Lawson, Inc. Interim Earnings Presentation Six Months Ended August - PowerPoint PPT Presentation

Lawson, Inc. Interim Earnings Presentation Six Months Ended August 31, 2001 (Year Ending February 28, 2002) October 16, 2001 (Tue.) 13:00~14:30 Kenji Fujiwara President and CEO (Room Harumi, Royal Park Hotel)

Contents 1. Change in Composition of Shareholders 2. First-Half Results and Second-Half Targets 3. Operations Store Development Existing Store Sales Comparison (Product and Entertainment Strategies) E-business (Loppi and Lawson Tickets) 4. New Value Creation ATM Development Cooperation With Mitsubishi Corp. 5. Conclusion 2

Change in Composition of Shareholders (Since Selling Shares) As of June 30, 2001 As of August 31, 2001 Mitsubishi Corp . Marubeni Corp., Nintendo Co., Ltd., 12.3% 13.8% “Big Four” banks 27.9% 29.8% Daiei Retirement Benefit Trust 9.6% Daiei Group 17.3% FC owners' and Employees’ Shareholder Association 7.8% Companies Domestic Institutional Investors 2.6% 10.0% Overseas Institutional Investors 10.7% 1.1% 17.7% Individuals and Others 6.4% 27.2% 1.7% 1.2% 3.0% The floating shareholder ratio now exceeds 50% The floating shareholder ratio now exceeds 50% due to the repurchase and retirement of treasury stock due to the repurchase and retirement of treasury stock and the recent sale of shares by Daiei, Inc. Consequently, and the recent sale of shares by Daiei, Inc. Consequently, management is more focused than ever on creating management is more focused than ever on creating 3 shareholder value. shareholder value.

First-Half Results and Second-Half Targets First-Half Target First-Half Result Difference YoY Difference Second-Half Target Full-Year Target Openings 300 237 -63 -89 413 650 Closures 350 349 -1 228 101 450 Daily sales at existing stores (YoY) 100.0% 99.3% -0.7% 0.0% 99.0% 99.1% Daily sales at new stores (¥ thousands) 460 476 16 26 － 460 Gross profit margin 30.4% 30.3% -0.1% -0.1% 30.3% 30.3% Ratio of franchise stores 92.6% 92.7% 0.1% 3.8% － 93.8% Total no. of stores (Japan) 7,633 7,571 -62 -12 － 7,883 With the exception of openings, results were largely With the exception of openings, results were largely in line with provisional first- in line with provisional first -half targets. half targets. We are now focused on hitting our second- -half targets. half targets. We are now focused on hitting our second 4

First-Half Results and Second-Half Targets (Actual Results and Forecasts) (Non-Consolidated Basis) (¥100 million) First-Half Target First-Half Result Difference YoY Difference Second-Half Target Full-Year Target Total net sales 6,700 6,630 -70 128 6,410 13,040 Total transaction volumes 6,890 6,855 -35 174 6,595 13,450 Operating income 236 233 -3 2 200 433 Recurring profit 228 226 -2 10 197 423 Net income 108 115 7 30 82 197 (Consolidated Basis) (¥100 million) Operating income 233 232 -1 0 192 425 Recurring profit 224 225 1 7 191 416 Net income 105 115 10 28 77 192 First First- -half targets largely achieved despite half targets largely achieved despite difficult market conditions. Focus now on difficult market conditions. Focus now on achieving second- -half and full half and full- -year targets. year targets. achieving second 5

Operations ― Store Data Year-on-Year Comparison of Daily Sales at New Stores Mar.-Aug. (Cum.) Full-Year Target ( ¥ thousands) 476 237 650 Openings 480 188 200 Closures (FC) 470 460 161 250 Closures (RC) 460 349 450 Closures subtotal 450 450 91 － Relocations -112 200 Change 440 430 421 420 410 As of Feb. 28, 2001 As of Aug. 31, 2001 400 258 324 Contracts 390 6,972 7,022 No. of stores (FC) Aug. 2000 Aug. 2001 Feb. 2001 Feb. 2002 711 549 (Target) No. of stores (RC) 91 93 Ratio of franchise stores (%) These numbers underscore the success of These numbers underscore the success of Lawson’ ’s ongoing s ongoing “ “From Quantity to Quality From Quantity to Quality” ” Lawson initiative. initiative. 6

