Lotte's Future Business Focus on Bio and Healthcare, Directly Overseen by the Holding Company

At the 55th General Meeting, the 'Future Growth Promising Companies' Group Unveils Blueprint
Healthcare Business to Expand into Medical Sector... Global Market Entry
"Will Increase Corporate Value and Enhance Shareholder Returns" Maintaining Dividend Payout Ratio Above 30%

On the 25th, at the Lotte World Tower in Songpa-gu, Seoul, CEO Lee Dong-woo is responding to shareholders' questions during the 55th regular shareholders' meeting of Lotte Holdings.

"The bio and healthcare business will be directly invested in and nurtured by Lotte Holdings."

On the 25th, Lotte Holdings held the 55th regular shareholders' meeting at Lotte World Tower in Songpa-gu, Seoul, and announced that the holding company will directly foster the bio and healthcare sectors, identified as new growth engines for the Lotte Group. Lee Dong-woo, CEO of Lotte Holdings, who presided over the meeting, emphasized, "We will develop Lotte into a leading company in this field."

The atmosphere that day was more 'shareholder-friendly' than usual. CEO Lee repeatedly stressed his commitment to increasing corporate value and rewarding shareholders with profits, and actively communicated by responding to shareholders' questions with presentations. In particular, he devoted a significant amount of time explaining future business strategies to the shareholders.

Lotte Chairman Shin Dong-bin stated at the VCM (formerly the Presidents' Meeting) in the first half of this year, "Efforts to enhance medium- to long-term corporate value are key to creating capable companies and those with promising future growth," and urged, "We must focus investments on creating new customers and new markets." Since last year, Lotte has engaged in 12 cases of mergers and acquisitions (M&A) or equity investments exceeding 10 billion KRW, with the total amount surpassing 1 trillion KRW. Each business is led by the New Growth 2 Team (Bio) and New Growth 3 Team (Healthcare) under the ESG Management Innovation Office, established in August last year.

Lotte Holdings plans to invest 70 billion KRW to establish Lotte Healthcare Corporation. The company aims to build a platform that can provide comprehensive solutions across all areas of health management, including scientific diagnosis and prescriptions. The healthcare business plans to expand into the medical field and enter the global market. Collaborations with the food business group will focus on developing health functional foods and health-oriented products, and the company also plans to promote silver town projects. The bio business is also reviewing ways to create synergies with external capabilities.

The role of Lotte Holdings in supporting the strengthening of affiliate business competitiveness was also explained. CEO Lee said, "To strengthen competitiveness in the core food business, we supported the merger of Lotte Confectionery and Lotte Foods," and added, "We solidified market dominance in the convenience store business by acquiring Ministop."

Once the merger of Lotte Confectionery and Lotte Foods is completed, a comprehensive food company with sales of 3.7 trillion KRW will be created. The merger will enhance scalability for new businesses and build a food portfolio covering all ages and life stages, from infant formula to silver food. The plan is to leverage the infrastructure held by both companies and Lotte Confectionery’s global local corporation network to leap forward as a global food company.

In January, Lotte Holdings acquired Korea Ministop for 313.4 billion KRW. With over 2,600 stores and 12 logistics centers, the acquisition of Korea Ministop will solidify Seven Eleven’s position as one of the 'Big 3' in the convenience store industry. Ministop’s strengths include excellent locations secured early in the market and larger store areas compared to competitors. It is also expected to be actively utilized as a space to enhance customer convenience with services such as electric motorcycle charging, finance, home appliance care, and laundry services.

Together with group companies, Lotte is also fostering a comprehensive mobility business encompassing electric vehicle materials and charging infrastructure, as well as urban air mobility. Lotte is accelerating the construction of a value chain covering future mobility centered on Lotte Rental and Lotte Information & Communication. This month, Lotte Rental acquired a 13.9% stake in Socar for 183.2 billion KRW. In August last year, it invested 25 billion KRW in the autonomous driving technology startup 42dot. The plan is to launch a freight platform using autonomous driving technology and electric vehicles to build an integrated mobility platform enabling free movement of people and goods. In January, Lotte Information & Communication acquired the electric vehicle charging startup Jungang Control for 69 billion KRW. Lotte Information & Communication plans to combine Jungang Control’s manufacturing technology with its IT capabilities to provide comprehensive services from charger manufacturing to charging platforms and charging station operations.

Based on improved performance last year, Lotte Holdings will pay a total dividend of 107.3 billion KRW. The dividend per common share is about 1,500 KRW, with a dividend yield of 4.9%. Lotte Holdings stated it will maintain a dividend payout ratio of over 30% to ensure that corporate value enhancement translates into increased shareholder returns.

Meanwhile, at this shareholders' meeting, six agenda items were proposed and all approved as originally planned: ▲approval of financial statements ▲partial amendment of the articles of incorporation ▲appointment of directors ▲appointment of audit committee members ▲director remuneration limits ▲capital reduction for treasury stock cancellation.

Shin Dong-bin, Chairman and CEO of Lotte Holdings, and Vice Chairman Song Yong-duk were reappointed as inside directors. Ko Jung-wook, head of the Financial Innovation Office at Lotte Holdings, was appointed as a new inside director. Additionally, former KOTRA President Kwon Pyung-oh, Lee Kyung-chun, representative lawyer of Law Firm Class, former KB Credit Information CEO Kim Hae-kyung, and Professor Park Nam-gyu of Seoul National University’s Business Administration Department were appointed as new outside directors. Outside directors Kim Hae-kyung and Park Nam-gyu were also appointed as members of the audit committee.

This content was produced with the assistance of AI translation services.