ASKUL Corporation (2678) Q4 2026 Earnings Call Transcript

Disclaimer: This document is a translation of the original Japanese version and is provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Summary of Q&A Session Financial Results for the Fiscal Year Ended May 20, 2026 [Date and time] [Respondents and Attendees]

Friday, July 3, 2026, 5:00–5:45 p.m. Akira Yoshioka, Representative Director, President and CEO Tsuguhiro Tamai, Director, CFO Katsuhiro Kawamura, Director, COO Shinichi Hokari, Director, CTO *Additions, corrections, and reordering have been made to facilitate understanding.

[FY5/2026 Full-Year Results] Q: What factors caused FY5/2026 results to exceed the revised plan?

A: Net sales exceeded the revised plan by 5.1 billion yen, and operating profit was 3.0 billion yen above the revised plan. The main factors were net sales exceeding the plan due to promotional measures, including the Revival Special Campaign, as well as special demand for petroleum-related products and other items related to conditions in the Middle East toward the fiscal year-end. In addition, for certain items that we had initially planned to discount significantly during the Revival Special Campaign, we adjusted prices upward in response to the impact of conditions in the Middle East. As a result, the gross profit margin also trended more favorably than planned. Q: How do you evaluate the impact of the Revival Special Campaign? A: Frankly, some aspects fell slightly short of the level we had initially expected. On the other hand, it was a major achievement that approximately 90% of customers who had used other suppliers for three months (during ASKUL service suspension) returned to ASKUL. In industries where ASKUL has traditionally been strong, such as medical and nursing care, manufacturing, construction, education, and retail, we confirmed a steady recovery in both the number of customers and net sales. Customers clearly cited delivery speed, logistics quality, and strong support for original products as reasons for returning to ASKUL, and the campaign gave us an opportunity to reconfirm ASKUL's competitive advantages. Q: What insights did you gain from the Revival Special Campaign? A: The campaign clarified which products respond significantly to price competitiveness and which products have only a limited response even when discounted. We believe the Revival Special Campaign was not only a recovery measure following the impact of the ransomware attack, but also a large-scale opportunity to verify customer responses to pricing and products. Going forward, based on these results, we will further refine our initiatives to strengthen price competitiveness and select products for promotional campaigns. Q: What was the background to the impairment loss recorded for AP67 Co., Ltd. (core company: FEED Corporation)? A: FEED Corporation operates FEED Dental, a specialized e-commerce business for dental clinics. We acquired the company to strengthen the medical domain, and it has competitive specialized products, including overseas-manufactured gloves. On the other hand, its profit margin has recently declined due to higher procurement costs caused by the depreciation of the yen. In the short term, securing profit through price increases was one option, but that could have led to a slowdown in growth. We therefore decided to prioritize future growth, record the impairment loss this time, and aim to strengthen the business foundation and achieve renewed growth through integrated operations with ASKUL.

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Q: Has the business value of FEED Corporation itself declined? A: We do not believe that the business value of FEED Corporation itself has declined significantly. In fact, net sales are growing and the company is generating profit. The main reasons for the impairment loss were a decline in the profit margin due to foreign exchange effects, as well as an increase, for accounting purposes, in the discount rate (WACC) used to calculate the business value. We continue to believe that the customer base and specialized products of its specialized ecommerce business for dental clinics remain valuable. Going forward, we will integrate procurement and logistics functions with ASKUL, accelerate the creation of synergies by realizing nationwide next-day delivery and eliminating overlapping functions, and work to enhance business value. Q: What is the status of considerations regarding business restructuring and selection and concentration, other than FEED Corporation? A: As explained at the time of the third-quarter financial results, we are considering multiple matters related to business restructuring and selection and concentration. The impairment loss related to FEED Corporation announced this time concerns one of the business restructuring matters involving impairment, and it was disclosed as one of the matters expected to have a negative impact that we referred to at that time. On the other hand, the other matters under consideration are not yet at a stage where we can disclose them. If any matters requiring disclosure arise, we will announce them at the appropriate timing.

[FY5/2027 Full-Year Outlook] Q: Is the FY5/2027 net sales plan conservative or challenging? A: The net sales plan is neither conservative nor extremely challenging. It has been formulated based on a return to a sustainable growth trajectory. Current monthly results may appear weak, partly due to the reactionary decline from demand in the previous fiscal year related to extreme heat and mandatory heatstroke prevention measures, as well as special demand stemming from conditions in the Middle East. However, our plan assumes that we will achieve steady growth as these temporary factors fall away. We regard returning net sales to a growth trajectory as our most important priority and have incorporated the necessary promotional expenses into the plan. Q: Will you conduct another large-scale promotional campaign this fiscal year like the one in the previous fiscal year? A: We do not plan to conduct a large-scale discounting measure like the Revival Special Campaign. On the other hand, we will maintain and improve price competitiveness by strengthening our Honki Price initiative. In the fourth quarter of the previous fiscal year, the gross profit margin declined due to the impact of discounts associated with large-scale promotional measures, and that was the main factor behind the decline in profitability. This fiscal year, while maintaining the necessary price competitiveness, we expect the gross profit margin to improve by optimizing selling prices. Q: How do you expect the gross profit margin to recover? A: The primary factor behind the recovery in the gross profit margin will be the disappearance of the discount impact from the large-scale promotional measures implemented in the fourth quarter of the previous fiscal year. In the previous fiscal year, the profit impact from the lower gross profit margin exceeded 6.0 billion yen, and most of that was attributable to large-scale promotions including the Revival Special Campaign. On the other hand, we continue to incorporate foreign exchange effects as a negative factor. Going forward, while maintaining 2

