Good morning and good evening, everyone, and thank you for joining us today. Since I recently shared the overview of where we stand at our recent full-year results briefing, I think today I'd like to focus on how we're going to accelerate in the next phase of our transformation. As I mentioned two weeks ago, in 2026, we will build on the momentum we regained last year and accelerate the disciplined execution of our transformation across the globe. What we need to do is clear. We're operating in an environment of rapid structural change. In order for us to remain at the forefront of change, we will accelerate our transformation, doubling down on our strengths and sharpening what differentiates us. In doing so, we will be our customers' first choice for convenience, and today we'd like to brief you on the specific actions that we plan to take. First and foremost, we will elevate our customers' experience by offering superior quality at a compelling value. Quality and value will be at the center of the initiatives we'll be taking. We will raise the bar on both across every product, every store, and every touch point. That means at 7-Eleven, our products will delight our customers and exceed their expectations, and we will provide trusted and seamless service anywhere, and we will enable and empower franchisees to deliver quality and value to our customers. As we look toward 2030, we will invest to deliver on these objectives and rigorously review how we deliver. I'll be working with my leadership team to allocate the necessary resources and drive progress. In Japan, SEJ will invest to accelerate the rollout of new equipment and continued innovation. We stay ahead of our customers' needs so our customers will keep coming back to our stores. At the same time, we're setting into action structural reforms to enhance profitability. Akutsu will share the details with you later on. In North America, SEI will strengthen the fundamentals and scale for our future. Our growth investments will span from store remodels to new stores, to private brand merchandise development, and further expansion of 7NOW. The initiatives which Stan and Doug will explain today are centered around how we elevate customer experience. Also, we're bringing discipline to our network strategy, including a focus on modernization and profitability. This includes closing unprofitable stores and converting to wholesale where appropriate so that we can focus on serving our customers and franchisee owners better. Most importantly, this direction is already taking hold across our global group. Across regions and companies, teams are stepping up, taking ownership, and driving change. This is one of the earliest and most meaningful proof points of our transformation, and it gives us strong confidence in our ability to drive growth globally. Through these initiatives, even in an increasingly uncertain and challenging market environment, we will serve our customers better and be their first choice for convenience. In doing so, we will deliver sustainable top-line growth and margin expansion and ultimately enhance both corporate and shareholder value. We previously shared our value creation algorithm. This has not changed. Over the last two years, we have increased earnings per share by 40%. By driving our transformation together with growing the business and disciplined capital execution or capital allocation, we will double earnings per share and nearly triple our consolidated ROIC over the next five years. We remain firmly committed to our shareholder return policy, including our JPY 2 trillion share repurchase program through fiscal 2030, as well as a progressive dividend policy. These commitments reflect our confidence in the strength of our cash flow generation and our focus on enhancing total shareholder returns over the long term. You will today hear from the leaders of SEI, SEJ, and 7-IN, along with an update on our sustainability initiatives. Across each of these areas, our message is consistent, our strategic direction is clear, our capital allocation priorities are well-defined, and we are executing with discipline while increasing the pace of delivery. Now before I hand over, I'd like to touch on a recent change in the leadership team. I'm very pleased to welcome Takagi-san as our new CFO, taking over from Maruyama-san, who contributed immensely over his years in Seven & i. Takagi-san will bring his strong global experience to our effort to drive the next phase of our growth. He will be joining us later to share his perspectives. Now with that, I'd like to hand it over to Stan Reynolds, who will walk you through our initiatives in North America. Thank you. Thank you very much, Mr. Dacus. With this, we would like to end the opening session. We would like to now start the second session, 7-Eleven, Inc. The presenters are from 7-Eleven, Inc., President and Co-CEO Stan Reynolds, COO and Co-CEO Doug Rosencrans. After the presentation, the two will respond to your questions. Over to you. Good morning and thank you for joining us. I'm Stan Reynolds, President and Co-CEO of 7-Eleven. 7-Eleven has led this industry for decades. Sustaining that leadership requires constant reinvention, and we have entered a decisive inflection point for the business. The portfolio is being simplified, our strategic focus being sharpened, and accountability across the organization is clearer than it has ever been. The actions we are taking are deliberate and forward-looking, designed to strengthen the business and position 7-Eleven for sustainable growth and improved returns. Today, I will walk through where we are, how we are reshaping the operating model, and how this translates into tangible financial outcomes for our shareholders. Next page. As a quick recap, at our last Investor Day, we outlined the key challenges facing our business, from shifting consumer behavior and cost inflation to intensifying competition across all our markets. Those challenges remain, and in many cases, they have become more pronounced. What has changed is how we are organized to respond. The key point on this slide is that this is not a list of aspirations. These are committed priority initiatives with accountability and progress already underway. Next slide. Before we get into the specific initiatives, I want to start with our North Star and the strategic logic behind why we are moving with urgency. The market is changing and is changing fast. Customers today expect great value, quality fresh food, and digital convenience as a baseline. These are no longer points of differentiation. They are minimum expectations. At the same time, our legacy store formats need to evolve to support a stronger product offering, and competition across the convenience landscape is accelerating. To retain and extend our leadership, SEI must move decisively. Our North Star organizes our response around three pillars: customer, store, and enterprise. On the customer side, a store network that is available when and where customers need us, clean and welcoming stores, clear leadership in food and beverage, and an experience that gives customer a reason to come back. On the store side, a best-in-class experience, simplified operations, and digital and delivery excellence. These are the operational foundations that translate into consistent unit economics. On the enterprise side, strong talent, cost discipline, and continued innovation. This is how we build a business that grows sustainably over time. Every initiative you will hear about today connects back to this North Star and to a clear path towards long-term value creation through 2030. Next slide. Now let's look at how the North Star translates into action through five core priorities. We have organized our roadmap into two tracks, strengthen the fundamentals and scale the future. The foundation is a modern store network. Through remodels, new standard stores, and franchising, we are building the physical platform that everything else depends on. Without modernized stores, our product and experience strategies cannot reach their full potential. On top of that foundation, four priorities. First, a leading product assortment to create real differentiation in fresh food and private brands. Second, the best customer experience to increase loyalty and frequency across physical and digital channels. Third, fuel vertical integration to capture more value within our supply chain and expand margins. Fourth, cost leadership to fund growth and improve returns over time. These five priorities give us and give you a clear line of sight into how we create value through 2030. Next slide. Let's start with the foundation, our modern store network, and specifically our remodel program. By 2030, we plan to complete more than 7,000 store remodels. The purpose is straightforward. Elevate the customer experience by improving the stores we already have. Our approach is targeted and disciplined. Every store will receive a modernized exterior, signaling to the customer that we have invested in the property before they walk through the door. Inside, we are upgrading equipment, expanding product offerings, and simplifying store operations to make every visit easier. Beyond that baseline, we take a store-by-store, needs-based approach, making additional investments based on the local customer base and expected returns on capital. We are piloting first, validating the impact, and then scaling what works. Modernized stores are the foundation. They unlock everything that follows. Next slide. Now let's turn to the second pillar of a modern store network, new standard stores. Between 2025 and 2030, we will open 1,300 new stores, with 122 already open in 2025. These are not incremental improvements to the old format. Our new standard was developed from the ground up, designed around what today's convenient customer expects. The results speak for themselves. New standard stores outperform the existing portfolio by 30% in traffic and 44% in merchandise sales at maturity. At five years and beyond, our new store portfolio generates ROSE north of 20%. What is important for investors to understand is that this is no longer a pilot. We have proven the model, validated the economics, and built a repeatable template that we can scale with confidence over the next decade. Each new store we open strengthens the network, expands our reach, and compounds the returns we deliver to shareholders. With that, I will turn it over to Doug Rosencrans. Thank you, Stan. Good morning and good evening. This is Doug Rosencrans, COO and co-CEO of SEI. Please let me take you through the third pillar of our modern store network strategy, which is franchising, our core operating model. Between 2025 and 2030, we plan to convert 2,600 corporate stores to our franchise model, with approximately 390 to be converted in 2026. The rationale is straightforward. Franchising delivers three things that matter to investors. First, stronger unit economics. Franchisees absorb labor and cost variability, while SEI maintains stable and predictable margins. Second, stronger local execution. Franchisees bring deep knowledge of their local markets, delivering more relevant experiences and value for local customers, while also improving store-level performance. Third, a leaner operating model. A unified franchise system reduces capital intensity and lowers operating costs at scale. Looking ahead, we will extend franchising across all markets, apply one uniform operating model, and introduce franchising into our restaurant business as well. The bottom line, a strong franchise system allows SEI` to grow faster with less capital and deliver stronger returns on every dollar deployed. Now let's turn to our second core priority, building a leading product assortment, starting with fresh food and restaurants. Our ambition is clear. By 2030, we will deliver an incremental $1 billion in fresh food sales and add 1,100 new restaurants across the network. The goal is to make 7-Eleven a primary food destination, not just a place to pick up a drink or a snack, but a place customers choose for quality and value. This will be enabled by a redesigned and enhanced value chain to support fresh food at scale, reducing cost per unit, and improving freshness across all 13,000 stores. In 2026, we are accelerating our fresh food platform with expanded hot food offerings. In turning to restaurants, our confidence in this business model is grounded in proven economics. Stores with restaurants already generate 28% higher sales, 32% more traffic, and higher margins than stores without. This is not a forecast. This reflects our actual performance across our existing restaurant base. The combination of fresh food and restaurants, enabled by our transformed value chain, will drive differentiation, increase customer frequency, and expand margins, all built on the modern store network we just discussed. Next within product assortment, private brands. This is one of the clearest margin expansion opportunities in our portfolio. Our private brand products carry approximately 18 percentage points higher margin than comparable national brands with better or equivalent quality. That is a meaningful economic advantage at scale. Today, our private brand business is $1.3 billion. Our goal is to double that to $2.6 billion by 2030. While we are well ahead of our peer group in private brands penetration, we are relatively early in this journey compared to other retail sectors, which means the upside is significant. We are expanding into high-growth categories where customers are already showing strong demand, including hydration, protein, and Hispanic products. The strategy rests on three things. First, continuous improvement in our existing product lines. Second, accelerating innovation and new product launches, and third, making our private brands the preferred choice for customers in every category where we compete. Private brand is differentiation that customers cannot find anywhere else. It builds loyalty, it drives repeat visits, and it delivers margin that funds reinvestment into the business. Let's now turn to how we deliver, literally, the best customer experience, and specifically our digital delivery platform, 7NOW. 7NOW has been one of the strongest growth stories. Between 2022 and 2024, the business grew at a compound annual growth rate of nearly 25%. In 2025, same-store sales growth exceeded 20%. This is a high-growth business that is contributing meaningfully to the network. The reason it works is simple. We are leveraging our physical store network as a fulfillment engine, with more than 7,500 stores already enabled. We offer industry-leading delivery times of under 28 minutes and an average basket that is 80% larger than in-store transactions. Looking ahead, we are targeting $1.8 billion in 7NOW sales by 2030. We will get there by expanding to 8,500 enabled stores, scaling our Gold Pass subscription program, and increasing the share of proprietary products on the platform. No other convenience retailer has a digital delivery business at this scale. 