First Half Results for FY2017(Six months ended August 31, 2017)

Lawson, Inc.
October 12, 2017

Copyright (c) 2017 Lawson, Inc. All rights reserved.

1

Financial Results forFirst Half of FY2017
Satoshi Nakaniwa
Senior Vice President
Chief Financial Officer
Lawson, Inc.
Copyright (c) 2017 Lawson, Inc. All rights reserved.

2

Financial Results for 2017 1H: Overview
FY2016 1H

Billion of yen

FY2017FY2017 1H

Act.

Act.

Diff.

v. plan

Forecast

Operating Profit

39.9

38.9

▲0.9

＋1.4

68.5

Recurring profit

38.3

38.4

＋0

＋2.4

65.5

Net profit

22.6

23.6

＋1.0

＋2.6

33.5

＋89

(no change frominitial estimate)

12,733

Non-consol.

31.7

31.1

Seijo Ishii

3.3

3.4

United Cinema

1.6

2.0

Overseas

▲1.7

▲1.8

OP

TTL no. of storesin Japan13,587＋854

Non-consolidated: Existing-store sales: +1.0% YoY
 Gross profit margin: 31.3% (±0.0% YoY)
 SG&A: 138.9 billion yen (+5.2bln yen YoY, -2.8bln yen v. plan)
・Personnel costs+1.7bln yen YoY ±0.0bln yen v. plan・IT related expenses -2.1bln yen-2.0bln yen
・Facilities expenses +4.7bln yen±0.0bln yen
 Opening 466 stores (excl. Lawson Store 100, incl. 101 brandconversion). Closure 139 stores (+91 v. plan)

Consolidated OP down 0.9bln yen YoY but up 1.4bln yen above target
OP down YoY on higher preparatory costs for entering the finance services and increased pro-forma standard taxes. OP up v. plan onschedule review for next-generation systems investment.
Net profit increased 1.0bln yen YoY, 2.6bln yen above target
Net profit up YoY on lower losses caused by reflecting losses on natural disaster in the previous year and fewer store closures, and theprevious year’s reversal of deferred income tax assets. Net profit up v. plan on higher-than-expected operating profit and reduced losses
resulting from fewer store closures.
Ref.: Total number of stores includes the convenience stores operated by Lawson group, Regarding Seijo Ishii, only the number of stores directly operated is included.
Copyright (c) 2017 Lawson, Inc. All rights reserved.
3

FY2017 2H/ Full-year Company Forecast
FY2017
Billion of yen

OP

FY2017
Diff.

1H

2H

Year

1H

2H

Year

Est.

Est.(a)Est.

Act

Rev.(b)

Est.

(b-a)

37.5

31.0

68.5

38.9

29.5

68.5

approx. -15

 2H OP estimate revisions
IT costs approx. +0.5bln yen

32.0

Next-generation system investment
schedule review

31.5

0.5

0.5

31.0

Sales commission
approx. -0.5bln yen
Additional support for new stores

0.8

30.5
30.0

0.7

31.0

Other SG&As
approx. -0.8bln yen

29.5

Subsidiary firms OP
approx. -0.7bln yen

28.5

Copyright (c) 2017 Lawson, Inc. All rights reserved.

29.0

29.5

FY2017 2H Initial
forecast

IT-related
expensesSales
commission

Other expenses

Subsidiaries

FY2017 2H
Revised Forecast4

Achieving Our Mid-Term
Management Vision
Sadanobu Takemasu
President and CEO
Representative Director
Chairman of the Board
Lawson, Inc.
Copyright (c) 2017 Lawson, Inc. All rights reserved.

5

Mid-Term Management Vision
Mid-Term Management Vision (Key targets toward FY2021)
・Consolidated OP: more than 100bln yen
・Daily sales: 600,000 yen/per store ・Japan CVS network: 18,000 stores
・ROE: over 15%
・Debt/equity ratio: 1.0 or less1000 Days Action Plan

Copyright (c) 2017 Lawson, Inc. All rights reserved.

FY2017 Initial Plan

6

FY2017 1H Results Review
Consolidated OP: 38.9 bln yen (-2.5% YoY, +1.4 bln yen v. plan)
Consolidated net profit: 23.6 bln yen (+4.6% YoY, +2.6 bln yen v. plan)・Achieved profit target but gross profit margin fell short of target.
・Reviewed planning for investment in next-generation systems.

