First Half Results for FY2018(Six months ended August 31, 2018)

Lawson, Inc.
October 12, 2018

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

1

Financial Results forFirst Half of FY2018
Satoshi Nakaniwa
Senior Vice President
Chief Financial Officer
Lawson, Inc.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

2

Financial Results for 2018 1H: Overview(Consolidated : Billions of yen)

FY20171H
Act

FY2018 1H
Act

Diff.

v. PlanOperating profit

38.9

34.4

-4.4

+3.9

Recurring profit

38.4

33.5

-4.9

+4.5

Net Profit

23.6

17.9

-5.7

+0.9

(Non-consolidated %)Existing store sales

100.5%

99.2%-1.3%pt-1.3%pt

Gross profit margin

31.3%

31.4%

+0.1pt+0.0ptNo. of CVS stores

13,45014,340+890- 52Consolidated operating profit: -4.4 bil yen YoY, +3.9 bil yen v. plan

FY2018
Forecast

60.0
57.0
28.0

No changefrom initialplan

・YoY: Gross operating revenue increased thanks to the increase number of stores, although operating
profit decreased due to increased costs relating to franchisee support and next generation system, andopening of Lawson Bank business・v. plan: profit rose on the back of lower business expenses and unused advertising andpromotion spending.

Non-consolidated existing-store sales: -0.8% YoY, -1.3pp v. plan
・YoY & v. plan: Successful evening/nighttime range strengthening and stronger everyday living support
boosted customer spend (+1.5%), but sluggish customer numbers (-2.2%) led to fall in sales.

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

3

FY2018 Full-year Plan（Consolidated Operating Profit）（Billions of yen）

Operating Profit

FY18 Initial Plan
1H

2H

Full Year

1H Act2H Revised

Full Year

30.5

29.5

60.0

34.5

25.5

60.0

InitialPlan

Next
Generation
SystemApprox.

New
businesses

Approx.

CVS etc.

Approx.

Total

FY18 Revised Plan

RevisedPlan-7.0 bil. Approx. -5.0 bil.

Diff
Approx.

-2.0 bil. Approx. -2.0 bil.

+3.0 bil. Approx. +1.0 bil.

Approx. -6.0 bil. Approx. -6.0 bil.

+2.0 bil.
±0.0 bil.

Approx.

-2.0 bil.
±0 bil.

Diff
1H( Initial v. Actual)

2H(Initial v. Revised)

Approx.+4.0 Approx.-4.0
1H (approx+4.0 bil yen)
Next-generation systems

Cost cuts (installation
efficiency etc.)(+1.0)

CVS etc.
Cost cuts etc.

A&P unused etc.

(+0.5)(+2.5)

2H (approx-4.0 bil yen)
Next-generation systems
Cost cuts (installation
efficiency etc.)(+1.0)
CVS etc.
Daily sales review etc. (-1.0)
Natural disaster costs etc.

(-1.5)

Unused expenses in 1H(A&P etc.)(-2.5)※Data rounded to the nearest 0.5bil yen for simplification purposes
Copyright (c) 2018 Lawson, Inc. All rights reserved.

4

FY2018 Full-year Forecast
Consolidated OP 60.0 bil yen (YoY -5.8 bil yen)
Consolidated Net Profit 28.0 bil yen (YoY +1.1 bil yen)（Billions of yen）
FY2018
Forecast

vs PY

Non-consolidated operating profit
Existing-store sales (yoy)100.0%

Gross profit margin (yoy)+0.1％P

Operating profit

44.5

-6.5

Diff. cons./ non-cons.