Store Openings and Daily Sales at New Stores in the Tokyo Metropolitan Area and Tokyo New Store Daily Sales in the Store Openings in the Tokyo Tokyo Metropolitan Area and Metropolitan Area and Tokyo (¥ thousands) Tokyo (Stores) 700 70 650 60 600 50 Tokyo 550 Tokyo metropolitan area 40 500 30 450 20 400 10 350 Aug. Aug. Aug. 0 1999 2000 2001 Aug. 1999 Aug. 2000 Aug. 2001 Strong momentum for opening high- Strong momentum for opening high -quality stores in quality stores in Tokyo metropolitan area: Tokyo and the Tokyo metropolitan area. Key is Tokyo and the Tokyo metropolitan area. Key is channeling human resources to these areas. channeling human resources to these areas. Tokyo, Kanagawa, Chiba, Saitama 7

Total No. of Stores and Average Daily Sales in the Tokyo Metropolitan Area and Tokyo Average Daily Sales in the Tokyo Metropolitan Area and Tokyo Total No. of Stores in the Tokyo Metropolitan Area and Tokyo (Stores) (¥ thousands) 570 1800 560 1600 550 1400 540 1200 530 1000 520 Tokyo 800 510 Tokyo metropolitan area 500 600 490 400 480 200 470 0 460 Aug. 1999 Aug. 2000 Aug. 2001 Aug. 1999 Aug. 2000 Aug. 2001 Strategic relocations and store closures are Strategic relocations and store closures are Tokyo metropolitan area: improving the quality of the Lawson chain in improving the quality of the Lawson chain in Tokyo, Kanagawa, Chiba, Saitama the Tokyo Metropolitan Area. the Tokyo Metropolitan Area. 8

Store Openings and Daily Sales at New Stores in the Kinki Region and Osaka (Stores) Store Openings in the Kinki Region and Osaka New Store Daily Sales in the Kinki Region (¥ thousands) and Osaka 40 700 35 650 30 600 25 550 Osaka Kinki region 20 500 15 450 400 10 350 5 Aug. 1999 Aug. 2000 Aug. 2001 0 Aug. 1999 Aug. 2000 Aug. 2001 Having already improved the quality of stores, Lawson Having already improved the quality of stores, Lawson has now turned its attention to opening more stores in has now turned its attention to opening more stores in the Kinki region and Osaka by channeling human the Kinki region and Osaka by channeling human Kinki region: Osaka, Kyoto, Hyogo resources to these areas. resources to these areas. 9

Total No. of Stores and Average Daily Sales in the Kinki Region and Osaka Average Daily Sales in the Kinki Region and Osaka Total No. of Stores in the Kinki Region and Osaka ( ･ t h o u s a n d s ) (Stores) 1800 520 1600 510 1400 1200 500 Osaka 1000 Kinki region 490 800 600 480 400 470 200 0 460 Aug. 1999 Aug. 2000 Aug. 2001 Aug. 1999 Aug. 2000 Aug. 2001 Strategic relocations and store closures Strategic relocations and store closures are improving the quality of the Lawson chain are improving the quality of the Lawson chain Kinki region: Osaka, Kyoto, Hyogo in the Kinki region, including Osaka. in the Kinki region, including Osaka. 10

Building on Lawson’s First-Mover Advantage No. of Stores and Average Daily Sales in First-to-Enter Regions To retain and build on its first-mover advantage, (Stores/¥ Lawson will: thousands) 650 ・ Adhere to “grid points” policy 600 ・ Develop stores and raise distribution productivity by forging ties with local 550 convenience store chains 500 ・ Make effective use of Mitsubishi Corp.’s networks 450 ・ Cooperate with ATM-Partner regional banks 400 350 Lawson will retain and build on its first- Lawson will retain and build on its first -mover mover advantage by pursuing three main strategies: advantage by pursuing three main strategies: 300 (1) Continue to concentrate store openings on the basis (1) Continue to concentrate store openings on the basis Aug. 1999 Aug. 2000 Aug. 2001 of redefined “ “grid points, grid points,” ” of redefined No. of stores (2) (2) Efficiently secure prime store sites, and Efficiently secure prime store sites, and Average daily sales (All stores) (3) Take maximum advantage of its unique resources. (3) Take maximum advantage of its unique resources. Average daily sales (New stores) First-to-enter regions: Aomori, Akita, Kagawa, Tokushima, Ehime, Kochi 11

Improving the Quality of the Nationwide Chain (1) No. of Stores by Daily Sales (Stores) 2400 1900 1400 900 400 ～ 350 350 ～ 400 400 ～ 450 450 ～ 500 500 ～ 600 600 ～ (¥ thousands) As of August 31, 2000 As of August 31, 2001 Lawson will improve overall chain quality by aggressively reloca Lawson will improve overall chain quality by aggressively relocating ting and closing stores and raising daily sales of new stores. A concurrent urrent and closing stores and raising daily sales of new stores. A conc goal is improving earnings of FC owners through relocation and goal is improving earnings of FC owners through relocation and 12 management of multiple stores. management of multiple stores.