(Yen in billions)Non-consolidated operating profit
Consolidated operating profit
Consolidated recurring profit
Consolidated net profit
Existing-store sales (YoY)
Gross profit margin
Copyright (c) 2017 Lawson, Inc. All rights reserved.

FY2016
1H
31.7
39.9
38.3
22.6
-0.9%
31.3%

FY2017FY2017
1H
YoY
1H Est.
31.1
-1.8%
38.9
-2.5%
37.5
38.4
+0.2%
36.0
23.6
+4.6%
21.0
+1.0%
+1.0%
31.3%
31.6%
7

1H Results Summary
Existing-store sales YoY 101.0%
Gross profit margin31.3%
Hit desserts (GODIVA collaborated) and salad items→Attracted quality-seeking customers,
female customers

Stronger support for everyday life
(Supermarket alternative, broader product ranges)→ Evening/nighttime customer spend increases

Boxed-meals, OTC fast food sales below plan
→ Gross profit margin falls short of target
Copyright (c) 2017 Lawson, Inc. All rights reserved.

8

1H

Stronger products
Differentiated products

Expanding new customer base

Dessert +2.5% Pasta
Sales per store (YoY)

Sales per store (YoY)+16.3%

Salad

Sales per store (YoY)+12.1%
Strong support from female customers andquality-seeking customers
Copyright (c) 2017 Lawson, Inc. All rights reserved.

9

1H

Stronger support for everyday life

Alternative to supermarket

Wider range of products

Evening/nighttime

Larger number ofSpending per
customer
spend

CustomersDeliwith 5 purchases

Daily
deliveredfoods

Frozenfoods

1H Existing-store Number of customers
YoY -0.5％
Spending per customer YoY＋1.5%
Copyright (c) 2017 Lawson, Inc. All rights reserved.

10

1H

Core CVS categories

Over-the-counter fast food・Struggled in 1Q but improved in 2Q

Deli,
OTC FFstrong1H existing-store sales trend for over-the-counter fast food
（％）

100

1Q
YoY

▲2.6％

Renewal

2Q
YoY

+4.0％

Rice based items
・ Continued declining year-on-year sales trend for rice balls and boxed-meals

Copyright (c) 2017 Lawson, Inc. All rights reserved.

11

2H

Stronger rice products(launch “new onigiri-ya”, strengthen bento)

Greatly improved taste of rice
Launch new onigiri-ya

Hal salt water, halfsalt sprinkling
Sprinkle with salt
large-graincoarse salt
salt

salt

salt

sweetsalt

Steam in salt sweet salt
water for salt
salt
to permeate salt
rice

1.6 x increase

100% salt sprinkling
Use smallsalt
grain salt forsweet
just the salt
salt
right
sweet
permeation
salt

Maintainsalt sweet
salt
sweetnessof ricesalt

Change the operation from steaming in thesalt water to only sprinkling salt

amount of filing

Boxedmeals

Stronger
staple items

Copyright (c) 2017 Lawson, Inc. All rights reserved.

New launching
Nov. Mixed lunch box
Hamburg box
Dec. Deep fried chicken box
122H

Stronger over-the-counter foodStronger delimenu
15 items

19

items

Fuller evening/nighttime
product range“Machikado Chubo”(in store kitchen)
End February 2018

4,000stores
Stronger menu
 Standardized operation for more
efficient processes（店内調理の様子）Reduce preparation time by improving store productivity
Use tablets for more efficient preparation schedules andfreshness management

Copyright (c) 2017 Lawson, Inc. All rights reserved.

13

2H

Ingredients initiatives

The tastiest café latte

Raw
milk

100%

Uses carefully
selected milk fromdifferent regions

Coffeebeans
Improved milk mix

Milk bottle
TrademarkLawson’s“Hot milk”

Long, low-heat roastingNew Mandolin blend

On sale10.17

Desserts with superior ingredients
Made with “French chocolate”

Premium chocolate
eclairCopyright (c) 2017 Lawson, Inc. All rights reserved.

“Nagano purple”
Grape-in rice cakewith bean paste

14

Expand health-related items category

Continue achieving “delicious health”

200
bln yen60
bln yen
6% of
all food118
bln yen

10% of
all food

20% of
all food

2013

2014

2015

250
bln yen300
bln yen350
bln yen

25% of
all food

30% of all
food

35% of
all food

20162017 target2018 target

Copyright (c) 2017 Lawson, Inc. All rights reserved.