7NOW extends our reach, deepens customer engagement, and generates incremental revenue on top of our existing store economics. Continuing on customer experience, let's talk about how we are simplifying store operations to ensure operational excellence. The logic is straightforward. When stores are easier to operate, associates spend more time with customers, stores are cleaner, shelves are better stocked, and checkout is faster. All of this drives loyalty, frequency, and sales. We are currently piloting a comprehensive set of simplification initiatives in our model market, and the early results are very encouraging, showing measurable improvement in sales, associate productivity, and customer satisfaction. The approach is disciplined. We test in the model market, validate the impact, and then carry the learnings across the entire network. This is not a one-time effort. It is how we will run stores going forward, and the impact compounds as we apply it as part of the remodels and new builds we just discussed. Now I'll hand it back to Stan Reynolds. Now let me turn to fuel vertical integration, which is a meaningful initiative intended to strengthen cost discipline and supply reliability over time. Our focus is on selectively expanding our participation in areas where greater control can improve economics and resilience while remaining consistent with a capital-light operating model. The approach is guided by three considerations, improving supply security, capturing incremental margin across the value chain, and aligning more closely with established industry practices. Execution is focused on three areas, including direct fuel sourcing, optimization of logistics through pipelines and terminals, and expanded blending capabilities. These actions represent an estimated EBITDA opportunity of approximately $400 million by 2030, with approximately $75 million expected in 2026 based on identified initiatives and phased implementation. The organizational capabilities and infrastructure required are being put in place with initial investments underway and early actions incorporated into 2026 plans. The model is well established across the industry, and our focus is on disciplined participation where it offers clear economic benefit. Next slide. Finally, cost leadership. This is the discipline that funds reinvestment and makes our growth sustainable. The principle is simple. We will grow gross profit faster than we grow operating cost consistently over the full planning period. We are already demonstrating this discipline. In fiscal 2025, SG&A declined while gross profit held steady even in a difficult cost environment. These are not one-time savings. The improvements come from how we source, how we operate stores, and how we allocate resources. They are built into the way we run the business going forward. The point I want to leave you with on this slide, cost discipline gives us the capacity to keep investing in the areas that drive growth, while making sure more of that growth flows through to the bottom line. With that, I'll turn it over to Doug to close. Thanks again, Stan. To close out, let me bring it all together. This slide summarizes the key targets we will hold ourselves accountable to through 2030. You've heard the detail behind each of these, so I'll keep this brief. The foundation, a modern store network, 1,300 new stores, 7,000 or more remodels, a fundamentally upgraded physical platform. On top of that, a leading product assortment, $1 billion in incremental fresh food sales, 1,100 new restaurants, and a private brand business that doubles to $2.6 billion. The best customer experience with 7NOW scaling to $1.8 billion in delivery sales, and operational improvements rolling out across the entire network. The two priorities that fund and sustain it all, approximately $400 million in EBITDA from fuel vertical integration and cost discipline that keeps SG&A growth well below gross profit growth. These are not aspirations. These are committed targets with clear ownership, defined timelines, and progress already underway. By 2030, 7-Eleven will be a structurally different business, better aligned with what customers expect, and delivering meaningfully stronger returns for shareholders. Thank you for your time today. Thank you very much. We would now like to start the Q and A session. The answers will be provided by 7-Eleven, Inc., Mr. Stan Reynolds, and Mr. Doug Rosencrans. Those who have questions, please press the raise hand button on the screen below. We will call upon your name out of those who have asked questions. When your name is called, the secretary, Ott, will ask you to unmute yourself, so please start talking unmuted. This will be simultaneously translated. However, if you are on the Japanese channel, please ask your question in Japanese, and if you are on the English channel, please ask your question in English. If you are at the original channel, you can ask questions either in Japanese and English. Please state your affiliation and name first. We would like to limit one question to one person, since there are a lot of people participating today. We may not be able to take questions from everybody. I ask for your understanding. We would like to take the first question. Mizuho Securities, Mr. Takahashi. This is Takahashi of Mizuho Securities. First of all, thank you for opening this IR day event. I have one question. I have a question regarding the supply chain of the merchandise in the United States. If I visit your stores, as you have just explained, I see clean and new stores, and I think the products have also greatly improved. Today, you have showed us a very ambitious target, like you are going to double your private brand, or you are going to add another JPY 1 billion for fresh food as well. These are very ambitious. In achieving these goals, manufacturers or vendors, how are you going to evolve the relationship with manufacturers and vendors that you partner with? That is what I would like to know. In addition, 7-Eleven has a global network. I think you may expand globally from the United States, but the global procurement network for 7-Eleven, Inc. in the United States, what kind of opportunity will global procurement provide to 7-Eleven, Inc. U.S.? Those are my questions. Takahashi-san, thank you very much for your question. A big part of our transformation is optimizing our full value chain. Really it comes down to providing the best products and the quality products and the best value that we can to our customers. We're looking for opportunities throughout the value chain to improve quality and take cost out. The solution will be different for us by region. Areas where we have very concentrated stores will have potentially a different value chain solution than an area where we have more dispersed stores. What's going to stay constant is the commitment to quality products, innovation with the products, and delivering value. How we do that market by market may change somewhat, and we're going to have to optimize the value chain. To take costs out, improve our cost competitiveness, which we can reinvest into adding quality to our products. As part of that, you also mentioned about the global procurement. I think that is certainly an opportunity which we're going to pursue with Seven & i. We think there are opportunities there to take costs out, learn from our partners across the globe from a product innovation perspective, product development perspective. We will be collaborating both on the quality product development side as well as, obviously, the sourcing and cost side. Thank you very much. Next, we will take question from Shigeoka-san from Daiwa Securities. This is Shigeoka from Daiwa Securities. Thank you for the presentation. I'd like to ask around CapEx, as well as what do you expect for that CapEx to contribute to your performance? I think there's JPY 337 billion amount that is to be invested globally, but how much of that would be for 7-Eleven, Inc.? For example, it could be for a system, it could be about supply chain revamping. If you can, what is going to be the breakdown of this capital investment that you're going to be doing? I do believe there's going to be a lot of store renovation, and I think there's probably a lot of investment that is going to be required, including exterior as well as interior. It is going to be a comprehensive investment, but then I'm sure there's a lot of hardware equipment that needs to be invested for. What is your expected return through this investment? That's my question. Thank you. Thank you for your question. I apologize if I didn't get it all. We're getting some background noise, but I'll answer as best I can. Certainly the reinvestment plan that we have scheduled for the stores will require incremental CapEx. I think the point of our CapEx plan is it's really going to be largely focused on growth initiatives, both reinvestment in the stores through remodels and also adding, which we've talked about, 1,300 new stores, 1,100 new restaurants. Once again, the reinvestment plan. The reinvestment in the stores will be both investment in physical remodels, exterior and interior, store simplification investments within the store, and then selected equipment in the store, food production equipment, food cases, beverage equipment, et cetera. The expectation is absolutely this drives a strong return. Internally, we measure everything by a minimum criteria of 12% ROIC. If you look at our new stores, which I think I talked about in the presentation, the new stores that are 5+ years old, once they have matured, they're yielding over 20%. At the very minimum, we're looking for 12% on anything we do. I think the point of the increased CapEx is that the increment will be return oriented, whether it's new stores, remodels, or restaurant adds. Yeah, once again, I think we're going to refine that CapEx model as we make it through the first 200 stores we are testing with this remodel. I think the scale of the investment per store, the pace of the spend, and the exact return expectation will be above 12%, but the exact expectations will be refined as we make it through those first 200 stores. Hopefully, I answered all of your questions there. Thank you very much. I think there's like JPY 300 billion capital expenditure. Do you know the breakdown of that? That's all of my question. Yeah, I think Seven & i can respond to the overall breakdown within the group. We will be expanding CapEx and, as I said, we'll be producing a strong yield on that incremental CapEx. Thank you very much. What about the breakdown within SEI? I was looking at your 2026 plan for capital expenditure, and so you're going through new store development, renovation. If you'd be able to give us a rough breakdown of the capital expenditure you'd be able to spend for each of the items out of the total. Once again, the majority of the spend, more than 50%, is new stores, remodels, and growth investments. A minority is kind of basic, keep the lights on, maintenance, systems expenses that we routinely do. The predominance of the spend is around growth initiatives that are return oriented. On the new stores, we've got great proof points on that. We've got over 100 of these new stores out there producing great results. Our five-year-old stores, as I said, are over 20%. The remodels, we're going to validate that, but we're not going to spend money unless we get a great return. That's the bulk of the money, and I think from there, we'll refine the allocation as we get through the pilot stores. Thank you very much. Next, from JPMorgan Securities, Mr. Murata. Hello. This is Murata of JP Morgan. Can you hear me? Yes, we do. Thank you. The impact of the increasing fuel price on SEI is what I would like to ask. In the small meeting the other day, in the IR meeting the other day, I think you explained some crude oil prices going up, and more than that, CPG is going up. Gross margin, fuel gross margin is in a very good situation. That's what you explained. However, the customers are struggling with inflation, therefore, you would like to return some of your margin to customers, and that will be wisely used to sales and promotion. I think that is what you mentioned. Can you elaborate on those plans? How are you going to wisely use the excessive margins? And even if you do use them for sales and promotion, the SEI's performance, do you think that you have a leeway to use those additional margins for sales and promotion? Murata-san, this is Doug Rosencrans. Thank you very, very much for your question. Short answer is yes, but let me give you a little bit more context to that. Three key, actually four key areas. The first is within fresh food and restaurants. Providing additional fresh food bundles and restaurant food bundles for our customers that are also very profitable for franchisees. Second area is with private brands, and some of those bundles also include private brands, but promotions using our private brands and highlighting those distinctly and then within their own right for customers. That's the second area. The third, you may be aware or recall our fuel loyalty program and leveraging not only our existing customer base and highlighting gasoline-related value for them there, but also bringing that offer to the forefront to attract new customers who are seeking value at the pump. The fourth area is by highlighting the value through Gold Pass and the consistent opportunity that comes there with a very small monthly investment by the customer that covers proprietary beverage, delivery fees, cents off gasoline, cash back through 7NOW delivery. It's an industry-leading subscription offer. No one else is doing that. All of those components are going to be supported by incremental spend across multiple marketing channels to highlight this value, this incremental value to our customers. Thank you very much. Just to confirm on your plan, the CPG's increase is not included in your plan, I guess. These are sales and marketing activities will be conducted. Even after conducting these sales and marketing activities, you still have some leeway in your financial health. Am I right to understand? Murata-san, I think there's a tremendous amount of volatility, as you're clearly well aware, in the marketplace. What we're keenly focused on is that volatility and the increase in retail prices on the street is putting pressure on consumers. We're doubling down on our value messages and our value offers for the customer. Mm-hmm. That is critical to us to be there for them during this time of compression and volatility, and that is where we're clearly focused. I understand. Thank you very much. Next, Yamaoka-san from Nomura Securities, please. This is Yamaoka from Nomura Securities. Thank you for taking my question. I'm just supposed to ask one question. I think it was six months ago when I was looking at your plan. Compared to that, I think, for example, revenue plan for PB's private brand or plans for 7NOW, I think has been heightened compared to the one that I saw before. Now, from an outsider, when I would be looking at your sales trend, it's not exactly easy to grasp how better the situation has become. On the other hand, your target for 2030 has been increased. Does that mean you have more confidence as you look into the future? Maybe it's something that you're finding more recently. I wanted to know the reason why you have now a higher target for 2030. Thank you very much for your question. Yeah, I think the confidence for us really comes from the improvement we've seen in the business, first off, throughout the course of 2025 and into the first part of 2026. I think first from a traffic perspective, we started off slowly in 2025 from a traffic perspective, narrowed the traffic loss very significantly going into the third quarter. We went from 6% down in traffic first quarter of 2025 to 1.8% down in third quarter. Had a little blip in the fourth quarter with the government shutdown and the restriction on government funding and staff benefits, but we responded very nicely since then. Comp store sales up in December throughout the first quarter and month to date through April. We're seeing some traction, both getting customers back in the store. We've seen sustained strong basket performance kind of throughout that time period. A lot of that's been aided by private brands. Private brands were up over 5% last year. We're seeing traction in the private brand business. We're really doubling down in terms of looking at new categories to enter within private brands, strengthening our existing private brand offerings. While we are much more penetrated in private brands than most c-stores in the U.S., we have huge potential, and it's nowhere near the penetration we see with SEJ. There's a lot we can learn. There's a lot more we can do in this area. The margins are dramatically higher as you know. It's a big growth opportunity for us, and we're really leaning in on it, building out the team, and we're very focused on really transforming the private brand business. 