Summary of Results for FY2017

Lawson, Inc.
April 12, 2018
Copyright (c) 2018 Lawson, Inc. All rights reserved.

1

Financial Results for FY2017
Satoshi Nakaniwa
Senior Vice President
Chief Financial Officer

Copyright (c) 2018 Lawson, Inc. All rights reserved.

2

Earnings Summary for FY2017
Consolidated OP 65.8bln yen (-10.8% yoy, -2.6bln yen v. plan)
Consolidated net profit 26.8bln yen (-26.3% yoy, -6.6bln yen v. plan)- Lawson non-consolidated revenue and gross profit margin below plan
- Existing store sales (yoy) -0.1%:
customer number -1.3%, customer spend +1.3%- Recorded extraordinary losses on systems and other items
billion yen

FY2016FY2017Act

YoY

FY2017plan

Non-consolidated operating profit

57.4

51.0

-11.1%

52.5

Consolidated operating profit

73.7

65.8

-10.8%

68.5

Consolidated recurring profit

73.0

65.1

-10.8%

65.5

Consolidated net profit

36.4

26.8

-26.3%

33.5

Existing-store sales (YoY)

-0.2%

-0.1%

+1.0%

Gross profit margin

31.4%

31.3%

31.5%

Copyright (c) 2018 Lawson, Inc. All rights reserved.

3

FY2017 Growth Investment and Impact on Profit*1

Plan (yoy in yen)
CVS profit
increase

Approx.

+4.0

bln

Act (yoy in yen)
Approx.

-1.0

bln

Income fromFC stores

Approx.

+15.0 bln

Approx.

+10.0 blnothersApprox.

-11.0 bln

Approx.

- 11.0 bln

Growthinvestment

Approx.

-6.5

Approx.

Next generation
system

bln

-4.5

bln

Diff. (yen)Approx.

-5.0

Approx.

bln-5.0 bln±0

Approx.

+2.0

bln

Approx.

-2.0 bln

Approx.

-1.0 bln

Approx.

+1.0 bln

New businesses

Approx.

-2.0 bln

Approx.

-1.5 bln

Approx.

+0.5 bln

Brand
conversion

Approx.

-2.5 bln

Approx.

-2.0 bln

Approx.

+0.5 bln

Approx.

-2.5 bln

Approx.

-2.5 bln*2

Unavoidable*1 Revised on Oct. 12, 2017±0

*2 Pro-forma tax, Seijo Ishii’s change in accounting period※Figures rounded to nearest 0.5bln yen for clarity of display
Copyright (c) 2018 Lawson, Inc. All rights reserved.

4

FY2017 Review: Growth Investment (Next-generation systems)
FY2017 operations & progress

Evaluation

・Planned a framework that reflects inventory conditions bycollecting ordering and sales data

Full migration
to the cloud

・Difficult to provide a consistently stable service for all Japan stores
so need a different structure than initially assumed

×・Reviewed entire systems development schedule
・Recorded a 6.0 billion yen impairment loss on software that
couldn’t be upgraded or diverted to new uses
Introduced tablets
Work schedulemanagement
OTC fast-foodproduction
management

・Enable to manage work schedule and OTC FF production in digital(cloud data)・Introduced tablets into all stores in Japan・Some pilot stores generated over 10% increase in OTC FF sales○

・Improve proficiency, boost OTC FF sales, and operational efficiency

New POS cash
registers

・Introduced mainly in new stores in FY2017

・Plan to introduce into all stores in FY2018△

・Significantly reduce risk through gradual cloud migration

Strategy

・Place additional staff from Mitsubishi Corporation in the Systems
Development Department

Copyright (c) 2018 Lawson, Inc. All rights reserved.

5

FY2017 Review: Growth Investment(New businesses, brand conversions)
FY2017 operations & progressCompany
preparingentry intobanking

Brand
conversions

Evaluation

・Applied for Preliminary Examination of License in March 2018 in
preparation for development of banking business. Signed anagreement for a 130 billion yen syndicate loan as working capitalfor the new bank.
・Offered some financial services to date through Lawson ATM
Networks’s joint ATM operation. Intend to use our existing
experience in ATM operations and our solid operational platform
to develop more convenient financial services
・Aim to launch banking business in FY2018

・Completed conversion of 125 Save On and 195 Three F
stores・Average daily sales increase approximately 20% on brandconversions

Copyright (c) 2018 Lawson, Inc. All rights reserved.