380
bln yen
Perfect andpolish contents

2019 target

15

Growth investment: Overall
Brand conversion: Completed for 52 stores as planned
converted from Save On/ Three F
New business: 0.6bln yen invested in preparation forentry into finance services
Next generation systems: Started introducing tablets
Reviewed overall schedule to reflect opinion in pilot store
FY2017
Initial Plan

Brand conversion: approx. –2.5 bln yen

GrowthInvestment

Next generation system:
approx. –4.0 bln yen

Copyright (c) 2017 Lawson, Inc. All rights reserved.

New business: approx. –2.0 bln yen

16Growth investment: Brand conversion
1H results

SAVE ON: 45 stores (Saitama)Three-F : 7 stores (Chiba, Tokyo, Kanagawa)

Daily sales: Improved over 20% as average
By changing brand names, stores have been able to..
・Change customer base: Increase female customers
・Change top-selling products: Higher counter FF sales

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17

Growth investment: Next generation systems
Reviewed overall schedule based on pilot store results
Put schedule back a few months to reflect on-the-ground opinion
Tablet-style terminals
Counter Fast foods preparation→Efficient preparation to reduce
sales opportunities loss
Some pilot stores managed to boost counter fast foodsales by over 10%

Work schedule management

New POS cash registers
Speedy calculations→Efficient money management
New double-speed receipt printers

Easy-to-use operation→Even new crew can serve ourcustomers smoothly→Standardize operation to reducedifficulties, waste and fluctuations

Changed design of checkout counter

Introduced in FY2017 2Q

Introduce from FY2017 4Q

Copyright (c) 2017 Lawson, Inc. All rights reserved.

→Reduced required space by one third18

FY2017 Cons. OP forecast unchanged at 68.5 bln yen
Initial estimate (yen)Growthinvestment
Next generation
systemBrand
conversion
New business

CVS profit
increase
Unavoidable

Approx.

-8.5

Approx.

Approx.

Approx.

Approx.

Approx.

New planning (yen)Approx.

bln-4.0 bln-2.5 bln-2.0 bln+6.0 bln-2.5 bln

Approx.

Approx.

Approx.

Approx.

Approx.

-6.5-2.0 bln-2.5 bln-2.0 bln+4.0 bln-2.5 bln

bln

RevisedApprox.

-2.0↑

bln yen SAVE ON Three Fetc.
 Finalcial business Healthcare relatedetc.

1H
Shortfall↓1.0

2H additional
budget↓1.0

bln yenbln yen Improve sales  Franchise store Strengthen new
supportstore openings  Recruitment, etc.
※Forecast of subsidiaries are mostly the same, excl. LS100※Figures rounded to nearest 0.5bln yen for clarity of display
Copyright (c) 2017 Lawson, Inc. All rights reserved.

19

FY2017 Estimate
Consolidated OP 68.5 bil yen (YoY -5.2 bil yen)
No change from initial estimate(Billionsof yen)Billionyen

FY2017 Plan

Plan

Nonconsolidated

Difference/YOY

Existing-store sales (YOY)*+1.0%

Gross profit margin diff.*+0.1%P

SG&A expenses (YOY)+5% ～ +10%

Operating profit

52.5-4.9 / -8.6%

Difference : consolidated and non-consolidated

16.0-0.3 / -2.2%

Consolidated operating profit

68.5-5.2 / -7.1%

Consolidated net profit

33.5-2.9 / -8.0%* Including LAWSON and NATURAL LAWWSON stores

Copyright (c) 2017 Lawson, Inc. All rights reserved.

20

The changing CVS environment
Aging society

Nuclear families

Changing lifestyles

Future Opportunity
More women at work

More international
staffs/customers

An essential part of our community life

The best store in town
Copyright (c) 2017 Lawson, Inc. All rights reserved.

21

■ Strengthen upstream, downstream supply chain
・ Overseas ingredients・ Domestic vendors
・ Domestic distributors■ Global network■ Human resources (Overseas & new businesses)

Aim to maximize Lawson’s corporate value by
exploiting Mitsubishi Corporation’s global networks
and resources
Copyright (c) 2017 Lawson, Inc. All rights reserved.

