Seven & I Holdings Co., Ltd. · TSE:3382

Seven & I — Seven & I Hldgs — Q1 2023 Earnings Presentation

37 slides from Seven & I's earnings presentation, Jul 13, 2023

  1. Slide 1: Presentation for the First Quarter of FY2023

    Seven & i Holdings Co., Ltd. Presentation for the First Quarter of FY2023 (Fiscal Year Ending February 29, 2024) July 13, 2023 Copyright(C) Seven & i Holdings Co., Ltd. All Rights Reserved. 1

  2. Slide 2: Executive Summary

    Executive Summary  The group has made steady progress in strategic initiatives  Revenues from operations in Q1 FY2023 consolidated results achieved record highs  Operating income of major domestic companies achieved the plan Copyright(C) Seven & i Holdings Co., Ltd. All Rights Reserved. 2

  3. Slide 3: Strategic Initiatives: Status of Progress

    Strategic Initiatives: Status of Progress To Become a World-Class Retail Group Centered Around Its “Food” September 1, 2023 The merger between Ito-Yokado and York July 1, 2023 May 1, 2023 Completed the transfer of Completed the sale of Seven Card Service’s shares Barneys Japan to Seven Bank November

  4. Slide 4: Q1 Consolidated Results Highlight

    Q1 Consolidated Results Highlight (Billions of yen, %) FY2022 FY2023 YOY Change vs. Plan Change Group’s total sales *1 3,839.7 4,162.0 108.4 +322.2 99.1 (38.5) Revenues from operations 2,447.3 2,650.6 108.3 +203.3 98.2 (49.3) Operating income 102.3 81.9 80.1 (20.3) 94.5 (4.8) Ordinary income 95.5 73

  5. Slide 5: Q1 Results by Operating Segment (YOY)

    Q1 Revenues from Operations, Operating Income and EBITDA by Operating Segment (YOY) (Billions of yen, %) Revenues from operations Operating income EBITDA YOY/Change YOY/Change YOY/Change 108.3 80.10 97.20 Consolidated 2,650.6 +203.3 81.9 (20.3) 208.3 (6.0) 106.4 108.1 107.2 Domestic CVS operations 2

  6. Slide 6: Q1 Results by Operating Segment (vs. Plan)

    Q1 Revenues from Operations, Operating Income and EBITDA by Operating Segment (vs. Plan) (Billions of yen, %) Revenues from operations Operating income EBITDA vs. Plan/Change vs. Plan/Change vs. Plan/Change 98.20 94.50 99.20 Consolidated 2,650.6 (49.3) 81.9 (4.8) 208.3 (1.6) 102.5 105.1 104.3 Domest

  7. Slide 7: Seven-Eleven Japan (1)

    Seven-Eleven Japan (1) Existing store sales & GPM SG&A (Billions of yen, %) Q1 Major factors Amount YOY YOY change for change +4.9 +1.0 +4.2 +4.9 +5.0 (％) (％) SG&A 146.6 106.5 +8.9 +3.7 +3.6 Resumption of merchandise Advertising +1.7 +0.6 expenses 8.5 131.5 +2.0 exhibitions 50th anniversary related

  8. Slide 8: Seven-Eleven Japan (2)

    Seven-Eleven Japan (2) Change in operating income Trend in income of franchised stores (Billions of yen) Income of franchised stores (Monthly amount) 1,400 (Thousands of yen) +2.5 (%) YOY 109.2 (8.9) 110 106.6 +11.2 102.4 1,200 100.2 100 98.5 64.4 1,000 59.6 90 +4.8 Revised royalties 80 800 FY2019 F

  9. Slide 9: Seven-Eleven Japan (3)

    Seven-Eleven Japan (3) “Ideal Image” and “Four-part Vision” Realize a healthy society through valuable merchandise Health and services Community Realize a society that thrives alongside neighborhoods Environment Realize a circular society that respects the environment Human Realize a fulfilling soci

