TSURUHA HOLDINGS INC. (3391) Q4 2026 Earnings Call Transcript

TSURUHA HOLDINGS INC. Financial Results Briefing for the Fiscal Year Ending February 2026 April 9, 2026

Event Summary [Company Name]

TSURUHA HOLDINGS INC.

[Company ID]

3391-QCODE

[Event Language]

JPN

[Event Type]

Earnings Announcement

[Event Name]

Financial Results Briefing for the Fiscal Year Ending February 2026

[Fiscal Period]

FY2026 Annual

[Date]

April 9, 2026

[Number of Pages]

55

[Time]

12:00 13:31 (Total: 91 minutes, Presentation: 48 minutes, Q&A: 43 minutes)

[Venue]

Webcast

[Venue Size] [Participants] [Number of Speakers]

5 Jun Tsuruha Hideaki Kirisawa

Ryutaro Miyake Takamune Shibazaki Kei Wakabayashi

[Analyst Names]*

Sho Kawano Toshio Takahashi

President and Representative Director Director and Executive Officer, In charge of Group Sales and Product Management, and Supervisor of Welcia Holdings Co., Ltd. Executive Officer and Chief Financial Officer Executive Officer and Deputy Chief Financial Officer Investor Relations and Budget Management Department Head Goldman Sachs Mizuho Securities

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or whose questions were read by moderator/company representatives. Support Japan Tollfree

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Presentation Wakabayashi: As the scheduled time has arrived, we will now begin the financial results briefing. Thank you very much for joining us today for the presentation on TSURUHA HOLDINGS fiscal year ending February 2026, as well as our medium-term management plan. First, let me introduce today's attendees. Mr. Jun Tsuruha, President and Representative Director. Tsuruha: I am Tsuruha. Thank you. Wakabayashi: Mr. Hideaki Kirisawa, Director and Executive Officer. Kirisawa: This is Kirisawa. Thank you. Wakabayashi: Mr. Ryutaro Miyake, Executive Officer and Chief Financial Officer. Miyake: I am Miyake. Thank you. Wakabayashi: Mr. Takamune Shibazaki, Executive Officer and Deputy Chief Financial Officer. Shibazaki: I am Shibazaki. Thank you. Wakabayashi: I, Kei Wakabayashi, Investor Relations and Budget Management Department Head, will be serving as your moderator. Thank you. Next, I would like to briefly outline today's presentation and proceedings. This briefing session will be held on-site and via Zoom webinar. We will share the presentation materials with you on the screen, and you can also download them from our website. As for today's proceedings, Mr. Miyake will first give an overview of the financial results and earnings forecast of TSURUHA HOLDINGS, and then Mr. Tsuruha will explain the mid-term management plan. We will conclude with a question-and-answer session. The presentation is scheduled to end at 13:30. For those taking photographs, we ask that you shoot from either side. Now, we will proceed with the presentation. Thank you.

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Miyake: Now, I, Miyake, will now explain TSURUHA HOLDINGS' financial results for the fiscal year ended February 2026 and its plan for the fiscal year ending February 2027. First, please look at the contents. In these financial results presentation materials, to facilitate a clear understanding of the corporate status both before and after the business integration, the pre-integration TSURUHA HOLDINGS is referred to as the "TSURUHA Group," the pre-integration WELCIA HOLDINGS as the "WELCIA Group," and the financial figures disclosed in the post-integration financial results reports as "TSURUHA HD Consolidated."

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Please see page three. This explains the financial highlights for TSURUHA HD Consolidated. Net sales were JPY1,450.5 billion, operating income was JPY63 billion, and net income attributable to owners of parent was JPY42.6 billion. Although gross profit trended favorably in February, driven primarily by strong sales of hay fever medications and similar products, the significant impact of a YoY decline in December and January (attributable to a high base effect from the previous year's cold season) resulted in a final figure that fell slightly short of the projections released on January 8. Goodwill amounted to JPY443 billion, with an amortization period of 20 years. From the end of the current fiscal year, EBITDA was newly established as a management indicator to show real profitability amid the impact of goodwill and capital investment associated with the business integration, resulting in an EBITDA of JPY93.2 billion and an EBITDA margin of 6.4% for the fiscal year ended February 2026. Please note that, as the fiscal year-end was changed to the final day of the month effective from the end of the previous fiscal period, comparative figures against the prior year have not been presented.

