Seven & i : Brief Summary for the Third Quarter of FY2016

Brief Summary for the Third Quarter of FY2016.xls

Brief Summary‌‌‌ for the Third Quarter of FY2016

January 7, 2016 Seven & i Holdings Co., Ltd.

CONSOLIDATED RESULTS

Nine Months Ended Nov. 30, 2014		Nine Months Ended Nov. 30, 2015		Fiscal Year Ended Feb. 28, 2015		Fiscal Year Ending Feb. 29, 2016(Forecast)
YOY(%)	YOY(%)	YOY(%)	YOY(%)
Group's total sales*1		7,648,730	106.5	8,025,141	104.9	10,235,664	106.6	10,600,000	103.6
Revenues from operations		4,501,751	107.5	4,513,893	100.3	6,038,948	107.2	6,150,000	101.8
Convenience store operations	2,075,194	108.6	2,040,761	98.3	2,727,780	107.8	2,767,000	101.4
Superstore operations	1,487,174	100.2	1,524,809	102.5	2,012,176	100.1	2,060,000	102.4
Department store operations	627,156	100.3	632,376	100.8	875,027	100.4	900,000	102.9
Food services	60,729	102.4	63,085	103.9	80,980	103.1	84,700	104.6
Financial services	133,766	112.9	144,110	107.7	178,221	112.2	192,000	107.7
Mail order services	132,238	-	116,053	87.8	185,802	-	164,000	88.3
Others	40,794	107.2	45,923	112.6	53,897	106.7	70,000	129.9
Eliminations / corporate	(55,303)	-	(53,227)	-	(74,937)	-	(87,700)	-
Operating income (loss)		249,455	100.1	261,037	104.6	343,331	101.1	367,000	106.9
Convenience store operations	209,637	106.1	235,704	112.4	276,745	107.5	302,000	109.1
Superstore operations	9,452	55.4	443	4.7	19,340	65.2	20,600	106.5
Department store operations	(1,721)	-	(3,271)	-	7,059	107.1	7,600	107.7
Food services	(398)	-	802	-	44	7.3	1,600	-
Financial services	36,966	107.3	37,665	101.9	47,182	105.1	50,000	106.0
Mail order services	(5,228)	-	(7,296)	-	(7,521)	-	(6,900)	-
Others	2,805	138.3	3,848	137.2	3,669	169.4	4,500	122.6
Eliminations / corporate	(2,057)	-	(6,859)	-	(3,188)	-	(12,400)	-
Ordinary income		249,287	100.1	259,408	104.1	341,484	100.7	362,000	106.0
Special gains		3,184	124.1	2,215	69.6	4,835	145.1
Special losses		24,601	123.2	28,694	116.6	36,124	115.8
Income before income taxes and minority interests		227,871	98.4	232,929	102.2	310,195	99.7
Net income		127,310	99.4	125,439	98.5	172,979	98.5	183,000	105.8
Net income per share		yen 144.01	% 99.4	yen 141.88	% 98.5	yen 195.66	% 98.4	yen 206.98	% 105.8

1. Financial Results (Millions ofyen)

Number of shares outstanding (shares)

Average*2	884,063,363	884,126,270	884,064,278
End of period*2	884,068,013	884,150,312	884,066,302

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

Convenience store's total sales including total store sales of Seven-Eleven Japan and 7-Eleven, Inc. for nine months ended 2014 and 2015, fiscal year ended Feb. 28, 2015, and fiscal year ending Feb. 29, 2016 are 5,222,173 million yen, 5,552,009 million yen, 6,924,497 million yen and 7,217,000 million yen, respectively.

*2. Excluding treasury stock

Exchange rates

Nine Months Ended Nov. 30, 2014	Nine Months Ended Nov. 30, 2015	Fiscal Year Ended Feb. 28, 2015	Fiscal Year Ending Feb. 29, 2016 (Forecast)
Income statements U.S.$1= 1yuan=	102.93 yen 16.71 yen	120.98 yen 19.33 yen	105.79 yen 17.18 yen	120.00 yen 19.00 yen
Balance sheets U.S.$1= 1yuan=	109.45 yen 17.73 yen	119.96 yen 18.96 yen	120.55 yen 19.35 yen	- -

(Reference) Operating income before amortization of goodwill (Millions of yen)