15.5

+0.7

Consolidated operating profit

60.0

-5.8

Consolidated net profit
Dividend (yen)

28.0
255

+1.1
±0

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

5

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

6

Lawson Overview
LoppicHealthcare

Finance

Japan CVSEntertainment

China

Shanghai, Chongqing, Dalian, Beijing, Wuhan

Digitaltechnology

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

Overseas
operations

Southeast Asia

Indonesia, Thailand, Philippines+α71000-Days Action Plan Overall

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

Analog

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

8

Japan CVS: 1000-Day Action Plan Project
Building next-generation CVS model～Providing everyday living support, responding to labor shortages

FY2016FY2015
Improve ordering
efficiency

Strongereverydaylivingsupport

Improve productenvironment● All store renewal● Strengthen alternative

supermarket categories suchas daily prepared foods andorders using
frozen foods
ordering systems ● Expand SKU from
3,000→3,500 product items☆ Recommended

Improve productenvironment

Expand product range● Strengthen core CVS

products (over-the-counterfast food & rice related
products)● Improved MACHIKADOKITCHEN menus☆New tablets● Easy to plan working

schedule at stores

Build a structure to explore
future revenue opportunities,
respond to labor shortage● New contract package

Labor
shortage
response

FY2017(HQ share store
disposal)● Lawson Lab

HQ support forrecruitment at stores● Regirobo● RFID pilots, etc.

● Established a new

FY2018Strengthen evening, nighttime ranges● Sweeping review of orderingsystems, products● Diagram review● Change order cutoff times● Lawson Fresh Pick

Strengthen product rages● Expand MACHIKADO KITCHEN(6,000 stores at end of FY2018)☆ Introduced new

POS cash registers
with automatic
cash dispensers
Smartphone payment

staffing services co.
LAWSON Staff

Year 0
Copyright (c) 2018 Lawson, Inc. All rights reserved.

Year 1

Year 2

Year 39

FY2018 First-half Results
Review

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

10

FY2018 1H Review
Orders & Logistics Review, Inventory Changes
Evening/nighttime strengthening products
Inventory increase after 16:00

Inventory numbers

140

Post strengthening
120

100

80

Pre strengthening

60

40

1時
1 2時
2 3時
3 4時
4 5時
5 6時
6 7時
7 8時
8 9時
9 10時
10 11時11 12時12 13時13 14時14 15時15 16時16 17時17 18時18 19時19 20時20 21時21 22時22 23時23 24時24

Time (24 hours)
Copyright (c) 2018 Lawson, Inc. All rights reserved.

11

Successful Strategy to Strengthen Evening/Nighttime Range
Daily sales on stronger evening/nighttime category increased
following strengthening drive

Morning, lunchtime

Evening, nighttime

Customer Spend ＋2.4％ → +2.7％

Customer Spend＋5.0％ → +7.5％

Daily sales＋3.0％

Daily sales＋0.2％

103.1％

98.7％
100.1％

98.5％

Pre-drive
May 2018

Post-drive

Jun.～Aug. 2018

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

Pre-drive
May 2018

Post-drive

Jun.～Aug. 2018

※Stronger evening/nighttime category: boxed males, rice balls/sushi, cooked breadstuffs

12

Successful First-half Initiatives ～New POS Cash Registers～
New POS Cash Registers are so easy to use

Multilingual
response

Speedy /Easy tooperateAutomaticchangedispenser

Space saving

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

Won Good Design Award
FY201813

Successful First-half Initiatives ～”Loppic” “Lawson Smartphone Pay”～
Lawson Fresh Pick (Loppic)

Lawson Smartphone Pay

Shop on your smartphone

No more checkout lines

Popular items: Meat, fish, vegetables you can’t
buy instore, meal kits, specialty store taste

Barcode payment via a specialist app
Buy what you want without waiting in line

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

14

Sales down on Lower Customer Visits
Severe competition with restaurants, online sales,
drugstores and other retail formats
Daily sales-0.8%

Customer visits -2.2%（-2.2% v. plan）

Potential target
Steady growth(Men/women over 50)

Heavy CVS users(Men/women in 30s, 40s)

YoY

YoY

+3〜+5%-3.0〜-8.0%

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

Customer spend +1.5%（+1.0% v. plan)

Broad age and customer range
YoY

+1.5%
15

FY2018 2H Initiatives～Further Improve Everyday
Customer Support～

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

16

Further Improve Everyday Customer Support
Being an essential part of community life