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The figures provided represent the actual results of the TSURUHA Group and the WELCIA Group, in addition to the financial impact associated with the business integration. Full-year results for the TSURUHA Group and the WELCIA Group are detailed on the next page and thereafter. As for the impact of the business integration, amortization of goodwill was approximately JPY5.5 billion and the gain on step acquisition was approximately JPY10.5 billion for the first three quarters. Regarding the TSURUHA Group, while sales saw a strong performance in existing OTC product lines from mid-February onward driven by the onset of pollen season, the significant YoY decline experienced in cold remedies and seasonal items during December and January ultimately weighed on results, causing sales to fall slightly short of our projections. The WELCIA Group experienced fundamentally similar trends regarding these seasonal factors; however, thanks to measures implemented to boost customer traffic such as intensified promotional activities the Group successfully met its sales targets, although it ultimately fell short of its targets for gross profit. In addition, for both companies, the prescription pharmacy segment demonstrated double-digit growth throughout the year, serving as a key driver of overall sales performance.

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This is the result for the full 12-month period of the TSURUHA Group. Net sales were JPY1,107.1 billion, operating income was JPY52.8 billion, and net income attributable to owners of the parent was JPY28.7 billion, generally in line with the plan. In addition, the previous year's reference values include a JPY2 billion expense associated with the correction of prior period financial results at the end of the fiscal year ended May 2024, and a one-time expense of JPY4 billion associated with the change in fiscal year-end at the end of the fiscal year ended February 2025. These results do not include amortization of goodwill and gain on step acquisitions resulting from the merger with WELCIA Holdings.

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This represents the full-year results for the WELCIA Group. The results here are prepared in accordance with the previous accounting standards of WELCIA Holdings in order to facilitate YoY comparisons. Consequently, Q3 period are presented in a format distinct from one that would incorporate the aforementioned threeter. Net sales increased to JPY1,353.3 billion due to growth in same-store sales driven by M&A and dispensing, operating income increased to JPY42 billion and net income increased to JPY16 billion due to appropriate control of SG&A expenses, especially personnel expenses, and earnings improved. In Q4, the JPY6.4 billion impairment loss incurred in the accounting period was directly recorded in net assets as a result of consolidation reclassification on the consolidation of TSURUHA Holdings. Regarding the currentperiod results presented on this slide, the relevant impairment loss is reflected as an extraordinary loss.

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This represents quarterly trend for TSURUHA HOLDINGS. This is a comparison with reference values for the same period of the previous year. The fourth fiscal quarter of the fiscal year ended February 2025 the period corresponding to the current quarter in the previous year spanned a duration of 3.5 months due to a change in the fiscal year-end. Regarding the corresponding periods for the first through third quarters of the previous year, we have not included YoY comparisons, as the respective periods spanned 16 days and 15 days.

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This represents quarterly trend for WELCIA Group. This, too, has been calculated in accordance with WELCIA Holdings' conventional accounting standards. In Q4, sales and profits increased due to SG&A cost controls, although gross profit margins declined due to the impact of intensified sales promotions, especially for food products, against the backdrop of a decline in sales in reaction to the influenza epidemic in the previous fiscal year.

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Existing store sales YoY Trend for TSURUHA HD Consolidated. As explained at the beginning, although sales performed strongly particularly for allergy medications through the latter half of February, the impact of a reactionary decline following last year's cold season in December and January meant that we fell slightly short of our targets. On an annual basis as well, the combined effects of extreme summer heat and the aforementioned cold and flu outbreaks of the prior year, including COVID-19, resulted in a lackluster overall performance. Conversely, our prescription dispensing operations served as a key driver of sales growth for both companies.

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This shows performance by product group for TSURUHA Group. Sales of OTC drugs were sluggish due to a reactionary decline from the cold epidemic of the previous year. In cosmetics, growth was sluggish due to the withdrawal of some makeup brands, but on the other hand, basic cosmetics and men's cosmetics performed well, and some high gross margin merchandise performed well, resulting in a gross profit margin of 33.5%. Food products showed a steady increase, with growth in coffee and other luxury goods and rice contributing to the increase, accounting for 14.1% of the total.

