Q3 FY2021 Financial Results Presentation January 12, 2021 Seven & i Holdings Co., Ltd. President and Representative Director Ryuichi Isaka Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 1 1 Q3YTD Results TODAY’S Revision of Full-Year AGENDA 2 Forecast 3 Toward Sustainable Growth Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 2 1 Q3YTD Results TODAY’S Revision of Full-Year AGENDA 2 Forecast 3 Toward Sustainable Growth Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 3 YOY Change in Existing Store Sales (Figures for Dec are preliminary estimates) 120 140 (%) Convenience store (%) Superstore 110 120 100 100 90 80 Seven-Eleven Japan 7-Eleven, Inc. Ito-Yokado (incl. tenants) Ito-Yokado (food) 80 60 York-Benimaru York Mart / York Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 200 200 EC (%) Department store / Specialty store (%) 150 150 100 100 IY Online 50 50 SS e.Department store Akachan Honpo IY Net Supermarket (Nishi-Nippori) Sogo & Seibu Denny's 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 4 Q3 YTD Consolidated Financial Results Highlights Sales and profit both declined YOY but all profit stages reached their plans (Billions of yen, %) 1H Q3 Q3 YTD FY2021 YOY / YOY / YOY / vs. Plan / Variance Variance Variance Variance 90.4 94.2 91.7 99.7 Group’s total sales* 5,421.1 2,845.0 8,266.2 (576.3) (176.7) (753.1) (22.0) Revenues from 84.2 89.5 86.0 100.2 2,788.4 1,488.3 4,276.8 operations (524.8) (173.9) (698.7) +10.2 87.6 92.9 89.5 103.6 Operating income 179.7 105.8 285.6 (25.3) (8.0) (33.4) +9.8 Net income attributable to 65.5 98.6 77.1 110.0 72.5 58.4 130.9 owners of parent (38.1) (0.85) (38.9) +11.8 E B I T D A 93.9 97.0 95.0 - (Operating income + Depreciation and 308.6 171.2 479.8 amortization + Amortization of goodwill) (19.9) (5.2) (25.1) - *Group’s total sales include the sales of Seven-Eleven Japan, Seven-Eleven Okinawa and 7-Eleven, Inc. franchisees. Q3 YTD exchange rate： 1USD ＝ 107.55 JPY, 1CNY ＝ 15.37 JPY Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 5 Q3 YTD YOY Change by Business Segment Revenues from operations Operating income (Billions of yen) (Billions of yen) FY2020 4,975.5 FY2020 319.0 Domestic (39.2) Domestic ▲(17.7)17.7 CVS ▲39.2 CVS Overseas ▲435.6 Overseas +3.2 CVS (435.6) CVS Superstore ▲(35.9)35.9 Superstore +11.9+11.9 Department ▲ Department ▲(4.5) store (120.4)120.4 store 4.5 Financial Financial (4.2) services ▲(12.1)12.1 services Specialty ▲59.0 Specialty ▲(14.1)14.1 store (59.0) store Others ▲(3.3)3.3 Others ▲(0.23)0.2 Eliminations Eliminations ▲7.8(7.8) /corporate +7.0 /corporate FY2021 4,276.8 FY2021 285.6 Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 6 Domestic CVS Operations: Seven-Eleven Japan (1) YOY Change of operating income (Billions of yen) Cost structure reforms 120 (Trends in Q3 YTD SG&A expenses) (25.7) (%) +10.7 Sales (1.4) 109.1 GPM 198.4 SG&A 182.0 100 expenses 97.5 Advertising expenses Salaries & wages ¥(16.4) B Land & building rent Depreciation & amortization SG&A expenses total FY2020 FY2021 80 (FY) 2016 2017 2018 2019 2020 2021 approx. Royalties revision impact ¥(7.2) B YOY decline in SG&A expenses approx. COVID-19 Impact ¥(13.0) B for the first time (Q3 YTD) Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 7 Domestic CVS Operations: Seven-Eleven Japan (2) Existing store sales & GPM Sales by store location Railway stations, hospitals, and highway, etc. 120 East Tokyo Change in GPM (left) (%) West Tokyo +0.5 Existing store sales growth (right) +5.0 (%) (%) +0.3 100 +0.2 +1.1 +0.1 +0.1 +1.0 (0.1) (0.1) (0.1) ±0.0 ±0.0 80 +0.3 (1.8) (1.4) (1.6) (2.0) 60 (4.6) (0.5) (5.0) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Dec 40 FY2020 FY2021 1/6Janー 6 2/17Feb ー17 3/30Mar ー30 5/11May ー11 6/22Jun 22ー Aug8/3ー 3 Sep9/14 14ー 10/26Oct 26ー (Week) Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 8 Domestic CVS Operations: Seven-Eleven Japan (3) Average spending per customer Sales by merchandise category 130 150 Sales Foot traffic Average spending per custmer (％) (％) 115 125 100 100 85 75 Seven Premium delicatessenDelicatessen Frozen foods Wine & Liquor Counter products 70 50 1/6Janー 6 2/17Feb ー17 3/30Mar ー30 5/11May ー11 6/22Jun 22ー Aug8/3ー 3 Sep9/14 14ー 10/26Oct 26ー 1/6Janー 6 2/17Feb ー17 3/30Mar