Seven & I Hldgs Co Ltd

I'm Steve Dacus. Good afternoon to all of you and thank you all for taking the time to join us today. As I've been nominated by the board as our next CEO, I thought I would take this opportunity to talk a bit about my priorities and the path forward for the company. You know, I've had the good fortune to work for some great retailers around the world, including in Japan and the US. These are companies that are both iconic and dominant in their space, and they're continuing to grow far faster than their competitors. I've learned a few things that have helped shape my thinking about how to win in retail and how to increase value for both customers and shareholders. And I wanted to share my thoughts with you today, as this will inform how I approach my new role. So first, allow me to share my thoughts regarding where we are today. 7-Eleven is an iconic brand and is the leading convenience brand in both North America and Japan. We got here in part because our team are great merchants and innovators. Our team are humble and they're focused on delighting our customers. That customer focus is directly responsible for our culture of innovation. The proof is in the data. Our ASPD, average per store day merchandise sales, are between 20% and 30% higher than our key competitors in both Japan and North America. Our customers are responding to the innovation our merchants and operators are bringing to our stores. I believe this is our biggest competitive advantage and it's a really important one. I believe another key source of our strength is our franchisee network, as well as the systems and organization we have in place to support them. We would not be the iconic brand we are today without the incredible work that our franchisees do each and every day to serve our customers. Their customer focus and hard work built this business, and we need to make sure that they have the support they need to continue to grow our business. In addition to these strengths, there are a few areas that I would like to change. Truthfully, we have historically been a bit conservative. This has led to us moving a bit slower than we should have and missing opportunities. And it has impacted our ability to execute. This is something I intend to change. We also need to re-emphasize our focus on the creation of shareholder value. I intend to do this with a much more strategic approach. You'll be hearing a bit more about this later. I believe there are a few critically important keys to winning in mass market retail. The first is a maniacal customer focus. Focus on continuously bringing our customers better products and services. This is where our culture of innovation and strong merchandising comes in. The second key is execution. This is all about speed and discipline. It does no good to have innovative products or services if you can't get them into your stores with speed. Someone else will do it for you and you'll miss out. By the same token, if you can't roll out a new product or service in the right way at the right time, your customers will be disappointed and you'll miss out. The third key is cost control. There are many things that a merchant cannot control, so you need to be sure you are on top of the things you can. And costs are one big thing that are largely within your control. If you are focused on your customer and disciplined, you can make sure that every yen that is spent provides value to your customers. And if it doesn't, don't spend it. Invest where your customers will appreciate it. The fourth key is global leverage. You know, we have different strengths in our operating units that need to be leveraged more aggressively. Some successes have been achieved already with the introduction of Tampinkandi in international markets, the partnership with suppliers, Watabea, for example, in the U.S., and the introduction of 7Now in Japan. However, we need to accelerate this to better serve our customers. There is so much more to leverage across our business units, including our approach to retail media, private brands, global sourcing, the list just goes on and on. We need to focus on leveraging our size and scale better and faster to drive value for our customers. So today you'll be hearing some really exciting initiatives to invest and innovate in our stores, in our products and our services in ways that will delight our customers and drive our growth. I'm really excited about things like the rollout of our QSRs in the U.S., which will more than double the number of QSR stores from 1,000 to 2,100, the rollout of our new prototype in the U.S. with 1,300 new stores expected over the next several years, the rollout of the ship store innovations in Japan to bring hot, fresh, cooked-in-store quality food that our customers can eat at home, in-store, or have delivered. You will see us invest aggressively in new formats and new capabilities to improve the customer experience at existing stores. I'm really excited about our way forward, and we need to move quickly to make this a reality. We need to execute faster. We need to execute with discipline. We need to focus on our cost structure. We need to leverage our strengths and innovations better and faster across our business units. And lastly, we will be taking a more disciplined approach to capital allocation and investment for growth. I will come back to this topic a bit later. So with that, I'd like to hand over to Mariama-san to take us through our FY24 results.

