May 2022, our fifth BIO-RAL store
Installed a large-sized BIO-RAL section for new stores■ BIO-RAL Shinjuku Marui Store■ BIO-RAL section of our new stores

Cater to the enhanced needs for peace of mind andsafety as well as health consciousness
Offer various products full of natural blessings

Opened in the Shinjuku Marui Main Building that
attracts approx. 8.4 million visitors annually
Set up a cafe attached to our store, in which visitors
can get relaxed while commuting

Shinjuku Marui Main Building

Agricultural produce section

Central Square Yebisu Garden Place Store

Moriguchi Takii StoreBIO-RAL Cafe

Light meal section

Nishiogikubo Store

Horikawa Kitayama Store― 25 ―

LIFE CORPORATION

Pursuing unique products (BIO-RAL business)
Offer delicatessens and bento boxes in line with BIO‐RAL’s concept of “organic,”“local,” “healthy,” and “sustainability” in addition to private brands for processed foods■ Delicatessens and bento boxes focusing on ingredients and production methods
Offer delicatessens and bento boxes full of natural blessings to cater to further growing needs for ready-toeat foods resulting from demand changes in the society

Rice ball section

Over-the-counter sale of delicatessens

Bento boxes including dried red bream withedible fishbone (uzsing organic brown rice)― 26 ―

Rice balls made of organic brown rice
(edible brown algae)

Bento box section

LIFE CORPORATION

Pursuing unique products (BIO-RAL business)■ Further expand product lineups
189 items →(End-February, 2022)■ BIO-RAL net sales during FY2022 H1

247 items¥1.2 billion →(End-August, 2022)¥2.4 billion(End-August, 2021)(End-August, 2022)

By designing, manufacturing, and selling■ Popular on social media■ Newthat
products
one after anotherproducts
don’tappear
use pesticides,
chemical“Ginger ale using ginger juice made in fertilizers, and food additives as much as
Kochi Prefecture”
possible, BIO-RAL supports the healthy living of[Sales results] people and aims to realize the environmentallySold over 130,000 friendly and sustainable world envisioned inSDGs.
bottles within fivemonths after initiating
the salesThin noodles madeOrganic oatmeal
Oatmealof whole wheat flour

Organic parboiled vegetables― 27 ―

Ice cream made from jersey milk

LIFE CORPORATION

Investment in new stores (Central Square Yebisu Garden
Place Store)

Achieve the brand concept of “delicious,” “exciting,” and “happy” backed by our brand-new initiatives
and products introduced for the first time in the Tokyo Region
Some of these know-how and products will be introduced for new stores and existing stores■ Over-the-counter sale of grilled chicken with
■ Water tanks containing live fish
Japanese breed brand chicken (Junwaakadori)Prepare fresh fish for cooking at the store according to
Grill skewered chicken elaborately inside ourcustomers’ preferences after driving a spike directly into thestore, the level of which is comparable tohindbrain and draining blood from live fish (ike-jime) andspecialty stores
severing the major artery and spinal cord of live fish(shinkei-nuki). These techniques allow for offering fresh fish

■ Gift section
Offer a wide variety of gifts suitable as a gift,including an assortment of fruits■ Sale of local foods
Arrange various foods offered by restaurants,
etc. operating in Yebisu― 28 ―■ Custom-made bento boxes
Broil and offer steaks, hamburger steaks, etc.
using splendid Japanese black beef after
receiving orders■ Handmade bread with fermented ingredients added
Add the ingredients fermented inside our store to
our bread for further enhancing its taste and flavor
and offer it only at our Yebisu StoreLIFE CORPORATION■ Investing in new stores (FY2022 H1)Opened six stores during FY2022 H1
Set up large-scale frozen foods, wine, and other sections catering to customers’ needs■ Nishiogikubo Store
Our largest-scale frozen food sections catering to a great need of ourcustomers■ Kameido Clock Store
Wine section associated with a winery■ Moriguchi Takii StoreGreengrocery-like handmade salad section using fresh vegetables
procured by our agricultural produce department■ Horikawa Kitayama Store
Kyoto vegetable section with traditional Kyoto vegetables and branded vegetables― 29 ―

LIFE CORPORATION■ Investing in new stores (FY2022 H2 plan)
Plan to open five stores during FY2022 H2 (11 stores in total for full-year FY2022)
Open one store in the Tokyo Region and two stores in the Osaka Region in September■ Toyosu Store (opens on September 10)
Offer a wide variety of fresh foods, such as fresh fish directly delivered from the Toyosu Market, and Life’s largest-size frozen food counterSet up a terrace area inside the eat-in section where visitors can enjoy drinking organic coffee■ Hanazono Central Park Store(opens on September 17)■ Shijo Omiya Store(opens on September 28)■ VIERRA Maita Store (opens on October 20)

IchigayayakuojiStore― 30 ―

LIFE CORPORATION

Expanding online supermarkets

From March to June 2022, demand decreased due to the lifting of activity restrictions.
During FY2022 H1, however, net sales posted approx. ¥6.7 billion
Both Life online supermarkets and Life’s Amazon online supermarket expanded theirdelivery areas significantly
During FY2022 H2, we plan to encourage users to further use our services leveraging our
expanded number of members and delivery areas■ Life’s Amazon online supermarket■ Life online supermarkets

Expand delivery areas further

Expand the number of stores proactively[Total]83 stores[Increase in the Tokyo Region]
Tokyo(End-August, 2022)

Kanagawa[Increase during
the first half]+17 stores[Increase in theTokyo Region]+4 stores[increase in the
Osaka Region]+13 stores

Saitama+3 cities+1 city+5 cities[increase in the Osaka Region]
Osaka
Hyogo
― 31 ―+3 cities, +1
district (gun)+1 cityLIFE CORPORATION

4. ESG initiatives― 32 ―

LIFE CORPORATION

Integrated report
Published the Integrated Report 2022, our first version of an integrated report― 33 ―

LIFE CORPORATION

Reduction of environmental burden <Reduction infood wastes>
Target: Reduce final food waste per net sales by 50% by 2030 (vs. 2017)■ Biogas power generation

Established and initiated the full operation of a biogas power
generation facility at Tempozan Food Process Center, Japan’slargest-size power generation facility in the retail industry.