ー30 5/11May ー11 6/22Jun 22ー Aug8/3ー 3 Sep9/14 14ー 10/26Oct 26ー (Week) (Week) Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 9 Domestic CVS Operations: Seven-Eleven Japan (4) ■Performance at new layout ■Evolution of New Layout (Difference between these rolled-out stores stores and respective area average) Lifestyle changes & product 800 introduced development technologies stores in Sep From FY2018 (Thousand yen) onward ＋ Oct Nov Connection with sales floor Sales excl. cigarettes +14.0 +16.1 Daily goods displayed in From Sep 2020 Expand “New Layout 2020” open display case +5.1 +7.1 onward (Enlarged liquor sales space) Desserts +1.2 +1.8 End of Nov 2020 Approx. 2,900 stores Alcoholic beverages +1.7 +1.5 End of FY2021 Daily life products +0.3 +0.2 6,000 stores (vegetables, processed meat, etc.) Addressing demand for at-home drinking and take-out meals Rollout scheduled for all target FY2022 stores Stable results amid spreading awareness 12,000 stores Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 10 Domestic CVS Operations: Seven-Eleven Japan (5) 7-Eleven online convenience store Group last-mile DX platform Customers FY2021 FY2022 Delivery Order Product Field tests at 300 stores Online CVS EC platform Tokyo added (Jul) Roll out to 1,000 stores Real-time inventory check (Oct) Last-mile DX platform Delivery in 30 min at the earliest (Dec) (Optimization through AI-based delivery control) Denny’s products Vehicle / Delivery Delivery Pick-up (Field test) driver charge route location Sogo & Seibu’s Food section products (Field test) Delivery resource Pick-up Last-mile initiatives through platformization Driver Vehicle location Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 11 Domestic CVS Operations: Seven-Eleven Japan (6) Initiatives with franchisees to achieve Income YOY in franchised stores sustainable growth System that enables franchise stores to concentrate 110 Income (Monthly amount) Income YOY 1,400 on store management with peace of mind (％) (Thousand yen) Strengthen communication with franchisees 102.6 102.8 (Opinion exchange meetings with franchised store owners, video release 102.3 101.8 102.4 102.0 from headquarters) 100.6 Revision of “7-Eleven Charge” royalties 100 1,200 (Franchisees income +¥500K /year /store) Late-night closing guidelines, Close-out sales guidelines 95.1 Support for franchisees 90 1,000 Last mile (7-Eleven online convenience store, store pickup for products 1% reduction in royalties ordered online and vending machine, etc.) New layouts New layout Ethical project initiative Royalties revision 80 800 Reduced-personnel facilities Online product exhibition (FY) 2016 2017 2018 2019 2020 Q1 Q2 Q3 2021 2021 2021 COVID-related support for franchisees Continue supporting and growing together Infection prevention Management support with franchisees measures measures *Figures for Q1 FY2021 include COVID-related support for franchisees Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 12 Overseas CVS Operations: 7-Eleven, Inc. (1) YOY Change of operating income (Billions of yen) Existing store sales & GPM SG&A (Figures for Dec are preliminary estimates) expenses, Fuels etc. (%) Change in GPM (left) (%) (13.9) Foreign Existing store sales growth (right) currency +1.5 +4.5 +30.8 exchange +3.4 impact +3.1 (10.3) +2.8 +1.0 +3.0 Financing (1.3) +2.2 +2.0 support for (0.73) FZ owners +0.5 +1.0 +1.5 MDSE +0.8 +0.7 +0.7 +0.7 +0.7 95.5 91.1 ±0.0 ±0.0 +0.1 +¥4.4B (0.8) (0.5) (1.6) (1.5) (0.5) FY2019 FY2020 (0.7) (1.0) (3.0) approx. Income： ¥(6.9) B COVID-19 Impact (1.5) (1.3) (4.5) approx. Expenses： Q1 Q2 Q3 Q4 Q1 Q2 Q3 Oct Nov Dec ＋¥4.3 B FY2019 FY2020 Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 13 Overseas CVS Operations: 7-Eleven, Inc. (2) Crude oil price (WTI) Fuel sales volume & GP (CPG) 70 (￠) (%) (USD) +20.0 +18.0 +40.0 60 YOY change in CPG (left) Fuel sales volume growth per store (right) 50 +10.0 +8.6 +20.0 +4.9 40 +3.5 +1.2 +1.1 (0.2) 30 ±0.0 ±0.0 (1.3) (1.2) (1.7) (2.8) (15.6) 20 (10.0) (9.9) (20.0) 10 (31.7) 0 (20.0) (40.0) Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2020 FY2019 FY2020 Historic decline in crude oil prices led to increases in CPG trend Q3YTD Fuel GP ： +$282M (+23.3％) Copyright (C) 2021 Seven & i Holdings Co., Ltd.