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This is the results by product group for WELCIA. These are also the results under the accounting standards before the integration. Sales grew in merchandise sales due to the impact of higher unit prices, particularly for food products, as well as successful sales of PB products and flyer-promoted items. In the dispensing business, the number of prescriptions received increased by double digits due to the promotion of the establishment of dispensing facilities and other factors. The gross profit margin for food products declined due to the impact of enhanced sales promotions as a countermeasure for customer numbers, but overall gross profit margin remained at the previous year's level. Since this is based on the classification before the integration, it may differ slightly from the movements of the TSURUHA Group.

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This is a breakdown of SG&A expenses. Overall, expenses were executed within budget. While a direct comparison is difficult, given that the previous fiscal year included one-time expenses associated with a change in the fiscal year end, the overall result was a decline in the sales composition ratio.

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This is a breakdown of SG&A expenses for WELCIA Group. This report has been prepared using the classification method previously disclosed by WELCIA Holdings, to facilitate a comparative analysis with the current fiscal period. Personnel expenses were impacted by wage increases but strengthened labor-hour control led to a 0.2pp decrease YoY in the ratio to sales. Overall SG&A expenses are being controlled through appropriate controls.

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This is the status of dispensing pharmacies. Both the TSURUHA Group and the WELCIA Group are performing well in the dispensing, with double-digit growth continuing. The composition ratio is also rising steadily, which has a positive effect on the overall gross profit margin. Combined, the sales composition was 19.19% of total sales, with a gross margin of 37.2% and a dispensing store ratio of 58.5%.

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Performance of PB products. The PB composition ratio was 12% for the TSURUHA Group and 11% for the WELCIA Group. While this figure serves as a reference value, the combined PB ratio currently stands at 11.5%. From the fiscal year ending February 2027 onward, we intend t +1 to further increase the composition ratio. Details will be explained later in the medium-term management plan.

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This is the status of store openings and closures. In conjunction with the integration, we have made partial adjustments to the designated areas and presented them in a manner that applies retroactively to the beginning of the fiscal year.

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Balance sheets and cash flows status. The amount of each element of financial position at the end of the current fiscal year increased compared to the end of the previous fiscal year, mainly due to the impact of the business integration with WELCIA Holdings, Inc. as of December 1, 2025. Total assets at the end of the current fiscal year were JPY1,647.9 billion, an increase of JPY1,064.6 billion from the end of the previous fiscal year. Total net assets at the end of the consolidated fiscal year increased by JPY589.3 billion compared to the end of the previous consolidated fiscal year, reaching JPY895.7 billion. This was mainly due to an increase in assets such as cash and deposits and sales bonds resulting from the acquisition of WELCIA Holdings as a consolidated subsidiary, as well as JPY443 billion in goodwill resulting from the acquisition of WELCIA Holdings. As a result, the equity ratio increased by 4.9 percentage points to 53.1%. The balance of cash and deposits increased by about JPY68 billion due in part to the fact that the closing date was a holiday. Excluding the effect of the holiday, cash and deposits at the end of the fiscal year were approximately JPY140 billion.

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Fiscal year ending February 2027 plan for TSURUHA HD Consolidated. For the full year, we forecast net sales of JPY2,555 billion, operating income of JPY99.4 billion, EBITDA of JPY162.3 billion, and an EBITDA margin of 6.4%. Existing store growth rate is expected to be 102.3% in H1, 102.4% in H2, and 102.4% for the full year.

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These are the respective plans of the TSURUHA Group and the WELCIA Group. For the TSURUHA Group, projected figures stand at JPY1,147.6 billion in net sales, JPY62.2 billion in operating profit, JPY81.4 billion in EBITDA, and an EBITDA margin of 7.1%. For the WELCIA Group, projections are JPY1,407.4 billion in net sales, JPY9.3 billion in operating profit, JPY0.9 billion in EBITDA, and an EBITDA margin of 5.7%.

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This is the plan for H1 and H2 by group. Regarding the growth rate for existing stores, the TSURUHA Group projects 101.6% for H1 of the fiscal year, 101.8% for H2, and 101.7% for the full year.

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For the WELCIA Group, the plan for same-store sales growth stands at 103.3% for H1, 103.5% for H2, and 103.4% for the full fiscal year.

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Store opening plan for the next fiscal year. We plan to open 80 stores under the TSURUHA Group and 74 stores under the WELCIA Group, for a total of 154 new locations. We plan to close 44 stores under the TSURUHA Group and three stores under the WELCIA Group, for a total of 117 closures. The net increase consists of 36 stores for the TSURUHA Group and one store for the WELCIA Group, resulting in a planned total net increase of 37 stores.