7NOW is a fantastic business for us, almost $1 billion in revenue. We talked about earlier, 2022 to 2024, we grew at a 25% clip. We grew over 20% last year. We have aggressive plans to continue to grow the 7NOW delivery business. We're also leaning into Gold Pass, which is our new subscription program. We have other means to grow that delivery business as well. I think these are both areas of investments, areas where we have proof points that we're seeing success and we see a path towards really accelerating. That's where we're getting the confidence and obviously those two areas you mentioned, along with the one you didn't, food, are kind of key elements of how we're going to grow this merchandise business and really part of the overall transformation of our customer offering. Thank you very much. Well understood. This will be the last question for 7-Eleven, Inc. UBS Securities, Kazahaya-san. This is Kazahaya of UBS Securities. Do you hear me? Yes, we do. I would like to confirm about the store network. You are going to open new stores with remodeling and also close some stores as well. In 2030, which is the last year of a North Star in North America, how many stores will have in the United States? What are your thoughts? Within the next five years, M&A strategies or acquisition of stores through M&A, do you have any thoughts on that as well? Or any plans? Yes. Kazahaya-s an, thank you for your question. Thank you. First off, with respect to the store count, our overall, what we call controlled real estate store count, will increase by 2030. What I mean by that is a lot of what we've talked about in terms of sites that will no longer be 7-Eleven branded are actually being converted to wholesale operation. They're not actually being closed down as a store. We're simply converting them over to wholesale. Several benefits from that. Number one, the conversion, in and of itself, is more profitable. Secondly, these are generally older sites that we would have to reinvest in to bring up to our new standard we're striving for across the network. We think the better economic solution and the better solution in terms of improving our network image is to convert them to wholesale trade. That's most of what we're doing in terms of the store base changes. I think we've heard a lot of the press talk about an aggregate closure number. Most of that, what's called closure, is actually conversion to wholesale. Net net, our portfolio is growing. There will be some movement, retail to wholesale, but once again, it's going to be more profitable and it's going to be better for the store image. On M&A, we'll continue to be opportunistic. I think the thing we'll probably primarily focus on are what we call bolt-on acquisitions. These are smaller acquisitions where we buy in an existing area of operation. The stores get rebranded to 7-Eleven basically immediately, with our systems, and so there is virtually no integration per se. They're more like bulk real estate purchases. We've done a lot of those over the years, have been very successful. They're a lot less risk, with those types of acquisitions. I think they're a ratable way for us to augment our store count and augment our overall growth. If that is the case, I would like to confirm. The new store openings that you have announced, including wholesale conversion, in net net, you will be increasing the number of store counts. Is that correct? Yeah, I expect our total store count inclusive of wholesale will increase by 2030, even without M&A. From new store openings, we will net net grow our overall store count. Once again, some may be conversions to wholesale, which is something we shouldn't be. It's not an issue. We make more money, better for image, and we will still be growing the overall base of stores. Then any M&A would be supplemental to that. Understood. Thank you very much. With this, we would like to end the Q and A session for 7-Eleven, Inc. The next session is 7-Eleven International. We will start the presentation. The presenter, the speaker from 7-Eleven International, Director, President, and CEO, Ken Wakabayashi. Wakabayashi, the floor is yours. Morning, ladies and gentlemen. My name is Wakabayashi. Today, I would like to report on the progress of our initiatives at 7-Eleven International. Next slide, please. Under Stephen's leadership, all operating companies of the 7-Eleven Group are working as one team, concentrating our management resources on the convenience store business at 7-Eleven. We are also taking on the challenge of entering a new growth stage for the group for the two fronts, strengthening collaboration with existing markets and preparing for expansion into new markets. Specifically, building on our two solid foundations in Japan and North America, we are achieving closer collaboration with master franchisees and licensees in existing regions, aiming to satisfy customers in each market through the values of convenience, quality, and trust inherent in the 7-Eleven brand. At the same time, while leveraging our track record and foundation, we are pioneering new markets around the world through investment-led approaches to secure even higher returns, with the goal of delivering our value to as many new customers as possible. Next slide, please. 7-Eleven was born in Dallas, Texas, in 1927 and will finally celebrate its 100th anniversary next year. With nearly 87,000 stores, it is by far the world's largest chain store by number. Comparing it with major global competitors, our scale is approximately three times larger, showing an overwhelming difference. Furthermore, as Stephen mentioned at the beginning, those 87,000 stores welcome over 60 million customers every single day. As you can see, there is a massive gap between us and our competitors in terms of both store count and customer traffic. However, the number of markets we operate in is currently 19 countries and regions, which is by no means large compared to other global brands. In other words, while 7-Eleven already possesses an overwhelming scale, it remains a brand with tremendous room for expansion and growth in the global market. This relatively small number of markets is a result of our store opening strategy, market concentration. Whether at the national or city level, once we enter a market, we execute concentrated store openings to improve logistics efficiency, streamline store support, and enhance brand power and also recognition. However, in regions outside of Japan, North America, and Asia, as you can see, our store count is low. For example, in Europe, we currently only have 363 stores, in Nordic region and zero in South America. Therefore, there are vast untapped markets or white spaces for 7-Eleven, and we believe we can achieve significant growth in the future by applying the strengths I will explain today. Next slide, please. As we have explained previously, we position Europe as a critical market that will become our fourth pillar. Going forward, we plan to execute concentrated store openings through a return-focused investment model and nurture this market significantly. Furthermore, as we explained last October, even in untapped regions outside of Europe, such as Latin America, we will proactively consider opportunities that offer high potential, manageable risks, and the prospect of substantial returns. Next slide. Along with our proactive stance, I want to emphasize that under the equity model, we explore investment opportunities with strict discipline. It does not mean that any untapped 7-Eleven market with a high potential and manageable risks will do. We carefully select markets and partners with a strong emphasis on process and discipline. While there are over 170 countries worldwide where 7-Eleven does not yet operate, we have recently narrowed down our top priority markets to 11 countries using 30 carefully selected metrics. Within these narrowed down top priority countries, we identify excellent companies, those possessing the capabilities we require, and proactively approach them to advance discussions and negotiations for acquisition or joint ventures. What I also would like to say is that we are not being reactive, but all the time, the companies that we have chosen, we approach them in a proactive way and advance discussions, negotiations for acquisitions or joint ventures. There are multiples that are in the process. It has been exactly two years since we acquired 7-Eleven Australia, and as I will touch upon later, the integration process is progressing smoothly. We often receive questions such as when and where is the next investment? Over the past two years, Seven & i and 7-Eleven International have jointly evaluated a significant number of investment opportunities. We have negotiated without any compromise. If a deal does not meet our high return hurdles or if risks cannot be sufficiently mitigated, we do not hesitate to pass on with strict discipline. Going forward, our policy remains unchanged. We prioritize the quality of the opportunity over the number of deals, strictly select the best opportunities, and execute only those that our investors will welcome. Next, please. To realize growth in new markets, we will deploy our winning formula accumulated in Japan and North America. Specifically, we will thoroughly inject our core competencies, excellent store operations, differentiated product offering, and profitable store expansion, which are the three pillars of operations in the convenience store business into new countries to accelerate the growth of our investee companies. Next, please. We believe there are five key success factors required to firmly replicate 7-Eleven's winning formula in new markets. In existing markets, we consider a market successful when all five of these elements are present, with SEJ being the prime example. The success factors in new markets are also consolidated into the five elements listed on this slide, which essentially represent our 7-Eleven business model itself. Excellent store operations, differentiated product offering, profitable store expansion, an efficient supply chain, and a local team with deep market knowledge prioritizing a customer-centric approach. These five are the elements of success for delivering quality and value to our customers. Among these five elements, the three green boxes on the left are our core competencies that we can bring, deploy, and apply overseas. SEJ, SEI, they are experts, and 7-Eleven has a roster of experts in store operations, product development, and new store development. Some of this talent has already been dispatched to Australia and is delivering results. They not only know 7-Eleven's know-how inside out, but also have gained global experience at 7-Eleven International. This allows them to apply our know-how according to each country's needs and provide necessary solutions rather than simply copying the success of Japan or North America. First, regarding store operations, at 7-Eleven, we grasp customer needs and optimize the product assortment for each individual store and for fresh food by day of the week and time of day. This ensures that as many customers as possible purchase as many items as possible, leave satisfied. We carefully manage everything from product ordering to display to maximize sales and profits by reducing out-of-stocks and food waste. This is the item by item management Tanpin Kanri approach, and this mindset is deeply embedded in our DNA. We also possess the know-how regarding communications, meetings, and training to instill this approach throughout the organization, all of which can be deployed overseas. To realize the second element, differentiated product offering, 7-Eleven utilizes a method called team merchandising. This is a system where the person in charge of each product category at SEJ acts as an orchestra conductor. They bring together not only vendors and manufacturers, but also packaging and raw material manufacturers to develop safe, high quality products and sell them at affordable prices. Similar to item by item management operations, the team merchandising approach is built into the DNA of SEJ's merchandising team members, and this can be rolled out overseas. While there are exceptional cases where we bring SEJ products like the egg salad sandwich directly overseas, our primary approach is not just exporting the products themselves. Instead, we bring the team merchandising system and the product development process overseas and use them to develop local products that match the needs, tastes, preferences, and habits of local customers. The third element, profitable store expansion, is also packed with the know-how of SEJ, which operates a highly profitable network of over 21,000 stores in Japan and is fully deployable overseas. Our team is fully versed in the concept of concentrated store openings, which improves logistics and headquarters counseling efficiency while raising brand awareness in an area, as well as the know-how for site evaluation, sales forecasting, and creating optimal store layouts based on the plot. On the other hand, the two red boxes on the right are also indispensable elements for 7-Eleven's success, but we do not inherently possess them in newly entered countries. We need to collaborate with local partner companies to deliver value to customers. First, an efficient supply chain. In Japan, we have production facilities and distribution centers as the infrastructure supporting SEJ stores. However, in new regions such as Europe, we currently do not have this physical infrastructure. Therefore, in Europe, we will need partnerships with excellent local companies that possess such infrastructure. Regarding the rightmost element, human resources, as we did in Australia, we can send five or 10 outstanding experts from our side to the local market, but that alone will not win the support of local customers. The presence of a local team, deeply familiar with the local market and aware of local customer needs, is essential for success. Since we do not possess this overseas either, it is crucial to form partnerships with excellent local companies that have outstanding management teams and execution units. We recognize that these five elements, our three core competencies plus two local capabilities, are critical for global expansion. In fact, in Australia, our first global investment step, these five elements were exactly the key to driving numerical improvements. By combining 7-Eleven International strengths with local strengths of 7-Eleven Australia, and fulfilling these five necessary capabilities, we are seeing continuous numerical improvements. Therefore, we are confident that we can replicate this success in new countries, establishing a foundation for further global growth. Next please. The acquisition of 7-Eleven Australia two years ago was our first acquisition in the global market, positioning it as a highly important touchstone to prove whether combining our strengths with local strengths would work globally. In Australia, adding the two localization capabilities to our three strengths mentioned on the previous slide has yielded significant results. Let me introduce examples in store operations, product development, store development, and digital. First, as an example of excellent store operations, I can cite the expansion of product assortment. Before the acquisition, the number of items carried per store was only about 1,700. However, immediately following the acquisition, we quickly implemented initiatives such as introducing additional shelving, and expanding the sales area in front of the registers. Recently we have increased the assortment of 2,600 items to satisfy more customers. As a result, merchandise sales, excluding tobacco, have grown significantly by 6% year-over-year, successfully offsetting the sales decline caused by tobacco sales regulations. Also, simply increasing one item is not enough. Therefore, the assortment must be constantly reviewed to achieve this. As I mentioned earlier, we are realizing strong, sustainable growth by anticipating changes in Australian customers' needs, using the item-by-item management know-how cultivated at SEJ. Next please. Here's an example of our second strength, differentiated product offering. In February this year, 7-Eleven Australia ran a major campaign featuring Japan-related products, striving to expand sales of fresh food, beverages, and ice cream. As a result, the sales of campaign-related items increased by over 40% compared to the previous week. The onigiri and sushi category, which featured updated packaging designs, became a massive hit with a 70% increase year-over-year. Next please. As for a new store opening, again, we are injecting know-hows. Well, stores, you need permit until you open stores, so lead time will be necessary. New stores going forward, in order to expand new stores, we would like to beef up our resources. Australia, we have never exceeded 750. However, last year we reached 765 stores, and by the end of this year, we plan to have 790 stores. We will further accelerate the store opening process to expand the network to 1,000 stores by 2030. Next please. In Australia, efforts to improve customer convenience through digital products are also moving into high gear. As you can see here, the left-hand side, the scan rate of loyalty app increased by 30% in one year, meaning one in four customers now uses it. Furthermore, our 7NOW delivery business has achieved accelerating growth with the number of deliveries per store per day increasing by approximately 2.7 times over two years, demonstrating immense potential. To translate this potential into concrete results, we are deepening our collaboration daily, such as bringing SEJ's best practices to Australia and deploying Australian systems in North America. Next please. There are many more initiatives in Australia that I would love to share, but as for strategic initiatives, in all, the strength that we have, operation know-how in store operation, product development, in-store development with localization capabilities will be multiplied as a result. Both merchandise sales and gasoline volume sold last year showed a gap of compared to our competitors' performance about 9 percentage points. We feel a strong sense of