Top Management Message April 10, 2014

Today, Lawson announced its financial results for fiscal 2013 ended February 28, 2014.
A summary of our consolidated results for fiscal 2013 is:

• Operating profit 68.1 billion yen
(up 2.8% year on year)
• Recurring profit 68.8 billion yen
(up 4.5% year on year)
• Net profit 37.9 billion yen
(up 14.4% year on year)

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■Results for fiscal 2013, ended February 28, 2014

During fiscal 2013, we endeavored to expand the customer base and make our merchandise assortments better match the needs of customers by introducing freshly-brewed MACHI café and strengthening our offering of food ingredients to be prepared and eaten at home. However, weak cigarette sales and inclement weather had an adverse impact. As a result, our cumulative sales at existing stores (non-consolidated basis) for the fiscal year* were down 0.2% year on year. The Lawson Group in Japan opened 869 stores and closed 393, resulting in a net increase of 476 stores for the fiscal year. In addition, we developed and expanded sales of high-value-added products, by utilizing our strength in directly engaging in the procurement of raw materials. Consequently, gross profit margin on products excluding cigarettes continued to rise 0.4 percentage points in fiscal 2013 compared to the previous year.
*Year-on-year cumulative sales at existing stores: As in the calculation up to the 3rd quarter of fiscal 2013, sales of LAWSON MART/LAWSON STORE100 stores are excluded.

Although a net increase in the number of stores and the aggressive introduction of MACHI café boosted facility expenses, advertising and promotional expenses were well managed by utilizing effective and efficient sales promotion methods and other measures. As such, overall sales and general administrative expenses were appropriately controlled, as in previous years, with due consideration to Return on Investment (ROI).

As a result, consolidated operating profit was 68.1 billion yen, up by 1.8 billion yen or 2.8% from the previous year. We achieved to increasing operating profit for the 11th consecutive year and recorded record-high profits. Net profit amounted to 37.9 billion yen, up 4.7 billion yen from the previous year, while ROE improved from the previous year to 16.1%.

■Profit and dividend plan in FY 2014

Our profit forecast for FY 2014 is to achieve 75 billion yen operating profit on the consolidated basis (110.1% year on year), which will mark the 12th year consecutive profit improvement.

As for the dividend, targeting ROE of 20% as our medium-term target, and wishing our shareholders will continuously support us in a mid-to-long term, we plan to raise our full-year dividend by 20 yen for the ongoing fiscal year to February 28, 2015 to 240 yen per share.

As announced recently, I am set to assume the post of Chairman effective May 27, 2014*.
*The appointment will be officially resolved at the General Meeting of Shareholders and the subsequent Meeting of the Board of Directors, which will be held on the same date, May 27, 2014.

I am grateful that Lawson has achieved its 11th consecutive year of profit growth and ROE of 16% in the fiscal year ended February 2014, partly due to constructive dialogue with you, our shareholders and investors. Lawson’s stock price has significantly appreciated since my appointment as the President and CEO in May 2002. Our Total Shareholder Return (TSR), including dividends, has turned out to be considerably higher than the averages of the industry and the Tokyo Stock Exchange.

Going forward, as Chairman, I intend to support our new President and CEO Genichi Tamatsuka, who will assume that position effective May 1st, 2014. I would like to ask you all for your continued support and understanding.

April 10, 2014

Takeshi Niinami
Representative Director
Chief Executive Officer

Messages from CEO and COO about the New Management Team

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