Good afternoon. I am Mariama of 79 Holdings. So please turn to page three. This is the 2024 results and 2025 summary forecast. In 2024, both in Japan and the US, there was inflation, especially there was a rising food price. Therefore, young people and middle and low income groups had depressed consumer confidence. And in response to the needs of value-oriented consumers, we repeated trial and errors and implemented various measures. And at last, we were able to see some results in the latter half and some signs of improvement was seen. In our midterm management plan and the action plan that we announced in April last year, We have strategically promoted the liquidation of business and assets that do not generate profits or have a low profitability in order to maximize corporate and shareholder value over the medium term, long term, and we have almost completed this in fiscal year 2024. As a result of these efforts, In 2024, continued from 2023, we were able to achieve the four-year consolidated performance plan revised in October, although we had to record a large extraordinary loss. In 2025, we expect a significant increase in profits at the net income level as a result of the completion of these structural reforms. In addition, we announced management measures on March 6th and we presented a roadmap for the realization of corporate and shareholder value. Today, we will explain in details our business strategy for future growth and steadily implement plans to significantly increase shareholder value, including the 600 billion yen share purchase program announced. In addition, we will certainly implement plans to significantly increase shareholder value, including value. Next, I will explain the consolidated financials of fiscal year 2024, the highlights of our consolidated results in 2024.

So in terms of operating revenue, we were at 11.9727 trillion yen, 104.4% year-on-year and 108% planned. Operating income was at 420.9 billion yen, 78.8% year-on-year. and 104.5% versus the plan for net income, 173 billion yen, 77% year-on-year, and as against plan of 106.2%. So in terms of revenue income and net income, as I said, we ended up with a tough result versus last year, but we have started to see benefit of the measures we have implemented, and though it's gradual, we are now on a steady path to recovery and And we were able to exceed the plan by 17.9 billion yen for operating income. For net income as well, since we have been working on reorganizing low-profit or non-profitable business and profit, though we did see the profits come down, we were able to exceed plan by 10 billion yen. and net income adjusted for one-time factors ended up at 197.7 billion yen. FX impact was 15.5 billion yen at the operating income level. Please turn to page 7. The operating revenue, operating income, and EBITDA is shown here in terms of segment breakdown, and you can also see the comparison year on year. In regards to the numbers for the international convenience business, these are after the amortization of goodwill. Consolidating operating income came down, mainly for domestic and international convenience store business. And that was the try-on error that we have implemented to address the changes in consumer behavior. And we have started to see benefits drop. in the second half of the year, but we were unable to make up for the weakness on a four-year basis, and so the profit came down year on year. For the domestic CVS business, in addition to the Pleasant Value Initiative we started in September last year, we have been also introducing a just-made counter product that is unique to 7-Eleven with a unique value line. We have seen a steady recovery of the same-store sales as well as the number of customers. And... We will continue to enhance initiatives to grow our revenue, as well as to improve and recover the gross margin for the international convenience store business. We will continue to be impacted by the consumption environment in the US, but the value offer measures, as well as enhancement of the original product development, our delivery service server now has been performing quite well. And all these factors have started to show improvement of the total traffic as well as the sales, and we'll continue to implement measures with higher effectiveness. Please refer to page 8. And here you can see the numbers versus the plan for each of the segments for operating income and EBITDA. We were slightly below the plan as for the domestic convenience store business and superstore business, but for the international convenience store business, finance business and for others, we were able to exceed the plan. And so we were able to achieve the plan on a consolidated basis. please turn to page nine and i'd like to explain about the extraordinary losses our group over the last number of years we have been working on maximizing the group's the corporate value and the shareholder value and as part of that we have been working on selection and concentration of various businesses and assets and the 2024 was the year of our compilation these efforts um we have been implementing the selection and consultation based on the midterm management plan as well as the action plan that we announced in April last year in the first half of the year. In addition to the impairment at the store level due to the structural reform at Ito Yokado, as well as the rebuilding of the last mile strategy for SSD business, we ended up registering a loss of 46.4 billion yen in the second half of the year. In addition to improving the profitability of SEI, we have booked a loss of 56.7 billion yen for the closure of unprofitable stores, as well as losses associated with system integration of yoke holdings. Now, these one-time extraordinary losses accounted for 145.6 billion