Flash Report on the Consolidated Financial Results

for the Fiscal Year Ended February 28, 2023

April 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.: +81-3-5435-2773

Scheduled date for the ordinary general meeting of shareholders: May 24, 2023

Scheduled date for submission of annual securities report: May 25, 2023

Scheduled date for payment of dividend: May 25, 2023

Supplementary materials for annual financial results: Yes

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

(Amounts less than one million yen are truncated)

1. Consolidated operating results for 2022 fiscal year (from March 1, 2022 to February 28, 2023)

  1. Consolidated operating results

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

Gross operating

Profit

Operating income

Ordinary income

attributable to

revenue

owners of parent

For the fiscal year ended

Millions

%

Millions

%

Millions

%

Millions

%

of yen

of yen

of yen

of yen

February 28, 2023

988,621

41.6

55,056

16.9

53,453

12.4

24,689

37.9

February 28, 2022

698,371

4.9

47,096

15.2

47,571

26.5

17,900

106.0

Note: Comprehensive income:

Fiscal year ended February 28, 2023

27,498 million yen

33.4 %

Fiscal year ended February 28, 2022

20,613 million yen

105.2 %

Profit per

Diluted

Ratio of ordinary

Ratio of

Return on

operating income to

share

profit per

equity

income to total

gross operating

share

assets

revenue

For the fiscal year ended

Yen

Yen

%

%

%

February 28, 2023

246.70

246.49

8.9

4.0

5.6

February 28, 2022

178.87

178.71

6.6

3.5

6.7

Reference: Share of profit of entities accounted for using equity method:

Fiscal year ended February 28, 2023

302 million yen

Fiscal year ended February 28, 2022

50 million yen

Note: "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, March 31, 2020) and other standards are applied from the beginning of the first quarter of the fiscal year ended February 28, 2023.

(2) Consolidated financial position

Total assets

Net assets

Shareholders'

Net assets per

equity ratio

share

As of

Millions of yen

Millions of yen

%

Yen

February 28, 2023

1,366,166

287,099

20.6

2,810.33

February 28, 2022

1,337,245

278,473

20.4

2,726.97

Reference: Shareholders' equity:

As of February 28, 2023

281,249 million yen

As of February 28, 2022

272,891 million yen

(3) Consolidated cash flows

Net cash provided

Net cash provided

Net cash provided

Cash and cash

by (used in)

by (used in)

by (used in)

equivalents at end

operating activities

investing activities

financing activities

of period

For the fiscal year ended

Millions of yen

Millions of yen

Millions of yen

Millions of yen

February 28, 2023

176,045

(45,626)

(124,028)

396,958

February 28, 2022

146,644

(51,781)

(109,516)

388,444

2. Dividends

Annual dividends per share

Total

Ratio of

Payout

dividends to

dividends

1Q

1H

3Q

Year-end

Total

ratio

shareholders'

for the year

equity

Yen

Yen

Yen

Yen

Yen

Millions of

%

%

yen

2021 fiscal year

－

75.00

－

75.00

150.00

15,010

83.9

5.6

2022 fiscal year

－

75.00

－

75.00

150.00

15,011

60.8

5.4

2023 fiscal year

－

100.00

－

100.00

200.00

69.0

(forecast)

3. Forecast of consolidated operating results for 2023 fiscal year (Under IFRS) (from March 1, 2023 to February 29, 2024)

Profit attributable to owners of parent

Basic earnings per

share

Millions of yen

%

Yen

1H of 2023 fiscal year

17,500

－

174.86

2023 fiscal year

29,000

－

289.77

Note: Since the Group has decided to voluntarily apply International Financial Reporting Standards (IFRS) for the consolidated financial statements in its Annual Securities Report effective from the fiscal year ended February 2023, "Forecast of consolidated operating results for 2023 fiscal year" is based on figures after applying "IFRS," and the percentage changes from the results of the fiscal year ended February 28, 2023 are not provided.

Furthermore, financial forecasts for the fiscal year ending February 29, 2024 other than the Profit attributable to owners of parent based on "IFRS" will be provided in the flash report(Under IFRS) scheduled to be issued on May 25, 2023.

4. Notes

  1. Change in significant subsidiaries during the fiscal year (Changes in certain specified subsidiaries resulting in changes in scope of consolidation): Yes

Added: Yes

Excluded: None

Lawson Philippines, Inc.

