First Half Results for FY2022(Six months ended August 31, 2022)

Lawson, Inc.
October 7, 2022

Copyright (c) 2022 Lawson, Inc. All rights reserved.
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Financial Results forFirst Half for FY2022
Masayuki Itonaga
Executive Vice President
Chief Financial Officer
Lawson, Inc.
Copyright (c) 2022 Lawson, Inc. All rights reserved.
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Consolidated Financial Results for FY2022 1H
Unit: Billions of yen

FY2021 1H
Results

Operating income
Ordinary income
ProfitFY2022 1H
Results

YoY

v.plan

26.7
27.8
17.4

28.9
28.9
15.4

+2.2
+1.1
-1.9

+1.4
+2.9
+1.9

101.6%
30.7%

102.4%
30.9%+0.8%pt+0.2%pt+0.4%pt±0.0%pt

14,651

14,655+4-(Non-consolidated) excluding LAWSON STORE100 business

Existing-store sales (YoY)
Gross profit margin
Total no. of stores in Japan*Lawson group total※Any differences v. plan in these documents are compared to the plan issued along with the announcement of FY2021 results in April 2022.

1.Operating profit: 28.9 billion yen(1)YoY: Existing-store sales at the domestic convenience store business rose 2.4% YoY on store refurbishment effects and profit also
increased as we controlled costs. While profit from our overseas business fell following lockdowns in China, our entertainment-related
and financial services businesses proved firm and generated a higher profit, resulting in an expanded profit in consolidated terms.
(2)v. plan: YoY growth in existing-store sales at domestic convenience store business came in 0.4pp above plan, with operating income
from the Lawson parent coming in 1.6 billion yen above plan. While our overseas business fell far short of plan on those Chinese
lockdowns, our entertainment-related and financial services businesses exceeded plan. Results for the Group as a whole were roughly
in line with plan. Consolidated results 1.4 billion yen above plan.

2.Profit : 15.4 billion yen(1)YoY: Profit down in comparison with dividends on investments and profit on the sale of shareholdings in the previous year.
(2)v. plan: Achieved plan on higher-than-planned operating income.
Copyright (c) 2022 Lawson, Inc. All rights reserved.

3

FY2022 1H Initiatives Review
Unit: Billions of yen

FY2022 1H
Consolidated
operating income

Initial plan

Results

v.plan

YoY

27.5

28.9

+1.4

+2.2

Various measures

Progressv. planYoY

Charge feesfrom franchise stores, etc.

Sales of in-store kitchens Machikado Chubo food and frozen foods strong thanks to store refurbishments
and enhanced product lines designed to better capture daily demand. Also, existing-store sales increasedby 2.4% YoY and 0.4pp v. plan on our HAPPY LAWSON PROJECT and other marketing strategies and arecovery in people flows.

+1.0

+6.0

Sweeping Transformation
Executive Committee
measures, etc.

Facilities expenses and other costs increased as we refurbished 1,240 stores in 1H (5,545 total) in linewith our pursuit of ideal store format project. However, the figures were in line with our plan.

±0.0

-2.0

Marketing measures andnew measures, etc.

We developed marketing strategies such as TV commercials and app coupons based on the HAPPYLAWSON PROJECT, but we controlled any rise in costs by rationalizing and replacing existing marketing
initiatives with the new ones. As a result, these costs came in lower than planned.

+0.5

±0.0

Electric utility expense, etc.

Increased on the back of the rise in electric power unit costs, but roughly in line with plan.

±0.0

-2.0

Group companies performed roughly to plan overall.
<Seijo Ishii>
Fell short of plan compared to strong COVID-induced stay-home demand in the previous year.
<Entertainment-related>
Exceeded plan as marketed energized primarily during long holiday periods without any restrictions on
movement.
<Financial services>
Exceeded plan on higher ATM usage.
<Overseas>
Below plan on drop in sales after lockdowns and other large-scale restrictions on movement in China.

±0.0

±0.0

+1.5

+2.0

Subsidiaries

Total
Copyright (c) 2022 Lawson, Inc. All rights reserved.

*Figures rounded to the nearest 0.5 billion for clarity*Any differences v. plan in these documents are compared to the plan issued along with the announcement of FY2021
results in April 2022.

4

FY2022 1H Results & Full-Year Plan
Unit: Billions of yen

FY2022Full-year
initial plan

Consolidated operating
incomeSubsidiaries, etc.