yen out of the 220.9 billion yen of extraordinary losses we booked for FI 2024. The completion of these efforts towards structural reform will contribute significantly to improving the profitability or recovering the profitability that will start from the next fiscal year. Please turn to page 10. And these are the actual for the 2024 consolidated financial KPIs for the quantitative indexes for EBITDA. we are impacted by the deterioration of business for the Japan and U.S. CBS business, and so we ended up with only a decrease, but the operating cash flow excluding finance and the free cash flow excluding the financing activities have achieved an improvement, and the ability to generate operating cash flow continues to remain solid. ROE and ROI, the quantitative figures, ended up decreasing year on year. That was because of the decrease in net income due to booking of extraordinary losses due to promotional structural reform. And because of the weaker yen, the investment capital increased significantly in yen. By the way, the PL rate for FY2024 was 11.02 yen. weaker year-on-year at 151.69 yen. The balance sheet rate was 16.35 yen lower than the end of last fiscal year at 158.18 yen. In other words, the significant impact from the denominators. And for that EBITDA, the multiple, which is as sound as the index of our financial position, we actually secured about 300 billion yen of debt in order to acquire SEA and FI2024 as well as Suncoast Stripe in Australia. But it's more or less at the same level as previously because we have been working on reducing debt. This completes my explanation about our performance in FI2024. Thank you.

Mr. Fumihiko Nagamatsu, President of 7-11 Japan, will explain. I am Nagamatsu of 7-11 Japan. I would like to talk about our major strategies in 2025 of 7-11 Japan. Please turn to page 12. First of all, as for the priority measures of 7-11 Japan, 7-11 Whilst we see various changes in the environment, we always try to blend ourselves into the customers. And with the vision of creating tomorrow's miles together, we aim to be a store that can be used conveniently together with member stores in daily use. franchise stores, and daily manufacturers. To achieve this, we will focus on product policy, one of 7-Eleven's core competencies, to strengthen high-value-added products to promote habitual use and strengthen SIP initiatives to develop potential needs to create the 7-Eleven of the future. In addition, 7-Now, which is a new way to propose the way to use 7-Eleven, we would like to grow 7-Now And we were able to gain a great hint while we proceed with our SIP strategy, which I would like to explain in details. Please turn to page 13. I would like to explain our approach to strengthening our core products in 2025. We will once again thoroughly pursue the introduction of high-value added products and communicate the value to customers and aim to achieve 102.5% year-on-year growth in same-store sales. The number of customer count which have been on the recovery trend from last year continues to improve and Whilst the result unit sales price is improving, we would like to drive furthermore the increase. To realize this goal, we will increase the composition ratio of these products by promoting products in the mid-price and high-price categories with taste and quality that exceeds customers' expectations along with tricks to make them feel a sense of excitement. On the other hand, We believe that the need for economic viability will remain strong in the current fiscal year, so we will continue to narrow down the range of products with pleasing prices. We will also focus on providing new value-added ready-made products such as 7 Café Bakery and 7 Café Tea. High value added products are 7-11 strength. So we would like to reinforce high value added products once again in order to grow ourselves as well as gross margin. Please turn to page 14. In order to explore potential needs, we started SIP store number one last year. Compared to the national average, the counter merchandise products and daily products, frozen food products, sales mix is extremely high. And even after there are supermarkets being open in the neighborhood, both sales as well as the customer count is continued to grow more than 10% compared to the previous year. And we believe that the most important thing will be freshly prepared products going forward. We have begun introducing counter products at 20 stores in Saitama Prefecture from this year. And as a result, as shown in the right side, the total sales and customer numbers of Target stores in February increased by more than 7%, which have been well received. And the increase in the ratio of counter products which have relatively high gross profit margins has also resulted in increase in the overall gross profit margin of the stores please turn to page 15. seven now uh our delivery service as of end of february has completed uh um the recommendation campaign nationwide In order to expand awareness of 7Now and develop it into a pillar of sales, we believe that the usage of 7Now at SIPs test stores will provide important clues. Of the top 10 products ordered from 7Now at the test stores, nine are freshly prepared products. And this characteristic is pronounced compared to the rest of the country. As shown, the number of orders is double the national average and confirming the steady effect of both daily sales and gross profit. We believe that the expansion of the SIP element will be an important key for 7NOW to increase the number of sales as the store's assortment of freshly made products is highly compatible with that of 7NOW, which delivers products from store inventory. With the expansion of SIP elements by 2030, we are aiming So this is the roadmap for the priority measures for 2025.

