Message from the President

The retail industry continued to face a severe business environment due mainly to the impact of intensifying competition across business categories, consumers' ongoing preference for lower prices, and labor shortages at stores and in logistics. Under these circumstances, FamilyMart UNY Holdings Co., Ltd. has been making efforts to innovate its retail business models. Meanwhile, we have been striving to become a social and lifestyle infrastructure provider indispensable to consumers' lives.

In the convenience store business, we gave the utmost priority to completing our brand conversion. At the same time, we moved forward with efforts to enhance product competitiveness, improve store operating procedures, and reinforce store foundations with the aim of improving the quality of our existing stores.

Regarding brand conversion, we discontinued the operations of all domestic Circle K and Sunkus stores in November 2018 and completed their brand conversion to FamilyMart stores. Since September 2016, we have been working Companywide to promote this brand conversion, with a cumulative total of 5,003 stores being converted. Daily sales and customer numbers at these converted stores have been rising year on year.

In addition, on January 4, 2019, we transferred all of our shares in UNY CO., LTD. to Pan Pacific International Holdings Corporation. As a result, the businesses of UNY CO., LTD. and its subsidiaries have been classified as businesses to be discontinued.

As a result of these efforts, for the fiscal year ended February 28, 2019, gross operating revenues came to 617.2 billion yen, core operating profit reached 51.6 billion yen, and profit attributable to owners of parent stood at 45.4 billion yen.

To win out under an increasingly competitive environment in the fiscal year ending February 29, 2020, we will seek opportunities for growth by concentrating our management resources to provide unique value. For FamilyMart as a whole, we have adopted four strategies. While giving highest priority to the strategy of "enhancing support for franchised stores," we will implement the strategies of "strengthening store profitability," "moving forward with the shift to digital," and "promoting business collaboration with Pan Pacific International Holdings Corporation." Under these strategies, we will pursue a wide range of initiatives with a sense of speed.

Under the "enhancing support for franchised stores" strategy, we will focus on store investment aimed at improving store operating procedures. This includes investment in self-checkout registers and new tablet devices for placing orders. By doing so, we will respond to the issues of labor shortages and cost reductions, including personnel expenses. We will also start experimenting with set business hours for our stores. Additionally, as a part of our efforts to reduce waste at franchised stores, we will work to extend the shelf life of ready-to-eat items and reinforce the sale of boxed lunches and seasonal items by reservation.

Furthermore, for the "moving forward with the shift to digital" strategy, we will commence the provision of the FamiPay smartphone app in July 2019. With the FamiPay app, customers will be able to begin new transactions using our unique "FamiPay" digital currency. Additionally, the app will work to improve customer convenience by offering discounts and coupons exclusively to app users. Also, in terms of the smartphone barcode payment services domain, we will attract more customers by expanding our strategy for incorporating a wider variety of application payment services. At the same time, we will launch new businesses that utilize data. By enhancing such services and businesses, which we believe will expand well into the future, we will promote the shift to cashless payments in the domestic payment services market.

Through these efforts, for the fiscal year ending February 29, 2020, we forecast gross operating revenues of 525.0 billion yen, core operating profit of 65.0 billion yen, and profit attributable to owners of parent of 50.0 billion yen.

In regard to the distribution of profits to shareholders, in the form of dividend payments, we have targeted a payout ratio of about 40% (consolidated basis). Our fundamental policy is one of stable, long-term distribution of dividends to shareholders in line with the growth of operations. Based on this policy, we decided to issue a dividend payment of 144 yen per share for the fiscal year ended February 28, 2019, a year-on-year increase of 32 yen. In the fiscal year ending February 29, 2020, based on the number of shares after we implemented the four-for-one stock split to shares of common stock, we intend to issue a dividend of 40 yen per share (160 yen per share on a conventional basis).

Additionally, we will carry out an absorption-type merger of the wholly owned subsidiary FamilyMart Co., Ltd. in September 2019, and subsequently change our trade name to FamilyMart Co., Ltd..

We ask for the continued support of all our investors and shareholders going forward.

Representative Director and President
Takashi Sawada