Seven & i : Financial Results Presentation FY2021

FY2021

Financial Results Presentation

April 8, 2021

Seven & i Holdings Co., Ltd.

Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.	1

Consolidated Financial Results Highlights

Sales and profit both declined YOY but all profit stages reached their plans (Billions of yen, %)

	Q3 cumulative	Q4	FY2021
	YOY /	YOY /	YOY /	vs. Plan /
	Variance	Variance	Variance	Variance
Group's total sales*	91.7	93.3	92.1	100.3
8,266.2	2,778.6	11,044.8
	(753.1)	(199.6)	(952.7)	+30.8
Revenues from	86.0	89.3	86.8	100.9
4,276.8	1,489.9	5,766.7
operations
(698.7)	(178.9)	(877.6)	+48.7
	89.5	76.7	86.3	106.2
Operating income	285.6	80.6	366.3
	(33.4)	(24.4)	(57.9)	+21.3
Net income attributable to	77.1	100.1	82.2	124.1
130.9	48.2	179.2
owners of parent
(38.9)	+0.05	(38.9)	+34.7
E B I T D A	95.0	86.9	93.0	-
(Operating income + Depreciation and	479.8	147.0	626.8	-
amortization + Amortization of goodwill)	(25.1)	(22.2)	(47.4)

*Group's total sales include the sales of Seven-Eleven Japan, Seven-Eleven Okinawa and 7-Eleven, Inc. franchisees.

FY2021 exchange rate： 1USD ＝ 106.76 JPY, 1CNY ＝ 15.48 JPY	2
Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.

Consolidated B/S Summary

										(Billions of yen)
		Assets	Feb 29	Feb 28	Variance	Liabilities and net assets	Feb 29	Feb 28	Variance
		(Main items only)	2020	2021	(Main items only)	2020	2021
							Total liabilities	3,239.6	4,115.4	+875.8
Current assets	2,471.9	3,350.2		+878.3
							Current liabilities	2,157.1	2,782.4	+625.2
	Cash and bank deposits	1,357.7	2,189.1		+831.4
		Cash and due from banks at	846.2	925.4		+79.1	Notes and accounts payable-trade	410.7	385.2	(25.5)
		Seven Bank
							Short-term loans	129.4	619.9	+490.4
	Notes and accounts receivable-trade	351.9	318.1		(33.7)
							Current portion of bonds	168.4	213.6	+45.2
	ATM-related temporary payments	153.0	216.4		+63.4
		Current portion of long-term loans
							Deposits received	228.4	236.4	+7.9
Non-current assets	3,522.5	3,594.0		+71.4
							ATM-related temporary advances	74.2	130.1	+55.9
	Property and equipment	2,183.3	2,206.0		+22.6
							Deposit received in banking	655.0	741.4	+86.3
		Buildings and structures, net	992.3	994.0		+1.7
			business
		Land	746.9	746.2		(0.62)	Non-current liabilities	1,082.4	1,333.0	+250.5
	Intangible assets	608.8	645.8		+36.9	Bonds	281.9	565.0	+283.0
	Investments and other assets	730.2	742.1		+11.8	Long-term loans	403.1	362.5	(40.5)
Deferred assets	2.4	2.5		+0.16	Total net assets	2,757.2	2,831.3	+74.1
Total assets	5,996.8	6,946.8		+949.9	Total liabilities and net assets	5,996.8	6,946.8	+949.9
										3
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Consolidated Statements of Cash Flows

800				CF from operating activities (left)		CF from investing activities (left)		400
			CF from financing activities (left)		Free cash flow (right)
(Billions of yen)						(Billions of yen)
400								200

0

0

(400)				(200)

(800)				(400)

(Billions of yen)		FY2017		FY2018		FY2019		FY2020	FY2021		vs. FY2020
CF from operating		512.5		498.3		577.8		576.6		539.9		(36.6)
activities
CF from investing		(371.6)		(240.4)		(557.4)		(318.0)		(394.1)		(76.0)
activities
Free cash flow		140.9		257.8		20.3		258.6		145.8		(112.7)
CF from financing		(78.1)		(168.5)		(5.3)		(213.2)		690.5		+903.7
activities
Cash and cash		1,209.4		1,300.3		1,310.7		1,354.8		2,183.8		+828.9
equivalents
at end of period												4
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Special Losses

Special losses increased significantly due to COVID-19

(Billions of yen)

	FY2020	FY2021
Special losses	79.9	109.0
Loss on disposals of property	15.5	12.1
and equipment
Impairment loss	27.9	31.6
Restructuring expenses	7.7	10.2
Loss on digital and settlement	13.4	-
services