○

○

6

FY2018 Forecast
Consolidated OP 60 bil yen (YoY -5.8 bil yen)
Consolidated Net Profit 28 bil yen (YoY -1.1 bil yen)
Billions of yen

FY2018
Forecast
diff./ YoY
Non-consolidated
Existing-store sales
Overall gross profit margin
SGA
Operating profit
Cons./non-cons. difference
Consolidated operating profit
Consolidated net profit
Dividend+1.0%+0.1％P+10%～+15%
44.5-6.5/-12.8%
15.5+0.7/+4.7%
60.0-5.8/-8.8%
28.0+1.1/+4.4%
255yenFlat

Note: Existing-store sales and overall gross profit margin (YOY) include LAWSON and NATURAL LAWSON.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

7

FY2018 Plan and Envisaged FY2019 Picture
FY2018 Plan
Growthinvestment

Approx.

-9.0(yoy profit impact)

Approx.

-7.0 bln

New businesses

Approx.

-2.0 bln

OperatingprofitApprox.

+3.0

Approx.

-6.0(yoy profit impact)

bln

Next generation
system

CVS profit
increase etc.

FY2019 Picture

bln

bln

60.0 bln※Figures rounded to nearest 0.5bln yen for clarity of display
Copyright (c) 2018 Lawson, Inc. All rights reserved.

8

FY2018 Plan and
Future Business Outlook
Sadanobu Takemasu
President and CEO
Representative Director
Chairman of the Board
Copyright (c) 2018 Lawson, Inc. All rights reserved.

9

FY2018 Forecast
Consolidated
60 bilyen
yen(YoY -5.8
yen/-8.8%)
Consolidated
OP OP
60.0bln(-8.8%
YoY,bil-5.8blnyen v. plan)
Consolidated
net profit
28.0blnyen(+4.4%
YoY, bil+1.1blnyen v. plan)
Consolidated
Net Profit
28 bilyen(YoY -1.1
yen/+4.4%)
Billions of yen

FY2017FY2018
Forecast

Diff./YoY

Non-consolidated operating profit

51.0

44.5

-6.5 -12.8%

Consolidated operating profit

65.8

60.0

-5.8

Consolidated recurring profit

65.1

57.0

-8.1 -12.5%

Consolidated net profit

26.8

28.0

+1.1 +4.4%

Existing-store sales (YoY)

-0.1%

+1.0%

+1.1%

Gross profit margin

31.3%

31.4%

+0.1%

Copyright (c) 2018 Lawson, Inc. All rights reserved.

-8.8%

10

■2018年方針

Maintain morning and daytime sales,
offer attractive products during evening and nighttime
Copyright(c)(c)20162018
Lawson,Inc.reserved.
All rights reserved.
CopyrightLawsonAll rights

11
11 11

First Evening/Nighttime Food Year: Reconfirming the Market
Lawson’s share of evening/nighttime market is lower than morning/daytime
share. Gaining a similar share could boost daily sales by 135%

Food use (monetary share)by time and businessEvening/Morning/nighttime
daytime

Food use (monetary share) by time and business
MKT size100%

24.2 tril. yen

LAW

2.9%

25.1 tril. yen

▲0.7%

2.2%

Supermarket

50%

2.2% 135%

2.9％（Ref.）
overall

12.5％ 118%

14.7％

CVS

Drugstore

Restaurant

0%
Morning/daytime
朝・昼

LawsonEvening/
Nighttime
夕夜間<Potential boost to daily sales>
If Lawson’s share of evening/nighttime
sales grew to a similar level as its
morning/daytime share, daily evening
and nighttime sales could potentiallyexpand by approximately 135%.
That’s equivalent to a 175.0 billion
yen monetary share.

※Lawson research. Scale of food use market, excluding cigarette and non-foodstuff sales
Copyright (c) 2018 Lawson, Inc. All rights reserved.