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This shows the dividend forecast for the next fiscal year. The details of our dividend policy will be explained in the medium-term management plan that follows, but we plan to pay an annual dividend of JPY48 per share, for a total dividend of JPY21.7 billion, based on our basic policy of paying progressive dividends. This concludes the explanation regarding the overview of financial results for the fiscal year ended February 2026 and the projections for the fiscal year ending February 2027. Please refer to the appendix starting on page 24 for the results of each operating company. Thank you for your attention.

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Wakabayashi: We will now move on to the explanation of the medium-term management plan.

Tsuruha: This is Tsuruha. Thank you very much for joining us today, despite your busy schedule. Today, I would like to explain our new medium-term management plan based on the integration of our group management. This plan is not merely an expansion of our business, but a clarification of the direction in which we intend to create value as the largest drugstore group in Japan. Today's explanation will consist of the six components you see here.

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First, the Group Vision, which is the image we are aiming for, followed by numerical targets to achieve the vision, and then key strategies, financial strategy, human capital strategy, and ESG strategy. Today's presentation will focus on three key areas in particular: key strategies, KPIs, and cash allocation.

First, I would like to present our group vision. This premises on our understanding of the industry landscape. Driven by regulatory deregulation, the drugstore industry has evolved into a vital part of our social infrastructure, characterized by the expansion of store formats, intense competition through dominant-area strategies, and differentiation achieved through private-label products and e-commerce. Currently, in addition to competition among drugstores themselves, the industry is shifting toward cross-format competition involving other retail sectors, such as supermarkets and convenience stores. Among these, we have three major strengths. The first is the largest nationwide network of stores in Japan, the second is a broad and high-quality product lineup, and the third is the customer data obtained from these two strengths.

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Currently, the Company has the following strengths: stores, customers, and data. On the other hand, these still exist as dots. For example, customer data is not yet fully utilized and optimization across stores is limited. In other words, the strengths are not yet structured. To win future competition, we believe it is necessary to integrate these networks and evolve them into a customer-driven network.

Our goal is to become a life store. This is not just a product sales business, but an infrastructure that accompanies the customer's life itself. We will provide necessary products, services, and consultation functions at every stage of life, from childbirth and child rearing to nursing care. Accessibility, lineup, and customizability are important for this purpose. The life store we are aiming for is an infrastructure and Support Japan Tollfree

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platform that protects people's lives, supported by the know-how, brands, and human resources cultivated over many years by both TSURUHA and WELCIA. We will establish a competitive advantage by simultaneously fulfilling the following three requirements: accessibility that can be used anywhere, lineup that offers everything, and customizability that is individually optimized and tailored to the needs of each customer. We will offer points of contact available anywhere in the country, at any time; provide a comprehensive range of life essentials; and deliver optimized recommendations for each individual. Achieving this is the starting point of our medium-term plan.

The services we provide change at every stage of life, from birth to old age. The key is to maintain continuous contact with that change. From childbirth and child rearing to nursing care, we will provide support for every stage of life, both in sickness and in health. We will change our value range as our customers change. This will maximize customer lifetime value.

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This medium-term management plan will promote transformation in two phases. We position the initial three-year period as the foundational phase for realizing the "Life Store" concept. Specifically, the Company will work to create synergies through integration, integrate data systems, and redesign stores, products, and dispensing models. Our main theme is to establish a winning structure over the next three years.

The specific actions in Phase 1 will be as shown.

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Next is the numerical targets. For Phase 1 covering the three-year period commencing with this initial year of integration we have set a consolidated Group revenue target of JPY2.7 trillion for the fiscal year ending February 2029. Next, as our most important indicator of real profitability, we aim to achieve an EBITDA of JPY202.5 billion and an EBITDA margin of 7.5%. The operating income target is JPY135 billion, with an operating margin of 5% and ROE of 7%. Equity capital increased as a result of the stock swap, and ROE temporarily declined, but is expected to recover in stages. As a result of the business integration, goodwill amortized over a 20-year period increased to JPY443 billion, exceeding our initial projections; however, our strategy remains focused on maximizing synergies and enhancing our earnings power with the aim of improving the overall business performance of the WELCIA Group.

