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Retailer Presentation


Contents

Retailer Summary

Strategy

Management Structure

Countries of Operation

Global Retail Index

Financial Information

Key Formats

SWOT

Seven & I Holdings’ Banners include:


Domestic Market: Japan

Operating countries: 19

Turnover*: Yen 5,752,393m

Store Numbers: 34,944

Number of Formats: 4

Ownership: Public

Chairman & CEO: Toshifumi Suzuki

* Fiscal year ended 29 February 2008.

Summary


Mission:

“Aiming at continuously evolving a ‘new, comprehensive lifestyle industry’ in a continuously changing society.”

Medium - Long-term priorities:

Strengthening existing fields of business.

Will not consider mergers/acquisitions merely to expand market share or scale.

Focus on initiatives that contribute to raising turnover on a group basis.

Expansion of e-money service (nanaco) to further stores, as well as entering into tie-ups with non-

group companies.

Corporate Strategy


Current Priorities:

Price – focus on ‘Everyday Fair Prices’ to combat perception of high prices.

Product lifecycles – explore new approaches to shorten cycles.

Freshness – further improvement, coupled with local sourcing policy.

Quality – improving quality in response to health-related concerns.

Use of IT – extensive use to improve business processes.

Sourcing:

Seven & I has been developing a global sourcing structure, as well as direct-import supplier relationships.

Supplies mail order company Otsuka with food and other products to distribute via its catalogue.

Plans to install e-commerce software to bulk buy goods and services for its employees.

Trading


Historically, each group company developed its own private label lines.

Seven & I launched the Group Merchandising Reform Project to look at

group-wide merchandising activities.

Launched a new private label food range, Seven Premium, in May

2007.

This range is now the group’s key private label focus.

Range now comprises around 380 SKUs such as soup, drinks and

processed foods.

Seven & I hopes to increase the range to 1,000-1,200 SKUs over

three years.

Prices are 20-30% lower than similar national brands.

Private Label Strategy


Toshifumi SuzukiChairman & CEO

Noritoshi MurataPresident & COO

Tadahiko UjiieDirector & CFO

Board of Directors


NAFTA7,504 stores

Convenience Stores

Europe316 stores

Convenience Stores

Australasia364 stores

Convenience Stores

Note: Includes franchises.

Asia26,760 stores

Hypermarkets, Supermarkets, Convenience Stores, GMS, Restaurants

Seven & I Holdings' Store Numbers by Region


Delhaize Group1213

Costco1112

Groupe Casino 811

Aldi 910

Rewe Gruppe109

Lidl & Schwarz 138

Auchan 77

Seven & I66

Ahold 55

Metro Group44

Tesco33

Wal-Mart Stores22

Carrefour11

RetailerGRI

2006GRI

2007 RetailerGRI

2006GRI

2007

Cora Louis Delhaize2425

Marks & Spencer2724

Coop Norden2223

Kroger2122

Woolworths Ltd2321

Safeway Inc.2020

Edeka Gruppe1919

Leclerc1718

Intermarché1817

Tengelmann1616

Aeon1515

Spar International1414Leading global

operators

Leading international

retailers (potential to be

global)

International retailers

(less of a global focus)

Leading domestic retailers (potential to internationalise their

operations)

See penultimate slide for definitions.

IGD Global Retail Index 2007


83,664

54,958

468,063

502,001

330,145

1,489,381

1,843,409

2,574,306

Revenues from Operations

(Yen m)

Financial Services13,032+10.9Seven Bank Ltd**

Department Store16+0.5Seibu Department Stores Ltd

Foodservices--Seven & i Food Systems Co*

Department Store12+0.3Sogo Co

Supermarket149+5.2York-Benimaru Co

Convenience6,088+9.07-Eleven Inc

Hypermarket176-1.5Ito-Yokado Co

Convenience12,034+1.6Seven-Eleven Japan

DivisionStore Numbers

% Change vs. Fiscal year ending

Feb 2007

Company

Source: Seven & I Holdings at 29/02/08 for Seven-Eleven Japan and 31/12/07 for other divisions. Data for Seven Bank at 31/03/08. Store numbers include franchisees. Other group companies operate within these stated divisions.

* Note: Seven & i Food Systems was established in January 2007 by the merger of Denny’s Japan, Famil Co and York Bussan.

** Note: Store numbers refers to number of ATMS, Seven Bank does not operate standalone outlets.

Top Group Companies


Fiscal year ending 29 February 2008.

Key points:

Revenue rose following consolidation of York-Benimaru supermarket business.

Earnings fall was attributed to factors including start-up costs for e-money service, a weak convenience

store business and loss-making restaurant chain Denny's Japan.

-2.1286,838281,088EBITDA

+7.85,337,8075,752,393Turnover

Fiscal year ending February 2008

(Yen m)

Fiscal year ending February 2007 (Yen

m)

% Change

Source: Seven & I Holdings

Last Full Year


+17.1

286,838

+37.0

5,337,807

2007

+13.4

244,940

+7.5

3,895,772

2006

-2.0+2.0+3.2EBITDA Growth (%)

207,783

+0.3

3,542,146

2004

211,950

+2.3

3,623,555

2005

281,088

+7.8

5,752,393

2008

EBITDA(million Yen)

Turnover (million Yen)

Turnover growth (%)

Note: Data refers to year ended 28/29 February.