  10. Slide 10: Seven-Eleven Japan (4)

    Seven-Eleven Japan (4) Seven-Eleven's strength as a foundation for growth - strong value chain Merchandise planning Sales Procurement Production Logistics and development and marketing Merchandise development Sanitation, quality control and Realization of high quality merchandise by Team MD (merchan

  11. Slide 11: Seven-Eleven Japan (5)

    Seven-Eleven Japan (5) Trend in sales of proprietary merchandise as our growth foundation Change in composition of cup noodle’s sales volume (Q1) Other food Fresh food 5,000 1.0 Seven Premium Q1 High-quality PB +2.0pt. (Billions of yen) Proprietary merchandise ratio in the food sector 0.9Proprietary

  12. Slide 12: Seven-Eleven Japan (6)

    Seven-Eleven Japan (6) Effect of main fairs on daily sales Regional fairs in 2023 March April May Hokkaido Akita Kyoto Fukui Gifu Ibaraki Tochigi Nippon! Umaimono Curry Fair (Part 3) Korea Fair Ashikaga City Gourmet Fair (％) Karuizawa Niigata +1.2% +1.0% +1.1% Names of major fairs Effect on (March t

  13. Slide 13: Seven-Eleven Japan (7): SIP initiatives

    Seven-Eleven Japan (7) SIP* initiatives SIP FY2023 Q1 Q2 2H SEJ: All stores introduction Merchandise and IY: Plus-One-Deli deployment in services Tokyo metropolitan area Expand stores introduction SEJ/IY: Frozen sweets introduction Sales promotion SEJ/IY：Regional joint sales promotion and Chiba Pref

  14. Slide 14: 7-Eleven, Inc. (1)

    7-Eleven, Inc. (1) Crude oil price (WTI) U.S. CPI/PPI (Comprehensive)*1 Fuel retail price*2 （YOY growth) 15.0 (%) CPI WTI PPI 120 Fuel retail price (right) 6.50 ($) ($) 108.5 11.7 10.1 10.0 90 5.00 83.2 8.5 78.1 7.5 6.4 4.22 73.3 71.6 5.7 5.0 5.0 60 3.50 3.56 4.0 3.32 3.42 3.34 2.7 1.1 0.0 30 2.00 J

  15. Slide 15: 7-Eleven, Inc. (2)

    7-Eleven, Inc. (2) Merchandise existing store sales growth & GPM Fuel sales volume & GP (CPG) (￠) (％) Change in GPM (left) +20.0 +18.4 +60.0 Existing store sales growth (right) Existing store sales growth vs. 2019 (right) +1.5 +15.0 (%) (%) +10.0 +18.4 +30.0 +9.1 +1.0 +10.0 +7.6 +6.8 +5.7 +2.4 +4.3

  16. Slide 16: 7-Eleven, Inc. (3)

    7-Eleven, Inc. (3) Fuel CPG in FY2023 Q1 declined but recovered from April onward 5,000 70 (Gallon) Fuel sales volume per store (gallon) (left) CPG(￠) (right) (￠) 4,000 50 3,000 30 Speedway 2,000 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY2019 FY2020 FY2021 FY2022 FY2023 Note) Fuel r

  17. Slide 17: 7-Eleven, Inc. (4)

    7-Eleven, Inc. (4) SG&A Change in operating income (Millions of dollar, %) (Billions of yen) Q1 Major factors for YOY change Amount YOY change SG&A 2,263 102.2 +49 Advertising expenses 34 71.1 (14) Timing of Media Ad Salaries and +5.8 wages 729 99.4 (4.4) Reorganization Land and building rent 262 10

  18. Slide 18: 7-Eleven, Inc. (5)

    7-Eleven, Inc. (5) Strengthening Proprietary Products (Q1) Accelerate Fresh Food through Innovation Enhance Value Chain FY2024 Q4 Ohio Commissary U.S. Existing Store Change in Merchandise Sales growth +4.7% merchandise GPM +1.0%  Enhancing Commissary Capabilities FY2023 Q3  Accelerating Product Vi