accomplishments from the results shown in these numbers. While we certainly feel a strong response in Australia, our first global investment in Touchstone. Our full scale growth is just beginning. As I mentioned earlier, we are preparing to achieve a 1,000-store network by 2030, and we are targeting an EBITDA of over AUD 380 million, roughly double the current level. In new markets we will enter through future investments, we will build on the success and lessons of the equity model gained in Australia. By multiplying our strength with those of local partners, we will rapidly deliver quality and value to customers in these new markets. Through this, we will achieve significant growth in our global expansion and we would like to be able to report more concrete progress to you at an early opportunity as early as possible, and all members of Seven & i are working very hard for that. Thank you very much. That is all for myself. Thank you, Mr. Wakabayashi. Now we will move on to the Q and A session. In addition to CEO Wakabayashi, 7-Eleven International Chairman and Director Shinji Abe will respond to your questions. Those who have a question, please use the Raise Hand button on the screen. Please state your company name and your name when you start your question. We would like to kindly ask to limit one question per person. We will continue with simultaneous interpretation. If you're on the Japanese audio, please ask your question in Japanese. If you're on the English audio, please ask your question in English. Now, please ask your question. BofA Securities, Nishizawa-san, please. This is Nishizawa from BofA. In Europe, what is the probability of success? How confident do you believe that you will be successful? In Denmark and in Norway you have presence and I think it was about from six months before, and also at the CEO Summit, there was a mention that you highly evaluate the Nordic and also I think you have a bakery in Norway, and also there is a very strong localization. With the current presence, what is the take that you have? What is the expectation moving forward? Also, Poland and any other, there are convenience players. How do you plan to differentiate yourselves from local convenience players? That is my question. Nishizawa-san, thank you for your question. For the existing markets in Europe, as you mentioned correctly, Norway, Sweden and Denmark, we have fresh food, and also from the local customers, we believe we are being highly appreciated. We do feel that for other nations, once we expand, we can inject that knowhow that we have accumulated, for sure. Especially in Denmark, in the Danish market, what we focus on mostly, one of the indicators is per day, per store traffic. If we look at Denmark, the number of traffic is among the top. Especially where they have strength is at the airport. In Copenhagen Airport, if you go and visit there, you will notice that the 7-Eleven brand is everywhere. In Copenhagen Airport, you will not never miss a 7-Eleven convenience store. Inside the security, also outside the security, a total of 13 7-Eleven stores. On top of that, there's vending machines that is branded with a logo of 7-Eleven, more than 30. Everywhere you will find common sight of the 7-Eleven brand. This success also we can expand, roll out. Not only we're going to enter airports, but airport stores, we do have accumulated know-how which we can tap on and capitalize. Another part of your question was for the specifics, I will refrain because we do have our counterpart, and there is nothing at this point that I can disclose or report. As you did say, in Europe. If we think of the European market, there are many splendid companies players. During my presentation, as I explained, the supply chain in existence, an existing infrastructure, that is what we are looking at and injecting our process so that we can offer the high-quality products to the local customers with a high-quality manufacturing facility and also the distribution logistics network. That is a kind of a company that we are seeking and looking at. Another important point is that the team, the talent. When we think of the team, the talent, Seven & i is a small entity. Even if we invest and make the investment, and the number of expats that we can send could be five or 10. Even in Australia it was seven, so that will be the kind of level that we're talking about. The local operation will be done by the local team, meaning that we do need a good team, the good management. That is also going to be a very important decisive factor as well. Thank you very much. Maybe my question was not clear. There's a lot of local splendid companies, so what would be a criteria? For example, is it going to be their digital capability? Thank you for the follow-up. Right. There are many companies that are very advanced in digital, so that could be one area. Also, for the convenience store, I did mention about the three pillars, operation, store operations, that they have a rigid operation. Also, the product and merchandise development. They have already existing capability, the store development capability. Those are the areas, aspects that we would define how they are a excellent local player. Thank you very much. Thank you. We will now take a question from Kazahaya-san of UBS Securities. This is Kazahaya of UBS Securities. Do you hear me? Yes, I do. Thank you very much. I also would like to ask a question regarding the M&A project in Europe. Australia was very successful, so I think your eyes are next turned to Europe. But when we talk about Europe, there are not companies like 7-Eleven Australia. So the players or the type of companies that you are focusing on, what kind of companies are you focusing on? And in Australia, you have bought a company with 700 stores, which turned out to be very successful. But considering your capability and the situation of the counterpart, to what extent can this company or the M&A size be scalable or big? Those are my questions. Kazahaya-san, thank you very much for your question. I would like to answer your question. In Europe, what type of companies we are focusing on? Well, convenience stores or mini supermarkets, to which we will be able to apply our know-how after acquisition. That's the first type of businesses. Of course, like Australia having 750 stores network, there are not so many companies as such that we'll be able to acquire all at once. At the start there may be a possibility that we will start small. However, even so, as I mentioned earlier, our store development know-how is what we have as our strength. Therefore, even if we do start from small store counts, we would like to, in line with our concentrated store strategy, we believe that we'll be able to expand our store counts going forward. When it comes to convenience stores or mini supermarkets, if we partner with them, we'll be able to gain a local supply chain. If we do have a local supply chain, the supply chain efficiency will go up as we increase more store counts. This will be a win-win strategy as we grow together. Thank you. If that is the case, depending on the project, it could be small. I think that is what you said. Considering your company's capability, if you do acquire a company which is double or triple the size of Australia, you do not have any concerns in your company's capability. Is that a case? Yes. Even if we do acquire such a sizable company, it's not that we have any concerns. Regardless of the size of the acquisition, we believe that our strategy can be applied. We are focusing on Europe as a fourth pillar. That is how we made our announcement. However, our service is not limited to Europe and Latin America. If there is a brilliant project, we would like to consider that as well. In other white space areas, similarly, if we can expect high returns and at the same time with a lower risk, then our strategy is not limited to Europe. Understood. Thank you very much. That is all from myself. Thank you. Thank you. We would like to next, JP Morgan. Murata-san, please. Hello, this is Murata from JP Morgan. Thank you for the presentation. One question. About the investment and about the basic policy and approach, I would like to ask a basic question. As you said, so there are some focus countries, and you want to have the majority with equity investment. I think that is your basic approach, your basic policy. First, I want to confirm whether my understanding is correct. Listening to your explanation, depending on your partner, well, sometimes your requirement may be high, and sometimes you are asking for a very high quality. The counterpart's bargaining power may be also strong. Does that mean that in the process of the negotiation, you might not own the majority, or you may create a joint venture? That probability rising, is that also possible? I wanted to ask and confirm about some of the investment styles. Thank you. The first project, the deal was Australia and 100% investment stake in that case. That is not the only approach. The possibility we opened to joint ventures, so not only 100% stake is our option, as you said correctly, our requirements, what we are looking for, the capability for the local partners, the local partner's capabilities is quite demanding. Yes, I would agree. That is true. It leads to your question. I think what you said is all true. This is our strategy and the capabilities that we are seeking, especially the two capabilities, we will not never compromise. If that is lacking, we will not face success. Although it could be time-consuming, that is an area that we will be very much focused on the quality. You are saying from our view, as a consolidated subsidiary, it might be easier to expect contribution, but that may not be always the case. Am I right? There is a possibility, but our approach, our first choice would be to become a consolidated subsidiary. Thank you. Thank you very much. With this, we would like to end the Q and A session of 7-Eleven International. The next session will be about 7-Eleven Japan. The presenter is Tomohiro Akutsu, Representative Director and President of 7-Eleven Japan. Mr. Akutsu will also be responding to your questions after the presentation. With that, Akutsu-san, the floor is yours. Yes. Good morning to everyone. This is Akutsu from 7-Eleven Japan. I will be presenting about 7-Eleven Japan today. If we can go to the next slide. These are the areas that I'd like to cover in my presentation today. Ever since we have been able to bring the new management to SEJ, it's almost a year. Now I'd like to recap on what we've been able to do in FY 2025. Ever since we have been able to become the new management structure, there were a lot of challenges that we faced. It was not exactly a rosy environment. At the same time, we knew that we had some challenges about execution, and so the franchisee owners, people at the Gemba, as well as our employees, were losing steam, were not exactly fully motivated. That was exactly the time when I assumed this post as the President of SEJ. The first thing that I wanted to do was to make sure that we'd be able to have an exciting place to work. It was to really revive the momentum of the company, and that's exactly what I worked full-fledgedly over the past year. The first thing I did was to redefine what is SEJ? What do we want to be? It was about redefining our purpose, our existence, and we declared that to our customers. In September, there was a new commercial that we launched. For the first time, we were able to have the commercial where we were featuring the franchisee owners, for example, Yuki Amami, and she would say, "My dream is to make our customers happy." And so that was really the first declaration we wanted to put forth to our customers. Likewise, within our TV commercials, we wanted to create a new message. What do we have in this new 7-Eleven? We wanted to have customers feel excitement and the feeling to look forward to what they'd be able to find in the 7-Eleven stores. That was exactly what we have been pursuing to really create the change in the corporate culture. In the past, it was about trying to make sure we'd be able to do exactly what we've been able to practice in the past. I think we're changing this culture to challenge to something new. Promotion. Product assortment has really been changing. For example, product promotion. We wanted to make sure that we have a seamless product promotion, but now we're trying to encourage our customers to think, "Let's try going to 7-Eleven store to find what they have." For example, Rice Ball Super Sale is something that we did for the first time after some years, and there were a lot of excitement felt among our customers. In November Black Friday, we had the flyer sales, and we were able to generate massive amount of sales. That is the sales promotion that we've been able to do. At the same time, the product that we had, we wanted to review our product category. We always held a theme to work on. For example, En Musubi that's the rice ball. Also for noodle counter fast food, we also wanted to make sure that we'd be able to promote sweet product. The pastry, we actually did a pick your favorite sweet food. Even if we were showing the same product, we wanted to change how we'd be able to communicate these products to our customers. That's how we have been able to create these initiatives, create actual results. That's exactly what we have been seeing within our numbers. For example, APSD in Q4, it was 102%. We're finding this growth, as you can see on this slide. What is driving that is the basket price of our customers. We are passing on some of the cost to the price, but still, I think we have come into an environment where our customers are still willing to purchase our products. When unit price goes up, there was the gross margin that we used to lose, but now we have been able to come to the same level that we've been able to achieve last year. For even on the quantitative level, we are seeing good results. However, with that said, I do understand there still are challenges that we need to overcome. For example, customer count we still are underperforming versus the previous year. There are a lot of impact. For example, inflation as well as cost increase after introducing new equipment. SG&A ratio is still creeping up. Our important partners, franchisee owners, their profit level has not come to the level of the previous year. We are gradually narrowing the gap, but there still are things that we need to do. We do want to make sure that we'd be able to keep on putting a new initiative so that we'd be able to really show the change. Next. Again, as we try to head towards 2030, what is the direction of the transformation that we're trying to pursue? First of all, it is about increasing top line, and the other is trying to drive structural reform. We do believe we need to do both. First of all, for the top line growth, in 2025, the same store sales growth in APSD, we have, for the first time, been able to clarify the big target of JPY 700,000, and we're going to keep up this pace. We're going to make sure that we'd be able to bring it to JPY 800,000 as soon as possible. We're trying to do this by 2030. To do that, counter fresh food is something that we're going to really be focusing on. When we enhance this, we need to offer new customer experience. For example, mobile ordering. This is really about changing how customers would be able to purchase our products, and that's exactly how we're trying to create new value. Again, we're trying to create a lot of excitement for the customers. What can they find in our 7-Eleven stores? The categories that's been sustaining our growth, I think there still are more room for growth. In other words, as we clarify the target customers and occasion for use, I think we'd be able to really clarify what strategy we have. On the other hand, there are new areas that we can monetize. For example, how we'd be able to utilize our IP contents, trying to go for entertainment. I think those are some of the drivers in bringing us to JPY 800,000 APSD as soon as possible. At the same time, we're trying to pursue transformation program. In other words, the structural reform that we've been embarking on from last year. That includes optimization of value chain as well as cost structural reform. Especially when it comes to value chain or supply chain, we're trying to again target APSD of JPY 800,000. Of course, that means there's a lot we'd be able to do and what we'd be able to show inside the store. That is also about how we'd be able to enhance store operation, at the same time keeping discipline, keeping control of SG&A cost at the HQ. We're trying to make sure we'd be able to entice on the growth together with our franchisee owners as well as