The capital investment for FI 2025 due to the rollout of these measures, as shown on the right. We will be spending about 15 billion yen for the expansion of these SIP elements, and we'll capture the SIP elements and we'll roll this out to the existing stores. So in that regard, we are conducting tests of the next generation store layout. Together with that, we are introducing the people-saving facilities with the aim of improving productivity. And so we are planning 12 billion yen of spending to renovate stores. And together with renewal of this store system and also to realize a greater continuity as well as efficiency of the operation, we will be introducing a next generation store system with expectation of generating greater counter space. And for this, we are planning to spend some 27 billion yen. We will verify these measures and we will be working on initiatives to realize as early benefit of these initiatives as possible. Please go to page 17. So because of the measures we have implemented thus far in FI 2025 operating income increased by 11.2 billion yen to 245 billion yen. And so this is what we are going to achieve. And the major KPIs that was achieving this, as you can see on the right, in terms of same-store sales, a growth of 2.5%. Their growth margin is an improvement of 0.1%. and the SJNA ratio vis-a-vis sales, even under the cost inflationary environment, we will scrutinize the details and we will maintain this level at the bean flat. Please turn to page 18. This is my last slide. And this slide explains the growth strategy for 7-Eleven Japan towards 2030. So we have the existing business centered around the merchandise and stores as well. And we have been maintaining the leadership position within industry in Japan. And so I would like to explain about new business thinking that utilizes the first party data. We also consider it very important to continue to work on initiatives to enable a sustainable growth for the value chain overall. And so I will also give some explanation from such a perspective as well. First of all, in regards to a key strategy for the existing business, what is most important is to continue to provide high value added products that meets the consumer needs. And this remains unchanged into the future. Now, how are we going to realize that? We will introduce SIP and we will propose new ways of using the convenience store. In other words, we will be accelerating the growth of 7NOW in that regard. And we will look into the detail of the unique features of each of the areas. we will promote a store opening strategy that is mindful of investment efficiency. In regards to the new business, we will roll out the retail media business that utilizes digital signage and application. And we will also roll out the retail data business that utilizes our first-party data. And these will be positioned as new pillars of earnings going forward. And we will start with more earnest initiatives in this area. And the increases in various costs are important. in Japan due to the progress inflation such as personnel expense. We expect this situation to continue. And so we do recognize there is a risk that there could be impact towards franchise owners as well as the suppliers. So in order to realize the various initiatives that I've explained thus far, it is essential that we optimize the value chain overall. And so from such a perspective, using the information that we gather from communicating with the owners as well as the various suppliers, we want to work towards maximising the trading schemes as well as introduction of more automated facilities. And by implementing each and every measure towards these risks, we want to work on enabling sustainable growth for the value chain overall. By doing this, We want to achieve more than 6 trillion yen of sales in 2030 and the APSD of more than 750,000 yen and growth profit margin of more than 32.5% in 2030. And this completes my explanation. Thank you very much.

