Q&As at the Financial Results Briefing for FY2021 1H of Lawson, Inc.
Date of holding

October 8, 2021 (Friday), 13:00–14:30

Attendees

Sadanobu Takemasu, President and CEO, Representative Director,
Chairman of the Board
Satoshi Nakaniwa, Member of the Board, Executive Managing Officer,
Chief Financial Officer
Tomoki Takanishi, Senior Vice President, Division Director of Financial
Administration Division
Kino Arai, General Manager, Investor Relations Dept.

Q：Was the downward revision of the unconsolidated results caused by the external environment
or any other factors?
A：We had developed an initial plan in view of the social circumstances about the same as lastyear; however, we experienced stricter limitations on the flow of people and worse weather
than we had expected. We are verifying the data on the renovated stores to promoterenovation that is suitable for each store’s features. Though it is difficult to forecast the social
circumstances of the second half, we believe that sales by existing stores for the second half
will reach 104 ％ compared to the previous fiscal year after renovation of stores andstrengthening of the product lineup.

Q：The renovation of stores led to an increase in sales. Isn’t store renovation affected by theexternal environment? And will the effect of the store renovation continue?
A：We think that the stores will become what customers rely on in their daily lives by taking
advantage of being located nearest to the daily lives of customers. We will promote store
renovation so that the stores can be used by customers on a daily basis for three meals anddaily necessities and can become robust enough to change with the external environment. In
the test, the effect of the improvement in daily sales has been maintained after store
renovation.

Q ： In the Lawson Group Sweeping Transformation Executive Committee, are long-term
approaches considered instead of short-term revenue? Does the company see the potential ofvendors and logistics?
A：We think it is important to be continuously recognized highly by customers among convenience
stores by responding to changes in customers’ needs during the COVID-19 crisis. In this sense,
we will develop not only measures for short-term recovery in sales but also medium- to longterm approaches by the Sweeping Transformation Executive Committee without fail. Inaddition, we are pushing ahead with bold actions for the optimization of vendors and overalllogistics in the vendor distribution project of the Committee.

Q：Please describe the view of opening stores and expanding revenue in China.
A：When opening a large number of stores, it is important to develop human assets, including
not only human assets for development that engage in the opening of stores but also humanassets of supervisors who direct store management and human assets for productdevelopment. We have developed and prepared human assets for promoting the opening ofmore stores with a focus on human asset development in China based on the experience inJapan, which has led to the current stores opened and our growth. We have the view of aimingfor 10,000 stores and operating income of triple-digit billion yen in 2025.

Q：How do franchise owners have an incentive for the product lineup?
A：We feel that they have a strong incentive for the product lineup, and this trend has been
particularly evident since October when the state of emergency was lifted. In addition, we areworking on supply chain reform to optimize opportunity losses and disposal losses.

Q ： I find the group branding project among the projects of the Sweeping Transformation
Executive Committee. Does this project aim at group synergy with subsidiaries in goodfinancial standing?
A：We have launched the group branding project in order to dispel the negative image of
convenience stores under the business environment before the COVID-19 crisis, including thelabor shortage, and to reaffirm as the Lawson Group the significance of the existence of
convenience stores during the COVID-19 crisis. We are working on actions for making all Group
members feel proud of working in the Lawson Group.

Q：The company faces a decrease in the profits of headquarters. What is the challenge in thissituation? What is the difference in the measures under the Transformation Executive
Committee from previous ones?
A：The Headquarters thinks it is important to increase the profits of franchisees. Therefore, it isworking on measures for an increase in sales while reducing the cost of stores. In theTransformation Executive Committee, we will make a commitment to improving theinvestment effect based on careful verification of what has been carried out. We will aim atbecoming a more muscular company by tackling challenges continuously so that we can gaincustomers’ trust enough to be used by them on a daily basis.

Q：Please describe the business vision of Seijo Ishii toward 2025.
A：We have many options, such as opening stores in domestic areas where our stores are not
located and expanding the business overseas. As the first step, we will promote businessdevelopment making maximum use of the central kitchen that will start operation in the springof 2022.

Q：Seen from the actual results of current daily sales, the Company does not seem to haveachieved good results from the efforts. What does the Company think about that?
A：In the first half, while we met the demand for products for daily use under the circumstancesof a decreased flow of people, sales of other core products were significantly affected by thedecrease in the flow of people. In the second half, we will renovate stores into an ideal one,
remodel kitchens, and develop products that include frozen foods to capture not only thedemand for daily life products but also meet the demand created by an increase in the flow ofpeople.

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