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The most important value creation in this integration will be synergies. We expect to generate JPY40 billion over the next three years. In the first year, the contribution to profit will be limited due to the amortization of goodwill, but from the second year onward, the accumulated effects will contribute to the business performance. The breakdown is the supply chain area, particularly the MD strategy, which accounts for about 80% of the total effect of boosting gross profit. In addition, we expect to reduce costs by 20% overall, including dispensing purchases, switching to electric power, consolidation of unprofitable stores and stores in cannibalized areas, and overhead costs. We place the utmost importance on ensuring the reliable execution of these initiatives and building upon them steadily.

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Next, I will explain our key strategies. Until now, our services have existed as dots and each channel has been fragmented, but through integration centered on the DX strategy, we will evolve from dots to planes. Specifically, the integration of customer IDs and data linkage will enable us to make optimal proposals based on the same understanding of customers anywhere in the country.

Next is our store strategies. We will continue to shift our focus from expansion in number to quality. Specifically, in addition to new store openings, we will strengthen refurbishment and scrap & build and refurbish approximately 1,500 stores over the next three years. In the past, the ratio of refurbished stores to the total store investment of the two companies combined was about 15%, but this figure is now targeted at Support Japan Tollfree

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30%. In addition, we will improve profitability by utilizing AI to increase the accuracy of store openings, liquidate unprofitable stores, and consolidate stores.

With respect to our store opening strategy, we will strengthen store openings in urban suburbs, especially in the Kanto area, in light of future demographic trends. In addition, we will establish a six-block nationwide system and implement speedy management through the transfer of authority. This will enable us to flexibly open new stores in accordance with regional characteristics and increase our competitiveness. We will also strengthen the development of drug-and-food type stores, which are currently being undertaken by WELCIA Pharmacy. These drug-and-food type stores will be expanded to 400 stores in three years, centering on WELCIA Pharmacies, to achieve a 25% increase in food sales and a 10% increase in the number of customers. We aim to maximize sales and profits by simultaneously increasing customer visit frequency through an enhanced food product lineup and driving traffic to our healthcare and cosmetics sections.

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Next is our dispensing strategy. We aim to go beyond mere prescription fulfillment to social implementation of primary care. By integrating the dispensing pharmacy into the drugstore, we will provide consistent services ranging from daily health consultations to medical examinations, medication administration, or follow-up services. We will raise the rate of stores with dispensing services from the current 58% to 62% over the next three years. Currently, the ratio of dispensing pharmacies is 38% for the TSURUHA Group and 77% for the WELCIA Group, with a slight gap between the two groups. By the fiscal year ending February 2029, the Group plans to achieve group dispensing sales of JPY600 billion by increasing the ratio of each of its dispensing facilities. We will also continue to invest in DX for dispensing. In the dispensing business, we will evolve to a service that integrates medical consultation appointments, online medication instruction, and follow-up, and is completed on our own application.

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The core of this process is the use of AI agents. Based on the industry's largest scale of customer data and health care data, we will realize optimal proposals for each individual consumer. What is important is not only to improve convenience, but also to enhance the ability of consumers themselves to understand, choose, and act on their own data, thereby enhancing their ability to face their health itself. As a result, we hope to evolve from a place to be used when in need to a partner that is there for you on a daily basis.

Next is the PB strategy. PB is a core strategy that is responsible for both revenue and growth in our group. Support Japan Tollfree

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Over the next three years, we plan to renew our existing PB products into a new brand, Karada to Kurashi ni +1, and develop new products with particular emphasis on the beauty and food categories. In healthcare and beauty care, we will further increase profitability by expanding exclusive products and joint development. In the area of health foods and other value-added food products, we will promote product development focusing on products recommended by our group's nutritionists. On the other hand, in the low-price area, we will combine top value to increase the frequency of store visits. By combining these initiatives, we will build a structure to increase the number of customers while generating profits. The PB ratio will be raised in stages, aiming to reach 15% in the fiscal year ending February 2029.

Next is our DX strategies. Starting in March 2027, the WELCIA Group will also introduce the common point system shared with the TSURUHA Group. For the time being, we will focus on WAON points while gradually shifting to our own points to build a common foundation for the entire group in the future. At the same time, we will release a common application and promote unification of customer IDs. The key is not to end with mere points system integration, but to centralize customer data. The entire group will deepen its understanding of customers to realize optimal sales promotions and services for each customer.