At the EXPO 2025 held in Osaka, we plan to produce methane from garbagederived biogas and use it for the heat supply facilities and gas-based kitchensinside the venue. We will join the experiment and make use of the garbage
emitted from our company (1 t per day).
Fermentation
Garbage

Garbage(biomass resource)

BiogasElectrolysis
of water
RenewableenergyMethanation facilities

Hydrogen

MethaneUsed in appliances which
consume city gas

Methanation is a technology to synthesize methane, the main
component of city gas, from hydrogen and carbon dioxide■ Recycle■ Curb the occurrence offood waste■ ReuseFood bank activity

Food recycle

Review of selling periods

Donate foods, including those whose selling
periods have expired or whose packages arebrokenRecycle food residues for fertilizers
and feeds

Reduce a loss resulting from food waste
by increasing sales opportunities

Reduce food waste to increase net sales and profit
by improving the processing costs for food waste of ¥1.0 billion
and the loss amount resulting from food waste of ¥2.1 billion *FY2021 results― 34 ―

LIFE CORPORATION

Reduction of environmental burden <Reduction inplastics>■ Reduction in use of petroleum-derived plastics■ Use lighter and more simple packages

一 Eg., Change the package for our private brand oden*1

from a drawstring pouch to a pillow shape
Results: Reducing the amount of plastics used andpackaging costs

・ Adopt paper packages for some of the BIO-RAL products・ Switch to wooden- or paper-cutlery*1: Japanese dish containing various ingredients cooked ina special broth of soy sauce, etc.

■ Strengthen resource recycling activities
・ Newly collect transparent trays
・ Strengthen recycling pet bottles

Reduce plastics used and curb packaging
costs and also the burden charge forrecycling containers and packages (¥260
million*2), thereby improving profitability*2: FY2021 results― 35 ―

LIFE CORPORATION

Reduction of environmental burden <Reduction in
CO2 emissions>Target: Reduce CO2 emissions (Scope 1 & 2) by 50% by 2030 (vs. 2013)■ Energy conservation

Replacement with high-efficiency coolingcases and air conditioners
Introduction of LED lights and motion sensor
lights for every store
Make use of covers to prevent leakage of cold
air from open showcases after closing
Construct ZEB (Net Zero Energy Building) stores■ Energy creation ■ Renewable energies
Solar power generation
Biogas power generation

Toyosu Store with ZEB certificate― 36 ―

Use renewable energies both at oureastern and western headquarters

LIFE CORPORATION

Responses to the TCFD (Task Force on Climate-Related Financial
Disclosures) Recommendations
We consider climate change-related social and environmental issues as urgent problems. Inline with the concept of TCFD, we collect and analyze necessary data.
■ Create a risk map on the axes of climate change-related “impact on financials” and “probability of occurrence”
Our supermarket business model entails many risks that are based on assumptions by scenario. We will lower the impact
on our businesses and financials by seizing opportunities steadily and prioritizing and bolstering our risk responses.
Large

Financial impact from assumed risks at 2030

❶ Cost increase due to higher
electricity prices

Financial impact❺ Increased customer
outflow and reputationalrisk if climate change is
not addressed❻ Damage caused by flooding andpower outages

Scenario❷ Increased tax burden due tothe introduction of a carbon
tax❸ Increased capital expendituresdue to CFC regulations❹ Increased costs for substitutes due to plastic regulations❾ Increased commodity prices due tofood resource shortages❽ Increased refrigeration andair conditioning costs andrepair costs

Carbon tax

Increased costs associated with carbon taxation(annual)Electricity rates derived
from renewable energy

Increase in procurement cost of electricity derived fromrenewable energy (annual)

Decrease in gross profit due to store closings
Damage due to flooding, (1 store per day)power outages, etc.
Decrease in gross profit due to center shutdown(1 day for all centers)❼ Product supply shortages due to damage to suppliers and logistics

Possibility of occurrence

Assumptions
1,425 to 1,852
million yen
170 to 680
million yen
2 to 4
million yen
80 to 120
million yen

Large■ Opportunities
Enhancement of environmental consciousness and changes inlifestyles＞ Expand sales of our environmentally-friendly BIO-RAL brands
and their products＞ Expand sales of products packed with environmentally-friendly
packages and trays

Changes in corporate evaluation＞ Increase the number of customers by enhancing ourcorporate image as an environmentally-friendly company＞ Ensure our competitive edge in recruitment activities＞ Raise funds under favorable conditions― 37 ―

LIFE CORPORATION

Further disclose of English documents
In light of diversifying shareholders and investors, we have expanded our scope ofEnglish disclosure to disclose our financial presentation materials and earnings briefings(full texts) in English from the fiscal year ended February 28, 2022.
We also plan to publish our integrated report in English in autumn 2022
■ Earnings briefings■ Financial presentation materials― 38 ―

LIFE CORPORATION― 39 ―