Loss related to novel	-	40.5
coronavirus (COVID-19)

	Variance		Major factors for the change
	+29.0	Losses mainly due to COVID-19
	(3.3)	Delay of remodels due to COVID-19, etc.
	+3.6	IY[+3.2], SEI[+2.3], FOC [+1.4] *, 7FS [+1.1]
	SEJ [(2.9)], YB[(1.1)], YO[(1.0)]
	+2.4	IY [+4.1]：Close stores, Personnel initiative, etc.
	SS[(1.6)]:Career change support measure in FY2020, etc.
	(13.4)	Abolishment of the 7pay service in FY2020
		SEJ [7.5]	Franchisee support money [5.1]
			Cost of infection prevention and control [1.8], etc.
		SEI [6.1]	Cost of infection prevention and control [4.0],
			Payment of employee allowances [2.1], etc.
	+40.5	IY [7.8]	Transfer of fixed costs [7.1],
			Payment of employee allowances [0.47], etc.
		SS [11.2]	Transfer of fixed costs [10.8],
			Cost of infection prevention and control [0.27], etc.
		Others YB[0.99], 7FS[1.7], THE LOFT [1.7], AH [0.53]

*FOC：Forecast Co., Ltd. Impairment losses following business restructuring associated with Tokyo Metropolitan Area food strategy

Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.	5

YOY Change by Business Segment

Revenues from operations		Operating income
	(Billions of yen)		(Billions of yen)
FY2020		FY2020
Domestic		Domestic
CVS		CVS
Overseas		Overseas
CVS		CVS
Superstore		Superstore
Department		Department
store		store
Financial		Financial
services		services
Specialty		Specialty
store		store
Others		Others
Eliminations		Eliminations
/corporate		/corporate
FY2021		FY2021

Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.	6

FY2021 Forecast of Revenues from Operations

and Operating Income by Business Segment (vs. previous year)

										(Billions of yen, %)
		Revenues from operations	Operating income
				YOY	Variance			YOY	Variance
	Consolidated	5,766.7	86.8	(877.6)		366.3	86.3	(57.9)
	Domestic CVS operations
	920.8	94.8	(50.4)		234.2	91.3	(22.3)
	Overseas CVS operations
	2,191.3	80.0	(548.4)		98.0	96.2	(3.9)
	Superstore operations	1,810.8	97.9	(38.2)		29.6	139.3	+8.3
	Department store Operations
	425.1	73.6	(152.4)		(6.2)	-	(7.0)
	Financial services	198.9	91.5	(18.4)		48.0	89.7	(5.5)
	Specialty store operations
	263.8	77.7	(75.8)		(13.5)	-	(18.2)
	Others	22.0	87.3	(3.1)		1.9	125.1	+0.39
	Eliminations / corporate
	(66.2)	-	+9.4		(25.9)	-	(9.6)

Exchange rate： 1USD ＝ 106.76JPY, 1CNY ＝ 15.48JPY	7
Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.

FY2021 Forecast of Revenues from Operations and Operating Income by Business Segment (vs. plan)

										(Billions of yen, %)
		Revenues from operations	Operating income
				vs. Plan	Variance			vs. Plan		Variance
	Consolidated	5,766.7	100.9	+48.7		366.3	106.2		+21.3
	Domestic CVS operations
	920.8	100.1	+0.83		234.2	101.7		+3.9
	Overseas CVS operations
	2,191.3	101.4	+29.3		98.0	102.4		+2.2
	Superstore operations	1,810.8	100.9	+15.8		29.6	118.3		+4.5
	Department store Operations
	425.1	99.8	(0.84)		(6.2)	-		+2.1
	Financial services	198.9	98.5	(3.0)		48.0	103.8		+1.7
	Specialty store operations
	263.8	101.5	+3.8		(13.5)	-		+3.4
	Others	22.0	115.8	+3.0		1.9	114.4		+0.24
	Eliminations / corporate
	(66.2)	-	(0.27)		(25.9)	-		+2.8

Exchange rate： 1USD ＝ 106.76JPY, 1CNY ＝ 15.48JPY	8
Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.