with the entire supply chain. That's exactly the structural reform that we're embarking on. Today, I do want to report to you a little more on what we have. First of all, about new value creation. In the past, we have been trying to identify what everyone wants. In other words, we've been trying to identify for all something that everyone would want and trying to identify that. That was exactly the main driver of our value creation. We know that people's way of lifestyle has diversified. It has become more complex. From here off, it's going to be important that we need to focus on what individuals would want. In other words, for ones, so that we'd be able to cater to all these individual needs. It's not about trying to provide for everyone. It's not about trying to provide what's the average or standard. We want to sharpen what we want to provide for whom. That's exactly the organization that we have brushed up, enhanced from the spring. The organization that would be taking part in the merchandise strategy would be operations, marketing, as well as the merchandise HQ. There's also going to be a merchandise strategy division that's been added into the merchandise department. This group, especially the strategy division, is going to identify what is the needs, so that they'd be able to tell to the trinity of the product development team. We thought that is going to be the most optimal way. In addition to that, we also want to enhance our touch point with our customers, so we have the communication HQ. At the same time, we do also want to look into some of the knowledge that we can learn from outside. As a result, we're now able to create category strategy that is based on target scenes. We've been able to do that for this past year. For example, the most important target customer, for example, would be the segment that we have not really been able to tap into. In other words, it's the younger generation. Within also the demographics, we know that senior population is also becoming a majority. There's also people who's looking for time performance. For example, dual income couples. We have tried to identify what are the scenes that these people would be wanting convenience stores. We have identified the needs and tried to make sure we'd be able to really spearhead in sharpening what we can offer in that scene. That's exactly what we are trying to do. First of all, to do that, it's about freshly prepared meals. What kind of counter fast food fresh would we be able to offer? We have been able to mark a record high growth second half last year, 10% growth. We're going to make sure that this momentum is going to be continued in 2026 and onwards. 7-Eleven counter food, the uniqueness lies in the liveness. You'd be able to feel the goodness in using your five senses. Freshly prepared meals, we want to enhance the assortment here. Within FY 2026, here are some of the initiatives that we have. For example, bakery, pastries, something that we started full-fledged last year. We have been able to implement this within 8,000 stores last year, but now we're going to expand this into 10,000 stores. We're trying to make sure that all the stores that can implement will be able to offer SEVEN CAFÉ Bakery and pastries. Also, SEVEN CAFÉ Tea, we have already been able to apply this to 2,000 stores, but we're going to make sure that we'd be able to add 8,000, so that it will be 10,000 within FY 2026. We can do more in this freshly prepared meals. At the same time, we're trying to launch more major campaigns because that was a great driver last year. For example, Black Friday. On the third day of Black Friday, that was Saturday, we offered fried chicken, and we have been able to offer 7.8 million unit in that single day. That's a real momentum. That was the record high type of sales that we've been able to do. This type of major campaigns, we are planning that, and I hope you'll be able to look forward to what you'll be able to find. At the same time, what contributes to this freshly prepared meals would be 7NOW, our mobile order. We have been able to full-fledged start this mobile order from April 2026. We know that this has a great affinity with this ready-made counter food. In order to support this, within the 7-Eleven app, there's also mobile order button in addition to delivery. In Japan, it's not really popular for people to do this mobile order. We do want to make sure we'd be able to let people know that this is available. People can have a product be delivered, but they can do mobile order so that they'd be able to pick up the products when it's ready. That will contribute to 7NOW as a total. Once mobile order becomes more known, that means we'd also be able to offer fast food with high value added features. For example, fryers or bakeries within 7-Eleven stores. We usually would bake and fry and keep it in the shelves for some time. Keeping it in the shelf can also cause food waste risk, especially if it's for high price products. It's not exactly for owners to really know how much they should prepare. Now mobile order, you can provide the products once you have the order. Now we can start working on some of the more higher priced lunchbox or even for noodle products that you need to make sure that it is provided when it has just been prepared. I think this freshly prepared meal is going to create much more room for growth. Another stream for further profit is the excitement and entertainment. To create the excitement, 7-Eleven Japan, we have originally had the resources, these IP contents, we want to maximize and utilize these assets. As you all are aware, the fandom activity is expanding every year. I also have my favorites, and sometimes it is linked with spending, and sometimes you want to save your food for your fandom activities. For FY 2026, the toys, which is on the rise, we were able to achieve 25% growth. Also the Puppet Sunsun Happy Kuji at all the stores, it was all sold out. That is happening now. Once again, the IP contents entertainment, that is an area that we are going to strengthen, especially around the toys. Initiatives based on toys, together with various partners, we're going to strengthen IP contents and strengthen the alliance, also create new contents. Another area, apparently, that will contribute to growth is our brand, the 7-Eleven brand. In March, we have launched this Happy Lottery 7-Eleven. We started the sales of a lottery. It was very popular, and it immediately contributes to sales. For example, this large cushion that is like a fried chicken, I do receive personal requests that, "I want to get it. Is there any way that you could get one for me?" I would always say, "You have to buy the lottery." Also in apparel, there was the Osaka Expo. It was very highly received. In other ways, other IP patents and also IP contents holders, collaborations, and there's a lot ongoing, which were not captured as sales, but they could be some add-on additional sales. We do want to make use of these so that the ESG will reach JPY 800,000. Another pillar is the structural reform, our transformation plan, driving comprehensive reforms without exceptions through 2030. Today, I would like to focus on value chain and also the SG&A. Next slide, please. Starting with the value chain reform, structural reform. In this area is especially important. I earlier mentioned about the traffic reform, especially also optimizing the selling price at the store, and this area is going to make a large difference in contribution. I would like to give two examples which are already in place, starting from the left. Delivering affordable price and the supply chain to support that. In Hokkaido, we have piloted a two batch production for rice balls in Hokkaido since February. We have leveraged that from the past. In the past, it was three preparations per day, and it was delivered. Now the delivery is twice, so the labor cost and also distribution cost is now reduced. This will first benefit the vendor side to improve their performance. While they create a new system, it will lead to the GP improvement with a lower cost, and that will result in a more affordable price for our customers. Though this is the entire plan, this is how it started. Area expansion is being planned. The rollout is going to happen so that we listen to the voices, and we do not impair the value. We will expand the rollout. Moving on to the right part. Grow customer traffic by optimizing price and value. This is pastries and reviewing the process of the manufacturing. We have started this initiative from April. Our original bread bakery, the process, it starts from the dough, and then it goes to the baking factory distribution center and then to the SEJ stores. In order to produce a product with a high quality and good taste, you may wonder, and it was said that no wonder that the price is high. That is why we have had a new food manufacturer enter the process. This food manufacturer at one site can create the dough and also bake the product. Already at the storefront, some of the produce, for example, egg salad bread roll, now the selling price is JPY 128. Also the very thick apple danish, the same price. This is what we offer. The existing food manufacturers are also showing some signs, but we do need to enhance the value at the storefront. Unless the franchisees and also the vendors, we are all going to fail. That is why everyone is on board to start the new initiatives to improve the efficiency and productivity. We are revisiting the existing production process so that we can lower the price. That resulted in JPY 20 cheaper, affordable bread and bakery. This is how we are working on with the existing issues, available at the stores. Now the pastries, the number of customers that are purchasing has increased 16.6%. Sales also, and also the value in absolute amount, we are seeing results in good progress. Next is about the structural reform, especially about the disciplined cost control. The SG&A is rising in the past years, that is for sure. Having said that, compared to the sales, we want to control that less than 12% of sales. Recently, we're seeing a rise in the system operating cost. On the right, for the system operating cost, the long-term cost reduction via the cloud adoption, and also by promoting DX, we want to make further progress. By doing so, when the terminal was developed, we were doing it in-house with a large investment, but now more store operations depend on the general-purpose devices. Also the enabling work style suited for diverse owner workforces and supporting multiple stores is now available. Now we have that infrastructure. In order to cope with the cost inflation, we are making sure that we do have the deliverables. Also, other than that, reducing the electricity bill, we are introducing new technology. Also, as equipment increase, the maintenance and repair cost is increasing. For the first time in several years, we were able to reduce the maintenance and repair cost. In this way, the SG&A control, we are doing it without any exception. Finally, operational KPIs towards 2030. For the fresh food and differentiation with a live meal, full rollout of equipment to expand freshly prepared meals to all capable stores. For the store network, as we said, by 2030, net increase of approximately 1,000 stores. For 7NOW, steady and consistent growth. For SG&A cost control, SG&A ratio below 12%. Consumer perception, this is absolutely about the sales APSD, CAGR 2.5%-3%, and as early as possible, APSD of JPY 800,000 to achieve is our KPI. In the past 12 months, we have already achieved numerous reforms and change-up, but still, we are facing issues. We will not stop where we are, and we will make progress. We will execute the changes so that we become profitable. This concludes my presentation. Thank you. Thank you, Akutsu-san. Now we'd like to open the floor for Q and A. If you have any question, please press the raise your hand button at the bottom of the screen. Please state your company as well as your name. Please be reminded to keep your question to just one. It will also continuously be offered through simultaneous interpreting. If you're selecting English as your audio, please ask your question in English. Likewise, in Japanese, ask your question in Japanese. We will now open the floor. We will first take a question from Takahashi-san, from Mizuho Securities. Yes. This is Takahashi from Mizuho Securities. Thank you for calling my name again. I have one question that I really wanted to ask. I also use 7NOW. It is really convenient, and I use this many times. Aside from whether or not a store can provide 7NOW service, it seems like there are some differences between the franchisee owners. There are people who's really proactive in 7NOW delivery. There are some differences. For example, even for what you'd be able to do in the store, there are some owners who still haven't really been able to do full-fledged what they're able to do on the counter products. You mentioned that you have been able to create a lot of difference amongst your employees, and of course, that's exactly something that we can feel when I look at your product assortments. What do you think you could be able to do in changing the mindset of your franchisee owners? Of course, we could just only visit some limited number of stores, but from your perspective, I know you're doing a lot of in-depth communication with the franchisee owners. If you really wanted to enhance the level of understanding among the franchisee owners, what do you think you can do? Yes, Takahashi-san, thank you for your question. What the franchisee owners be able to do, how can we create the evolution amongst them is something that we're really working on. Looking back 12 months ago, even amongst the franchisee owners, there were people who would not really be forward-looking. APSD as well as profit. It was the time when a lot of franchisee owners faced challenges, and it's not a surprise that people would not be really motivated. Of course, as a company, we had not really been able to show the direction forward, and I'm sure that was really a big point there. Now, there's been a zone conference last year where we have been able to communicate with the franchisee owners. There were owners that we've been able to speak directly. There were people who had not been able to, but we have been able to set a session where we'd be able to speak with 13,000 franchisee owners. I think that's one thing. The change that we are going through at the head office, I believe is now being felt by the franchisee owners. I do believe they do understand and appreciate that we're trying to go through the change at the same time. Sometimes the franchisee owners might be passive in embarking the change, but I think there are more owners who are trying to be proactive on the other hand. If we look at the current situation, there is this labor cost that is burdening the franchisee owners. There still is a fact that not all franchisee owners are able to really enjoy the momentum. There is this burden in the operating of the store, and some of the benefits has not really been visible, has not surfaced yet. First of all, it's going to be important that we implement initiatives or sales promotions so that franchisee owners will be able to see this uplift in the top line. That will, I'm sure, enable the store staff, franchisee owners to feel more motivated. Also in terms of the structural changes, we're trying to change some of the cashiers so that stores, when they're ready, be able to switch to more self-cashiers. That is going to enable more control in the cost. Top-line growth as well as cost control. If the franchisee owners would be able to feel more room to breathe, I'm sure they'd be more motivated in this operational changes. 