SEVEN & I HOLDINGS CO., LTD. Consolidated Financial Results |
for the Six Months ended August 31, 2015 |
Seven & i Holdings Co., Ltd. (URL http://www.7andi.com/en) |
Securities Code No. 3382
President and COO: Noritoshi Murata
The Company's shares are listed on the First Section of the Tokyo Stock Exchange. Submission date of quarterly securities report scheduled: October 14, 2015 Starting date of paying dividend: November 13, 2015
Preparation of brief summary materials for quarterly financial results: Yes Holding of quarterly financial results presentation: Yes
Note: All amounts less than one million yen have been disregarded.
Business Results for the Six Months ended August 31, 2015 (from March 1, 2015 to August 31, 2015)
Results of Operations (cumulative) (Millions of yen, except per share amounts)
Revenues from Operations
Operating Income
Ordinary Income
Six Months ended August 31, 2015
2,994,992
(0.3)%
172,459
3.1%
170,686
2.1%
Six Months ended August 31, 2014
3,004,423
7.0%
167,225
1.6%
167,237
1.5%
Net Income
Net Income per Share
Diluted Net Income per Share
Six Months ended August 31, 2015
Six Months ended August 31, 2014
84,521 0.7%
83,901 0.7%
95.60 (yen)
95.51 (yen)
94.82 (yen)
94.90
(yen)
Notes: 1. Comprehensive income:
Six Months ended August 31, 2015: 101,767 million yen [ 44.3%]
Six Months ended August 31, 2014: 70,534 million yen [ (51.3)%]
2. Percentages represent increase (decrease) from the corresponding period in the prior fiscal year.
*Group's total sales include the sales of Seven-Eleven Japan and 7-Eleven, Inc. franchisees: Six Months ended August 31, 2015: 5,310,227 million yen [ 4.5%]
Six Months ended August 31, 2014: 5,082,915 million yen [ 7.0%]
Financial Position (Millions of yen, except per share amounts)
Total Assets
Net Assets
Owners' Equity Ratio
Owners' Equity per Share
As of August 31, 2015
As of February 28, 2015
5,464,642
5,234,705
2,497,967
2,430,917
43.3%
43.9%
2,674.02 (yen)
2,601.23 (yen)
Note: Owners' equity (net assets excluding minority interests in consolidated subsidiaries and subscription rights to shares) : As of August 31, 2015: 2,364,239 million yen As of February 28, 2015: 2,299,662 million yen
Dividends
Dividends per Share (yen)
Record Date
First Quarter
Second Quarter
Third Quarter
Year-end
Annual
Year ended February 28, 2015
-
36.50
-
36.50
73.00
Year ending February 29, 2016
-
38.50
Year ending February 29, 2016 (forecast)
-
38.50
77.00
Note: Revision of dividends forecast during the current quarterly period: None
Forecast of Business Results for the Fiscal Year ending February 29, 2016 (from March 1, 2015 to February 29, 2016)
(Millions of yen, except per share amounts)
Revenues from Operations
Operating Income
Ordinary Income
Net Income
Net Income per Share
Entire Year
6,150,000 1.8%
367,000 6.9%
362,000 6.0%
183,000 5.8%
206.98 (yen)
Notes:
Percentages represent increase (decrease) from the corresponding period in the prior fiscal year.
Revision of business results forecast during the current quarterly period: Yes
* The forecast of Group's total sales include the sales of Seven-Eleven Japan and 7-Eleven, Inc. franchisees: Entire Year: 10,600,000 million yen [3.6%]
Others
Changes in significant subsidiaries during the period:
(changes in specific subsidiaries accompanying change in scope of consolidation): None Added: none Excluded: none
Application of specific accounting for preparing the quarterly consolidated financial statements: None
Changes in accounting policies, accounting estimates or restatements 1.Changes due to amendment of accounting standards: Yes
(Application of Accounting Standard for Retirement Benefits, etc.)
For the Accounting Standard for Retirement Benefits (ASBJ Statement No. 26, May 17, 2012) and Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012), the Company and its domestic consolidated subsidiaries have additionally applied the provisions set forth in the main clauses of paragraph 35 of the Accounting Standard for Retirement Benefits and paragraph 67 of the Guidance on Accounting Standard for Retirement Benefits effective from the beginning of the first quarter of this consolidated fiscal year. Accordingly, the Company and its domestic consolidated subsidiaries reviewed the calculation of retirement benefit obligations and current service cost and changed the method of attributing expected benefits to periods from the point basis and straight-line basis to the benefit formula basis as well as amended the determination of discount rate from that determined based on bonds with a maturity period approximate to the expected average remaining working lives of employees to one that is a single weighted average discount rate reflecting the estimated timing of retirement benefit payment and the estimated amount of each retirement benefit payment.