Operating Income of Major Operating Companies

												(Billions of yen, %)
	Q3 cumulative	Q4			FY2021
												YOY /	vs. Plan /
			YOY / Variance			YOY / Variance				Variance	Variance
Seven-Eleven	182.0	91.7		51.2	92.4			233.3	91.9	101.4
Japan	(16.4)		(4.2)			(20.6)	+3.3
7-Eleven, Inc.	95.5	104.8		23.6	77.5			119.2	98.0	101.8
[Billions of yen]	+4.4		(6.8)			(2.4)	+2.1
7-Eleven, Inc.	888	106.4		228	81.3			1,116	100.1	102.0
[Millions of dollar]	+53		(52)			+0.9	+22
Ito-Yokado	1.8	-		5.8	79.3			7.7	119.3	155.6
+2.7		(1.5)			+1.2	+2.7
York-Benimaru	16.7	150.8		3.7	65.0			20.5	121.4	103.0
〈Incl. Life Foods*〉		+5.6			(2.0)				+3.6	+0.6
Sogo & Seibu	(7.0)	-		0.38	13.7			(6.6)	-	-
(4.4)		(2.4)			(6.8)	+2.1
* Life Foods is a wholly owned	subsidiary which produces and sells delicatessen in York-Benimaru stores.
The combined operating income for York-Benimaru and Life Foods represents internal management reporting figures.				9
	Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.

Existing Store Sales Growth and GPM of Major Operating

Companies

	Q3 cumulative	Q4		FY2021
	Existing store	GPM /	Existing store	GPM /	Existing store	GPM /
	sales growth	Variance	sales growth	Variance	sales growth	Variance
Seven-Eleven Japan	(2.7)	32.0	(1.5)	31.8	(2.4)	32.0
(0.1)	(0.2)	(0.1)
7-Eleven, Inc.	+0.7	34.2	+1.0	33.8	+0.9	34.1
(0.8)	(0.2)	(0.7)
Ito-Yokado	(6.8)	29.7	(2.6)	29.7	(5.3)	29.6
(0.3)	(0.1)	(0.3)
	[incl. tenants]	[incl. tenants]	[incl. tenants]
York-Benimaru	+5.6	26.3	+3.2	27.0	+5.0	26.4
+0.4	±0.0	+0.3
Sogo & Seibu	(27.4)	22.9	(15.3)	21.9	(24.2)	22.6
(1.3)	(1.0)	(1.3)

Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.	10

Domestic CVS Operations: Seven-Eleven Japan (1)

YOY Change of operating income (Billions of yen)

(32.1)

		+14.5
Sales	(3.0)	SG&A
253.9	GPM	expenses

233.3

¥(20.6) B

FY2020

FY2021

	Cost structure reforms
	(Trends in SG&A expenses YOY)
120			Advertising expenses
(%)			Salaries & wages
			Land & building rent
			Depreciation & amortization
			SG&A expenses total

109.5

100

97.5

Royalties revision impact	approx.
¥(9.7) B
COVID-19 Impact	approx.
¥(17.0) B

80
2016	2017	2018	2019	2020	2021
(FY)

Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.	11

Domestic CVS Operations: Seven-Eleven Japan (2)

Existing store sales & GPM

			Change in GPM (left)
+0.5			Existing store sales growth (right)	+5.0
(%)	+0.3	(%)

+0.2

+0.1 +0.1 +1.0 +1.1

(0.1)	(0.1)	(0.1)	(0.2)
±0.0 +0.3			±0.0
(1.6)	(1.4)	(1.5)
		(2.0)

(0.5)					(4.6)		(5.0)
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
FY2020			FY2021

Sales by store location

120

(％)

100

80

60

Railway stations, hospitals and highway, etc.

East Tokyo

West Tokyo

40

Jan 6- Mar 2- Apr 27- Jun 22- Aug 17- Oct 12- Dec 7- Feb 1- (Week)

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Domestic CVS Operations: Seven-Eleven Japan (3)

Average spending per customer

Sales by merchandise category

130	Sales
	Foot trafic
(％)	Average spending per customer
115

100

85

150

(％)

125

100

75

Seven Premium delicatessen

Frozen foods

Wine & Liquor

Counter fried products, etc.

70			50
Jan 6- Mar 2- Apr 27- Jun 22- Aug 17- Oct 12- Dec 7-	Feb 1-	Jan 6- Mar 2- Apr 27- Jun 22- Aug 17- Oct 12- Dec 7- Feb 1-
(Week)		(Week)	13
	Copyright (C) 2021	Seven & i Holdings Co., Ltd. All Rights Reserved.

Overseas CVS Operations: 7-Eleven, Inc. (1)

YOY Change of operating income (Billions of yen)

(24.4)

+58.2

SG&A

(11.2)

10.2

(11.8)

expenses,

Fuel

etc.