1H Results

Full-year
revised plan

53.0

28.9

53.0

Lawson

30.0

18.6

30.0

Seijo Ishii*1

13.6

5.6

11.6

Entertainment-related
business*2

2.7

2.6

4.4

Financial service business*2

2.6

2.0

3.6

Overseas business (China)

2.6

-2.2

-0.3

22.0
150yen

15.4
-

22.0
150yenConsolidated profit
Dividends per share（Assumed conditions for the plan）
・YoY increase in existing-store sales*2 : 103.0%（+1.9％pt YoY）
・Gross profit margin*2：31.1％（+0.4％pt YoY）
・Store numbers: Opening 300 stores, closure 250 stores, net increase 50 stores
Copyright (c) 2022 Lawson, Inc. All rights reserved.

*1 Seijo Ishii Co., Ltd.
*2 segment profit*3 excluding LAWSON STORE100 business *4 Lawson group total

5Factors affecting FY2022 consolidated operating income
InitialFull-year plan

approx.

Unit: Billions of yen+15.5

Charge feesfrom franchise stores, etc.

approx.

-3.5Marketing measures,
New measures, etc.
approx.

approx.

-3.0

Electric utility
expense, etc.

-4.5

Sweeping
Transformation
Executive
Committee
measures, etc.

approx.

＋1.5

Subsidiaries

53.0
47.0

FY2021
Consolidated
operating income
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Existing-store sales
PlanFirst half
+2.0%
+2.0%
Second half
+4.0%
+4.0%
Full year
+3.0%
+3.0%

Results+2.4%※Figures rounded to the nearest 0.5 billion for clarity

FY2022
Consolidated
operating income(plan)

6

FY2022 Initiatives

Sadanobu Takemasu
President and CEO
Representative Director
Chairman of the Board
Lawson, Inc.
Copyright (c) 2022 Lawson, Inc. All rights reserved.
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Lawson Group’s Challenge2025 Overview

2025
50 th anniversary

Customers, society, friends’

Achieve Group philosophy

No.1 recommended brand

Promise 1
Superior taste

Promise 2
Human kindness

Creating happinessandharmony in our communities

Promise 3
Environmental(machi) friendlinessCommitment to SDGs
ESG-focused management
Work motivation, determined spirit, digital data

Lawson Group Sweeping Transformation Executive Committee
Copyright (c) 2022 Lawson, Inc. All rights reserved.

8

FY2022 Key concept

Community-based × individual customer
andindividual store-focused
Deliver new conveniences for daily living in local communities
Create “New hubs of refreshment in every community”
that people will want to go to even if they are a little further away•••

Improve store brand power by thoroughly pursuingvalue for every customer
Clear differentiation strategies for products and services
Superior marketing strategies that use customer mindshare

Copyright (c) 2022 Lawson, Inc. All rights reserved.

9

FY2022 1H Business environment■First long holiday and Obon holiday without restrictions on movement in 3 years after priority
measures were removed in March■People flows on recovery track despite rising positive COVID cases caused by 7th wave
Population in motion (％)
10
New positive COVID cases (weekly average)

New positive cases (1,000 persons)
250
Population in motion* trends (v. 2019 levels)

0
200
-10

Seventh
wave

-20
-30

Sixth
wave

-40
-50

First
wave

-60

Second
wave

Third
wave

Fourth
wave

-70

Fifth
wave

150

100

50

0

*

2020
2021
*Population in motion: Population whose assumed place of residence is outside the municipality

Copyright (c) 2022 Lawson, Inc. All rights reserved.

2022
Source: Regional Economy and Society Analyzing System (RESAS), Japan Cabinet Office10

FY2022 1H Domestic convenience store business-Daily sales at existing stores, number of customers, spending per customer■Achieved 1H plan by implementing sales promotion measures focused primarily on
ideal store refurbishments and HAPPY LAWSON PROJECT

Daily sales【YoY】
Daily sales

Number of customers

Spending per
customer（1H Plan 102.0％）

105.0%

103.1%

102.7%

103.2%

103.0%
101.8%

100.7%

101.2%

101.1%

102.3%

102.3%

Number ofcustomers
1H 100.1%

Spending per
customer

1H 102.3%■Ideal store refurbishment✓ 5,545 stores by end August.

101.2%

100%

102.7%

102.3%

1H 102.4％（FY2022 1H 1,240 stores）

101.1%✓ Introduced Machikado Chubo in-store
kitchens, refined and expanded frozen
foods and other products

98.5%
97.7%

99.1%

■HAPPY LAWSON PROJECT
Mar.

Apr.

Copyright (c) 2022 Lawson, Inc. All rights reserved.

May

Jun.

Jul.

Aug.