The application of the Accounting Standard for Retirement Benefits and its Guidance is in accordance with the transitional measures provided in paragraph 37 of the Accounting Standard for Retirement Benefits.
Accordingly, the effect of the change in the calculation of retirement benefit obligations and current service cost has been added to or deducted from retained earnings as of the beginning of the first quarter of this consolidated fiscal year.
As a result of this application, as of the beginning of this consolidated fiscal year, net defined benefit asset decreased by 3 million yen, and retained earnings decreased by 3 million yen. The effect of this application on operating income, ordinary income and income before income taxes and minority interests during this consolidated fiscal year is immaterial.
2.Changes due to other reasons: None 3.Changes in accounting estimates: None 4.Restatements: None
Number of shares outstanding (common stock)
Number of shares outstanding at the end of period (including treasury stock)
As of August 31, 2015: 886,441,983 shares As of February 28, 2015: 886,441,983 shares
Number of treasury stock at the end of period
As of August 31, 2015: 2,291,360 shares As of February 28, 2015: 2,375,681 shares
Average number of shares during the period (cumulative quarterly consolidated period)
As of August 31, 2015: 884,114,221 shares As of August 31, 2014: 884,060,592 shares
Supplementary information
The Act for Partial Revision of the Income Tax Act, etc. (Act No.9 of 2015) and the Act for Partial Revision of Local Taxes, etc.(Act No.2 of 2015) were promulgated on March 31, 2015, and as a result, the corporate tax rate, etc. will be lowered from the consolidated fiscal years beginning on or after April 1, 2015.
Accordingly, the effective statutory tax rates used to measure deferred tax assets and deferred tax liabilities will be changed from 35.6% to 33.1% for temporary differences expected to be settled or realized in the fiscal year beginning on March 1, 2016. Additionally, the effective statutory tax rate used to measure deferred tax assets and deferred tax liabilities will be changed to 32.3% for temporary differences expected to be settled or realized in the fiscal years beginning on or after March 1, 2017.
As a result of this change in the tax rate, the amount of deferred tax assets (after deducting deferred tax liabilities) decreased by 2,347 million yen, the amount of income taxes-deferred increased by 3,759 million yen and unrealized gains (losses) on available-for-sale securities increased by 1,144 million yen, and remeasurements of defined benefit plan increased by 267 million yen.
NOTICE REGARDING QUARTERLY REVIEW PROCEDURES FOR THE QUARTERLY FINANCIAL RESULTS
This quarterly financial results statement is exempt from the quarterly review procedures based upon the Financial Instruments and Exchange Act. At the time of disclosure of this quarterly financial results statement, the quarterly review procedure based upon the Financial Instruments and Exchange Act has not been completed.
FORWARD LOOKING STATEMENTS
The forecast for the year ending February 29, 2016 is based on Seven & i Holdings' hypotheses, plans and estimates at the date of publication. It is possible that some uncertain factors will cause the Company's future performance to differ significantly from the contents of the forecast.
Brief summary for the second quarter of FY2016 is posted on the Company's website (http://www.7andi.com/en/ir/library/kh/201602.html). The presentation materials related to financial results which will be used on financial results presentation planned to be held on October 9, 2015, will be posted as soon as possible after the presentation.