MDSE

MDSE

COVID

(2.5)

CPG

Sales

GPM

(20.9)

support of

Foreign

121.6

FZ owners

exchange

119.2

impact

Fuel

Volume	¥(2.4)B

FY2019				FY2020
	Income：	approx.
COVID-19 Impact	¥(9.0) B
	approx.		Secured earnings growth in dollar basis
	Expenses：
	+¥4.5 B
			14
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Overseas CVS Operations: 7-Eleven, Inc. (2)

	Existing store sales & GPM			Changes in consumption behavior
		140	Sales Foot traffic Average spending per customer
			(%)	125.5
(%)	Change in GPM (left)	(%)	120
+1.5	Existing store sales growth (right)	+4.5	100

	+3.4 +3.1						80
+1.0					+3.2	+3.0
+2.2
		+2.0			60
				+1.0
+0.5					+1.5	Jan Feb Mar Apr May Jun Jul	Aug Sep Oct Nov Dec Jan Feb
+0.7 +0.7 +0.7	+0.8 +0.7			2020		2021
		+0.3
					Key category sales for Feb (YOY change in amount)
±0.0						±0.0
		+0.1		(0.2)			Frozen	120.1%	Growth in sales of pizzas,
(0.5)			(0.5)	(1.6)		(1.5)	foods	single dishes, etc.
				(0.7)			Alcoholic	113.7%	Growth in sales through
(1.0)						(3.0)	beverages	bulk purchases in boxes
			(1.3)				Non-Foods	134.1%	Growth in sales of daily
(1.5)					(4.5)	necessaries
	Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Jan Feb
	FY2019		FY2020						15
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Overseas CVS Operations: 7-Eleven, Inc. (3)

Crude oil price (WTI)

70

(USD)

60

50

40

30

20

10

0

Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan

2019

2020

2021

Historic decline in crude oil prices led to significant increases in CPG trend

Fuel sales volume & Margin (CPG)

(￠ )								(%)
+20.0					+18.0			+40.0
YOY change in CPG (left)
Fuel sales volume growth per store (right)
+10.0						+8.6		+20.0
		+3.5		+4.9			+4.7
+1.2	+1.1
	(0.2)
±0.0							±0.0
(1.3)	(1.2)	(1.7)	(2.8)		(15.6)
(10.0)				(9.9)			(14.9)	(20.0)
(20.0)					(31.7)			(40.0)
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
FY2019			FY2020
YTD Fuel margin ：	+$342M (+20.5%)

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Superstore Operations: Ito-Yokado

YOY Change of operating income (Billions of yen)	Structurally reformed stores drove profit
growth
		SG&A
		expenses		Stores that implemented
	6.5	7.7	+¥1.1 B
	+25.5
	structural reforms

	Sales		Transfer Shokuhinkan	+¥1.2 B
	(26.1)		and THE PRICE to York*
		GPM
	+1.8
		+¥1.2B		New stores / Closed stores	+¥0.17 B
FY2020		FY2021
		Income：	approx.
COVID-19		¥(10.2) B	Other stores	¥(1.3) B
Impact		Expenses：	approx.
		+¥11.3 B	*20 stores were transferred ｆｒom Ito-Yokado on Jun 1, 2020
			17
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Department Store Operations: Sogo & Seibu

YOY change of operating income (Billions of yen)

Factors in YOY Change of operating

Income by store / business segment

FY2020

¥(6.8)B

FY2021

Store-operating business

¥(8.5) B

0.17

(6.6)

Flagship stores in the Tokyo

¥(8.8) B

Sales

metropolitan area

(5 stores)

(33.6)

SG&A

expenses

Regional / suburban stores

+30.4

¥(0.77) B

(3 stores)

GPM

Remodeled / Closed stores

(3.6)

+¥1.0 B

(7 stores)

Income：

approx.

COVID-19

¥(30.3) B

Corporate sales

+¥0.47 B

Impact

approx.

Expenses：

+¥23.8 B

* Based on operating income after calculating special losses related to COVID-19

Copyright (C) 2021

Seven & i Holdings Co., Ltd. All Rights Reserved.

18

With Livings - Seven & i Group

The information disclosed by the Company may contain forward-looking statements. These statements are based on management's judgment in accordance with materials available to the Company at the time of disclosure, with future projections based on certain assumptions. The forward-looking statements therefore incorporate various risks, estimates, and uncertainties, and as such, actual results and performance may differ from the future outlook included in disclosed information due to various factors, such as changes in business operations and the financial situation going forward.

Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved.

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