Japan CVS
Product
StrategyEver stronger evening,nighttime range

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

LoppicConvenience via yoursmartphoneBank

The closest bank forour customers

17

Product Strategy: Stronger Evening, Nighttime ～Staple Items～
Counter FF, lunches to appeal to avid consumers in 30s, 40s
OTC fast foodMore fried deli
items
Packaged items
Dinner & snacks
Ready-made meals

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

18

Product Strategy: Stronger Evening, Nighttime Items～Lawson Original～
Renewal “staple items” to satisfy broad customer range
Sandwiches,Superior
Desserts
bakeryingredients,

method, quality

Special bread, bumper
fillings
Noodles

Superior flour, noodles,
soy sauce
Copyright (c) 2018 Lawson, Inc. All rights reserved.

First fresh cream range renewal
for 10 years
Riceballs

Top quality rice & cooking,improved seaweed

19Products: Stronger Evening/Nighttime Ranges ～Differentiation～

MACHIKADOKITCHEN

Joint Seijo Ishii
rangesExpand joint stores nationwide, 4,900 stores(at end August 2018)

Repeat customers, customer numbers up
Positive effect on daily sales per store

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

20

Expand Lawson Fresh Pick (Loppic)

Introduced in 1,200 stores by mid October⇒ 70% of 23 Tokyo districts, all of Kanagawa pref.
Aiming for 3-4 instore pickups/day, adding 3,000-4,000
yen to daily sales for each store
Four most popular categories:① Meat kits, ② Daily delivered foods, ③ Desserts,④ Fresh fruit and vegetables

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

ローソン商品と組み合わせ21

Lawson Bank Business Concept andDirection of Aiming Financial Services

President and CEO Masashi Yamashita
Lawson Bank, Inc.

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

22

Challenging to New Banking Business by Taking Over Profitable ATM Business

To NewBusiness

13,000Over
Cash points

Growing tobusiness tosecure stable
cash flowMore than

200 million
customers

Over 90affiliated financial
institutions

Banking Business

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

ATM Business23

Lawson Bank Business Model

Customers

Deposits, credit cards, Internet banking, Cashless
payments, etc.

Banking Services for Retailers
Lawsonfranchisees andother stores

Regional
financial
institutions

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

Sales deposits, salary prepayments, low-costsettlement services, etc.

Banking Services for Regional
Financial Institutions

ATM operational
base

Retail Banking Services

Joint ATM, ATM operation supplement/substitution,
joint store operation, provision of new sales
opportunities, linkage between urban and regional
cities, etc.

24

Ultimate Cashless Settlement Lawson Bank Aiming

Cashless Settlement

Customers

QR, barcode, NFC, etc.

Immediate use after registering existingaccount
Remittance between individuals
Provision of personalized services

Lawsonfranchisees andother stores

Dealing with cashless settlements
Reduction of burden of settlement commissions
Data marketing initiatives

New Settlement Platform
Improvement of convenience ofaffiliated financial institutions
Increase revenue from commissions

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

25

Ultimate Financial Services Aiming Lawson BankC

Other bankaccounts

LB credit
cards

Deposit andwithdrawal/
transfer

Immediate deposits /settlements

LB
accounts

Other bankaccounts

User
communication

Transfer

Electric
money/coins

Remittance
betweenindividuals

Loyaltyprogram

Payment

QR, barcode, etc.

Platform

Smallchangedeposits

Investment
trustsPurposespecificdeposits

small loans
Salaryprepayments

PFM(Personal
financemanagement)
・Including services to be provided with partners
・LB : Lawson Bank

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

26

Development of Functions to Support Regional Financial Institutions

ATM operation
supplement/substitution
Operation of joint outlets
with Lawson
Support of business efficiency

Joint promotion of cashless
settlements
Support of cashless settlements inregional economy from both users
and franchisees

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

Expansion of sales
opportunities for financial
products
Provision of new sales channels
including Lawson stores, ATMs andwebsiteLinkage of distancecustomers in regional andurban areas
Support of Lawson Bank and nationwide
ATM network to customers moving tourban cities for study or work27