12

1000-Day Action Plan
Building a next-generation convenience store chain

Year 0 FY2015

Semi-automated, planned ordering, New franchise contract
packageYear 1 FY2016

Remodeled our everyday living support, strengthened daily
prepared foods and frozen foods

Year 2 FY2017

Year 3 FY2018

Strengthened delicatessen fast food “Deka Yakitori(Mega-grilled chicken)”, introduced tablets into stores
Strengthened rice balls, boxed meals, home-meals
Lawson laboratory
Sweeping review of ordering and distribution anddiagrams、
Change order deadline, introduce new POS cash registers,
Lawson Fresh Pick, and payment via smartphone

Copyright (c) 2018 Lawson, Inc. All rights reserved.

13

1000-Days Action Plan, Year 3 Overview

Become an essential part of our communities
Build Next-generation LAWSON CVS model
Create appealing stores for evening/night-time customers
Stronger
products
DigitalStrongerstore
displays
Strongerfranchise
supportStronger
operation of
new openings
Analog

Revolutionize our operational system
Challenge for future growth opportunities and revolution
Copyright (c) 2018 Lawson, Inc. All rights reserved.

14

FY2018: Stronger Product Appeal
OTC Fast
Food・Expand fried deli food, sell in packs. Shorten time for making coffee
・Increase MACHIKADO KITCHEN stores to approx. 6,000

CoffeeRenew Uchi Café
Desserts

Copyright (c) 2018 Lawson, Inc. All rights reserved.

Homemeals

Bolster and refresh
staple home-meals

15

FY2018: Stronger Store Displays
Change framework between April and June to get ready togreet more customers at 4:00 pm (in the evening)
Changeorder/deadline
times

・Reduce lead times
・Avoid ordering at peak times

Distribution
system・Alter diagrams
・Review product category makeup foreach delivery

Product range

・Use semi-automated ordering tostrengthen third delivery (afternoon
delivery)Workschedule
review・Maximize tablet use
・Standardize OTC fast-food production
operation at each store

Copyright (c) 2018 Lawson, Inc. All rights reserved.

16

Results of Experiments at Pilot Stores
Conducted pilot experiments at a portion of stores
to strengthen the third delivery (afternoon delivery)
No special promotions, simply increase product lineups during

evening/nighttime

Daily sales up approximately 1%
Reduced lost sales opportunities by displaying more items,
and customer numbers increase as wellFurther strengthen evening/nighttime trade by boosting awareness of“Lawson’s extensive evening and nighttime product ranges”
Copyright (c) 2018 Lawson, Inc. All rights reserved.

17

FY2018: Stronger New StoresOpen highquality new
stores・Review HR evaluation system in chargeof store development
・Focus on daily sales/profits rather thansimply boosting total store numbers

Improveexisting-store
hardware・Expand customers by upgrading car
parks, etc.
・Improve visibility of store signs, etc.

Maximizedaily sales at
new stores・Exploit store opening sales
・Introduce ourselves to local residents
prior to store opening

Promotemultiple store
management

・Standardize multiple store management
・Offer support for staff crew employment

Copyright (c) 2018 Lawson, Inc. All rights reserved.

18

FY2018 Stronger Support for FC Stores
Foodstuffs fromvarious shops
Order in the morning and pick up
in the evening at LAWSONLAWSON FRESH PICKStart from a part of stores in Shibuya, Setagaya, Kawasaki, Yokohama, etc.

Smartphoneordersby 8 am

Selectproduce onEC
distribution

by 9 amStore
produce inchilleddeliveryservice

Deliver andstore atdesignatedstore

Pay and
pickup atdesignatedstore

middaydispatch

afternoon
delivery

after
6 pm

Copyright (c) 2018 Lawson, Inc. All rights reserved.

Aim toexpand firstin urbanareas
Developing
system to
受け取り時間もreceive
速やかに
goods
sooner19

Store Owners (Management Owners)

Management Owner
approx.

approx.

3,500

2,000

14,000Total approx.
stores(approx.6,000 owners)
approx.

(avg. 10stores x approx. 200 MOs)

Multiple store Owner(avg. 3-4stores)

Single store Owner(1store)8,500*Image with rough figures

Copyright (c) 2018 Lawson, Inc. All rights reserved.