Thank you. My name is Stan Reynolds. I am the president of 7-Eleven Incorporated. I want to spend a few minutes today discussing 7-Eleven Inc's Q4 and fiscal year 2024 results and highlight some of the short and long-term tactics we are leveraging to drive traffic, sales, and margin. Next slide. While full-year results were not what we wanted, we've made progress in same-store sales, margin, and units. And same-store sales, excluding cigarettes, turned positive in Q4. However, going into this year, our traffic declined in Q1, driven primarily by cigarettes. If we exclude cigarettes, we're expecting to see almost positive U.S. same-store sales growth in March. We've also seen continued momentum in units per transaction and a significant improvement in merchandise margin trends, both in Q4 and year-to-date through February 2025. We expect these trends to continue in March. Our results have been impacted by the macroeconomic environment, with inflation up 27% versus 2019 and record high debt and delinquency levels, magnified by the recent economic uncertainty around tariffs and immigration policy. We're closely monitoring the business and consumer impacts in response to the recently announced tariffs, and this uncertainty has impacted our customer, as we've seen consumer confidence fall to a multi-year low, and declining consumer spending as they try to stretch their dollars by shifting to channels online and delivery in search of deals and discounts. Despite these challenges, we are well positioned to deliver on the value that our customer is seeking through our key growth strategies. Next slide. So I'd like to take you through our short and intermediate term tactics focused on four key areas. First, growing our proprietary products, Second, accelerating digital and delivery. Third, improving efficiency and cost leadership. And fourth, growing and enhancing our store network. Let's start by looking at our key initiative to grow proprietary products. To accelerate our growth, we've strategically invested in store enhancements and growing our assortment. This includes investing in our food and beverage modernization program that offers our customers a wider assortment of bacon store and hot food items and specialty coffee. We're expanding this program with an additional 400 plus installs in Q1 of 2025, on top of over 2,100 installs last year. And our early results have shown an encouraging APSD lift of $135 versus prior year for our full implementations. We're able to drive further differentiation and value to customers through our portfolio of 900 plus private brands. 2024, we launched 215 new items across high growth categories that resonated with customers and plan to add another 200 items in 2025. In addition to driving traffic and sales to our stores, our private brands have a 51% margin, approximately 18% higher than national brands. We'll continue to invest in our private brand portfolio and launch high quality, high value products that customers are seeking. Next slide. Additionally, we've partnered with Warabea in Texas and Florida to meet growing demand for high-quality food offerings supporting 2,000 stores. Our 2025 growth plan with Warabea is to drive quality improvement to core items, complemented by introduction of innovative new items. Our restaurant portfolio continues to serve as a key differentiator and provides us another opportunity to deliver value that resonates with customers. With more than 1,100 locations across three brands, we're able to meet the ever-changing taste of our customers and the benefits are meaningful as stores with restaurants drive 57% more traffic, 36% more APSD sales, and carry an additional 30 basis points of margin as compared to our non-restaurant locations. Next, we're excited about the progress and opportunities for our industry-leading loyalty and delivery programs. With over 100 million total loyalty members, we're now focused on increasing our high-value customer base through personalized marketing and gamification to drive value and incremental trips to our stores. Since 2022, 7Now has consistently grown and delivers our products to our customers at their doorstep within 28 minutes. We're very excited and on track to hit our $1 billion sales goal through this channel by 2025. Next slide. We remain focused on maximizing operational efficiencies while also investing in our store portfolio. With a rigorous approach to cost discipline in 2024, we delivered $562 million in cost savings and plan to build on this momentum with the goal of reducing our OSG&A to sales ratio by 30 basis points in 2025. Since acquiring over 3,000 stores from Speedway in 2021, we've been working on integrating these stores into our portfolio and maximizing synergies. We are currently in the process of installing our proprietary point of sale system, RISC 2.0, and fuel dispenser experience, DEX, which will help standardize store systems across banners, simplify operations, and reduce costs. Rollout of this system has been a key growth driver for sales and margin across our mature acquisitions. We can plan to complete all of these conversions this year. Next