  1. Changes in accounting policies, changes in accounting estimates or restatements
    1. Changes in accounting policies associated with revision in accounting standards: Yes
    2. Changes in accounting policies other than 1. above: None
    3. Changes in accounting estimates: None
    4. Retrospective restatements: None
  3. Number of shares outstanding (common stock)
    1. Number of shares outstanding at the end of year (including treasury shares)

As of February 28, 2023:

100,300,000

As of February 28, 2022:

100,300,000

2. Number of treasury shares at the end of year

As of February 28, 2023:

222,962

As of February 28, 2022:

228,807

3. Average number of shares during the year

As of February 28, 2023:

100,076,025

As of February 28, 2022:

100,070,561

Reference: Non-consolidated operating results for 2022 fiscal year (from March 1, 2022 to February 28, 2023) Non-consolidated operating results (cumulative)

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

Gross operating

Operating

Profit

Ordinary income

attributable to

revenue

income

owners of parent

For the fiscal year ended

Millions

%

Millions

%

Millions

%

Millions

%

of yen

of yen

of yen

of yen

February 28, 2023

357,571

0.7

35,188

36.0

40,618

18.5

22,595

67.7

February 28, 2022

355,102

0.1

25,870

(1.1)

34,278

1.7

13,470

(15.3)

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. Overview of Operating Results, (4) Future Outlook" on page 13.

Contents

1. Overview of Operating Results

2

(1) Overview of Operating Results for the Fiscal Year under Review

2

(2)

Profit and Loss

12

(3)

Overview of Financial Position for the Fiscal Year under Review

12

(4)

Future Outlook

13

2. Basic Approach to Selection of Accounting Standards

14

3. Consolidated Financial Statements and Main Notes

15

(1)

Consolidated Balance Sheet

15

(2)

Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

17

Consolidated Statement of Income

17

Consolidated Statement of Comprehensive Income

18

(3)

Consolidated Statement of Changes in Equity

19

(4)

Consolidated Statement of Cash Flows

21

(5)

Notes to Consolidated Financial Statements

23

(Going Concern Assumption)

23

(Accounting Policies for the Preparation of Consolidated Financial Statements)

23

(Changes in Accounting Policies)

27

(Changes in Presentation)

28

(Notes to Consolidated Balance Sheet)

29

(Notes to Consolidated Statement of Income)

31

(Notes to Consolidated Statement of Comprehensive Income)

33

(Notes to Consolidated Statement of Changes in Equity)

34

(Notes to Consolidated Statement of Cash Flows)

36

(Segment Information)

37

(Per Share Information)

43

(Significant Subsequent Events)

43

1

1．Overview of Operating Results

(1) Overview of Operating Results for the Fiscal Year under Review

During the fiscal year under review, or fiscal 2022 ended February 28, 2023, we continued to take rigorous prevention measures against the infection of the novel coronavirus and responded to new normal demand by exerting concerted Group-wide efforts. Specifically, under the leadership of our Lawson Group Sweeping Transformation Executive Committee, which was launched in September 2020 to realize "Challenge 2025" formulated for 2025, the 50th anniversary of our foundation, we renovated our stores and revamped our product lineups in Domestic Convenience Store Business in response to changes in the business environment, and the whole Lawson Group endeavored to resolve medium- to long-term issues for sustainable growth, acquire new revenue opportunities and foster job satisfaction. Fiscal 2022 was a year in which we took concrete actions. Upholding a strategic concept of focusing on community, individual customers, and individual stores, we introduced an area company system in the Hokkaido and Kinki regions ahead of other regions. Under the new system, the roles and scope of discretion assigned to the headquarters and areas were reviewed, and greater authority and discretion were delegated to the respective areas so as to expedite decision-making and speed up the hypothesis/verification cycle.

As a result, for fiscal 2022 on a consolidated basis, gross operating revenue increased to 988,621 million yen (up 41.6% from previous fiscal year), operating income increased to 55,056 million yen (up 16.9% from previous fiscal year) and ordinary income increased to 53,453 million yen (up 12.4% from previous fiscal year). Profit attributable to owners of parent was 24,689 million yen (up 37.9% from previous fiscal year).

The Company has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and other standards from the beginning of the fiscal year ended February 28, 2023. Therefore, year-on-year comparative figures for the fiscal year represent amounts based on the previously adopted accounting policies. For information on the changes in relation to the application of the new accounting standards, please refer to "3. Consolidated Financial Statements and Main Notes (5) Notes to Consolidated Financial Statements (Changes in Accounting Policies)."

We also focused on improving our group-wide internal control system and addressing operating risks based on the 2022 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 fiscal year under review, the state of quasi-emergency declaration was lifted in March 2022, there have been repeated waves of new COVID-19 cases during the fiscal year under review, but an overall rising trend was seen in the movement of people.

Amid such drastic shifts in the business landscape, Lawson has been proceeding with store renovations considering the characteristics/situation of each store, helping them expand their merchandise assortment of frozen foods and other daily necessities to adapt to changes in customers' lifestyles and better address customer needs. By the end of fiscal year 2022, we had completed the renovation of some 2,985 stores, and the total

2

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Lawson Inc. published this content on 13 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 April 2023 06:24:04 UTC.