22

Shareholder returns
Maintain fundamental stance for continuous, stable returns
Boost ROE above 15% by FY2021
Annual dividend per share& dividend yield

ROE

（円）

20.0%

280
260
240

255
yen

4.0%

配当利回り（右）

220

15.0%

4.5%

１株当たり年間配当金（左）

3.5%

200
3.0%

180
160
10.0%

2.5%

140
2.0%

120

12.0％ 100
(FY2017）
5.0%

1.5%

80
1.0%

60
40

0.5%

20
0

0.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

（FY）
Copyright (c) 2017 Lawson, Inc. All rights reserved.

0.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

（FY）
23

Creating Happiness andHarmony in our Communities

To become an top-class effective company
To become an essential part of our community life
Copyright (c) 2017 Lawson, Inc. All rights reserved.

24

Reference

Copyright (c) 2017 Lawson, Inc. All rights reserved.

25

Earnings Summary: FY2017 1H
FY2015-1H

FY2016-1H

ActualActual(Billions of yen)

FY2017-1H
ActualYoY

vs. Plan

Consolidated

Net sales of all stores

1,035.4

1,076.5

1,148.5

106.7%

99.9%

Operating profit
Operating profit ratio
Recurring profit
Net profit
EPS (Yen)
Dividend per share (Yen)

42.0
4.1%
40.7
19.8
198.11
122.5

39.9
3.7%
38.3
22.6
226.07
125.0

38.9
3.4%
38.4
23.6
236.36127.5

97.5%▲0.3%P
100.2%
104.6%+10.29+2.5

103.9%+0.1%P
106.8%
112.6%
112.6%±0

12,305

12,733

13,587+854+89

Total no. of stores in Japan

Note: Total chain store sales (Net sales 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 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.

 Consolidated operating profit down 2.5% YoY but 3.9% or 1.4 billion yen above target
Non-consolidated OP dipped 1.8% YoY on such items as higher cost for brand conversion and pro-forma standard
taxation. Consolidated OP also down on a 0.6bln yen increase in preparatory costs for entering the financial
industry. However, both consolidated and non-consolidated OP rose v. plan on lower costs resulting from theschedule review for next-generation system’s investment at the Lawson parent.
 Consolidated net profit up 4.6% YoY and 12.6% above target
Rose YoY on reduced losses from fewer store closures and previous year’s reversal of deferred tax assets linked to
tax rate changes. Consolidated net profit also exceeded target thanks to lower losses from fewer store closures.
Copyright (c) 2017 Lawson, Inc. All rights reserved.

26

Existing Stores (Non-Consolidated*) * excluding Lawson Store 100<2017 1H> Gross Profit Margin： flat YoY
Existing-store sales: up 1.0%

105%

1.0%

(number of customers down 0.5%, spending per customer up 1.5%)

0.5%

100%

0.0%

-0.5%

95%

-1.0%
1H

2H

1H

FY20142H
FY20151H

2H

1H

FY2016

2H(Plan)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 rose 1.0% YoY as expected, but fell short of plan when ticket sales are excluded.
Customer visits dipped by a marginal 0.5% YoY, but average customer spend increased 1.5% on better
merchandizing for everyday needs and improved evening and nighttime product ranges.
 The overall gross profit margin held steady YoY at 31.3% as the proportion of sales contributed bycigarettes and over-the-counter fast food categories, which tend to impact gross margins, remainedlargely unchanged.
 Existing-store gross profit, which has direct implications for franchisee profits, rose 0.8% YoY in 1H.
Copyright (c) 2017 Lawson, Inc. All rights reserved.

27

Store Openings (Non-consolidated*) * excluding Lawson Store 100(Store number)(Daily new store sales in 1,000 yen)

Net store increase （Left）

Store Closure （Left）

Store opening (Left)

Daily sales per new store （Right）

600

600

300

400

466
327

0

200

139
-300

0
FY2014-1H

FY2015-1H

FY2016-1H

FY2017-1H

 Opened 466 new stores (including brand conversion for 45 SAVE ON, 7 Three F stores andothers) That total is just 4 stores below plan so roughly on target.
 Closed 139 stores, 91 fewer than initially planned, resulting in a net increase of 327 stores (+87
compared to initial plan).
 Daily sales per new store held steady at 497,000 yen.
* Converted LAWSON, LAWSON STORE 100 and NATURAL LAWSON stores are included in the new store openings and closure data from FY2015.
* Stores transferred from Lawson, Inc. to Lawson Sanin, Inc. are not included in the store opening, closure or net increase data.

