Lawson : 1H of FY2023 (ended February 29, 2024)

Flash Report on the Consolidated Financial Results [IFRS]

for the First Half of the Fiscal Year Ending February 29, 2024

	October 13, 2023
Listed Company Name: Lawson, Inc.	Tokyo Stock Exchange
Code No.: 2651	(URL https://www.lawson.jp/en/ir/)

Company Representative: Sadanobu Takemasu, President and CEO, Representative Director, Chairman of the Board

Contact: Tomoki Takanishi, Senior Vice President, Financial Administration Division Director

Tel.: [phone]

Scheduled date for submission of quarterly securities report: October 13, 2023

Scheduled date for payment of dividend: November 10, 2023

Supplementary materials for quarterly financial results: Yes

Holding of presentation of quarterly results: Yes (for institutional investors and analysts)

(Amounts less than one million yen are truncated)

1. Consolidated operating results for the first half ended August 31, 2023 (from March 1, 2023 to August 31, 2023)

1. Consolidated operating results (cumulative)

Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal year.

Profit

Total

Gross operating

Core operating

attributable to

Profit before tax

Profit

comprehensive

revenue

profit

owners of

income

parent

For

the

first

Millions

%

Millions

%

Millions

%

Millions

%

Millions

%

Millions

%

half ended

of yen

of yen

of yen

of yen

of yen

of yen

August 31,

545,492

11.1

53,069

45.8

47,909

52.4

32,618

60.2

32,403

58.3

34,601

38.5

2023

August 31,

490,936

－

36,409

－

31,427

－

20,363

－

20,467

－

24,975

－

2022

Basic earnings per

Diluted earnings per

share

share

For

the

first

half

Yen

Yen

ended

August 31, 2023

323.78

323.44

August 31, 2022

204.52

204.33

Note: "Core operating profit" is a profit indicator for operating income under Japanese GAAP that is calculated by subtracting the cost of sales and selling, general and administrative expenses from gross operating revenue.

(2) Consolidated financial position

			Equity	Ratio of equity
			attributable to owners
	Total assets	Equity	attributable to owners
	of parent to total
			of parent
			assets
As of	Millions of yen	Millions of yen	Millions of yen	%
August 31, 2023	2,300,341	281,081	276,859	12.0
February 28, 2023	2,242,421	253,858	249,941	11.1

2. Dividends

			Annual dividends per share
	1Q	1H	3Q	Year-end	Total
	Yen	Yen	Yen	Yen	Yen
2022 fiscal year	－	75.00	－	75.00	150.00
2023 fiscal year	－	117.50
2023 fiscal year (forecast)			－	117.50	235.00

Note: Revision of the most recent dividends forecast: Yes

3. Forecast of consolidated operating results for 2023 fiscal year (from March 1, 2023 to February 29, 2024) Note: Percentages represent increases (decreases) compared with the corresponding period of the previous fiscal

year.

	Gross operating	Core operating profit	Profit before tax	Profit attributable to	Basic earnings
	revenue		owners of parent	per share
	Millions	%	Millions	%	Millions	%	Millions	%	Yen
	of yen	of yen	of yen	of yen
2023 fiscal year	1,080,000	8.0	85,000	32.2	70,500	49.6	47,000	58.2	469.63

Note: Revision of the most recent consolidated operating results forecast: Yes

4. Notes

1. Change in significant subsidiaries during the quarterly consolidated period (Changes in certain specified subsidiaries resulting in changes in scope of consolidation): None

Added: None

Excluded: None

1. Changes in accounting policies, changes in accounting estimates
2. 1. Changes in accounting policies required by IFRS: Yes
   2. Changes in accounting policies other than 1. above: None
   3. Changes in accounting estimates: None

Note: For details, please refer to "2. Condensed Quarterly Consolidated Financial Statements and Main Notes, (5) Notes Concerning Condensed Quarterly Consolidated Financial Statements (Significant

Accounting Policies)" on page 17.
(3) Number of shares outstanding (common stock)
1. Number of shares outstanding at the end of period (including treasury shares)
As of August 31, 2023:	100,300,000	As of February 28, 2023:	100,300,000
2. Number of treasury shares at the end of period
As of August 31, 2023:	221,628	As of February 28, 2023:	222,962
3. Average number of shares during the period (cumulative six months)
As of August 31, 2023:	100,078,318	As of August 31, 2022:	100,075,070

Note: The Flash Report on the Consolidated Financial Results is not subject to audit.

