Medium-Term Management Plan

Four Strategies to Achieve the Goals of the Medium-Term Management Plan

Earnings Growth Scenario

Profit attributable to owners of parent surpassed the Medium-Term Management Plan forecast, which was announced in April 2017, in both fiscal 2017 and fiscal 2018 due to an increase in revenue stemming from higher daily sales at brand-converted stores and cost reductions resulting from the closure of unprofitable stores.

In regard to the plan for fiscal 2019, leveraging the profit of 30.1 billion yen from the FamilyMart business in fiscal 2018 as a launching pad, we have set a target of 50.0 billion yen for profit attributable to owners of parent in fiscal 2019, which will be realized through the results of a variety of initiatives. For example, we will use 9.0 billion yen as expenses related to support for franchise stores and capital expenditures in store facilities. At the same time, to help cover this investment, we plan to reduce head office costs by 5.0 billion yen, primarily through dramatic revisions to our operational procedures. Moreover, we will reach our target through an increase in the profits of brand-converted stores and the reduction of integration costs, as well as lower impairment losses due to structural reforms implemented in fiscal 2018, and an improvement in the profits of affiliated companies. In fiscal 2020, the final year of the Medium-Term Management Plan, we aim to achieve profit attributable to owners of parent of 60.0 billion yen.

FY2019 Priority Measures

The Group has set out to tackle four challenges: enhancing support for franchisees, to which the highest priority is given; strengthening stores' earnings power; implementing digital solutions; and promoting collaboration with Pan Pacific International Holdings Corporation. Initiatives for each challenge are carried out with a sense of urgency. Therefore, in fiscal 2019, 85% of store investments will be focused on existing stores, as we concentrate our efforts primarily on investments in existing stores to achieve medium-to-long-term growth.

Total investment for FY2019 ¥140.0 billion

Amount
Total ¥140.0 billion
For stores ¥133.0 billion
 For existing stores ¥113.0 billion
(85% of investment will center on existing stores)
 For newly opened stores ¥20.0 billion
Moving forward with the shift to digital ¥7.0 billion

Dividend Policy

The Company considers returning its profits to the shareholders to be an important management policy. The Company abides by a fundamental policy of stably distributing consolidated performance growthbased results on a continuing basis with regard to cash dividends. The Company's payout ratio target will be 40% on a consolidated basis.