  19. Slide 19: 7-Eleven, Inc. (6)

    7-Eleven, Inc. (6) Grow proprietary beverage Expand private brand Expand coffee modernization program High quality differentiated merchandise Bean to cup coffee Specialty & iced coffee PB Deliver value to customers strategy Less expensive than national brands Better margin and penny profit Bake in s

  20. Slide 20: Fundamental Transformation of SST Operations

    Fundamental Transformation of SST Operations Fundamental transformation promotion process 2023 May Jun. Jul. Aug. Top-down phase Bottom-up phase Action Set strategy, target and structure Tokyo Metropolitan area Quantify Formulate SST operations Action Target for FY2025 initiative effects action plan

  21. Slide 21: Strategy Committee: Status of Progress

    Strategy Committee: Status of Progress I Background and purpose  Monitor progress of the Group’s strategic priorities (CVS growth, SST transformation, etc.)  Continue to objectively and comprehensively review the optimal Group portfolio structure and strategic alternatives (IPO, spin-off, etc.) an

  22. Slide 22: Appendix

    Appendix Copyright(C) Seven & i Holdings Co., Ltd. All Rights Reserved. 22

  23. Slide 23: External Environment

    External Environment 15.0 Domestic CPI/PPI (Comprehensive) *1, 2 25.0 Electricity cost index *1 120 Crude oil price (WTI) *4 (％) (YOY growth) (％) (YOY growth) ($) 12.5 15.0 100 10.0 7.5 5.0 5.1 5.9 80 5.0 (5.0) 71.6 2.5 3.2 60 (15.0) 0.0 CPI Japan U.S. (17.1) (2.5) PPI (25.0) 40 Jan. May Sep. Jan. M

  24. Slide 24: Consolidated B/S Summary (As of May 31, 2023)

    Consolidated B/S Summary (As of May 31, 2023) (Billions of yen) Assets As of Feb. 28, As of May 31, Liabilities and net assets As of Feb. 28, As of May 31, Change Change (Main items only) 2023 2023 (Main items only) 2023 2023 Current assets 3,060.6 3,114.8 +54.1 Total liabilities 6,902.7 6,945.4 +42

  25. Slide 25: Q1 Consolidated Statements of Cash Flows

    Q1 Consolidated Statements of Cash Flows CF from operating activities CF from investing activities CF from financial activities Free cash flow 300 300 (Billions of yen) 150 150 0 0 (150) ▲ 150 (300) ▲ 300 (Billions of yen) FY2019 FY2020 FY2021 FY2022 FY2023 vs. FY2022 CF from operating activities 18

  26. Slide 26: Q1 Special Losses

    Q1 Special Losses (Billions of yen) FY2022 FY2023 Change Major factors for change Special Losses 7.5 14.4 +6.9 Loss on disposal of property and equipment 3.0 3.2 +0.23 - 7BK [+0.46]: System related Impairment loss 1.9 3.5 +1.5 SEJ [+0.35]: Store related Loss on transfer of 7&i [+4.8]: Expenses relat

  27. Slide 27: Q1 Impact of Energy Cost Increase

    Q1 Impact of Energy Cost Increase (Billions of yen) Operating income Utility expenses YOY change YOY change Seven-Eleven Japan 64.4 +4.8 15.7 +2.3 Ito-Yokado (0.16) (0.93) 5.9 +0.89 York-Benimaru 4.5 +0.11 2.5 +0.51 Total 68.8 +4.0 24.1 +3.8 Consolidated [reference] 81.9 (20.3) 45.3 +7.3 Copyright(C