Note: Descriptions on appropriate use of financial performance forecasts and other special notes Forward-looking statements presented herein such as financial forecasts are based on currently available information and certain presumptions deemed to be reasonable as of the date of announcement. The achievement of said forecasts cannot be guaranteed. Actual results may be materially different from those in the forecast as a result of various factors. For preconditions of these financial forecasts and notes concerning their use, please refer to "1. Qualitative Information Regarding Quarterly Financial Results, (3) Explanation Regarding Forward- looking Statements" on page 9.

Contents

1. Qualitative Information Regarding Quarterly Financial Results ·····························································	2
(1)	Explanation Regarding Consolidated Operating Results ······································································	2
(2)	Explanation Regarding Consolidated Financial Position ·····································································	8
(3)	Explanation Regarding Forward-lookingStatements···········································································	9
2. Condensed Quarterly Consolidated Financial Statements and Main Notes ················································	10
(1)	Condensed Quarterly Consolidated Statement of Financial Position ····················································	10
(2)	Condensed Quarterly Consolidated Statement of Profit and Loss and Condensed Quarterly
Consolidated Statement of Comprehensive Income ··············································································	12
	Condensed Quarterly Consolidated Statement of Profit and Loss ······················································	12
	Condensed Quarterly Consolidated Statement of Comprehensive Income ·········································	13
(3) Condensed Quarterly Consolidated Statement of Changes in Equity····················································	14
(4) Condensed Quarterly Consolidated Statement of Cash Flows ······························································	16
(5)	Notes Concerning Condensed Quarterly Consolidated Financial Statements········································	17
	(Going Concern Assumption) ·············································································································	17
	(Significant Accounting Policies) ······································································································	17
	(Segment Information) ······················································································································	17

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1．Qualitative Information Regarding Quarterly Financial Results

(1) Explanation Regarding Consolidated Operating Results

During the first half of fiscal 2023, from March 1 to August 31, 2023, we made concerted Group-wide efforts to realize the "Lawson Group Challenge 2025" medium-term management vision, while society shifted toward a post-COVID world driven primarily by the downgrade in the categorization of COVID-19 to Class 5, which includes seasonal flu. Specifically, we undertook various measures under our Lawson Group Sweeping Transformation Executive Committee, which was launched in September 2020, and the whole Lawson Group collectively endeavored to resolve medium- to long-term issues for sustainable growth, acquire new revenue opportunities, foster job satisfaction, and introduced a range of LGBTQ initiatives aimed at creating a workplace environment and system that maximizes the full potential of diverse human resources. Focusing on community, individual customers, and individual stores, we expanded a company system in eight areas across Japan and transferred authority and functions from the headquarters to the frontline stores with the aim of facilitating our organizational structure to more vigorously pursue the creation of customer value at stores where we are close beside our customers. We are undertaking various initiatives under this new structure.

As a result, during the first half of fiscal 2023 on a consolidated basis, gross operating revenue increased to 545,492 million yen (up 11.1% from previous fiscal year) and profit before tax increased to 47,909 million yen (up 52.4% from previous fiscal year). Profit attributable to owners of parent was 32,403 million yen (up 58.3% from previous fiscal year).

The Lawson Group has prepared its consolidated financial statements in compliance with IFRS from end of previous fiscal year, and the figures for the first half of the previous fiscal year have also been restated in accordance with IFRS for comparative analysis.