Copyright (c) 2017 Lawson, Inc. All rights reserved.

28

Key Components of SG&A Expenses(Billions of yen)

Selling, general & administrative expenses

FY2017-1H
FY2016-1H
ActualActual Change vs.Plan
133.7
138.9
+5.2
▲ 2.8

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

FY2017

Forecast
Increase 5-10%

20.7
4.6

22.4
2.4

+1.7
▲ 2.1

+0.0
▲ 2.0

Increase 5-10%
Increase 0-5%

7.6
7.2
71.1

6.3
8.8
75.9

▲ 1.3
+1.6
+4.7

▲ 0.3
+0.0
+0.1

Decrease 10-15%
Increase 25-30%
Increase 5-10%

186.2

200.3

+14.1

▲ 3.5

Increase 5-10%

Note: Figures in italic indicate the revised figures from the initial plan.

Compared to FY2017 1H Plan

Compared to FY2016 1H
Non-consolidated

 Lower-than-expected IT-related costs on costcutting and a reviewed schedule for next
generation systems investment

 In addition to non-consolidated factors, include
additional cost of newly consolidated subsidiaries
and of new Lawson stores overseas.

Consolidated

Non-consolidated Consolidated

 Personnel: Wages up on more directly-run stores
 ＩＴ costs: Cost-cutting and investment plan review
 A&P: Down v. FY2016 promotion cost Sales commission: By increasing number of stores Same as above.

Copyright (c) 2017 Lawson, Inc. All rights reserved.

29

Earnings of Major Subsidiaries(Billions of yen)

Operating Profit

FY2017-1H

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

FY2017

FY-endOwnership

ActualYoY change

vs.Plan

Forecast

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

100.0%
100.0%
100.0%
100.0%
95.0%
100.0%
100.0%

3.41▲ 0.00
0.63
2.08
3.00
▲ 0.19▲ 0.75+0.09▲ 0.37▲ 0.33+0.48▲ 0.24+0.06▲ 0.11+0.41▲ 0.330.01
0.53▲ 0.090.00▲ 0.16

7.3
▲ 0.0
2.0
2.6
5.7
▲ 0.3
0.1

Note: Figures in italic indicate the revised figures from the initial plan.
Note: SEIJO ISHII’s result of FY2016 is result of 6 month from January to June 2016 due to changing closing month from December to February in FY2016.

LAWSON STORE100

Sales trend continues strong with existing-store sales rising 1.3% YoY in 1H. FY2017 estimates
include a considerable 0.4 billion yen contraction in OP due to the change in accounting period,
but an actual increase in OP when compared to the same twelve months from March throughFebruary.

SEIJO ISHII

Reported an overall operating profit of 0.03 billion yen in 1H. However, existing-store sales
contracted 1.3% YoY amid a struggling overall sales trend. Estimate a small amount of operating
loss for full year.

Lawson HMW Entertainment

Strong ticket sales but fierce competition for large-scale events weighed on profitability, anddampened 1H profits. Expect to keep the FY2017 profit level same as FY2016.

United Cinemas

Increased customer numbers attracted by hit movies helped generated a large gain in OP in 1H,
but expect OP to contract in 2H compared to strong previous year. FY2017 OP expected toincrease slightly.

Lawson ATM Networks

1H revenue rose on higher numbers of ATM machines but profit down on higher business costs.

Copyright (c) 2017 Lawson, Inc. All rights reserved.

30

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

FY2015-1H
Actual
18.2
2.4
8.7
0.4
29.7

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

FY2017
Plan
69.0
8.5
18.0
5.5
101.0

Leases

20.9

25.1

22.1

63.0

Depreciation and amortization

23.8

26.9

27.9

59.6

New stores
Existing stores
IT-related
Other
Subtotal for capital expenditure●Consolidated Cash Flows
Cash flows from operating activities
Cash flows from investing activities

Free cash flows
Cash flows from financing activities(Cash dividends paid)（Billions of yen）

FY2015-1H
Actual92.6▲ 33.259.3

FY2016-1H
Actual91.4▲ 28.962.4▲ 24.1▲ 11.9▲ 27.7▲ 12.2FY2017-1H
FY2017
ActualForecast
119.1
Approx. 120.0▲ 44.4 Approx. ▲110.0
74.7
Approx. 9.0▲ 67.0▲ 12.5

Approx. ▲1.0
Approx. ▲25.0

 New-store investment up on higher store openings YoY and increased investment in brand conversions.
 Higher financial cash outflow on repayment of 30.0bln yen in short-term borrowings.
Cash and cash deposits

Copyright (c) 2017 Lawson, Inc. All rights reserved.