7NOW, as well as the mobile order that we just started, we're trying to make sure that we don't cause any trouble to the users. It's going to be important that we make sure there's a seamless inflow into the stores. We are trying to make sure that we only start this expanded service to the stores that has been able to have this baseline, has this full capability. That's exactly what we're trying to identify and clarify at this moment. That's my response. Thank you very much. From that perspective, w hat you explained today, there's more potential, more than what you showed in these initiatives reflecting their goodness into the APSD and top line. Yes, that's exactly what I believe. For example, within the existing category strategy, for example, April, we did more on pastry, and we know that the effectiveness becomes visible in numbers. In order to make sure that this offer that we do becomes visible, it's going to be important that we really clarify which target customers that we're looking at and which scenes that we're trying to target. Needs fast food, IP, entertainment. These are also the areas that we believe there's much more room to bolster the overall sales. Thank you very much. Thank you. We would like to take the next question. Okasan Securities, Kanamori-san, please. This is Kanamori from Okasan Securities. Morning. Akutsu-san, I'm asking the same question each time, I'm afraid. APSD 2030 target by, and you want to front load achieving the goal. The current situation, JPY 700,000-JPY 800,000. Once again, you have set that goal. My question is, what is the likelihood, the probability of the achievement of this goal? What you have shown, the average basket size and also the traffic, these two drivers, at least, well, from bringing it from the JPY 700,000-JPY 800,000, 14%-15% uplift is required. Suppose that the customer average basket size is rising about 3%, so that, say, continues for five years, then it will be achievable. What you were saying, not only about the unit price per item, but the total number of items purchased and also the traffic and affordable pricing, supply chain reform, structural reform, all of that is inclusive in your plan. To achieve the 2030 target, there's a lot of possibilities. I think that the company is now trying to raise the unit price to increase, improve the margin, although the traffic is weak. That is the main focus, to improve the franchisees' performance and profit. At some point, your competitors, especially in the big city centers, they are going to be much more lower in their price offer. To which extent are you able to offer an affordable price? Because JPY 800,000, although you have that goal, I cannot deny that the sense of feeling that items are expensive. The 7NOW, you mentioned in your presentation, and also is part of the plan. In the past, I think it was last year, 2025 autumn IR Day, you did say that 7NOW 2030 target is that by revenue JPY 120 billion. I am going to go dig into the details, the operational KPIs. If I look at it, the very steady and robust achievement that is just by expression and it is just qualitative. At the store level, is that because you do not have a solid figure that you just gave an expression that you want to achieve steady and consistent growth? Is that the intent? APSD 800,000, the probability likelihood of achievement. As you said, not just by unit price will we achieve the target. Also from both sides, traffic improvement, traffic increase also needs to happen. When we talk about traffic, there's a lot of elements and factors to that through marketing and also sales promotion. We are seeing a positive trend, and what is still lacking, insufficient is the supply chain reform that adds the foundation at the basis, the price. Price also needs some change and reform. What can reflect and what can change a price? I have made some introductions to our initiatives. It is not that we are all going to set at a lower price across the board because the purchasing power of the consumers is rising, so they need to be convinced to pay for the value. As things are become more affordable, that will lead to a larger traffic. That is the kind of a story that we want to create. As an income is rising and as we are entering that cycle, that the purchasing power is increasing, we also need to ensure that the quality is there. The quality needs to be felt at a value product, needs to be ready and offered on a daily basis for our daily lives in our existing category. Both the affordable price range and also the quality-focused price range. Both customers for their daily use, I think that is the both sides that we want to grow. That is for the traffic growth. Talking about new products, new merchandise, high priced and also the added value food items. I think this is an area that we can differentiate ourselves. The unique and one only to 7-Eleven. Even if it is a certain price range with certain quality, I think that the unit price increase would be possible and also would be accepted. From traffic and also unit price rise, we will achieve the 800,000 APSD. I received in the past a question about an app from you. I remember that very clearly. A question about our app and our points schemes. I think we do need to revisit it from scratch because the value that our customers is feeling and how the customers see value in it, there's still room for improvement. We do need to make use of the customer ID and usage of apps. Still there's room for improvement. We're still studying, but we're still not at a phase to share anything in detail. All of this will for sure reflect to improve the traffic and also. That is an area that we do want to make sure that reform does take place. Finally, about the 7NOW, we did not provide any numerical target. We actually deleted the numerical target because we only believe in the growth of the 7NOW expansion. Steady and consistent growth, I am sure without doubt it will happen. In the past 12 years when I look at the 7NOW, as we are entering an inflationary economy and becoming more sensitive to inflation, the scheme with the delivery cost, we may need to apply a cautious view on this business scheme. Also in Japan, in the past, we always had the delivery of food and delivery cost is an area that people are sensitive, so we need to be cautious. The 7NOW had expanded greatly with speed, but from now we need to be cautious on the speed and also do not want to invest too much. Also, we do make sure that it permeates and is embedded into the culture. That is why we have retracted the numerical target. We need to understand about the needs and at some point we will provide some numerical targets and provide some vision. That is our current thought for the moment. At the front line at the stores, we do want to provide the value to the customers that visit our store, physical store. Once that happens at the store level, then we want to start the apps and also the 7NOW. We do have a very clear part already, which is communicated to the franchise owners. For sure the area is going to grow, and we are going to make sure that the steady growth is there. That is why we kept the expression. That is my response to your question. I understand. Thank you. Now we'd like to ask from Shigeoka-san of Daiwa Securities. Yes, this is Shigeoka from Daiwa Securities. I hope you can hear me. Yes, we hear you. Thank you very much. My question is around your supply chain transformation. As you try to align with vendors, I'm sure this is something that you need to deepen this activity. Now looking at what's happening in the Middle East, I'm sure you're going to find impact with a timeline probably in the second half that can have a little disruption within the supply chain as well as cost increase. Do you feel the risk that this is going to slow down the pace of your supply chain transformation or is it going to be an opportunity? It may become a key in accelerating this change. I believe the supply chain you have would be much more robust than what the peers would have. That is why I want you to give a little comment about what is your outlook in this regard. Yes. Shigeoka-san, thank you for asking around our supply chain. Looking at what's happening in the Middle East, the impact is something that we must expect to visibly create an impact. We're trying to look into the details to identify what this is going to cause, especially when it comes to electricity power costs, that is already visible. For example, anything around packaging or naphtha, is it going to impact the transformation speed? At this moment, we don't believe that it's going to be a risk. We don't think it is going to slow down our pace. However, we need to really look into the details of the profitability of our vendors before we'll be able to come up with our decision. We do want to be careful here because there might be an impact. This is something that we would have to expect, but I don't think there's any area at this moment that we find cannot be pursued at this moment because of what's happening in the Middle East. Also in regards to this Middle East, especially in the packaging, first of all, we have to think about business continuity. In other words, we want to prioritize what packaging could be provided on a sustainable basis. For example, any areas that could be switched to paper packaging, any areas that we might be able to pursue more cost reduction. If there are any areas that we might be able to pursue an advantage, that is going to be an opportunity for us as we try to speak with the vendors. I mentioned that electricity bill may increase due to the Middle East, and this is not really about packaging, but we are really planning about how we'd be able to change, to switch over to some of the equipments that enables us to use less power. We know that some of the newer equipments is going to create more opportunities to save electricity costs, and that is something that we are discussing with the construction support department within the store development. That's how we're trying to handle any disruption that might happen in the overall supply chain. When it comes to electricity cost, even within the transformation plan, those utility cost is something that we have tried to put in more control. For example, power generation using renewable energy, we have actually been able to implement much efficiency in the past. I think the amount of the increase in power bill, I think we've been able to control it much better than how we've been able to do in the past. Maybe what's happening in the Middle East may cause a little more increase in electricity costs, but we do want to make sure that we'll be able to capture any hints or signs of change. That's my response. Thank you very much. In other words, within your supply chain, it's really about stable supply. When it comes to agility, I think you do have better resilience compared to the peers. Is that the way I should take it? Yes, I believe so. Especially when it comes to taste and quality, we need to have raw materials. We also need to have manufacturing infrastructure, and I think we have ample capability to have sustainable provision of this. How this can be transferred into creating more value in the store. As we gain more purchasing power, what is the new value that we still can keep on offering to the customers is exactly what we want to focus on. Thank you. Now we will take the last question. Nomura Securities, Yamaoka-san, please. This is Yamaoka from Nomura Securities. About the store network, may I ask a question? 2030 target is an additional net increase of 1,000. I think it remains unchanged from the previous target that you have given. The same stores where you are seeing some benefits and reaping the benefits. Are there any changes in your medium long-term store network building? Yamaoka-san, thank you for your question. There's nothing that has largely changed. Net increase of 1,000 stores. The foundation with the existing stores, same store, that remains unchanged. Recent high expectations is the local community collaboration model in Fukuoka Prefecture, Yame City. There is a case. Together with the local municipality, actually by a request of the local municipality, we have created a new store. It is a size half of an average store, and also the delivery is not three times but twice a day, not a 24/7 operation model. In order to reduce the operation cost, we receive the support and assistance and usage of the local municipality subsidy. The fryers and the fast food, SEVEN CAFÉ, all of this is offered. We have created this new model, the Yame model, and the P&L is performing better than we had expected. It's also highly received by the local community. Now that we have created this model, from several tens of municipalities, we are receiving requests and inquiries that they want to invite the store opening at their local community. I believe that the potential needs is very high. Per store, the number of inquiries that we receive, there are different issues and local differences. We do have to look at each case carefully, and also the owner, the local operator, once it is opened. Once this scheme, we would want to establish this new scheme, which will open the business potential to an area that did not exist, and we will offer the means of shopping to a vacant area that they had no access to purchase their groceries. We would like to establish this as a new store opening scheme, and I believe that there is potential. This is my answer to your question. Thank you. Thank you very much. Thank you. This ends the Q and A session for 7-Eleven Japan. The next session is on sustainability strategy. The presenter is Seven & i Holdings, Executive Officer, ESG Development Division, Mr. Nobuyuki Miyaji. Mr. Miyaji will respond to your questions after the presentation. Over to you, Mr. Miyaji. Hello, everyone. Thank you for the introduction. My name is Miyaji. I am very pleased to have this opportunity to speak with you today. Next please. I would like to explain the overview of our sustainability strategy as well as our recent and future initiatives. Next slide, please. First, let me provide an overview of our strategy. Next slide, please. This slide looks back at our major initiatives to date. As shown in the upper left, since the establishment of the CSR Management Department in 2011, we have been promoting various initiatives in environmental and social areas with the support of many stakeholders, bringing us to where we are today. At this point, I would like to clarify our group's basic stance. We are fully aware of recent trends, including the anti-ESG and anti-DEI headwinds and backlash seen from last year into this year, as well as the latest geopolitical uncertainties. However, our core policy remains completely unwavering. We will continue to proactively advance our sustainability initiatives, including environmental efforts and broader SDG-related activities. Next, I would like to touch upon the areas outlined in red. Next slide, please. This slide illustrates our strategy map formulated in 2024 to provide an overall picture of our sustainability initiatives and concepts. Briefly explaining from the bottom, this map is based on our corporate creed of trust and sincerity, synergies within the group, and partnerships with our business partners and external stakeholders. Building upon this foundation, through our three core strategies shown in the center, environment, society, and communication, we aim to achieve both a sustainable society and sustainable corporate growth, as shown at the very top. As you may know, the scope of sustainability is extremely broad. Therefore, today, I would like to just focus specifically on the environment and certain aspects of communication, including the seven material issues enclosed in the red box. Next slide, please. Here are our seven material issues or materiality. We first identified our material issues in 2014, which were five at the time. What you see here is the revised version from 2022. The texts in red on this slide are the ones most closely related to today's presentation. Next slide, please. Next, I would like to explain our recent main initiatives and their progress. Next slide, please. You may have seen this slide a few times before, so I will omit the details, but this is an overview of our environmental declaration, Green Challenge 2050, formulated in 2019. We have defined targets in our vision for 2030 and 2050 across four areas, including CO2 emission reduction and plastic countermeasures. I would like to discuss our progress on the next slide. This shows our progress across the four areas. These are the figures for fiscal 2024, with actual results shown in orange. Thanks to the proactive efforts of each operating company and the owners of the franchisees, we are progressing almost exactly as planned. Next slide, please. This slide showcases examples of initiatives undertaken by operating companies in fiscal 2025. In the upper left, regarding decarbonization at 7-Eleven Japan, SEJ, we have partnered with companies like Tohoku Electric Power to utilize new off-site PPAs, and it may be difficult to understand with the pictures. The center is solar panels. We have sequentially started supplying renewable energy derived from solar panels, as shown in the center, and wind power as well. In the lower left, within the circular economy area, SEJ has been installing reverse vending machines since 2015. Currently, they are installed in approximately 4,600 stores, and as of last autumn, the installation area expanded to all 47 prefectures in Japan. To the right of that. In order to focus on procuring renewable energy to achieve the goals of our environmental declaration, in 2024, we established an electricity retail