We also focused on improving our group-wide internal control system and addressing operating risks based on the 2023 Basic Policy for Improvement of Internal Control Systems. We will continue promoting internal control going forward.

Operating results by business segment were as follows.

(Domestic Convenience Store Business)

During the first half under review, a general increasing trend was seen in the movement of people. Against this backdrop, each area company reinforced their sales floors with a particular focus on the scope of merchandise assortment and the quantity of inventory by building on the foundation established by the Lawson Group Sweeping Transformation Executive Committee, which has been proceeding with store renovations and expanding the merchandise assortment of frozen foods and other daily necessities. As of the end of August 2023, 12,484 stores have introduced MUJI products, which began full-scale introduction in the previous year. Also, as we work our way toward 2025, our 50th anniversary year, we continue to expand HAPPY LAWSON PROJECT! with the aim of creating "new hubs of refreshment in every community," and promoted measures to fulfill the three promises of our business policy-"Superior taste," "Human kindness," and "Environmental (Machi) friendliness"-in an effort to operate LAWSON stores endorsed by all our customers.

In addition to further strengthening our distinctive products that focus on taste and health, we are also working

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to provide heartfelt customer service in our stores, and we are continuing with our environmentally friendly measures such as reducing food loss, plastic usage, and CO2 emissions.

[Store Operations]

In store operations, we continued to focus on reinforcing adherence to the Three Essential Practices, which emphasizes (1) serving customers courteously; (2) offering a merchandise assortment focused on basic items with high demand; and (3) keeping our stores and communities clean. In our efforts to increase sales, we also focused on expanding our merchandise assortment to respond to changes in customer lifestyles and values. Furthermore, we kept up our initiatives to increase the profitability of franchise stores, including helping them streamline their store operation and control costs associated with food waste and utility expenses.

[Merchandising and Service Strategies]

Sales continued to surge in fast-food counter items, soft drinks and the rice range, products offered by the Machikado Chubo in-store kitchen service, and the cosmetics range driven by an increase in the movement of people. In the fast-food counter range, sales continued to surge in "Kara-age-kun" chicken nuggets of new flavors. In the rice range, sales continued to surge in rice bowls such as the renewed "Kinshari Onigiri Rice Ball" series. In the Machikado Chubo, we saw strong performance for regular items such as the Donburi rice bowls as well as box lunch items in which rice is packed separately. In the cosmetics range, new brand products jointly developed with a popular cosmetic brand enjoyed a growth in sales, as well as the MUJI product range, which is currently being introduced at more stores.

In food delivery service, the combined number of stores listed on 4 food delivery services such as Uber Eats, reached 4,178 in 47 prefectures as of August 31, 2023. In addition, Uber Eats delivers over-the-counter drugs sold at 99 LAWSON stores in 18 prefectures.

[Breakdown of Sales by Merchandise Category at Chain Stores in Domestic Convenience Store Business]

Fiscal year	Previous fiscal year	Current fiscal year
From March 1, 2022	From March 1, 2023
	to August 31, 2022	to August 31, 2023
	Sales	Percentage	Sales	Percentage
Product group	(Millions of yen)	of total (%)	(Millions of yen)	of total (%)
Processed foods	619,342	53.7	649,632	53.3
Fast foods	256,698	22.3	275,676	22.6
Daily delivered foods	178,639	15.5	186,730	15.3
Nonfood products	98,670	8.5	107,102	8.8
Total	1,153,350	100.0	1,219,141	100.0

[Store Development]

In opening new stores, the Group continued to focus on developing profitable stores.

During the first half of fiscal 2023, the total number of LAWSON, NATURAL LAWSON and LAWSON STORE100 stores opened in Japan stood at 130 stores. Meanwhile, we closed a total of 142. As of the end of August 2023, the total number of domestic stores was 14,619 *1.

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