Nine Months Ended Nov. 30, 2014		Nine Months Ended Nov. 30, 2015		Fiscal Year Ended Feb. 28, 2015		Fiscal Year Ending Feb. 29, 2016 (Forecast)
YOY(%)	YOY(%)	YOY(%)	YOY(%)
Operating income (loss)	263,540	100.2	276,730	105.0	362,226	101.1	388,000	107.1
Convenience store operations	216,097	106.0	243,457	112.7	285,454	107.4
Superstore operations	11,807	60.8	2,798	23.7	22,480	68.6
Department store operations	2,245	97.9	695	31.0	12,342	103.9
Food services	(398)	-	802	-	44	7.3
Financial services	38,117	106.6	38,936	102.1	48,742	104.5
Mail order services	(5,220)	-	(7,291)	-	(7,512)	-
Others	2,949	141.7	4,191	142.1	3,862	172.7
Eliminations / corporate	(2,057)	-	(6,859)	-	(3,188)	-

Notes: 1. Eliminations / corporate in operating income mainly reflect the Company's operating expenses relating to the Group strategy.

2. The results of Nissen Holdings and its subsidiaries and affiliates in the fiscal year ended Feb. 28, 2014 are consolidated only in the balance sheets.

2．Major Factors for Changes in Financial Results for the Third Quarter of FY2016

*For results of principal operating companies, please refer to page 5 to 6.

(Millions of yen)

Nine Months Ended Nov. 30, 2015		Major Factors
Change
Group's total sales*1		8,025,141	+376,410	(1) Growth in total store sales at Seven-Eleven Japan Higher total store sales due to increased stores and strong growth in existing store sales. (2) Upward pressure from the effect of a weaker yen
Revenues from operations		4,513,893	+12,141	Growth in revenues from operations at Seven‐Eleven Japan Upward pressure from the effect of a weaker yen: 225.8 billion yen (3) Mainly decrease of gasoline sales at 7-Eleven, Inc. Decreasegasoline sales mainly due to lower crude oil prices (Decrease in amount excluding foreign exchange effects: 282.4 billion yen)
Operating income		261,037	+11,582
Convenience stores	235,704	+26,066	(1) Seven-Eleven Japan Higher income due to growth in existing store sales and merchandise gross profit margin led by standard products such as rice balls. (2) 7-Eleven, Inc. Higher income due to growth in merchandise sales and gross profit margin led by fast food products and beverages. The effect of a weaker yen.
Superstores	443	(9,008)	(1) Ito-Yokado Lower income mainly due to deterioration of in apparel. (2) York-Benimaru (Including Life Foods*2)	the gross profit margin
			Higher income due to growth in existing store sales and improvement of gross profit margin. (3) Higher income at Akachan Honpo and improvement of operations in China
Department stores	(3,271)	(1,549)	Sogo & Seibu Lower income reflected a decrease in existing store sales and deterioration of the gross profit margin.
Food services	802	+1,200	Higher income at Seven & i Food Systems
Financial services	37,665	+699
Mail order services	(7,296)	(2,067)	Lower income at Nissen Holdings
Others	3,848	+1,043
Eliminations/corporate*3	(6,859)	(4,802)	Mainly an increase in expenses related to the Omni-Channel Strategy
Ordinary income		259,408	+10,120	Factors increasing operating income.
Net income		125,439	(1,871)

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

*2. Life Foods is a wholly owned subsidiary which produces and sells delicatessen in York-Benimaru stores.

*3. Eliminations / corporate in operating income mainly reflect the Company's operating expenses relating to the Group strategy.