price competitiveness, we will aim for gradual improvement by pursuing cost reduction activities and expanding original products. However, the gross profit margin assumed for the fourth quarter in this fiscal year plan remains below the FY5/2025 level, and we will work steadily toward further improvement. Q: If the yen is appreciated, is there room for upside in the gross profit margin? A: For this fiscal year, we have fixed our foreign exchange positions through roughly the end of the calendar year, and the budget is based on that assumption. Therefore, the short-term impact would be limited. However, if the yen is appreciateed from the second half onward, there is a possibility that the gross profit margin could improve. Q: Why does the plan assume that net sales of the LOHACO Business and Group companies, etc. will exceed the previous fiscal year? A: We recognize that the LOHACO Business and Group companies, etc. are recovering ahead of the ASKUL Business. Group companies were relatively less affected by the ransomware attack in the previous fiscal year, and our plan for this fiscal year is based on the same assumption. For LOHACO, current monthly results appear weak, but they are affected by the reactionary decline from special demand in the previous fiscal year, such as beverage demand caused by extreme heat and sales of stockpiled rice amid rice shortages. Excluding these temporary factors, we have confirmed a trend of recovery and growth and expect net sales growth above the previous fiscal year. Q: What measures will you take to recover net sales in the LOHACO Business? A: In the LOHACO Business, we believe that pricing strategies have a greater effect than in the Bto-B, and we will strengthen price competitiveness centered on the Honki Price initiative. We will also promote personalized marketing using AI and aim for sales growth by making optimal proposals to each individual customer. Q: What are the factors behind the increase or decrease in SG&A expenses in FY5/2027? A: Factors increasing SG&A expenses include 1.7 billion yen in advertising and sales promotion expenses, 1.3 billion yen from the return to normal SG&A treatment of depreciation that was recorded as non-operating expenses in FY5/2026 due to the ransomware attack, higher personnel expenses, and 0.5 billion yen in security- and AI-related expenses. On the other hand, one-time costs related to ASKUL Kanto DC and core system replacement incurred in the previous fiscal year will decrease by approximately 2.0 billion yen, and we expect approximately 1.0 billion yen in fixed cost reduction effects centered on outsourcing expenses. Q: How do you view the cost reduction effects from logistics base reorganization? A: Regarding logistics base reorganization in the Kanto region, we closed the Hidaka DC in the previous fiscal year and are now proceeding with additional distribution center reorganization. As a result, we expect a cost reduction effect of approximately 0.2 billion yen this fiscal year. From the next fiscal year onward, we expect a reduction effect of approximately 0.8 billion yen as the benefit contributes for the full year. The main reduction items are rent and related fixed costs for logistics sites.

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Q: Are there any items or upside factors not incorporated into this fiscal year's earnings forecast? A: Basically, all factors that can reasonably be expected at this point have been incorporated into the earnings forecast. We regard returning net sales to a growth trajectory as our highest priority, and have planned promotional expenses at a level above the previous year as necessary to achieve this. On the other hand, if sales recover more efficiently than expected and we are able to return to a growth trajectory without using all promotional expenses, the unused portion could become an upside factor for profit. However, at this point, the full amount has been incorporated as expenses necessary to achieve the plan. Q: What is your policy on interest-bearing debt and cash flow? A: This fiscal year, we expect free cash flow to turn positive as the business normalizes, and our basic policy is to reduce interest-bearing debt. At the same time, as part of our financial discipline, we will allow the net D/E ratio to be around 1x, and if there are investment opportunities that contribute to growth, we will actively utilize them. Through the ransomware response, we have also reaffirmed the importance of the business portfolio. If investments including M&A in new areas materialize, the level of interest-bearing debt may fluctuate.

[FY5/2027 Growth Strategy] Q: What measures will you focus on in particular this fiscal year to grow the ASKUL Business? A: Customers are steadily returning, but we recognize that the number of purchased items is still in the process of recovery. We will therefore continue strengthening daily necessities at workplaces, which is our medium-term policy, and focus on increasing the number of items purchased by existing customers. We will also work to acquire new customers, particularly by expanding our customer base among large enterprises. Through the Revival Special Campaign, we confirmed that daily necessities at workplaces are effective in recovering the number of customers and expanding usage, and we will continue to strengthen them as a core growth initiative. Q: What stage has AI utilization reached? A: Through the large-scale promotional measures during the recovery period, we have already confirmed the effectiveness of personalization initiatives. We have also established a clear outlook that using AI will enable us to deploy many more patterns of initiatives in a shorter period than before. We are now at the stage of fully scaling up initiatives whose effectiveness has been verified. Q: What is ASKUL's competitive advantage in data utilization? A: Because ASKUL has operated an e-commerce business for many years, we have accumulated sales data, customer data, and logistics data with a high level of accuracy. This data foundation itself has long been a source of our competitiveness. As AI utilization becomes full-scale, we believe the value of these data assets is increasing further. In FY5/2027, we will position AI as a core element of our growth strategy and advance full-scale business implementation across a wide range of areas, including marketing, demand forecasting, and product proposals. Q: How will you deploy AI-based proposal activities? A: The planning phase of identifying optimal proposal content for each customer and formulating sales policies has already been converted to AI utilization. This fiscal year, we will expand the scope of use to the actual proposal phase, including sales activities, telephone channels, 4