20

FY2018: Stronger FC Store Support
LAWSONFRESH PICK・Pick up fresh produce and meal kits in-store
・Attract working women & other customers

ＭＯ・Reform store operation from management
perspective
・Efficiency through managing multiple stores(Management owner)
POS cash registerwith automaticchange dispensers

Introduce
dishwashers

・Plan to introduce in all stores in FY2018
・Expand employment of international crew withmultilingual dispensers
・3,000 stores, starting with stores that sell the mostOTC fast food・Aggressive production of OTC fast foodMaximize tablet
use

・Work schedule management
・OTC fast food production management

Lawson smartphone
payment, pay anywhere
even without a register

・Relieve congestion at cash registers
・Alleviate work for midnight staff shifts

Copyright (c) 2018 Lawson, Inc. All rights reserved.

21

Challenging Further Growth
Financial Services
Applied for Preliminary Examination of License to establish
Lawson Bank. Aim to start business in FY2018◆Increase ATM transactions◆Consider new services

Create contact points
for financial services
Copyright (c) 2018 Lawson, Inc. All rights reserved.

22

The challenge of Further Growth
Global markets

Envisaged international
operation OP

China

FY16

Further expand operational scale bydeveloping area franchise in Shanghai,Chongqing, Dalian, Beijing, Wuhan
and other new areas

DalianprofitJapanSoutheast Asia
Build profitable model inIndonesia, Thailand, Philippines, etc.
Expand store network, Carve win-win
relationships with partner firms◆Establish profitable models in each market◆Aggressive expansion to create 3,0005,000 store network by FY2021

Promote profits and businessexpansion, create a solid future
profit source
Copyright (c) 2018 Lawson, Inc. All rights reserved.

FY17

0

FY18
（Plan）

ShanghaiprofitFrom FY19（Plan）

China
profitChina

DalianShanghaiSoutheast
Asia
Rest of
China

Thailand*Envisaged pattern

23

To Continue Our Essential Presence
Firm growing profit base from FY2019
Further strides in
FY2021 Medium-term Business Vision

1,000

Pursue further
sublimation andfulfilment of ourcorporatephilosophy toensure wecontinue to be an
essential
presence

800
600

・Maximize value of physicalstoresInvestment
period forsustainablegrowth400
200(Lawson Fresh Pick,advanced digital technology)

0
FY16

FY17

FY18

Consolidate base
Copyright (c) 2018 Lawson, Inc. All rights reserved.

FY19

FY20

・Exploit purchasing data
FY21 （Ponta members, etc.）
Further strides*Envisaged pattern24

Reform Companywide Administration Practices
Aim to become a strong organization by creating a stronger
collective entity, and promoting work-style reform, administrativereform and human resource training, based on solid compliance andhealth-conscious frameworks

New work
style

More time conscious
Take holidays
Personnel system thatcan respond to diverse
working styles

New admin

HR training

Greater efficiency andproductivity
Improve businessquality and enforcement
Review cost structures

Next-generation training
committee
Skills & action
evaluations
Job rotation

Compliance & Health
Copyright (c) 2018 Lawson, Inc. All rights reserved.

25

Shareholder Returns
Dividend: Maintain fundamental stance of providing
consistent and stable shareholder returns
ROE：Increase to over 15% by FY2021
Dividend per share and Dividend yield
（円）
280
260
240

255
yen

ROE
4.5% 20.0%

１株当たり年間配当金（左）Dividend per share

4.0%

配当利回り（右）Dividend yield

220

3.5% 15.0%

200
3.0%

180
160

2.5%
10.0%

140
2.0%

120
100

10.1％

1.5%

80

5.0%
1.0%

60
40

(FY2018）

0.5%

20
0

0.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

forecast(Fiscal)Copyright (c) 2018 Lawson, Inc. All rights reserved.

0.0%2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
forecast(Fiscal)26

ESG Initiative
Society &Environment

Contribute to society and environment throughour main line of work
Based on its corporate philosophy, the Lawson Group seeks
to conduct active business that considers society and theenvironment to achieve Harmony and Happiness in our
Communities (sustainable growth)

See http://www.lawson.co.jp/company/activity/ for more details

Candidates for new Member of the Board
Miki Iwamura

Corporate
Governance

Current position: Managing Director
APAC Brand & Marketing
CMO Japan, Google Japan G.K.
Iwamura’s appointment would maintain the current
total of 3 independent and female directors
Personnel changes proposal to be considered at the annual
shareholders meeting on Wednesday, May 22, 2018

See http://www.lawson.co.jp/company/corporate/system/governance/
for more details
Copyright (c) 2018 Lawson, Inc. All rights reserved.