company called Seven & i Energy Management, which commenced operations last year. On the right side are examples of our overseas initiatives. In Canada, 7-Eleven Canada has partnered with a company called Too Good To Go to sell food nearing its best by date at a discounted price as surprise bags at 7-Eleven stores. Additionally, 7-Eleven Australia has partnered with a company called Loop to upcycle decommissioned uniforms into blankets and sleeping bags. In this way, each company is taking the initiatives in areas such as the circular economy and social contribution, while also actively disclosing information. Next slide, please. This slide covers initiatives at the Holdings as well as the entire group level. In the upper left, in September of last year, we formulated an integrated TCFD and TNFD report, as shown in the center. Within this report, concerning our flagship product, coffee, we analyzed the impact and risks of the external environment in our group. We have disclosed the financial impact as of the year 2050. Having thoroughly shared this analysis internally, we aim to mitigate risks and create new opportunities regarding financial impacts. While we have already begun some of these efforts, we plan to accelerate our support for coffee bean-producing regions and farmers, as well as collaborative R&D with manufacturers. Next slide, please. As a result of these initiatives, while we acknowledge there are still challenges to address, we recognize that we have received relatively high evaluations from major ESG rating agencies, including the Dow Jones. Next page, please. Here, I will discuss our future main initiatives. Next page. Here are our priorities for future sustainability promotion. As indicated at the top green portion, even for sustainability initiatives, we will proceed to establish targets and a framework as a pure-play convenience store group based on the global principles. We shared this internally at the board of directors meeting last December and a sustainability committee in February of this year. With the major changes within our group structure last year, we have identified three immediate priority initiatives. First, revisiting and amending our environmental targets, Green Challenge 2050, and likewise, our materiality areas. Third, preparations for SSBJ. Concurrently, we want to advance the items at the bottom. This includes rebuilding a new sustainability governance from a global perspective, encompassing the operation of intra-group committees and various meeting bodies, as well as setting robust KPIs, not only for the environment but also for social areas. Furthermore, as I will explain on the next slide, we also aim to strengthen the ability to create positive impacts. Next slide, please. First, starting from left, this is just an image, conceptual diagram. Time on the horizontal axis and corporate value is stated on the vertical axis. Starting from the bottom, there is this more protective risk-managed sustainability We will gradually proceed with the reduction of what we refer to as negative impacts, which I also would like to explain on the next slide. Now, at the same time, moving forward, we will put even greater emphasis on the creation of positive impacts as value-creating sustainability shown above. Both risk-managed as well as value-creating initiatives, as indicated in the center. We intend to visualize these efforts, namely non-financial information, as much as possible, disclose this information, engage in dialogue with domestic and international investors and analysts, and continuously make improvements based on your feedback. By continuing these efforts, as shown on the right, what we want to aim is to synchronize, balance the sustainability of society and the Earth with corporate sustainability, ultimately leading to the maximization of corporate value. Next slide, please. Now, let me explain a little more of the floor concept that you saw on the previous slide. Again, starting from the bottom, it says there, negative impact. We want to reduce that. For example, our initiatives like Green Challenge 2050, we aim to reduce the negative externalities that we generate, alternatively mitigating and eliminating risks such as reducing the impact we receive from external environment and nature. Based on this foundation, as shown in the upper section regarding positive impact creation, we've included product examples here. We aim to develop and sell sustainable and ethical products primarily in food, thereby driving top-line growth. That's what we aim to do. Below that, so we aim to enhance our brand image through activities to share information and raise awareness with such products, services, or our stores. In this way, we intend to create impacts through our sustainability initiatives over short, medium, as well as over the long term. Especially when it comes to information sharing, awareness raising. I do want to introduce some more about this on the next slide. This is my final slide. As an example, here you see this diagram designed with climate change in mind. Starting from bottom left, many people learn about issues like climate change through news or media coverage. Over the past 2-. Years, I think a lot of people have experienced, also in Japan, extreme heat. Customers and consumers are starting to feel that something is wrong, or we're going to be in trouble if things continue like this. However, it's difficult for everyone to personalize the issue. It still feels like a distant issue or something far off in the future. You can't really feel this as a personal matter, even though it's supposed to be such an urgent issue. Climate change really requires movement across society. If you don't feel the personal ownership, behavior change will not occur. Consequently, this fails to foster public opinion needed to drive necessary policy changes. This recognition of this current challenge is now highly highlighted in the environmental field. As you are well aware, we have this enormous number of touch points with our customers, as shown at the top. Even if we limit this to Japan and North America, we interact with 30 million customers a day. While there are various approaches or methods in reaching out to our customers and business partners, this slide illustrates how through information sharing and awareness raising activities at these touch points, we can, we might be able to encourage even a slight shift in consumers' consciousness, helping them take personal ownership, driving behavior change. The accumulation of these changes will awaken public opinion, ultimately lead to social transformation. Of course, climate change in itself is a very, very large issue. There's a massive challenge that it cannot just be accomplished by us, a single company, or just the retail chain alone. It must be based on co-creation with external initiatives, including other companies, other business partners, other platforms. That's really going to be the baseline. However, we believe that if such behavior changes, social system transformation occur, there will be opportunities in creating new markets, new business opportunities. In this era where social issues are becoming increasingly severe and complex, we're committed to actively taking on the challenge of information sharing and awareness raising initiatives uniquely suited to our group. This concludes my presentation. Thank you very much. Miyaji-san, thank you very much. We would now like to start the Q and A session. Those who have questions, please use the raise hand button on the bottom of the screen. Please state your affiliation and name first. We would like to limit the question to one per person. This will be interpreted simultaneously. So if you are on the Japanese channel, please ask your question in Japanese, and if you are on English, please ask your question in English. Now we would like to take questions. From Mizuho Securities, Takahashi-san, please. Thank you. This is Takahashi once again. Thank you for the explanation on ESG. It was a long time since you last explained, but I was able to understand your progress today. Now, I would like to ask Miyaji-san. You have a franchise business model, and in addition, you have a lot of private brands. So you have vendors as well as transportation vendors and manufacturers, all different kinds of stakeholders. The stakeholders whom which you do have some certain control on. How are you communicating with these stakeholders or with your employees, those who are working for Seven & i, franchise owners, vendors? Vendors may include factories as well as transportation carriers as well as manufacturers. How are you communicating with those? Let's just say, how the human rights are protected among the supply chain. In order for making all people happy who are working for Seven & i, I would like to know your communication policies. Thank you very much, Takahashi-san. First of all, with regards to business partners and makers or PB-related manufacturers, I don't know whether this will answer all of your questions, but PB products, or in particular premium products, every year, our sustainable conduct guideline is explained on an annual basis to vendors. The other day, on an online basis, to 437 companies, and we had 631 participants participate. We explained the conduct guidelines, and also at the factory audit, there were a lot of findings regarding labor as well as hygiene. We have provided explanation regarding those issues as well. As a result, more than 200 factories overseas and more than 500 factories have conducted CSR audits. There, we were able to have opportunities to communicate with the people working at the fields. Through those opportunities, sustainable or ethical concepts and the recent trends have been communicated to business companies and other entities as well. With regards to the internal communication, with regards to how we penetrate this throughout the company, first, e-learning is being utilized regarding environment as well as human rights. At the merchandise department, we're also conducting trainings as well on these topics. In addition, in some business companies, OPCO's Sustainable Smile app, which is focused on SDGs, are being launched. Every day, they can use this app to know more about sustainability like a game. At Holdings, we used to have an all-group meeting where everybody participates to have communication regarding climate change so that people will be able to have a sense of ownership in these topics. Communication with the vendors, partners, as well as employees, we believe are very important, so we would like to continue to focus on these topics. Thank you. Thank you. This is not a question, but a request. As you disclose these topics, I think you include franchise stores in Scope 1 and Scope 2. If you include Scope 3 to a wider scope, then I think it will all be mixed up. This will include fuel business as well. If you can at least set out your private brand specific targets, I would appreciate it. For example, Uniqlo they are saying that they have a target to reduce 30% in Scope 3 just for the production part. If you can have such kind of specific targets, I would appreciate it. Thank you. Next. This is going to be the final question that we'd like to entertain for this section. Shigeoka-san from Daiwa Securities. Yes. This is Shigeoka from Daiwa Securities. Thank you for taking my question. I'd like to turn to page eight, Green Challenge 2050. As you try to pursue your environmental initiatives, I'm sure that is also going to create better business performance. You have laid four themes. Which do you think would have larger contribution to your business performance? I'm sure, for example, energy efficiency or trying to control food waste might be a good candidate, but what is your thought? Contribution to your business performance, anything around energy efficiency or food waste. What are some of your initiatives that you're trying to implement so that we might be able to see better contribution? You mentioned about, or Mr. Akutsu did mention a lot about power efficiency, but if there's anything you'd be able to share with us in regards to renewable energy, so forth, please. Yes. Thank you for your question. I don't know if I'd be able to give a straightforward answer, but all the four, we expect would be able to contribute to our business performance one way or the other. For example, even for CO2 reduction, as we use more renewable energy or trying to work for power generation or use less energy, in the end, we'd be able to curb down the amount of CO2 emission, but then that's also going to create more better power efficiency. That's going to be better for our business. Even for plastic, any material to be used for packaging, if we'd be able to switch to environment-friendly packaging, that in the end, there's going to be more value that we'd be able to offer, in regards to saving the environment. You may think that's going to mean higher price tag, but for example, some of the more unique food, there might be some areas where the customers may not need these conventional packaging. Maybe there could be some areas where we might be able to expect the customers may be able to come up with a unique idea, especially when it comes to some unique niche food. I think this, in the end, eventually would lead to saving SG&A. We also want to think about sustainability. For example, this Green Challenge 2050 issue. We're thinking more about biodiversity. Amidst this situation, even when we try to procure materials, there's a risk that we may no longer be able to. That's going to have a financial impact, and we try to quantify how much risk could that be, so that we'd be able to raise awareness inside the company. We want to make sure that risk would not prevail. That's why we need to implement initiatives that is about supporting the providers, the farmers. That's not about social contribution per se. It really impacts our business performance if we don't put this initiative. That's exactly how we want to position the meaning of Green Challenge 2050. One more thing. I think there was this discussion about the conflict in Middle East. The urgency of geopolitical risks nowadays, for example, it relates to energy insecurity. For example, renewable energy or EV penetration, that's really about decarbonization initiative. What's happening in Middle East may bolster the needs of, for example, EVs and so forth. Even for plastic packaging, we're seeing the increase in naphtha price. Would there be any renewable plastic that would be more immune to, for example, what can happen in Middle East? Japanese government is trying to go for such alternative items. That's going to have a good contribution for sustainability in the overall perspective. That's what we want to keep an eye on. I don't know if I really answered your question, but that's what we're trying to focus on. Yes. Thank you very much. Quantitative disclosure, I know you're working on a lot of things to show your progress in this regards. I'm hoping that you'd be able to present your disclosure so that it would be easier to understand. I'm hoping to be able to see more from you. Thank you very much. Yes, we're all very aware. Thank you very much. With this, we would like to conclude the Q and A session for the sustainability strategy. We will move on to the final session. Now we would like to start the final group Q and A session. The speakers will be Mr. Dacus, CEO, and also Seven & i Holdings Executive Officer and CFO, Tetsuya Takagi, will respond to your questions. First, at the outset, Mr. Takagi, CFO, will say a few words. Takagi-san, the floor is yours. Thank you very much for taking the time to join us today. My name is Tetsuya Takagi, and I've recently been appointed as CFO of Seven & i Holdings. First of all, I would like to express my sincere appreciation to our shareholders and investors for your continued support of our group. Having been involved with our group as a supplier, I have witnessed firsthand the strength of our operations and the power of our brand. I've also experienced 7-Eleven from the customer's perspective. As someone who shopped at its stores on a daily basis, I personally purchase products such as Seven Cafe Hydrogen- Roasted Coffee on a regular basis. As I now take on this new responsibility with a clear sense of purpose to help bring that quality and value to customers around the world. Every day, we welcome approximately 60 million customers to 7-Eleven stores around the world. As for our company, I strongly believe that we have significant potential to expand our business globally and achieve sustainable growth, and I am committed to contributing firmly to the realization of that potential from the finance and accounting perspective. At the