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The establishment of an infrastructure is a prerequisite for promoting the use of AI agents and the utilization of large-scale data through ID integration. Integration of systems, masters, and data will be promoted in this Phase 1. Integration requires a certain amount of investment and time, but we regard it as an important foundation on which to base our future growth. In order to start providing such services as inventory visualization of all AI agents in all stores in three years, we have established an Integration Promotion Department in the Information Systems Division, which will be staffed by 100 DX employees.

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Next, I would like to discuss operational efficiency. The recent rise in prices and labor costs, as well as the shortage of labor due to a declining population, are issues facing Japanese society as a whole. We will invest more than ever in store DX and redistribute it to value-added operations such as proactive proposals, rather than merely improving man hours, to increase customer satisfaction.

Next is our overseas strategies. The overseas business is positioned as a future growth driver, and we aim to expand to 100 stores in three years.

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To realize this goal, we will first rebuild our business foundation in ASEAN. Specifically, we will strengthen headquarter functions such as human resources, infrastructure, and governance, and develop an operational structure that can be replicated as a group. In the priority countries of Thailand and Vietnam, we will accelerate the opening of new stores while establishing a winning pattern. We will also utilize M&A and partner collaboration to achieve growth, including inorganic growth. Through these efforts, we will build a foundation to support sustainable growth in the future.

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This screen shows the roadmap for implementation that we have organized in the back casting process, which is a plan to implement each measure step by step, working backward from the ideal state in 2029.

Next is our financial strategies. Cash allocation. While this medium-term plan presents numerical targets for the next three years, our medium-term plan is to achieve sales of JPY3 trillion in FY2032, six years from now. We will use the operating cash generated from the synergies from the business integration to achieve a balance between investment in growth and financial soundness. We have presented the six-year figures solely for the cash allocation. We project the generation of JPY900 billion in operating cash flow. Backed by the cash-generating ability that will result from integration, we will shift from our traditional focus on new store openings to investments in renovations, DX, overseas, and human capital, with a balance between leveraged investments and financial soundness. We expect to invest up to JPY420 billion in growth, and plan to invest JPY50 billion in systems through the development of core integration, customer data, applications, and AI agents. We also intend to flexibly consider M&A, both in Japan and overseas.

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Next is the new dividend policy. In the previous medium-term plan, the dividend payout ratio was set at 50%. After this business integration with WELCIA, the year-end dividend per share was JPY23. The Company's dividend forecast for the current fiscal year is JPY24 per share for both the interim and yearend dividends. The Company's basic policy is to pay stable and progressive dividends while strengthening its management base through business integration and investing in growth, and to return profits to shareholders, taking into account business performance and other factors, with a target consolidated payout ratio of 35% or more.

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Next, I will explain our human resources strategy. For us, human resources are our greatest capital. With approximately 110,000 employees providing value directly to customers, it is the foundation upon which Life store is built. To this end, we will strengthen our investment in human capital and build a framework that supports growth and success.

Specifically, in addition to integrating and upgrading our educational programs, we will introduce talent management. By visualizing skills and motivation, we will maximize the abilities of our human resources by placing the right people in the right positions and realizing career development. This will lead to higher productivity throughout the organization. Support Japan Tollfree

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At the same time, we will work to improve the work environment. We have conducted a company-wide employee survey and will continue to improve the environment and benefits. As our Human Capital KPIs, we have set targets to increase the ratio of female managers and the paid leave utilization rate, thereby striving to achieve a balance between a comfortable work environment and a sense of professional fulfillment.

Lastly, I will explain our ESG strategies. We have taken the opportunity of management integration to redefine materiality and set non-financial KPIs. We will achieve sustainable growth while fulfilling our role as a social infrastructure.

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Specifically, we will also work to build a fair management foundation, a responsible supply chain, and reduce our environmental burden. In particular, we will contribute to solving social issues by reducing CO2 emissions and expanding our lineup of environmentally friendly products. Finally, as a summary of this medium-term management plan, we will strive to become a "life store" by leveraging the nation's largest store network and customer base. To this end, we will pursue investments in strategic DX and human capital in an integrated manner to achieve both sales growth and improved profitability. And we will strive not only to expand the scale of our operations, but also to improve capital efficiency and sustainably increase corporate value. That concludes our medium-term management plan explanation. Through the implementation of this plan, we will provide sustainable value to our customers, employees, shareholders, business partners, and all other stakeholders. We look forward to your continued support. That's all from me. Thank you for your attention.