27

Creating Happiness andHarmony in our Communities

To become a top-class effective company
To remain an essential part of community life
Copyright (c) 2018 Lawson, Inc. All rights reserved.

28

Reference Materials

Copyright (c) 2018 Lawson, Inc. All rights reserved.

29

Earnings Summary: FY2017
Net sales of all stores
Operating profit
Operating profit ratio
Recurring profit
Net profit
EPS (Yen)
Dividend per share (Yen)ROE

FY2016
Actual2,157.9
73.7
3.4%
73.0
36.4
363.96250
13.5%

Total no. of stores in Japan

13,243(Consolidated：Billions of yen)

Actual
2,283.6
65.8
2.9%
65.1
26.8
268.16255
9.7%

FY2017
YoY
105.8%
89.2%- 0.5%P
89.2%
73.7%- 95.80+5- 3.8%P

vs. Plan
98.9%
96.1%
- 0.1%P
99.5%
80.1%- 66.65±0- 2.3%P

14,132+889- 27

Note: Total chain store sales (Net sales of all stores) include sales from the convenience store operation in Japan, international operations and sales from Seijo Ishii (consolidated items only).
Regarding Seijo Ishii, only the store sales of directly operation are included.
Note: The number of stores is the total number of convenience stores in Japan operated by the Lawson Group plus the number of stores directly operated by Seijo Ishii.
Note: Changes vs. plan indicates comparison with the plan announced along with the FY2017 2Q results.

Consolidated operating profit: -10.8% YoY, -3.9% v. planNon-consolidated operating profit down 11.1% YoY due to cost of brand conversions, next-generation systems investment, and higher sizebased corporate taxes. Consolidated operating profit also down YoY on approx. 1.3 billion yen on increase in preparatory costs for entering
the financial industry. Operating profit below target on consolidated and non-consolidated basis owing largely to the lower-than-forecast
sales and gross profit margin at the Lawson parent.

Consolidated net profit: -26.3% YoY, -19.9% v. plan
Net profit below plan on a consolidated and non-consolidated basis, due to falling operating profit YoY and v. plan, and the recording of 6.0
billion yen in impairment losses on next-generational systems.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

30

Existing Stores (non-consolidated*) *exc. Lawson Store 100
FY2017

Existing-store sales fell 0.1% YoYOverall gross profit margin held steady YoY at 31.3%.
(no. of customers -1.3%, spending per customer +1.3%)

102.5%

1.0%
0.5%

100.0%

0.0%

-0.5%
97.5%

-1.0%
1H

2H

FY2014

1H

2H

FY20151H

2H

FY20161H

2H

FY2017Gross profit margin difference (YoY, Right）
Gross profit margin difference, excl. cigarette sales (YoY, Right）
Existing stores gross profit（YoY, Left)
Existing stores sales（YoY, Left）

 Existing-store sales fell 0.1% YoY, and short of plan. Customer visits fell 1.3% YoY, but average customer
spend rose 1.3% YoY on stronger support for everyday living and proactive evening/nighttime strategy.
 Overall gross profit margin held steady YoY at 31.3%. While gross margin-boosting daily delivered foods
constituted a higher YoY proportion of total sales, the proportion of gross-margin dampening cigarettesales also increased.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

31

Store Openings (non-consolidated*) *exc. Lawson Store 100（Store numbers）（Daily new store sales in thousand yen)Store Closure （Left）
Daily sales per new store （Right）

Net store increase （Left）
Store opening (Left)

1,300

600

1,000
700

1250

881

400

400
100

369

-200

200

-500
-800

0
FY2014FY2015FY2016FY2017

 Opened 1,250 new stores (150 less than planned), including 125 Save On and 195 Three F brandconversion stores.
 Closed 369 stores (131 less than planned).
 Net increase of 881 stores (19 less than initially planned)
Note: Changed standard to count business category changes between Lawson Store100, Natural Lawson and Lawson in the store opening/closing data from FY2015.
Note: Store openings/closures linked to the transfer of control from Lawson to Lawson San-in Co., Ltd. are not included.

Copyright (c) 2018 Lawson, Inc. All rights reserved.