✓ TVCM and WebCM run from June
✓ Implemented promotion measures,such as Lawson app coupons

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Domestic convenience store business-Lawson Group Sweeping Transformation Executive Committee-■ Project updated at the beginning of FY2022 to accelerate transformation

Lawson Group Sweeping Transformation Executive Committee
Daily sales improvement

Pursuit ofideal store format
Daily sales improvement

Machikado
Chubo in-store kitchens

Daily sales improvement

Product renewal
Daily sales improvement

MUJI introduction

Copyright (c) 2022 Lawson, Inc. All rights reserved.

Medium to long term

Customer-centric supply
chain reform
Medium to long term

Vendor distribution
reformMedium to long termGroup branding
Medium to long term

The No.1 recommendationacquiring

Medium to long term

Unified use of Groupdata

Operating companies

Medium to long term

Work motivation reform

SDG promotion

12

Domestic convenience store business-Lawson Group Sweeping Transformation Executive Committee-■Daily sales improved favorably thanks primarily to ideal store project

Impact of improved daily sales on all
stores up 1.7％
Daily sales improvement

Pursuit ofideal store format
Daily sales improvement

Machikado
Chubo in-store kitchens

Daily sales improvement

Product renewal
Daily sales improvement

MUJI introduction

Copyright (c) 2022 Lawson, Inc. All rights reserved.

Refurbished stores:
Total 5,545 1H +1,240
Sales of in-store Chubo: Approx. +30% YoYStores with kitchens: Total 8,853 1H +494
Frozen foods: Rose by over+10% YoY
Daily foods: exceeded previous year’s level

Stores with MUJI products:
Total 3,780 1H＋3,670

13

Domestic convenience store business-Lawson Group Sweeping Transformation Executive Committee-

Pursuit of ideal store format
FY
plan

Refurbished stores:+3,500
Refurbished stores:
Total 5,545 1H +1,240

1H
results

2H
Plan✓ Expanded shop floor displays offrozen foods, introduced
Machikado Chubo in-store
kitchens✓ Create
refurbishment
menu to suiteach store

Copyright (c) 2022 Lawson, Inc. All rights reserved.

Machikado Chubo in-store kitchens

FY Total Stores withplan kitchens : Approx. 9,600

1H
results

2H
Plan

Sales of in-store Chubo :Approx. +30% YoYStores with kitchens:
Total 8,853✓ Improved by developing local
menu to add
to regular items✓ Thoroughly
appeal thedelicious
taste of ricecooked in-store

14

Domestic convenience store business-Lawson Group Sweeping Transformation Executive Committee-

Product renewal
FY
plan

1H
results

2H
Plan

Strengthen range andpower of frozen and daily
foods
Frozen foods: Rose by over+10% YoY
Daily foods:
exceeded previous year’s level✓ Established the hardware todisplay wider product range
generated by ideal store format✓ Expanded side dishes in clear-top
sealed packs✓

Develop and expand
supply of innovative
new frozen foods**Frozen desserts, lunchboxes, sashimi, andbaked goods, etc.

Copyright (c) 2022 Lawson, Inc. All rights reserved.

MUJI introduction
FY Total stores with MUJI
plan products: Approx. 10,000

Stores with MUJI products:

Total 3,780 1H＋3,670
1H
results✓ Expand to KantoKoshinetsu region✓ Offer approx. 200
basic products* fordaily life
*lotions, stationery, readymade curry
packs, confectionery, etc.

2H
Plan

✓

Expand area
(Hokkaido, Kinki,
Shikoku, Kyushu,
Okinawa)15

Domestic convenience store business -area company■Exploiting our area company system to ensure swift re-openings
and tailor unique measures to suit each area

Hokkaido Company✓ Developed products using prized local✓
ingredients through initiatives for meeting
local needs✓✓ Immediately implemented measures driven
by company president to revitalize existing ✓stores (relocation, hardware improvement)
Daily sales：103.9%
Number of customers：101.1%
Spending per customer：102.7%
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Kinki Company

Nationwide pre-sale of specialty store
products
Launched original products made withlocal rice
Sales floor follow up by Kinki Company’s
own specialist teams＜YoY company average＞
Daily sales：102.4％
Number of customers：100.1%
Spending per customer：102.3%

Daily sales：103.7%
Number of customers：101.4%
Spending per customer：102.2%

16

Domestic convenience store business-Franchise Store Profits-◼Despite rising energy costs, franchise store profits rose YoY thanks tostronger product ranges and more effective sales promotion measures【V.2019 levels】
Per store

Per Franchise Owner

100%

FY2019Copyright (c) 2022 Lawson, Inc. All rights reserved.