Five Year Review


3,530,317 3,542,146

5,337,807

5,752,393

3,895,7723,623,555

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2003 2004 2005 2006 2007 2008

Ye

n m

-1000%

-500%

0%

500%

1000%

1500%

2000%

2500%

3000%

3500%

4000%

4500%

5000%

% A

nn

ua

l Ch

an

ge

Turnover million Yen % Annual Change


Turnover


66.5 (66.7)

32.4 (32.4)

1.1 (0.9)

Japan

USA

Others

Note: Figures for Fiscal year ending February 2007 are shown in brackets

Note: Data refers to year ended 29 February, split by geographic segment as reported by Seven & I. Others consists of results mainly from the People’s Republic of China.

% Segmented Turnover by Region (Fiscal year ending February2008)


0.6 (0.6)2.0 (1.9)

2.0 (2.3)

17.7 (18.4)

36.4 (35.0)

41.3 (41.8)

Convenience Store

Hypermarket

Department Store

Foodservices

Financial Services

Others

Note: previous year’s figures are shown in brackets. Foodservices was previously known as Restaurant division.

% Segmented Turnover by Operations (Fiscal year ending February 2008)


207,783 211,950

244,940

281,088286,838

201,301

164,865

0

100,000

200,000

300,000

2002 2003 2004 2005 2006 2007 2008

EB

ITD

A (

millio

n Y

en

)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

% A

nn

ua

l Ch

an

ge

Operating Profit million Yen % Annual Change


Operating Profit (EBITDA)


24,21026,028

27,384

29,895 30,64632,818

34,944

0

10,000

20,000

30,000

40,000

2002 2003 2004 2005 2006 2007 2008

Sto

re N

um

be

rs

Note: Data refers to year ended 28/29 February. Source: IGD estimates, Seven & I Holdings.

Store Numbers


Tokyo, Japan

Source: Retail Analysis photo gallery

188 hypermarkets

2 markets

Revenue from operations: Yen2,109,050m

Priorities include:

Working to develop Seven Premium private label range.

Store closures in Japan to help improve profitability.

Development of Ito-Yokado Net Supermarket service.

In March 2007, Ito-Yokado Otaka no Mori was first to open a

supermarket focused primarily on food.

New store openings in China, particularly Beijing and

Chengdu. 10 new stores targeted by December 2010.

Hypermarkets


Melbourne, Australia

33,913 stores

17 markets


Priorities include:

Japan

Strengthen development of counter fast food.

Build on openings of small satellite stores.

Aggressive expansion of Seven Premium.

Overseas

Accelerated store openings in Canada and US.

Store renovations.

In China, begin fully-fledged franchise development (Seven-Eleven Beijing) and open stores in Shanghai via area licensee (Seven-Eleven China).

Convenience


209 supermarkets

1 market

Revenue from operations: Yen330.1bn

Priorities include:

Development of differentiated, unique products.

Bolstering Seven Premium range.

Maintain pace of store openings.

Integration of merged operations of Super Kadoya and

Fujikoshi.

Supermarkets


Source: Wikimedia, discoverhongkong.com

58 General Merchandise Stores

5 markets


Priorities include:

Introducing more prestige brands at Sogo.

Remodelling of both Sogo and Seibu stores.

Specialist store openings at Seibu including:

Beauty Building – health & beauty.

Fashion Building – leading-edge designer brands.

Development of The Loft Co Ltd, which was made an

official subsidiary in 2007.

General Merchandise Stores


Seven & I opened its first discount store on 29th August 2008 in Tokyo.

The 3,000 sqm pilot store occupies a former Ito-Yokado supermarket in the Nishiarai area of Tokyo.

Trading under the fascia 'The Price‘, it will offer products at prices 25-30% lower than those in Ito-Yokado

supermarkets.

The store aims to cut costs by employing fewer full-time staff and sourcing some goods directly from

manufacturers. In-store decoration and marketing efforts will be minimal.

The assortment will include 70-80% food as well as clothing and small electricals. It will be at least 30%

smaller than that in group supermarkets.

Private label will not be present.

The concept will be rolled out, if successful, mainly in the Tokyo metropolitan area.

Discount


Source: various.

Seven & I is active in a number of non-grocery retail areas

including restaurants, financial services and e-commerce.

Priorities include:

Cost-cutting and restructuring in foodservice operations to

facilitate a return to the black.

Expansion of nanaco to stores outside the group.

Development of online services IY Net and Seven-Eleven

Net.

Installation of ATMs inside and outside group stores.

Forecasts around 14,000 ATMs by Fiscal year ending

March 2009.

Other Formats


Foreign entrants into Japanese market.

Increased price competitiveness.

Vulnerability of GMS format due to pressure on non-food

spending.

Pace of globalisation.

Competition in other operations e.g. banking.

Further development of e-commerce operations.

Expansion of financial services.

Increased supplier collaboration.

Exploit growing demand for convenience.

Further expansion into China.

ThreatsOpportunities

Cost of re-structuring.

Prices perceived as expensive.

Heavy reliance on franchising.

Dependence on 7-Eleven format.

Strong position in domestic market.

Global store portfolio and scale.

7-Eleven brand strength.

Superior IT capability.

Profitable retail strategy.

WeaknessesStrengths

SWOT Analysis

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