  28. Slide 28: Q1 Superstore Operations – Change in Operating Income

    Q1 Superstore Operations – Change in Operating Income (Billions of yen) (0.20) Note) IY: Ito-Yokado, YB: York-Benimaru, YO: York Copyright(C) Seven & i Holdings Co., Ltd. All Rights Reserved. 28

  29. Slide 29: Q1 Others – Change in Operating Income

    Q1 Others – Change in Operating Income (Billions of yen) +0.86 Note) 7FS: Seven & i Food Systems, AH: Akachan Honpo Copyright(C) Seven & i Holdings Co., Ltd. All Rights Reserved. 29

  30. Slide 30: Q1 Operating Income of Major Operating Companies

    Q1 Operating Income of Major Operating Companies (Billions of yen, %) Operating income Existing store Change in merchandise sales growth YOY YOY change GPM Seven-Eleven Japan 64.4 108.1 +4.8 +4.9 +0.4 7-Eleven, Inc. 47.8 70.4 (20.0) +4.7 +1.0 [Millions of dollar] [361] [61.9] [(222)] Ito-Yokado (0.1

  31. Slide 31: 7-Eleven, Inc.: Results of Speedway After Cycling Acquisition

    7-Eleven, Inc. Results of Speedway after cycling a year of its acquisition (YOY growth on a dollar basis) Merchandise Fuel SG&A・Operating income (％) (％) (％) Q3 Q4 Q1 Q3 Q4 Q1 Q3 Q4 Q1 Existing Fuel sales store +4.2 +3.2 +4.7 volume per (6.4) (4.1) +2.4 SG&A +3.5 +1.9 +2.2 sales store Advertising exp

  32. Slide 32: Eliminations/Corporate Expenses and Capex for Group Strategy

    Eliminations/Corporate Expenses and Capex for Group Strategy Q1 Results (Billions of yen, %) Expenses Capex YOY FY2023 YOY FY2023 Results vs. Plan Progress Results vs. Plan Progress change plan Change plan DX, system, security, etc. (13.6) (2.1) +0.01 26.1 (52.3) 3.3 (2.5) (3.9) 13.2 25.5 Others (4.

  33. Slide 33: FY2023 Consolidated Financial Forecasts

    FY2023 Consolidated Financial Forecasts (Announced on April 6, 2023) (Billions of yen, %) Amount YOY YOY change Group‘s total sales 17,418.0 97.6 (424.6) Revenues from operations 11,154.0 94.4 (657.3) Operating income 513.0 101.3 +6.4 Ordinary income 480.0 100.9 +4.1 Net income attributable to owner

  34. Slide 34: FY2023 Forecasts by Operating Segment (New Segment)

    FY2023 Forecasts by Operating Segment (New Segment) (Announced on April 6, 2023) (Billions of yen, %) Revenues from operations Operating income EBITDA YOY/Change YOY/Change YOY/Change 94.4) 101.3) 101.5) Consolidated 11,154.0 (657.3) 513.0 +6.4) 1,010.0 +14.6) 103.6) 105.2) 105.3) Domestics CVS oper

  35. Slide 35: Promotion of Sustainable Management (1)

    Promotion of Sustainable Management (1) Sustainable management efforts are the basis for the “Medium-Term Management Plan 2021 – 2025” Promote group-wide efforts to address climate change ① 1 Reduce CO2 emissions ② 2 Measures against plastic Environmental Target net zero emissions through group’s In

  36. Slide 36: Promotion of Sustainable Management (2)

    Promotion of Sustainable Management (2) Further strengthen efforts to meet the targets of the Environmental Declaration by 2050 1 Reduce CO2 emissions 2 Measures against plastic 100 Reduced 100% by 24.2% used Reduce by 50% (Plan) Net 50% zero used Less 28.9% FY2013 2013年 FY2021 2021年 FY2030 2030年 FY

  37. Slide 37: Forward-looking statements disclaimer

    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 t

Seven & I Hldgs — Q1 2023 Earnings Presentation on 6ix