FY2020

FY2021

FY2022 1H

17

Subsidiaries, etc. (1) -Seijo Ishii/Entertainment-related business-

Seijo Ishii
Operating income*

5.6billion yen-0.1billion yen YoY*Seijo Ishii Co., Ltd.

✓ While stay-home demand weakened YoY,
sales of original in-house deli items
remained strong✓ Launched Yamato No.
3 central kitchen in
July
Strengthened
production capacityfrom 200 stores toapprox. 400 stores✓ Continue 95 th anniversary campaign“Shiki (four seasons) project” started in 1H
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Entertainment-related
Operating income*

2.6billion yen＋1.7billion yen YoY*segment profit

Lawson Entertainment✓ Sales rose on the more energetic holding oflarge-scale concerts and live events✓ Continue to tap into rebound in entertainment
consumption started in 1H

United Cinemas✓ Hit products drawing in cinemagoers. Showingof movies using experience-based movie
systems (4DX) and IMAX helped boost sales✓ Continue 1H efforts to strengthen sales ofdigital ads like theater media, etc.

18

Subsidiaries, etc. (2) -Financial services/Overseas business-

Financial services
Operating income*

2.0billion yen+0.6billion yen YoY

Overseas
Operating income*-2.2billion yen-2.8billion yen YoY*China*segment profit
Number of ATMs used

China(per machine per day)

60

47.5

43.1

48.4

51.9

40

✓ Large-scale restrictions on movement
across China rising COVID-19 cases
fueled COVID restrictions✓ Continued to open new stores(Reached 5,000 stores in July)

Target: 6,000 stores

20
0
FY2019FY2020

FY2021

FY2022 1H

✓
SE
Asia
&
Hawaii✓ Increased daily use of individual ATM machines
by expanding services that charge cashless
payment apps that utilize the ATM network✓✓ Expanding financial institutions affiliated withATM business and expand services（Financial affiliates increased by 4 from end Feb.
to 382)
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Recovery of people flow thanks toeasing of prolonged, large-scale
restrictions
Strengthened counter fast foodand in-store food menu to satisfy
local market needs

Target: 400 stores

19

Subsidiaries, etc. (3) -Overseas business in China■Tough environment across China with large-scale restrictions on movement April-May■Sales recovered as restrictions were eased from July, but sporadic restrictions continue

1H situation (Jan-June)✓ Some stores had to close
temporarily and vendor
factories stop operations as
rising COVID-19 cases fueled
COVID restrictions

Operation area

Main restrictions on movement

Dalian・Lockdown across Shanghai region (3/28-5/31）
As many as half of our stores (approx. 1,200 stores)
were temporarily closed in April
・Restrictions on movement from outside the province(April to June）
・School attendance suspended (March to April)

Beijing・Restrictions on going out in Beijing (May to June)

Shanghai
Chongqing2H outlook (Jul-Dec)✓ Sales on recovery trends thanks to easing of prolonged,
large-scale restrictions on movement✓ Some sporadic restrictions could continue in individual
regions (temporary lockdowns occurred at end August in
Chengdu, Shenyang, Dalian, and Shenzhen)＜Main initiatives to help expand profits＞✓ Continue to open new stores✓ Use digital means (strengthen delivery, expand online sales
bookings)✓ Continue to develop Japanese quality products
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Main initiatives

110
（％）

・Strengthen delivery
・Expand online sales
bookings
・Online SV tours
・Develop private brandproducts

Daily sales at existing stores (YoY)

100

90
80
70
Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Develop Japanese quality products,
such as Mochi Puyo series

20Concept of business portfolio strategy◼ Seijo Ishii Co., Ltd. filed a listing application with the Tokyo Stock Exchange

Basic concept➢ Improve corporate value⇒Intensive investment in our core domestic
CVS business➢ Balance growth investment andshareholder returns⇒Pursue the optimum funding strategy➢ Ensure growth for individual Group
companies and the overall Group⇒Explore Group restructuring
and optimum funding strategy
to help improve Group
company profits【Progress in business portfolio strategy】➢ Seijo Ishii Co., Ltd. filed a listing application with the Tokyo Stock Exchange on September 9, 2022
➢ We take every possibility into consideration in other segments based on the basic concept of thebusiness portfolio strategy
Copyright (c) 2022 Lawson, Inc. All rights reserved.