slide. Finally, as we continue to invest in our store portfolio and leverage feedback from customers, we've developed and are implementing our new store standard. We plan to build 550 new stores between 2025 and 2027 with a focus on our new standard stores. These food forward stores are resonating with our customers and driving APSD about 18% higher than our system average. We'll continue learning from these stores and refine our new store standard to meet the needs of consumers both now and in the future. Next slide. Here you can see an overview of our 2025 plans. Along with an operating income target of $2.3 billion, we expect same-store sales of negative 1.5%, merchandise margin to grow by 40 basis points to 33.7%, and a ratio of OSG&A to sales to improve by 30 basis points to 16.5%. Our plans will not only improve our fiscal year 2025 performance versus 2024, but also provide the foundation for success in future years. In conclusion, we remain confident in our long-term strategy, which is aligned with the customer's evolving preferences and will set us up for success through 2030. We've seen promising results from our proprietary product initiatives. and plan to add 5,450 additional stores to our food and beverage modernization program by 2026, and add over 1,100 restaurants, as well as hit 1.9 billion in private brand sales by 2030. With consistent growth in SevenNow since inception, we expect to grow delivery sales to 1.25 billion by 2030. As discussed earlier, we're focused on maintaining financial and operational discipline, And we're confident our efforts will lead to a 275 basis point OSG&A rate improvement by 2030. Finally, we're accelerating new stores with a focus on our new standard. And we plan to open 1,300 new locations by 2030, with 550 of them between 2025 and 2027. So with that, I'll turn it back to Mr. Mariama.

From now, I, again, would like to talk about the domestic and North American plans that are included in the consolidated forecast for 2025. Page 30, please. This is the consolidated forecast for 2025. Operating income, $424 billion, 107% year-on-year. Net income, $255 billion. 147.3% year-on-year. This forecast includes only the first half results of consolidated subsidiaries attributable to York Holdings in the consolidated results, and reflects only equity in earnings of affiliates in the second half of the year in proportion to the percentage of ownership. As for Seven Bank, we aim to deconsolidate within Although specific timing has not been determined, only the first half results of SevenBank is included in the consolidated subsidiaries. Therefore, operating revenue decreased and operating income only increased $3 billion. On the other hand, as for net income, As the structural reforms completed, the risk of posting extraordinary losses has reduced significantly, and we expect a significant increase in the net income. We plan a significant increase in EPS of more than 150% over the previous year, coupled with the effect of the share buyback. Foreign exchange effects are expected to have a negative impact of 5.7 billion yen For your reference, on the right-hand side, we show the figures excluding the impact of making York Holdings and Seven Bank Equity Method affiliates. Next, page 31, forecast by segment, 2025 domestic convenience business and overseas convenience business. As explained, due to the measures, we expect to improve profitability and we have a plan to increase operating income and profit, respectively. In SEI's earnings forecast, as explained, due to the Trump administration's tariff policy and immigration policies, the consumer confidence has largely declined and we have factored that in. In the third quarter in January, we explained our KPA targets for fiscal year 2025. Same store sales growth rate from 1.5% to minus 1.5%, and merchandise gross profit margin have been revised down from 34.1% to 33.7%. For the SG&E to sales ratio from 16.4% to 16.5%, although we assume that the consumption environment in North America will continue to be unpredictable, we will achieve our operating income and profit plan, revenue and profit plan by steadily promoting strategic measures. In addition, since York Holdings and Seven Bank are expected to become equity method affiliates, operating revenues in the superstore business, finance-related business, and other businesses are expected to decrease significantly. Please turn to page 32. This is a breakdown of the first and second halves in a consolidated earnings forecast for 2025. As explained earlier, we expect group sales to We expect to make York Holdings on the 1st of September an Equity Method-affiliated company. In addition, although the timing is undecided, we will deconsulate Seven Bank during 2025, and therefore we expect operating revenue to decline largely. vis-a-vis the group's sales in the second half. Therefore, operating income is expected to increase due to recovery of the CVS business. Ordering income incorporates the recording of equity in earnings affiliates in the second half. Therefore, we plan to increase operating income in the first half and decrease operating in the second half.