printed materials, site content differentiation, coupons, and direct mail (DM). By using AI to automate and personalize a vast number of proposal combinations that could not previously be executed manually, we will seek to increase the number of items purchased by customers and improve loyalty. Q: When do you expect AI initiatives to begin producing effects? A: We expect the effects of AI initiatives to begin appearing in earnest mainly from the third quarter onward. Rather than rolling them out only to specific customers, we plan to sequentially expand them across sales and marketing activities, including sales activities, telephone channels, printed materials, site content differentiation, coupons, and DM. Fully personalized proposals in sales activities are scheduled to begin in the first half of the second half, with coupon and DM initiatives to be rolled out around the same time. In the second half, we believe AI-based automated personalization initiatives will permeate overall front-line business activities and lead to results. Q: What is the progress of the New ASKUL Website integration, and will there be any additional costs? A: The integration of websites for SME customers into the New ASKUL Website is progressing as planned, as previously explained, and at this point we expect completion during the first half. Although we are strengthening security in light of the ransomware attack, no additional costs are being incurred in connection with this matter, and the project is generally progressing within the scope of the initial plan.

[Response to External Environment and Product Supply-Demand Conditions] Q: How do you view the reactionary decline from demand related to extreme heat and heatstroke prevention measures? A: In the previous fiscal year, demand for heat-countermeasure products such as beverages, salt tablets, and large electric fans increased significantly against the backdrop of extreme heat and mandatory heatstroke prevention measures. Partly due to the reactionary decline from that demand, related categories are currently weighing on sales. On the other hand, we believe the summer sales season will start in earnest from here. Although the reactionary impact will remain in July, we expect demand to recover from August onward. Q: How do you view the impact of conditions in the Middle East on demand and prices for petroleum-related products? A: For petroleum-related products, we believe that demand is converging slightly faster than initially expected. Demand peaked in April, and after that, demand trends appear to have been affected more by changes in supply-demand sentiment caused by related news reports than by conditions in the Middle East themselves. In fact, since mid-June, when reports of ceasefires and moves toward agreements increased, demand has also been moving toward stabilization. We expect the reactionary decline from stockpiling demand that occurred from April to May to continue for a certain period, but demand should gradually converge to normal levels. Q: When do you expect prices and demand for petroleum-related products to normalize? A: Regarding demand volume, we expect it to generally return to normal levels around August, after the reactionary decline from stockpiling demand that occurred in April and May. On the other hand, we are not assuming that costs will return to their previous levels, and have 5

incorporated the assumption that prices of petroleum-related products will remain elevated throughout this fiscal year. Therefore, we expect demand to normalize while price levels remain high, and we assume a certain negative impact until then. Q: Will the initiative to sell paint thinner contribute significantly to net sales or customer acquisition? A: The initiative to sell paint thinner is not primarily intended to expand categories or increase net sales. It was started based on a request from the Ministry of Economy, Trade and Industry, in response to circumstances in which small businesses, including smaller operators and customers in painting businesses, were having difficulty obtaining paint thinner. Sales destinations are limited to customers whose need for supply has been recognized by the Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism, and volumes handled are also limited. Therefore, we do not expect it to contribute significantly to net sales or the number of customers in the short term, but we position it as an initiative through which we fulfill our role as a company supporting social infrastructure. Q: What is the significance of selling paint thinner? A: We believe the significance of selling paint thinner lies more in expanding customer touchpoints than in the sales volume itself. ASKUL has a strong image as an office supplies provider, but we also handle a wide range of MRO products, including paint thinner. Through this initiative, we expect to increase awareness among customers in construction, painting, and related industries. Going forward, it will be important to connect this initiative not only to paint thinner, but also to proposals and transaction expansion across the entire MRO domain.

[Management Structure] Q: What role do you expect Mr. Narimatsu to play following the planned change of president? A: For ASKUL going forward, the most important theme will be how to maximize the use of data and our customer base in the AI era to achieve sustainable growth. To do so, we need not only thinking that is an extension of the past, but also a perspective for creating new value through AI and leadership capable of making bold decisions. We expect Mr. Narimatsu to lead this transformation and accelerate ASKUL's growth. Q: How do you view Mr. Narimatsu's strengths? A: Mr. Narimatsu led the business restoration efforts during the ransomware response. He has also gained experience in various areas within the Company and advanced new initiatives using data. In addition to this execution capability, we expect him to play a role in leading transformation in the AI era.

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