21

FY2022 1H Consolidated financial results
Unit：Billions of yen

FY2021(Results)
１H

Full year

FY2022
１Ｈ(Results)

Full year(Plan)

Operating Income

26.7

47.0

28.9

53.0

Ordinary Income

27.8

47.5

28.9

48.5

Profit

17.4

17.9

15.4

22.0

■FY2022 １H Domestic convenience store business
Existing-stores sales*1 102.4％
Opening 129／Closure 130／Total number of store*2 14,655*1 excluding LAWSON STORE100 business *2 Lawson group total
Copyright (c) 2022 Lawson, Inc. All rights reserved.

22

Lawson Group Challenge2025
For sustainable growth in addition to challenge indicators
strategically select investment targets from the three perspectives ofenvironment, society, and corporate governance

FY2025
Performanceindicators

ESG-focusedmanagement

ROE：15% or higher
EPS：500 yen or higher

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23

Initiatives for ESG

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Copyright (c) 2022 Lawson, Inc. All rights reserved.

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

Environmental Initiatives

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25

Environmental Initiatives (1) FY2021 results
2030 target
2021 results

V. 2018 levels
Reduction of50％

Reduction of 24.7%

V. 2017 levels
Reduction of30%

Reduction of 19.3%

CO2 emissions
per store V. 2013 levels

Reduction of 50％

Reduction of 30.5％

KPI

50%

2018

Initiatives

Copyright (c) 2022 Lawson, Inc. All rights reserved.

2025

2030

・Improve order accuracy
・Thoroughly promote thecomplete sale of all stock.
・Expand boxed lunches’
expiration date by keeping them
fresher for longer

2017

2025

2030

・Reduce by changing or simplifying
containers and packaging
・Reduce by changing toenvironment-conscious materials(paper lunch boxes containers, etc.)
・Expand number of products sold byweight at Natural Lawson stores andexpand number of stores whichhave them

2013

2025

2030

・Introduce energy-saving
equipment and switch to solarpowered devices.
・Promote our 10 energysaving actions

26

Environmental and social initiatives (2) FY2022 1H■Realize the “three promise” based on our Group philosophy, promote SDGs, andstrive for sustainable growth

Reduce volume of plastic use
Gradually introduce cutlery withshorter handles and holes in thehandle, as well as wooden
spoonsReduce plastic use by approx. 67
tons/year

Reduce CO2 emissions
Gradually introduce energysaving equipment
Already installed at 4,600
stores *End FY2021
Continue 10 energy-saving
principles
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Reduce food loss
Donate center stockand event products via
foodbanks, etc.
Promote full sell-down
operations in storesSupport for disabilities
Create stores that arefriendly to people withhearing impairments
Placing seals displaying an
ear logo (from August 30)

27

Environmental and social initiatives (3) FY2022 2H■■Promote
ESG-centered management, become a leading company on SDGs initiatives

GREEN LAWSON(Ideal future store format)『GREEN LAWSON concept』
Express our three promises for the future in our stores

Offers services tailored
to individual customers

Make active use of instore Chubo kitchens

Reduce foodloss

Use avatars to provide
remote customer
service

Approach to makeorder items

Reduce CO2
emissionsLawson avatar operators
Aim to realize new communication by
supporting to customers having trouble using
avatars, explaining new products, andoffering entertainment together with VTubers

Avatar which will be used at Green Lawson
Copyright (c) 2022 Lawson, Inc. All rights reserved.

28

Corporate governance initiatives◼ High level of ethics and conduct based on our Group philosophy, Lawson Corporate Conduct Charter, andLawson Code of Ethics◼ We seek to improve management soundness and transparency and enhance governance by disclosing
information according to our Basic Principles Concerning Information Disclosure◼ We established a voluntary Nomination and Compensation Advisory Committee and seek to ensure theobjectively, appropriateness, and transparency of procedures in consultation with the Board of Directors
Nomination and Compensation
Advisory Committee

Composition of Directors
1210Internal(non-executive)

Outside(independent)

６1Outside(independent)

5Internal
６

Male
５

Female５Outside(independent)
５Internal
５

50% of directors are women
FY2021
Copyright (c) 2022 Lawson, Inc. All rights reserved.

FY2022• 5 out of 6 members are outside(independent) members• Chaired by Outside (independent) director

29

Reference Materials

Copyright (c) 2022 Lawson, Inc. All rights reserved.
Copyright (c) 2022 Lawson, Inc. All rights reserved.

Our policy on shareholder returns◼ Dividend policy
Our basic dividend policy involves securing the necessary internal
reserves for developing future business and pursuing sustainablegrowth for the Lawson Group, while paying a minimum stabledividend of 150 yen per share on an annual basis and aiming toachieve a consolidated dividend payout ratio of 50%.

Consolidated dividend
payout ratio target of 50%

Minimum dividend of
150 yen per share
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31