112.1

104.0

76.0

31

FY2017 Company Forecasts (Consolidated)
Net sales for all stores
Operating profit
Operating profit ratio
Recurring profit
Net profit
EPS（Yen）
Dividend per share (Yen)ROE

FY2015
Actual
2,049.5
72.5
3.5%
69.6
31.3
313.81245
12.0%

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

Total no. of stores in Japan

12,515

13,243

14,159+916

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

101.3%
101.4%
31.3%

100.0%
99.8%
31.4%

101.4%
101.0%
31.5%+0.1%P

Gross profit margin difference excluding cigarette sales
(YoY)

▲0.5%

+0.0%P+0.1%P-(Billions of yen)

FY2017 Forecast
Plan
YoY
2,310.0
107.0%
68.5
92.9%
3.0%
▲ 0.4%P
65.5
89.7%
33.5
92.0%
334.81▲29.15255+512.0%▲1.5%P(Non-consolidated*) *Lawson and Natural Lawson combined store total

Note: Figures in italic indicate the revised figures from the initial plan.
Note: Total chain store sales includes 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.

 Downward revision in 2H operating profit forecast. Full-year 68.5 billion yen OP estimate unchanged.
 YoY existing-store sales forecast and estimated gross profit margin reflect 1H performance.
Copyright (c) 2017 Lawson, Inc. All rights reserved.

32

FY2017 1H & 2H Estimates(Billions of yen)(Consolidated)

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

1H Initial Plan
1,150.0
37.5
3.3%
36.0
21.0

FY2017 Forecast
1H Actual
2H Plan
1,148.5
1,161.4
38.9
29.5
3.4%
2.5%
38.4
27.0
23.6
9.8

Full-Year Plan
2,310.0
68.5
3.0%
65.5
33.5

(Non-consolidated*) *Lawson and Natural Lawson combined store total

Gross profit of existing stores (YoY)
Net sales of existing stores (YoY)

Gross profit margin ratio

102.0%
101.0%
31.6%

100.8%
101.0%
31.3%

102.0%
101.0%
31.7%

101.4%
101.0%
31.5%

Note: Figures in italic indicate the revised figures from the initial plan.
Note: Note: Total chain store sales includes 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 direcctly operated stores are included.

 2H operating profit forecast revised down 1.5 billion yen compared to initial estimate on higher
non-consolidated franchisee support costs and other expenses, and revised expectations for
subsidiary firm performance.
Copyright (c) 2017 Lawson, Inc. All rights reserved.

33

Consolidated Balance Sheet at the end of FY2017

As of Aug. 31, 2017

Total current assets(Cash and deposits)(Accounts receivable)

Total noncurrent assets
Property, plant and equipment
Intangible assets(Goodwill)
Investments and other assets(Long-terms loans receivable)(Guarantee deposits)

Total Assets

269.8
76.0
90.2
648.7
338.8
104.4
44.3
205.5
45.4
97.8
918.5

(Billions of yen)
Change from
As of Aug. 31, 2017
Feb. 28, 2017

Change fromFeb. 28, 2017

+20.5
+7.9
+11.9
+31.4
+14.3
+9.6
▲ 1.6
+7.5
+0.9
+2.2
+52.0

(Retained earnings)

399.1
136.4
1.4
136.5
229.6
56.1
289.7
58.5
175.7

+42.3
+25.5
▲29.7
+33.4
+5.8
▲0.5
+3.8
+10.5

Liabilities and net assets

918.5

+52.0

Total current liabilities(Accounts payable-trade)(Short-term loans payable)(Deposits payable)
Total noncurrent liabilities(Long-term loans payable)

Net Assets(Common stock) Accounts payable-trade under current liabilities rose YoY due to differences in the number ofbusiness days in February and August. The short-term debt total declined YoY following
repayment of the 30.0 billon yen in short-term borrowings incurred at the end of FY2016.
Deposits payable were higher mainly due to increasing number of stores.
Copyright (c) 2017 Lawson, Inc. All rights reserved.

34

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) 2017 Lawson, Inc. All rights reserved.

35