1. Segment Information

   Nine Months Ended Nov. 30, 2014		Nine Months Ended Nov. 30, 2015			Fiscal Year Ended Feb. 28, 2015		Fiscal Year Ending Feb. 29, 2016 (Forecast)
   YOY(%)	YOY(%)	Composition (%)	YOY(%)	YOY(%)
   Capital expenditures	146,953	98.2	155,631	105.9	53.3	193,235	97.7	282,400	146.1
   Convenience store operations
   Superstore operations	53,019	88.5	68,634	129.5	23.5	65,490	98.2	87,000	132.8
   [65,000]	[99.3]
   Department store operations	12,180	97.2	15,141	124.3	5.2	15,380	98.6	15,800	102.7
   Food services	2,566	178.6	1,208	47.1	0.4	3,506	154.0	2,800	79.8
   Financial services	34,065	110.7	27,490	80.7	9.4	39,110	99.5	42,000	107.4
   Mail order services	2,765	-	4,259	154.0	1.5	3,815	-	7,200	188.7
   Others	5,010	71.5	3,181	63.5	1.1	5,381	71.1	3,800	70.6
   Corporate	6,886	-	16,594	241.0	5.7	15,152	199.7	21,000	138.6
   Total	263,450	100.6	292,142	110.9	100.0	341,075	101.3	462,000	135.5
   								[440,000]	[129.0]
   Depreciation and amortization	75,823	112.8	85,781	113.1	59.7	103,247	113.1	126,000	122.0
   Convenience store operations
   Superstore operations	15,085	111.5	17,379	115.2	12.1	20,696	112.0	23,000	111.1
   Department store operations	10,038	99.3	10,170	101.3	7.1	13,399	99.5	13,400	100.0
   Food services	518	165.8	609	117.5	0.4	709	162.0	800	112.7
   Financial services	18,587	125.5	21,753	117.0	15.1	25,233	124.9	29,000	114.9
   Mail order services	2,859	-	2,787	97.5	1.9	3,842	-	4,000	104.1
   Others	2,026	109.2	2,237	110.4	1.6	2,689	106.5	2,800	104.1
   Corporate	1,750	258.3	2,973	169.8	2.1	2,419	235.0	4,000	165.3
   Total	126,690	116.8	143,693	113.4	100.0	172,237	116.9	203,000	117.9
   Amortization of goodwill	6,460	103.7	7,752	120.0	49.4	8,709	103.8
   Convenience store operations
   Superstore operations	2,355	100.3	2,355	100.0	15.0	3,140	100.3
   Department store operations	3,967	100.0	3,966	100.0	25.3	5,282	99.9
   Food services	-	-	-	-	-	-	-
   Financial services	1,151	88.7	1,270	110.4	8.1	1,560	89.3
   Mail order services	7	-	4	67.2	0.0	9	-
   Others	144	277.3	343	237.8	2.2	192	277.3
   Total	14,085	101.4	15,693	111.4	100.0	18,894	101.5
   Impairment loss	4,607	132.3	7,178	155.8	51.6	5,739	132.8
   Convenience store operations
   Superstore operations	3,116	220.5	4,566	146.5	32.8	7,111	104.4
   Department store operations	518	34.8	1,604	309.3	11.5	1,763	56.3
   Food services	327	116.1	364	111.4	2.6	471	77.8
   Financial services	-	-	-	-	-	-	-
   Mail order services	-	-	179	-	1.3	90	-
   Others	31	-	30	96.1	0.2	44	23.1
   Total	8,602	128.4	13,923	161.9	100.0	15,220	100.8

2. Business Segment Information (Millions of yen)

   
   

   Notes: 1. Capital expenditures include long-term leasehold deposits and advances for store construction. An increase of the future amortization of assets under the "Accounting Standard for Asset Retirement Obligations" is not included.

   Figures for actual results don't include goodwill and others related to the acquisition of stores, etc.

3. Capital expenditures include investments related to openings of stores for each fiscal year and beyond.

   Corporate in capital expenditures mainly reflect the Company's capital expenditures relating to the Group strategy

4. In capital expenditures, figures in square brackets [ ] show the figures reflecting the securitization of assets of a new store in superstore operations.

5. Depreciation and amortization include amortization on intangible assets. Corporate in depreciation and amortization mainly reflect the Company's depreciation and amortization relating to the Group strategy

6. Amortization of goodwill include only the amount record on selling, general and administrative expenses.

7. The results of Nissen Holdings and its subsidiaries and affiliates in the fiscal year ended Feb. 28, 2014 are consolidated only in the balance sheets.

9. Geographic Area Segment Information (Millions of yen)

Nine Months Ended Nov. 30, 2014		Nine Months Ended Nov. 30, 2015			Fiscal Year Ended Feb. 28, 2015
YOY(%)	YOY(%)	Composition (%)	YOY(%)
Revenues from operations	2,907,301	107.0	2,992,783	102.9	66.3	3,941,337	107.0
Japan
North America	1,501,629	108.4	1,420,304	94.6	31.5	1,968,854	107.5
Others	94,565	109.2	102,531	108.4	2.3	131,058	109.9
Eliminations	(1,745)	-	(1,726)	-	-	(2,301)	-
Total	4,501,751	107.5	4,513,893	100.3	-	6,038,948	107.2
Operating income	214,293	98.1	208,776	97.4	80.0	295,666	98.7
Japan
North America	36,943	117.0	52,615	142.4	20.2	49,825	120.0
Others	(1,781)	-	(363)	-	(0.1)	(2,161)	-
Eliminations	(0)	-	8	-	-	1	-
Total	249,455	100.1	261,037	104.6	-	343,331	101.1

Note: "Others" consists of the business results in China, etc.