Building Financial Community and Open Platform

Datamarketing

Financial community (real and digital)
Cashless
settlements

Joint
ATMs

Asset
management

Remittance
Btw
individuals

Stockaccounttransfer

Loans

OthersOpen platform participated by financial institutions
Utilizingdata

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

Online banks

Megabanks

Securities
companies

28

Direction Lawson Bank Aiming

Retail Banking

Products provided
by alliance withaffiliated financial
institutions inaddition to own
products

ATM Business

Enhancement ofsettlement
platform function
utilizing existing
assetsDevelopment of own
economic zone

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

Aiming to contribute torevitalization of regional economy
together with customers, Lawson
franchisees and other stores, andregional financial institutions

Coexistence with
regional economy

29

■2018年方針

Maintain morning and daytime sales,
offer attractive products during evening and nighttime
Copyright
All rights
reserved.
Copyright(c)(c)2018
2016Lawson,
Lawson Inc.
All rights
reserved.

30 30
30

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 ourcorporate philosophy
to ensure we
continue to be an
essential presence

800
600

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

0
FY16

FY17

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

FY18

FY19

FY20

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

31

Shareholder Returns
Dividend: Maintain fundamental stance of providing consistentand stable shareholder returns
ROE：Increase to over 15%
Dividend per share and Dividend yield

（yen）
280
260
240

255
yen

１株当たり年間配当金（左）Dividend per share
配当利回り（右）Dividend yield

ROE
4.5% 20.0%
4.0%

220

3.5% 15.0%

200
3.0%

180
160

2.5%
10.0%

140
2.0%

120
100

1.5%

80

5.0%
1.0%

60
40

10.1％
(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)32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.

33

Reference Materials

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

34

Earnings Summary: FY2018 1H
Net sales of all stores
Operating profit
Operating profit ratio
Recurring profit
Net profit
EPS (Yen)
Dividend per share (Yen)FY2016-1H
Actual
1,076.5
39.9
3.7%
38.3
22.6
226.07125.0

FY2017-1H
Actual
1,148.5
38.9
3.4%
38.4
23.6
236.36
127.5

Total no. of stores in Japan

12,733

13,587(Consolidated：Billions of yen)

Actual
1,224.5
34.4
2.8%
33.5
17.9
179.32127.5

FY2018-1H
YoY
106.6%
88.5%- 0.6%P
87.2%
75.9%- 57.04+2.5

vs. Plan
98.8%
113.1%+0.4%P
115.6%
105.5%+9.42±014,482+895-

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 results.

Operating profit down 11.5% YoY, but up 13.1% v. plan
Profit declined a yoy basis on the back of increased sales strategies relating to the strengthening ofevening and nighttime food ranges, increased costs relating to franchisee support, and higher
investment costs to encourage future growth. However, profit rose versus our latest plan on the backof lower business expenses and unused A&P.
Net profit down 24.1% YoY, but up 5.5% v. plan
Down YoY on lower operating profit, and higher special losses relating to increased store closures.
Up v. plan primarily on higher-than-expected operating profit.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

35

Existing Stores (non-consolidated*) *exc. Lawson Store 100
FY2018 1H

Existing-store sales fell 0.8% YoYOverall gross profit margin improved 0.1p YoY to 31.4%.
(no. of customers -2.2%, spending per customer +1.5%)

102.5%

1.0%
0.5%

100.0%

0.0%
-0.5%
-1.0%

97.5%
1H

2H

1H

FY20152H
FY20161H

2H

1H

FY2017

2H(Plan)FY2018Gross 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）

Note: From FY2018 1H, Lawson has changed its disclosure figures of the existing-store sales to exclude the effect of the ticket sales including concerts, sporting events and gift card sales etc.