32

Key Components of SG&A Expenses
FY2016

Actual(Billions of yen)

Selling, general & administrative expenses
Non-consolidated＜Major Expenses＞
Personnel expenses
IT-related expenses(Hardware leasing, software amortization, maintenance, etc.)
Advertising and promotional expenses
Sales commission
Facilities expenses

Consolidated SG&A expenses

41.5
9.3

44.7
7.2

+3.1
-2.1

Increase 0-5%
Increase 90-100%

13.8
15.8
144.3

12.5
19.7
155.6

-1.2
+3.9
+11.3

Increase 10-15%
Increase 15-20%
Increase 5-10%

383.2

410.1

+26.8

Increase 10-15%

 IT-related costs down on cost-cutting and areviewed schedule for next-generation
systems investment

Consolidated

Consolidated

Copyright (c) 2018 Lawson, Inc. All rights reserved.

284.7

Non-consolidated

Non-consolidated

 Higher costs related to increased number of consolidated
companies, including the company preparing financial
services entry, and more overseas stores

268.2

vs.計画差Forecast

YoY
前年差
 Wages: Up on more company operated stores
 IT related expenses: Active cost-cutting A&P: Down v. FY2016 strong everyday living support
 Sales commission: Higher franchisee support costs asstores increase

FY2018ChangeForecast+16.4
Increase 10-15%

FY2017

 IT-related costs down on cost-cutting and areviewed schedule for next-generation
systems investment
33

Earnings of Major Subsidiaries＜Operating Profit＞(Billions of yen)

FY2018YoY change Forecast
-0.8
0.0
-0.1
7.8
-0.2
2.1
+0.0
2.3
+0.1
-0.0
-0.0
0.1

FY2017

Lawson Store100, Inc.
SEIJO ISHII CO., LTD.
Lawson HMV Entertainment, Inc.
United Cinemas Co., Ltd.
Chongqing Lawson, Inc.
Shanghai Lawson, Inc.

Lawson Store 100

FY-endOwnership

Feb.
Feb.
Feb.
Feb.
Dec.
Dec.

100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

Actual

-0.3
7.6
1.8
2.5
-0.3
-0.5

0.5 billion yen operating loss at Lawson Store100 overall. Existing-store sales down 1.7% YoY.
Expect slight operating profit in FY2018.

SEIJO ISHII

Strong sales trend continues with existing-store sales rising 1.7% YoY. FY2017 profit decreased 0.1
billion yen on change in accounting period, but increased on a simple March to February YoY
comparison. FY2017 profit also expected to rise.

Shanghai Lawson, Inc.

Existing-store sales growth has been favorable but recorded 0.5 billon yen operating loss in FY17,
which was approximately the same level as previous year. FY2018 plan is to come out even.

Copyright (c) 2018 Lawson, Inc. All rights reserved.

34

Consolidated Capital Expenditure & Cash Flow
● Consolidated Capital Expenditures（Billions of yen）

FY2015
Actual
40.4
6.7
15.8
1.4
64.5

FY2016
Actual
47.5
7.2
19.2
1.4
75.5

FY2017
Actual
55.8
7.4
18.6
5.4

Leasing

38.0

42.6

80.0

Depreciation and amortization

49.2

56.1

48.8
58.6

● Consolidated Cash FlowsFY2015
Actual112.2- 68.643.5- 50.2- 24.2FY2016
Actual99.8- 76.223.6- 25.6- 24.7FY2017
Actual113.9- 91.222.7- 61.2- 25.2FY2018
Forecast
Approx. 128.0
Approx. -95.0
Approx. 33.0
Approx. -17.0
Approx. -25.0

69.7

67.6

30.1

New stores
Existing stores
IT-related
Other

Subtotal for capital expenditure

87.2

FY2018
Forecast
56.0
9.5
20.0
5.5
91.0
71.4
（Billions of yen）

Cash flows from operating activities
Cash flows from investing activities
Free cash flows
Cash flows from financing activities(Cash dividends paid)

Cash and cash equivalents at end of period- New-store investment up on higher store openings YoY and increased investment in brand conversions.
 Cash and cash equivalent decreased due to control the increase in borrowings at fiscal end.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

35

FY2018 Company Forecasts (Consolidated)
Net sales of all stores
Operating profit
Operating profit ratio
Recurring profit
Net profit
EPS（Yen）
Dividend per share (Yen)ROE