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Question & Answer Wakabayashi [M]: We will move on to question-and-answer session. We will limit questions to those pertaining to the content of today's explanation. Please limit each person to two questions and ask two questions in succession. We will first take questions from those who come to the venue. Let's begin with the gentleman in the front row, please. Katou [Q]: Thank you. My name is Katou of Gekiryu. I would like to ask two major questions. My first question concerns the most recently concluded fiscal year. Within the respective companies of both the TSURUHA Group and the WELCIA Group while I am not asking for a comprehensive overview of every single detail could you please highlight any specific points that are particularly noteworthy? For instance, please identify areas where performance was exceptionally strong, or conversely, areas that presented significant challenges. Second, regarding MD, which is the largest part of synergy, please tell us about the current progress and what you are currently thinking about in terms of current issues. Tsuruha [A]: Thank you for your questions. First, I, Tsuruha, would like to respond to the review of the previous fiscal year by the operating companies of the TSURUHA Group. Comparatively, each company's operating profit margin increased in the last quarter compared to the previous one. Although there are some areas that are not completely comparable due to changes in the fiscal year end, such as KYORINDO, which had been struggling in the previous two fiscal years, the effects of controlling SG&A expenses have been seen, and the recovery of operating income margin has actually been achieved. As a result, I evaluate that the results of each company have been roughly in line with the plan. In particular, despite the extremely competitive environment in Chugoku and Shikoku, TSURUHA Group Drug & Pharma West Japan, or TGN, achieved an operating margin of 8%, a fairly high level of performance. Consequently, I assess that, as a whole, the TSURUHA Group saw its individual companies deliver relatively strong performance compared to two years prior. Kirisawa [A]: WELCIA was particularly challenged by the performance of Pupre Himawari, as you can see, and although we have taken impairment losses, we have struggled very much. In particular, our merchandise sales have struggled significantly, resulting in challenging overall performance; however, the situation is not entirely negative, as our prescription dispensing operations continue to grow steadily. Last year, we liquidated unprofitable stores, undertook structural reforms and operational reforms at stores with various work styles, and this fiscal year we are finally at the stage of entering the rebuilding phase. TGN, which was mentioned by President Tsuruha earlier, is headquartered in the same prefecture Hiroshima and offers many valuable insights we can draw upon. Consequently, Pupre Himawari is currently engaged in close information exchange and the sharing of know-how with TGN; we consider this fiscal year to mark our entry into a restructuring phase. So, I think the one that was particularly tough was Pupre Himawari in the WELCIA Group. That's all from me. Tsuruha [M]: Regarding the second point about the progression of synergies. Kirisawa [A]: Regarding the current progress of synergy, especially in the MD part, there are two major categories, NB and PB. Regarding NB products, we are currently in the process of rationalizing our supplier alignments and refining our trading terms with various business partners. This organizational restructuring is currently well underway, and improvements in our procurement terms have already begun to materialize in Support Japan Tollfree