So in terms of shareholder return, first for dividend, based on the progressive dividend payment, we're expecting 20 yen per share at the end of the fiscal year. As for 2025, for the dividend forecast, we're expecting an increase of 10 yen increase to pay out 50 yen in total. Furthermore, based on the update related to management measures that we announced on the 6th of March, we will focus more onto the convenience business going forward to maximize value for shareholders. And in order to achieve returns, we are going to implement a series of initiatives to reform their business together with the capital structure and management structure. And as one of those, we will be IPO in the SEI as well as SST business group to be deconsolidated. And we've already announced that we are going to acquire some 2 trillion yen of own shares. And as we made a press release today, as for 2025, based on recovering capital due to deconsolidation of SST business, we have set a a share buyback quarter or 600 billion yen. Please refer to page 24. These are the KPI expectation for 2025 on a consolidated basis. And your coding will be added as an equity method company And so, though the decision has not been made for the time in 2025, the Seven Bank is to be deconsolidated. So EBITDA is expected to come down. For ROE and ROIC, we are expecting to see significant improvement due to a significant increase in net income. But because of the invested capital, which is the denominator, is calculated by the average of the two halves. And so because of the impact at the end of 2024, when there was a significant weekend, the improvement is going to be smaller. However, as I said before, because of the execution of business strategy over medium term for the convenience of business in Japan, we're going to make significant improvement in the 526 EPS as well. This will be improved significantly due to significant share buyback in addition to implementing medium term business strategy after 2026. Please refer to page 35. And this is how we're going to generate cash based on the medium-term business strategy, which is going to be the basis of the capital allocation policy that Mr. Dacus will explain later on. And in addition to the size of our cash generation due to recovering capital, We are going to increase the debt capacity as you to steadily paying back a debt. And let me explain this on the left is a chart. And in addition to cash generated based on the domestic and international convenience of business, the cash that generated through a recovery of capital. You can see the recent six years as well as upcoming six years, how they changed. As you can see, in addition to the growth of the convenience store business in Japan and also abroad, since the York Holdings will be made an equity method company and we're going to recover capital through IPO of the SEI, there is going to be significant room for us to allocate capital towards improving corporate value and shareholder value going forward. And on the right, you can see the balances of interest-bearing debt as well as net interest-bearing debt. And this shows the transition to 2030. Due to a steady repayment, we can see that interest-bearing debt will come down quite significantly. And this forecast for paying down debt is based on the assumption that we are not going to engage in a large M&A during this period. But another way to put it is that If there is going to be an attractive opportunity for us, we have the sufficient debt capacity to engage in a large investment inclusive of M&A should there be an interesting and attractive opportunity. So this is one way for you to understand from the perspective of finance. We are going to take various options in terms of shareholder return as well as investment for growth towards enhancing corporate and shareholder value going forward. This completes my explanation. Thank you.