First-half existing-store sales fell short of plan, declining 0.8% YoY. Customer visits declined 2.2%
on a waning generation of avid consumers, and the adverse impact of poor weather. Averagecustomer spend up 1.5% YoY on efforts to improve evening and nighttime food offerings.
Gross profit margin improved 0.1p YoY to 31.4%. The main reasons for this were increased
commissions in non-food products, and improved profit margins for over-the-counter fast food.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

36

Store Openings (non-consolidated*) *exc. Lawson Store 100
Net store increase （Left）

Store Closure （Left）

Store opening (Left)（Store numbers）

Daily sales per new store （Right）（Daily new store sales in thousand yen)

600

600

300

400

495
350

0

200

145
-300

0
FY2015-1H

FY2016-1H

FY2017-1H

FY2018-1HOpened 495 stores (including 73 Save On and 63 Three F brand changes), so roughly on target.
Closed 145 stores (28 above plan), resulting in a net increase of 350 stores. Progress wasfavorable when comparing with financial year plan.
Daily sales per new store dipped slightly YoY to 490,000 yen.
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.

37

Key Components of SG&A Expenses
FY2017-1H
Actual138.9

Actual150.1

Change+11.2

Forecast
Increase 10-15%

22.4
2.4

23.0
3.5

+0.5
+1.0

Increase 0-5%
Increase 90-100%

Facilities expenses

6.3
8.8
75.9

7.2
10.6
81.8

+0.8
+1.7
+5.9

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

Consolidated SG&A expenses

200.3

217.8

+17.4

Increase 10-15%(Billions of yen)

Selling, general & administrative expenses

FY2018-1H

FY2018Non-consolidated＜Major Expenses＞
Personnel expenses
IT-related expenses(Hardware leasing, software amortization, maintenance, etc.)
Advertising and promotional expenses
Sales commission

vs. Forecast

YoY
Non-consolidated

IT costs: Higher investment in next-generation systems
A&P: Increased sales strategies relating to thestrengthening of evening and nighttime food ranges
Sales charges: Increased franchisee disposal loss support

Non-consolidated

Down v. plan primarily on the back of lower
business expenses and unused A&P.

Consolidated

In addition to the non-consolidated factors, higher
costs for our finance-related operation.

Consolidated

Down v. plan on above-mentioned factors andcost-cutting at subsidiary firms.

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

38

Earnings of Major Subsidiaries（Billions of yen）

＜Operating Profit of Major Subsidiaries＞
Lawson Store100, Inc.
SEIJO ISHII CO., LTD.
Lawson Entertainment, Inc.
United Cinemas Co., Ltd.
Chongqing Lawson, Inc.
Shanghai Hualian Lawson, Inc.

FY2018 1H

FY-endOwnership

Actual

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

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

-0.1
3.6
0.9
1.8
-0.1
-0.8

FY2018YoY change Forecast
-0.1
-0.0
+0.2
8.0
+0.3
2.4
-0.2
2.4
+0.0
-0.1
-0.0
0.1

Lawson Store 100, Inc.

Lawson Store 100 operation reported an operating loss of 100 mil. yen. Existing-store sales down
1.5% YoY. Estimate a slight operating loss for FY2018.

SEIJO ISHII CO., LTD.

Existing-store sales up 1.5% YoY on continued strong sales, OP expands. Expect full-year profit
gain.

Lawson Entertainment, Inc.

Profit increased thanks to the securing of large-scale content, and strong sales of HMW goods..
Expect full-year profit gain.
Operating loss steady YoY, in line with plan. Expect performance to improve from the 2H. Aiming for

Shanghai Hualian Lawson, Inc. a full-year profit.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

39

Consolidated Capital Expenditure & Cash Flow
● Consolidated Capital Expenditures
FY2016-1H
Actual
16.8
3.3
7.6
0.9
28.8

FY2017-1H
Actual
28.6
2.2
9.0
4.6
44.5

FY2018-1H
Actual
19.5
6.7
10.4
0.3
36.9

FY2018
Forecast
56.0
9.5
20.0
5.5
91.0

Leases

25.1

22.1

26.1

80.0

Depreciation and amortization

26.9

27.9

31.8

71.4

FY2016-1H
Actual
91.4
-28.9
62.4
-27.7
-12.2

FY2017-1H
Actual
119.1
-44.4
74.7
-67.0
-12.5

FY2018-1H
Actual
88.0
-40.5
47.5
-33.0
-12.7

FY2018
Forecast
Approx. 128.0
Approx. -95.0
Approx. 33.0
Approx. -17.0
Approx. -25.0