same time, I believe that our group is now at a point where we have a very significant growth opportunity and where an even greater degree of discipline and execution is required to realize it. As the world's largest convenience store network, we serve customers every day across the globe. At the same time, capital markets are asking more of us, higher expectations for the quality of growth, capital efficiency, and consistent execution on a global basis. My mission as the CFO is very clear. It is to further accelerate disciplined execution across our global operations and to enhance corporate value and create long-term shareholder value with speed and determination. To achieve this, we will ensure stronger alignment across the group under a globally unified brand by establishing common frameworks and enhancing coordination across businesses and regions. By maximizing knowledge sharing and scale across countries and regions, and leveraging individual strengths, we will drive more consistent execution across the group and pursue further global growth. In particular, as CFO, I intend to further strengthen and embed a management approach that places a strong emphasis on capital efficiency. Rather than treating ROIC simply as a management metric, we will continue to implement it more deeply as an operating framework embedded in organizational decision-making and day-to-day operations so that a capital efficiency-focused management approach takes root across the group. Our starting point has always been and will always be the customer. As we advance global growth and operate more as one group, the customer will remain at the center of everything we do. We are fully committed to being the first choice of our customers. To do so, we must continue to deliver products and services that combine superior quality and compelling value. Finance is a means, not an end. Our ultimate objective is to maximize customer value. That is how we will drive sustainable growth and corporate value and long-term shareholder value. In our capital allocation and financial strategy, we will focus on allocating management resources appropriately and executing steadily. We will continue to invest proactively in ongoing innovation, while at the same time decisively implementing structural reforms to improve profitability. Strengthening our business fundamentals and scaling the future. Balancing these two priorities is, in my view, the most important responsibility of a CFO. We also have a clear commitment to shareholder returns. We will continue to uphold our shareholder return policy, including share repurchases totaling up to JPY 2 trillion, as well as our progressive dividend. This is not a short-term measure, but a reflection of our confidence in our ability to generate strong and sustainable free cash flow. We will continue to make decisions with a consistent and disciplined approach to balancing growth investment and shareholder returns. Finally, regarding investor relations and disclosure, dialogue with analysts and investors is extremely important to me. In both favorable and challenging times, I am committed to transparent disclosure and honest, constructive communication so that we can clearly convey our value creation story. Building on this commitment, we will move beyond one-way communication and place two-way communication at the core of our approach. Insights gained through our dialogue with you will be shared across the group and leveraged to further enhance our management and business operations. Through these efforts, we aim to further improve the quality of our growth. Seven & i Holdings is still on a journey of growth. As CFO, I will move forward with clear resolve, driving transformation and working tirelessly to build one of the most trusted corporate groups in the world. I would also like to speak directly in my own words to our international shareholders and investors. Let me briefly switch to English to speak directly to our global investors. Thank you for your continued support. I believe that meaningful engagement with our investor is essential in achieving truly global growth. We welcome constructive and continuing dialogue w ith our investors. I'm personally looking very much forward to speaking with you in the near future. Thank you very much, and I look forward to your continued candid feedback and support. Thank you, Mr. Takagi. With that, we'd like to open Q and A session for Seven & i Holdings. Mr. Dacus, our CEO, and Mr. Takagi, our CFO, will be answering your questions. If you have any questions, please press the Raise Your Hand button at the bottom of the screen. Please make sure that you state your company and your own name. Each person can ask up to one question. Simultaneous interpreting will be provided. If you have selected Japanese audio, please ask your question in Japanese. Likewise, if you're in English, please ask your question in English. With that, we will take your question. Kazahaya-san from UBS Securities, please. I hope you can hear me. Yes, we do. Thank you. This is Kazahaya from UBS Securities. Thank you very much. I think, Takagi-san, this is the first time I'll be able to speak with you. My name is Kazahaya from UBS Securities. Thank you. I actually have one question that I wanted to ask to Mr. Takagi. Listening to you, for example, Maruyama-san was a perfect CFO. He was able to improve discipline of the finance, has been able to implement ROIC. I understand you're going to be succeeding this endeavor, and I'm really happy to hear that. Just one thing. In the past, when it comes to financial discipline, you made sure that you'd be able to keep a rating. That was the baseline. I think that was exactly the investment discipline that the company always talked about. Now, when it comes to, what about you? Would you also be prioritizing keeping the A rate? Yes. Thank you very much for your question. As we try to head to 2030, we have this transformation plan underway. Within that, we do want to make sure that we'd be able to strike the good investment efficiency. We're trying to manage this efficiency through setting KPI like ROIC. Like we mentioned earlier, we need to make sure the execution is disciplined. Otherwise, we will not be able to drive corporate value or shareholder value growth in the midterm. This roadmap to 2030, what we've said there, for example, debt/EBITDA ratio, those are some of the KPIs that we want to keep our attention to so that we'd be able to maintain our ratings to A. That's going to be really important, and that policy will be strongly kept. Mr. Takagi, is it single A for a single year? Is that the way to take this? Well, there is this ebbs and flows in investment, and it really depends on what you are investing for. Single A rating is something that we do want to secure as a principle, even for single year basis. Thank you. That's all for me. Thank you very much. Next, Nomura Securities, Yamaoka-san, please. This is Yamaoka from Nomura Securities. This question perhaps will be directed to Mr. Dacus. Considering your past explanation, the function of holdings is what I would like to know more. CVS as a business group are focused on convenience store business, and I think you have been talking about upgrading the holdings business to a convenience store-focused business. What is the progress, the holdings function as you become a more pure CVS company? How do you think holdings function needs to evolve? That is what I would like to know. Yamaoka-san, thank you very much for your question. In terms of the function of the holding company, I see it as really boiling down to four key areas. The first one is coordinating the global strategy. You have to make sure that everybody's moving in the same way, that we have a coordinated, aligned global strategy. By the way, hopefully you got that strong impression today from the presentations by our global leaders. Hopefully, it came out very clear that we have a very clearly aligned global strategy. We have similar challenges in different markets, and we are addressing them slightly differently, but we are addressing the same challenges with the same strategy. That's one thing. The second really key role of the holding company is capital allocation. By that I mean both financial capital and human capital. I think these are some of the most critical decisions we make. We need to obviously make sure that we invest our money in the right places and get the right returns. Also that we develop and grow our people, and we put our people in the right places to deliver the best results, and that they have the tools that they need to succeed. Capital allocation is the second item. The third item that I think is important for the holding company is just, I guess you could call it generally governance and monitoring the operating companies' results. That's something that we implemented. You've heard me talk about this before, but we implemented that very early on when we started with the new leaders. I think that's going very well. At Holdings, it's helped us to understand the operating companies' situations, their landscape, their environments, and their challenges, as well as how we can help them. It's also helped the operating companies understand our expectations as well as the expectations of our shareholders and all of our stakeholders. I think it not only helps improve performance, it helps improve communication. The monitoring function, the governance function, that's the third big element. The fourth element that I think, the fourth significant role of Holdings, I believe is really linking the entire organization together and ensuring that we are leveraging our scale, leveraging our capabilities, and getting the best value for our customers and delivering the best value to our shareholders. I think of it as global leverage, leveraging the business across, and that includes best sharing, best practice, and so forth. Those are all things that really the holding company needs to coordinate. In terms of the operating companies are responsible for execution, and within the framework of the strategy that's been agreed with them and the framework of the capital allocation that's been discussed, they have the freedom to execute aggressively and with urgency. Hopefully you sense that today as well. If there's any takeaway I would want you to take away from today's meeting, it would be the sense of focus, of urgency, and aggression that you heard from the leaders of our business today, whether it's 7-Eleven, SEJ, or SEI. I think a lot of that comes from knowing that you are accountable, and that you have the freedom and the autonomy to do what you need to do within that global strategic framework. Hopefully, that answers your question. Thank you. The so-called global alignment or in terms of coordination, the role of holdings that needs to be played, perhaps I think has been enhanced in the past and you have been working on enhancing those roles of holdings. Is that the case? Yes. Yes, we have. I am not satisfied. We still have a long way to go, if I'm being really honest. We've made some good progress. The progress has been in changing process. We've stood up our global center of excellence for technology, and they're starting to move. We've got the other areas are starting to move. We're making some progress. We've still got a lot more to do, and honestly, we need to accelerate. The short answer is yes, we've made some progress there, and I'm very pleased with the progress, but I'm never satisfied, if that makes sense. Understood. Thank you very much. Thank you very much. Next, we will take question from Kawano-san, Goldman Sachs. This is Kawano from Goldman Sachs. Thank you very much. I hope you can hear me. Yes, we do. First of all, this is the first time I speak with Mr. Takagi. I hope we'll be able to have a very good engagement and dialogue. I want to ask Mr. Dacus, listening to your presentation today, and I was thinking about the 2030 roadmap. You have that. Within this roadmap, if it's like 2030, that's far off. Let's say the plan for 2028, and of course, you have that as well. Looking into 2028, that's JPY 1.1 trillion for EBITDA, EPS JPY 148, ROIC 8.6%. You do have a lot of KPIs under 2028 goals, like five or six. After a year, I mean, you talked about urgency, aggression, but I'm sure the competitive landscape is really changing now, and a lot of geopolitical risks that can impact your business performance, starting with what's happening in Middle East. Looking at all of that, as you head to 2028, how confident are you? Are you more confident, or do you think there are areas where you find more room for growth, or areas where you find more risks? If you'd be able to sort that for us, I'd like to know. At the same time, listening to the presentation today, my take was, I think you're trying to invest like JPY 3.2 trillion over the couple of years. But there are a lot of areas where you have to invest. Disciplined investment is of course necessary, like you mentioned a t the same time. When you look at what you need to do, this ROIC target, of course, there's a lot of improvement that could be created by SEI, but what is your outlook in making the investment, making the returns? Sorry for asking a lengthy question. Kawano-san, thank you for your question, or I should say questions. I thought it was quite neat how you got several questions into one. Congratulations. Sorry for that. No, no. Congratulations. Well done. You called out a number of really important things. Yes, I'm confident in the steps that we're taking. I'm very confident in our approach. I'm confident in this team's ability to execute, and I'm confident about the various initiatives that are underway, all of which have been shared with you. You're quite right. There are risks. There are risks that are beyond our control, and we're seeing that right now. The geopolitical risks are significant. For me, ultimately, the biggest single risk is anything that impacts our customer, because that impacts customer behavior. That is all the more reason for us to act with a sense of urgency and to be agile. As things change, as the environment changes, as risks appear and disappear, being agile with a sense of urgency is how we will adapt to it. Perhaps that's a bit more cultural, but that's why I emphasize how important that sense of urgency and focus and aggression is because I think that's how you get through the various issues that might come up. We are always looking at the risks that we think might pop up and considering what are our options to deal with that. Obviously, right now, we're thinking hard about the current geopolitical situation and what that might mean for our business. I don't have an answer for you, so don't bother asking the fourth question. It's something that you should know that is top of mind for us, and particularly how that might impact our customers' behavior. You asked a question, I think your last question was about investment. Yes, we've got a lot of money to invest. Well, we've got a lot of investing to do, is another way to put it, to deliver this plan. We believe, as you heard from the presenters, that our approach to investing will be very disciplined. We have clear objectives in delivering returns on those investments, and if we don't believe we will get adequate returns on an investment, we will adjust and we will adapt. The overall roadmap is a roadmap. It doesn't mean that there won't be any changes at all along the way. That's the nature of any plan. I feel pretty confident that we have the processes in place, the thinking, the targets, the KPIs that will allow us to manage and monitor our business and adjust to whatever might come our way, even though we can't see it today, and we have no idea what that might be. I think a year ago, if you'd asked me that we would be in this conflict in the Middle East, I would've said that's probably a very low probability item, and I would've been wrong. None of us can predict the future. What we have to do is just stay agile with a high sense of urgency and adapt. That includes adapting our investments. Again, we feel very confident that we have the right strategy and the right approach to deliver this. I'm not sure if that answered your questions or not, but if they didn't, I'm sure you'll tell me. No, I think it was a long question. I think that really suffices. Thank you very much. Thank you. Thank you very much. Are there any other questions? Those who have questions, please use the raise hand button, please. With this, we would like to end the Q and A session. Thank you very much for your participation, for long hours to our IR Day presentation. With this, we would like to end Seven & i Holdings IR Day 2026 Spring. Once again, thank you very much for your participation.