Consolidated Quarterly Statements of Income
and Consolidated Quarterly Statements of Comprehensive Income ・・・・・・・・・・・・・・・・・・・・・・・4
Consolidated Quarterly Statements of Cash Flows ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・6 (4) Doubts on the Premise of Going Concern ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・8 (5) Segment Information ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・8
Consolidated Quarterly Balance Sheets
(Millions of yen)
February 28, 2015
August 31, 2015
Amount
Amount
ASSETS
Current assets
2,133,185
2,310,449
Cash and bank deposits
933,959
1,047,677
Notes and accounts receivable, trade
340,792
357,077
Trade accounts receivable - financial services
71,198
81,960
Marketable securities
100,001
190,001
Merchandise and finished goods
208,927
211,698
Work in process
71
509
Raw materials and supplies
3,170
3,598
Prepaid expenses
48,585
52,715
ATM-related temporary payments
166,686
85,959
Deferred income taxes
41,499
41,390
Other
223,653
243,127
Allowance for doubtful accounts
(5,361)
(5,264)
Non-current assets
3,101,424
3,154,140
Property and equipment
1,876,941
1,953,699
Buildings and structures, net
825,831
852,409
Furniture, fixtures and equipment, net
271,327
291,301
Land
725,553
755,851
Lease assets, net
13,229
11,729
Construction in progress
39,369
41,142
Other, net
1,629
1,264
Intangible assets
507,004
512,841
Goodwill
297,233
290,577
Software
57,150
67,123
Other
152,620
155,140
Investments and other assets
717,478
687,599
Investments in securities
168,738
146,261
Long-term loans receivable
16,361
16,163
Long-term leasehold deposits
401,206
397,256
Advances for store construction
1,210
942
Net defined benefit asset
40,889
43,387
Deferred income taxes
28,382
24,531
Other
65,673
63,853
Allowance for doubtful accounts
(4,984)
(4,796)
Deferred assets
96
52
New organization costs
0
0
Business commencement expenses
96
52
TOTAL ASSETS
5,234,705
5,464,642
(Millions of yen)
February 28, 2015
August 31, 2015
Amount
Amount
LIABILITIES
Current liabilities
1,826,791
1,904,427
Notes and accounts payable, trade
412,504
475,457
Short-term loans
130,780
134,636
Current portion of long-term loans
70,013
82,835
Current portion of bonds
59,999
40,000
Income taxes payable
42,979
41,426
Accrued expenses
104,284
108,945
Deposits received
149,610
160,800
ATM-related temporary advances
66,977
40,412
Allowance for sales promotion expenses
20,408
23,727
Allowance for bonuses to employees
12,893
15,101
Allowance for bonuses to Directors and
Audit & Supervisory Board Members
375
179
Allowance for loss on future collection of
gift certificates
2,532
2,276
Provision for sales returns
188
155
Deposits received in banking business
475,209
498,254
Other
278,035
280,218
Non-current liabilities
976,997
1,062,247
Bonds
319,992
399,993
Long-term loans
367,467
374,335
Deferred income taxes
63,536
64,572
Allowance for retirement benefits to Directors and Audit & Supervisory Board Members
2,060
1,996
Net defined benefit liability
8,669
8,867
Deposits received from tenants and
franchised stores
56,779
56,304
Asset retirement obligations
67,068
69,725
Other
91,424
86,450
TOTAL LIABILITIES
2,803,788
2,966,675
NET ASSETS
Shareholders' equity
2,193,677
2,246,132
Common stock
50,000
50,000
Capital surplus
527,470
527,474
Retained earnings
1,622,090
1,674,341
Treasury stock, at cost
(5,883)
(5,683)
Total accumulated other comprehensive income
105,985
118,106
Unrealized gains (losses) on available-for-sale
securities, net of taxes
21,571
26,722
Unrealized gains (losses) on hedging derivatives,
net of taxes
557
292
Foreign currency translation adjustments
80,342
86,825
Remeasurements of defined benefit plan
3,512
4,266
Subscription rights to shares
2,427
3,006
Minority interests in consolidated subsidiaries
128,827
130,721
TOTAL NET ASSETS
2,430,917
2,497,967
TOTAL LIABILITIES AND NET ASSETS
5,234,705
5,464,642
-
Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income
Consolidated Quarterly Statements of Income
(Millions of yen)
Consolidated Quarterly Statements of Comprehensive IncomeSix Months ended August 31, 2014
Six Months ended August 31, 2015
Amount
Amount
Revenues from operations
3,004,423
2,994,992
Net sales
2,488,652
2,421,593
Cost of sales
1,961,239
1,885,725
Gross profit on sales
527,412
535,867
Operating revenues
515,770
573,399
Gross profit from operations
1,043,183
1,109,266
Selling, general and administrative expenses
875,957
936,807
Operating income
167,225
172,459
Non-operating income
5,475
5,800
Interest income
2,967
2,754
Equity in earnings of affiliates
249
896
Other
2,258
2,149
Non-operating expenses
5,463
7,573
Interest expenses
3,245
3,530
Interest on bonds
1,337
1,324
Other
880
2,718
Ordinary income
167,237
170,686
Special gains
Gain on sales of property and equipment Gain on sales of investments in securities Compensation income for expropriation Other
Special losses