Thank you. You've heard a great deal today about how we will drive value for our customers and our shareholders. To summarize, our strategic priorities are as follows. One, we will execute with speed and accelerate the growth of our business in Japan and North America with initiatives laid out just a moment ago by Nakamatsu-san and Stan. Second, We will execute with discipline by focusing on our cost structure. We will improve cost efficiencies across the value chain to achieve a best-in-class cost structure. This is one thing we can absolutely control, and we have identified real opportunities that we can move quickly on. Third, we will invest in a disciplined manner so that we deleverage quickly and maintain our strong balance sheet as we ensure appropriate returns on our investments. Fourth, we are committed to completing the IPO of SEI by the second half of 2026, in which we believe we'll have a number of benefits, including unlocking a great deal of value for our shareholders. And last but not least, we are committed to delivering on our enhanced shareholder return framework via share repurchases and dividends. Next, please. As you heard today, these are the specific areas we will focus on to accelerate our growth. It's no accident that our key initiatives have a high degree of overlap across North America and Japan. This is because customer needs and expectations are becoming more similar across the world. This is an advantage for us as it gives us the opportunity to leverage our strengths and innovations in one market to other markets. It's something you will see us do more and more as we go forward. Next, please. In terms of profitability improvement and cost control, In North America, we have carried out a bottom-up process, which has identified some really significant opportunities for improvement. Our senior management team there are already executing on these initiatives, which include some quick wins, as well as initiatives to achieve longer-term growth and value creation. Next, please. In terms of our investment strategy, as you heard from Mariama-san, over the past decade or more, we have maintained a flexible balance sheet with low leverage, which has allowed us to drive organic investment and accretive M&A. After the Speedway acquisition, the largest acquisition we've ever completed, we were able to de-lever quickly, and we will continue to do so. And as you heard from Mariama-san, this will provide flexibility for future opportunities. Next, please. We are planning an IPO of SEI because we believe an IPO of SEI will be beneficial to our shareholders as it will unlock the intrinsic value of SEI and that will be reflected in 7i holdings. And it will also deliver significant shareholder return via share repurchases using proceeds from the IPO. SEI will also benefit from increased financial flexibility, allowing it to tailor capital allocation and M&A priorities. SEI will be able to retain top talent and execute M&A with the benefit of bespoke compensation and consideration packages. Next, please. In terms of capital allocation, We plan to allocate 3.5 trillion Japanese yen to growth investments in our convenience store business, as we discussed earlier, between now and 2030. This investment may also include smaller bolt-on M&A opportunities, but the vast majority will be for organic growth with the initiatives which we have just outlined. In addition, we also plan to repurchase approximately 2 trillion yen by fiscal year 2030, while prioritizing consistent dividend increases with our earnings growth. And finally, as I said, we will steadily and consistently pay down our debt and expect to continue to maintain our strong credit ratings, enabling us to pursue sizable M&A if attractive opportunities arise or further accelerate investment in organic growth drivers. This approach will allow us to balance increased return of capital for our shareholders with accelerated investment for growth. Next slide, please. As a first step, as you just heard, we are announcing a 600 billion yen share repurchase in this fiscal year using proceeds from the sale of our Superstore business group. In addition, we plan to repurchase additional 1.4 trillion yen in a consistent cadence through 2030. And we will enhance our capital returns by steadily increasing our dividend. These are all key components of our long-term growth algorithm, which I'll cover now. Next, please. Our shareholder return algorithm is pretty straightforward with the operational initiatives discussed here today driving mid-single digit EBITDA growth and the capital returns to our shareholders driving low double digit EPS growth and the inclusion of increasing dividends resulting in mid-teens total shareholder return percentage. Next slide, please. So in summary, our disciplined execution of the customer-focused initiatives discussed here today, along with better cost control, will accelerate our growth in Japan and North America. In addition, we have identified what we believe is a billion-dollar opportunity to improve profitability across the entire value chain. This will support our return of capital initiatives that will generate real value for shareholders through the execution of significant share repurchases while steadily increasing our dividend. And lastly, the IPO of SEI will be a huge value unlock for the business. Thank you for your time today. I hope you've seen that we are committed to accelerating profitable growth at Seven and I, and we are committed to delivering significant value to our customers, our shareholders, and all of our stakeholders. With that, we're happy to field any questions you may have. Thank you.