FY2016
Actual2,157.9
73.7
3.4%
73.0
36.4
363.96250
13.5%

FY2017
Actual
2,283.6
65.8
2.9%
65.1
26.8
268.16255
9.7%

Total no. of stores in Japan

13,243

14,132

14,932+800

Gross profit at existing stores (YoY)
Net sales at existing stores (YoY)
Gross profit margin ratio

100.0%
99.8%
31.4%

99.6%
99.9%
31.3%

101.3%
101.0%
31.4%+0.1%P

Gross profit margin difference excluding cigarettesales (YoY)±0.0%P-0.1%P+0.1%P+0.2%P(Billions of yen)

FY2018
Forecast
YoY
2,480.0
108.6%
60.0
91.2%
2.4%
-0.5%P
57.0
87.5%
28.0
104.4%
279.84+11.68255±010.1% +0.4%P(Non-consolidated*)*excluding LAWSON STORE100 businessNote: Total chain store sales (Net total of all stores ) include sales from the convenience store operation in Japan, overseas
operations and sales from Seijo Ishii (consolidated items only). Regarding Seijo Ishii, only the sales of directly operated
stores are included.
Note: The number of stores is the total number of convenience stores in Japan operated by the Lawson Group plus the number of
directly operated Seijo Ishii stores.

 As in FY2017, FY2018 OP will likely contract due to the downward impact of growth investment.
 Expect FY2018 net profit to increase when compared to FY2017, which reported significant systemCopyrightrelated(c) 2018 Lawson,
Inc. All rights
reserved.
36
impairment
losses.

FY2018 1H&2H Forecast(Consolidated: Billions of yen)

Net sales of all stores
Operating profit
Operating profit ratio
Recurring profit
Net profit

FY2018 Forecast
2nd Half
1st Half
Full year
1,240.0
30.5
2.5%
29.0
17.0

1,240.0
29.5
2.4%
28.0
11.0

2,480.0
60.0
2.4%
57.0
28.0

100.8%
100.5%
31.4%

101.8%
101.5%
31.3%

101.3%
101.0%
31.4%(Non-consolidated*) *excluding LAWSON STORE100 business

Gross profit at existing stores (YoY)
Net sales at existing stores (YoY)
Gross profit margin ratio

Note: Total chain store sales (Net sales of all stores) includes sales from the convenience store operation in Japan,
international operations and sales from Seijo Ishii (consolidated items only). Regarding Seijo Ishii,
only the sales of directly operated stores are included.
Note: The number of stores is the total number of convenience stores in Japan operated by the Lawson Groupplus the number of directly operated Seijo Ishii stores.

Copyright (c) 2018 Lawson, Inc. All rights reserved.

37

Consolidated Balance Sheet at the end of FY2017

As of Feb. 28, 2018

Change fromFeb. 28, 2017

Total current assets

231.8

-17.4

(Cash and deposits)

30.1

-37.9

(Accounts receivable)

82.6

+4.2

Total noncurrent assets

668.3

+51.0

Property, plant and equipment

349.9

+25.4

Intangible assets

100.1

+5.3

47.9

+1.9

218.2

+20.2

47.4

+2.9

100.6

+5.0

900.2

+33.6

(Goodwill)
Investments and other assets(Long-terms loans receivable)(Guatantee deposits)

Total Assets

As of Feb. 28, 2018

(Billions of yen)
Change fromFeb. 28, 2017

379.2

+22.4

(Accounts payable-trade)

118.1

+7.3

(Short-term loans payable)

36.3

+5.1

(Deposits payable)

109.6

+6.4

Total noncurrent liabilities

239.5

+15.7

55.4

-1.2

281.4

-4.5

58.5

-

(Retained earnings)

166.1

+0.9

Liabilities and net assets

900.2

+33.6

Total current liabilities(Long-term loans payable)

Net Assets(Common stock) The fixed assets rose on increased store numbers.
 Cash and deposits declined, which was due to control the increase in borrowings at fiscal end.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

38

Cautionary Statement
This presentation contains forward-looking statements and forecasts regarding the future plans, strategies and performances of
Lawson and its subsidiaries and affiliates. These statements and forecasts are not historical facts. They are expectations based onassumptions and beliefs derived from information currently available to the Company and are subject to risks and uncertainties
including, but not limited to, economic trends, heightened competition in the domestic convenience store sector, personal
consumption, market demand, the tax system and other legislation. As such, actual results may differ materially from estimates.
Figures in this presentation have been rounded down.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

39