Loss on disposals of property and equipment Impairment loss on property and equipment
Special expenses related to consumption tax rate change
Other
952
1,614
642
874
242
159
3
398
63
182
17,597
19,445
6,330
5,580
6,653
10,182
2,031
-
2,580
3,682
Income before income taxes and minority interests
150,592
152,855
Total income taxes
61,475
63,050
Income taxes - current
58,267
60,175
Income taxes - deferred
3,207
2,875
Income before minority interests
89,117
89,804
Minority interests in net income of consolidated subsidiaries
5,215
5,283
Net income
83,901
84,521
(Millions of yen)
Six Months ended August 31, 2014
Six Months ended August 31, 2015
Amount
Amount
Income before minority interests
89,117
89,804
Other comprehensive income
Unrealized gains (losses) on available-for-sale securities, net of taxes
Unrealized gains (losses) on hedging derivatives, net of taxes
Foreign currency translation adjustments Remeasurements of defined benefit plan
Share of other comprehensive income of entities
accounted for using equity method
2,755
5,066
(611)
(535)
(20,735)
6,630
-
782
9
18
Total other comprehensive income
(18,582)
11,962
Comprehensive income
70,534
101,767
Comprehensive income attributable to Shareholders of the parent
66,124
96,643
Minority interests
4,410
5,123
-
Consolidated Quarterly Statements of Cash Flows
(Millions of yen)
Six Months ended August 31, 2014
Six Months ended August 31, 2015
Amount
Amount
Cash flows from operating activities:
150,592
152,855
Income before income taxes and minority interests
Depreciation and amortization
83,694
93,872
Impairment loss on property and equipment
6,653
10,182
Amortization of goodwill
9,450
12,201
Interest income
(2,967)
(2,754)
Interest expenses and interest on bonds
4,583
4,855
Equity in losses (earnings) of affiliates
(249)
(896)
Gain on sales of property and equipment
(642)
(874)
Loss on disposals of property and equipment
6,330
5,580
Decrease (increase) in notes and accounts receivable, trade
(16,345)
(15,780)
Decrease (increase) in trade accounts receivable, financial services
(1,967)
(10,761)
Decrease (increase) in inventories
2,625
(2,902)
Increase (decrease) in notes and accounts payable, trade
79,873
61,558
Increase (decrease) in deposits received
60,517
11,007
Net increase (decrease) in loans in banking business
(7,000)
4,016
Net increase (decrease) in corporate bonds in banking business
(20,000)
-
Net increase (decrease) in deposits received in banking business
16,398
23,045
Net decrease (increase) in call loan in banking business
3,000
(5,000)
Net increase (decrease) in call money in banking business
22,000
4,000
Net change in ATM-related temporary accounts
(51,333)
54,162
Other
3,622
(28,493)
Sub-total
348,837
369,873
Interest and dividends received
2,214
2,255
Interest paid
(5,353)
(4,848)
Income taxes paid
(78,127)
(59,896)
Net cash provided by operating activities
267,569
307,384
Cash flows from investing activities:
(140,827)
(152,187)
Acquisition of property and equipment
Proceeds from sales of property and equipment
2,421
2,767
Acquisition of intangible assets
(12,821)
(21,909)
Payment for purchase of investments in securities
(22,355)
(15,609)
Proceeds from sales of investments in securities
13,321
44,909
Payment for purchase of investments in subsidiaries
(351)
(0)
Payment for long-term leasehold deposits
(13,179)
(11,206)
Refund of long-term leasehold deposits
19,480
17,072
Proceeds from deposits from tenants
1,909
1,164
Refund of deposits from tenants
(1,428)
(1,579)
Payment for acquisition of business
(98)
(4,733)
Payment for time deposits
(4,556)
(3,264)
Proceeds from withdrawal of time deposits
6,687
3,289
Other
(2,156)
(1,736)
Net cash used in investing activities
(153,955)
(143,021)
(Millions of yen)
Six Months ended August 31, 2014
Six Months ended August 31, 2015
Amount
Amount
Cash flows from financing activities:
4,562
(1,160)
Net increase (decrease) in short-term loans
Proceeds from long-term debts
66,800
41,750
Repayment of long-term debts
(64,825)
(23,149)
Proceeds from commercial paper
12,601
-
Payment for redemption of commercial paper
(12,601)
-
Proceeds from issuance of bonds
-
119,679
Payment for redemption of bonds
-
(60,000)
Dividends paid
(30,902)
(32,253)
Capital contribution from minority interests
26
-
Dividends paid for minority interests
(3,205)
(3,201)
Other
(9,075)
(3,464)
Net cash provided by (used in) financing activities
(36,620)
38,199
Effect of exchange rate changes on cash and cash equivalents
(2,916)
621
Net increase (decrease) in cash and cash equivalents
74,077
203,184
Cash and cash equivalents at beginning of period
921,432
1,000,762
Cash and cash equivalents at end of period
995,510
1,203,946
Doubts on the Premise of Going Concern
None
Segment Information
The adjustments on segment income (loss) of (1,550) million yen are eliminations of intersegment transactions and certain expense items that are not allocated to reportable segments.