104.0

76.0

43.8

(Billions of yen)

New stores
Existing stores
IT-related
Other
Subtotal for capital expenditure● Consolidated Cash Flows(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 deposits-

The decline in first-half new store investment reflects a comparison with when we recorded initial investment related tostore brand name changes.
Increase of financial cash flow compared to the first half of fiscal 2017 repayment of short-term borrowings.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

40

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

14,932100.0%
99.8%
31.4%+0.1%P

99.6%
99.9%
31.3%
-0.1%P

99.8%
100.0%
31.4% +0.1%P+0.1%P-(Billions of yen)

FY2018 Forecast
Forecast
YoY
2,450.0 107.3%
60.0 91.2%
2.4% -0.5%P
57.0 87.5%
28.0 104.4%
279.83 +11.67
255±010.1% +0.4%P+800(Non-consolidated)

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

Note: From FY2018, Lawson has changed its disclosure figures of the existing-store sales to exclude the effect of the ticket sales including concerts, sporting events and gift card sales etc.
Note: Figures in italic indicate the revised figures from the initial plan.
Note: Total chain store sales (Net total 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 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 system-related
impairment losses.
Copyright (c) 2018 Lawson, Inc. All rights reserved.

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

FY2018 Forecast
1H Initial Plan 1H Actual 2H Plan

Net sales of all stores

Full-Year Plan

1,240.0

1,224.5

1,225.4

2,450.0

Operating profit

30.5

34.4

25.5

60.0

Operating profit ratio

2.5%

2.8%

2.1%

2.4%

Recurring profit

29.0

33.5

23.5

57.0

Net profit

17.0

17.9

10.0

28.0

Gross profit at existing stores (YoY)

100.8%

98.4%

101.1%

99.8%

Net sales at existing stores (YoY)

100.5%

99.2%

100.8%

100.0%

Gross profit margin ratio

31.4%

31.4%

31.3%

31.4%

(Non-consolidated*) *excluding LAWSON STORE100 businessNote: From FY2018 1H, Lawson has changed its disclosure figures of the existing-store sales to exclude the effect of the ticket sales including concerts, sporting events and gift card sales etc.
Note: Figures in italic indicate the revised figures from the initial plan.
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 Group plus the number of directly operated Seijo Ishii stores.

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

42

Consolidated Balance Sheet at the end of FY2018 1H
As of Aug. 31,
2018

Change fromFeb. 28, 2018

As of Aug. 31,
2018

Change fromFeb. 28, 2018

Total current assets

263.7

+31.9

430.1

+50.8

(Cash and deposits)

43.8

+13.6

(Accounts payable-trade)

144.4

+26.2

(Accounts receivable)

100.8

+18.2

(Short-term loans payable)

41.6

+5.3

Total noncurrent assets

696.9

+28.5

(Deposits payable)

111.2

+1.6

Property, plant and equipment

364.0

+14.1

Total noncurrent liabilities

242.4

+2.8

Intangible assets

106.8

+6.6

50.0

-5.4

49.0

+1.1

Total liabilities

672.5

+53.7

226.0

+7.8

Net Assets

288.1

+6.7

48.4

+1.0

(Common stock)

58.5

-

101.5

+0.9

(Retained earnings)

171.3

+5.1

960.7

+60.5

960.7

+60.5

（Billions of yen）

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

Total Assets

Total current liabilities(Long-term loans payable)

Liabilities and net assets

Accounts payable up on different number of business days in February and August.
Long-term loans payable declined after subsidiary firms repaid high-interest bank loans before theperiod end..
Copyright (c) 2018 Lawson, Inc. All rights reserved.

43

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.

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