Segment income (loss) is reconciled with the operating income in the Consolidated Quarterly Statements of Income.
The adjustments on segment income (loss) of (2,634) million yen are eliminations of intersegment transactions and certain expense items that are not allocated to reportable segments.
Segment income (loss) is reconciled with the operating income in the Consolidated Quarterly Statements of Income.
Qualitative Information on Consolidated Financial Results Forecast for the Fiscal Year ending February 29, 2016
(from March 1, 2015 to February 29, 2016)
The Company has revised its consolidated financial results forecast for the fiscal year ending February 29, 2016 from the previous forecast announced on April 2, 2015.
Consolidated financial results forecast (Millions of yen)
Year ending February 29, 2016 | ||
YOY | ||
Revenues from operations | 6,150,000 | 1.8% |
Operating income | 367,000 | 6.9% |
Ordinary income | 362,000 | 6.0% |
Net income | 183,000 | 5.8% |
Assumed exchange rates: U.S.$1＝120.00 yen 1yuan＝19.00 yen
Revenues from operations and operating income forecast by business segment (Millions of yen)
Year ending February 29, 2016 | ||||
Revenues from operations | Operating income | |||
YOY | YOY | |||
Convenience store operations | 2,767,000 | 1.4% | 302,000 | 9.1% |
Superstore operations | 2,060,000 | 2.4% | 20,600 | 6.5% |
Department store operations | 900,000 | 2.9% | 7,600 | 7.7% |
Food services | 84,700 | 4.6% | 1,600 | － |
Financial services | 192,000 | 7.7% | 50,000 | 6.0% |
Mail order services | 164,000 | (11.7)% | (6,900) | － |
Others | 70,000 | 29.9% | 4,500 | 22.6% |
Eliminations / corporate | (87,700) | － | (12,400) | － |
Consolidated Total | 6,150,000 | 1.8% | 367,000 | 6.9% |
Contents
Consolidated Quarterly Financial Statements
(1) Consolidated Quarterly Balance Sheets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・2
(6) Notes on Significant Changes in the Amount of Shareholders' Equity ・・・・・・・・・・・・・・・・・・・・・・9
5. Consolidated Quarterly Financial Statements1. Information on Revenues from Operations and Income (Loss) by Reportable Segment
Reportable segments | Total | Adjustments (Note 1) | Consolidated total (Note 2) | |||||||
Convenience store operations | Superstore operations | Department store operations | Food services | Financial services | Mail order services | Others | ||||
Revenues from operations | 1,367,655 | 998,187 | 422,058 | 40,937 | 72,896 | 90,786 | 11,901 | 3,004,423 | - | 3,004,423 |
Revenues | ||||||||||
1. Customers | ||||||||||
2. Intersegment | 339 | 3,875 | 1,086 | 384 | 15,261 | 94 | 15,710 | 36,752 | (36,752) | - |
Total | 1,367,995 | 1,002,063 | 423,144 | 41,322 | 88,157 | 90,880 | 27,611 | 3,041,175 | (36,752) | 3,004,423 |
Segment income (loss) | 136,887 | 9,183 | (92) | 25 | 24,006 | (3,044) | 1,809 | 168,776 | (1,550) | 167,225 |
Six Months ended August 31, 2014 (From March 1, 2014 to August 31, 2014) (Millions of yen)
Notes:
Six Months ended August 31, 2015 (From March 1, 2015 to August 31, 2015) (Millions of yen)
Reportable segments | Total | Adjustments (Note 1) | Consolidated total (Note 2) | |||||||
Convenience store operations | Superstore operations | Department store operations | Food services | Financial services | Mail order services | Others | ||||
Revenues from operations | 1,330,326 | 1,019,447 | 424,139 | 42,718 | 77,775 | 79,509 | 21,074 | 2,994,992 | - | 2,994,992 |
Revenues | ||||||||||
1. Customers | ||||||||||
2. Intersegment | 435 | 4,625 | 1,641 | 406 | 17,520 | 405 | 10,522 | 35,558 | (35,558) | - |
Total | 1,330,761 | 1,024,073 | 425,781 | 43,125 | 95,296 | 79,915 | 31,597 | 3,030,550 | (35,558) | 2,994,992 |
Segment income (loss) | 152,328 | 1,158 | (869) | 1,110 | 24,123 | (4,703) | 1,944 | 175,093 | (2,634) | 172,459 |
Notes:
2. Impairment of Fixed Assets and Goodwill by Reportable Segment
No significant items to be reported.
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