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certain areas. We have a tangible sense that these efforts are steadily building momentum, serving as the primary pillar of the synergies outlined in our Medium-Term Management Plan. Regarding our PB initiatives as touched upon earlier during the explanation of our Medium-Term Management Plan the development of our new product line, "Karada to Kurashi ni, +1," is currently progressing smoothly. Furthermore, we have established a clear roadmap for this fiscal year to streamline the existing private brands of both companies. We have set a target to launch 300 new SKUs under the "+1" brand within this fiscal year, and as progress remains firmly on track, we feel confident that our merchandising synergies are materializing exactly as planned. That's all from me. Wakabayashi [M]: Thank you. Next person, please go ahead. Suzuki [Q]: I am Suzuki of Nihon Keizai Shimbun. One is related to the recent situation in the Middle East. There is a situation of unstable supply of products such as petroleum, and I wonder if there is a phenomenon of hoarding products in stores. Also, what kind of impact is expected on your company's operations and performance in the future? I think this would be related to the operation and also to the production of PB and other products, but what is the impact and how would you handle it? Tsuruha [A]: Thank you for your questions. I, Tsuruha, will answer your questions. First, this situation in the Middle East is not reflected in the current plan for the fiscal year ending February 2027, nor in the new medium-term management plan. However, we have received reports that sales of trash bags and plastic wrap are about 1.5 times higher than normal sales at stores. We honestly do not know what the future supply of products will be. What we must do is to supply products without running out. We regard this as our top priority; therefore whether we are working with national brand manufacturers or developing PB products our primary focus moving forward will be to ensure that products reach our customers. We intend to base our future planning and information gathering efforts on this fundamental principle. We believe that the impact on our business performance is minimal at this time, but if there is any information that needs to be disclosed in light of future circumstances, we will report it again at that time. That's all from me. Suzuki [Q]: One more point shortly, it is related to DX. Regarding the topic of online medication guidance, I believe you placed considerable emphasis on expanding this service through your own proprietary app. As I recall you, I think WELCIA, had previously offered online guidance in partnership with Amazon Pharmacy. However, my understanding now is that, going forward, you intend to shift your focus toward further strengthening your own online services, specifically those delivered via your Kirisawa [A]: First, regarding our collaboration with Amazon, it is strictly a matter of utilizing their platform; what we intend to do within our own dedicated app is to offer a comprehensive suite of services. Naturally, this will be predicated on the availability of online prescriptions; however, our plans extend to providing online medication guidance, and depending on the circumstances offering medication delivery services, or even installing medication lockers to allow patients to pick up their prescriptions at their own convenience. Therefore, while our Amazon-based initiative operates strictly within the confines of their platform, our ultimate goal is to leverage our own dedicated app to establish a robust connection with our patients and customers, thereby creating a fully integrated and self-contained service experience. Wakabayashi [M]: Thank you. Now, the person seated in the back please go ahead with your question.

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Kazahaya [Q]: This is Kazahaya from UBS Securities. Thank you. Please allow me to ask two questions about the medium-term management plan. The first point is that in the current medium-term plan, the operating profit margin is 6.2% for the TSURUHA Group and 5.5% for WELCIA, so compared to the profit margin figures you gave us for the current term, I think we can expect a 0.8 point improvement for TSURUHA and a 1.3 point improvement for WELCIA. While you previously mentioned an 80/20 split in the context of synergies, could you please outline the specific breakdown of how this improvement in profit margins specifically regarding the ratio of selling, general, and administrative expenses versus the gross profit margin is expected to be driven? Second point. With projected operating margins of 6.2% for the TSURUHA Group and 5.5% for WELCIA, the plan appears to be premised on the continued existence of a profitability gap between the two groups; could you please explain the background behind this disparity? Furthermore, looking at a slightly longer time horizon, could you also address whether you anticipate being able to eventually equalize the profit margins of the WELCIA Group and the TSURUHA Group? Miyake [A]: I, Miyake, will answer the questions. I believe the specific point of interest here is the extent to which synergies will impact operating profit. Our basic assumption is that this impact will initially be around 0.5 percentage points; while it is projected to expand significantly over time, particularly by the third year, we currently model its effect on gross profit margin to be in the range of 1.3 pp or thereabouts. Regarding expenses, we also anticipate some synergistic effects; although the numerical impact here is somewhat smaller compared to that on gross profit, our medium-term plan is structured around the assumption that synergies will contribute approximately 0.1 to 0.2 pp. As for your second question about the level of profit margin, there are still differences in fixed costs, the structure of core systems, etc., and other various factors. Naturally, there are differences regarding the specific regions in which we operate, as well as variations in factors such as the rate at which dispensing pharmacies are co-located with our stores. Consequently, we intend to review various aspects of our operations, including instances of store-level cannibalization going forward. In particular, as we advance our core systems and DX initiatives during Phase 1, we anticipate that gradually, likely from Phase 2 onward the standardization of our core systems and operational procedures will lead to the realization of even greater organizational synergies. Through this process, we believe that the disparities currently observed in our operating margins will gradually converge toward a more uniform level. The first step is to build a proper foundation in Phase 1. Ultimately, we expect these factors to lead to a harmonization of our operating margins and profit ratios. That's all from me. Kazahaya [M]: Thank you. Wakabayashi [M]: Next person, please. Kanoshima [Q]: Thank you for your explanations. My name is Kanoshima from Ryutsu News. I have two questions. My first question concerns the fiscal year ending in February 2027, the first full year following the business integration. With projected net sales exceeding JPY2.5 trillion for the current fiscal year, and targeting a 2.3% increase in existing-store sales, where specifically do you intend to focus your greatest efforts to drive growth during this period?

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Second, I would like to ask about your store strategy in the medium-term business plan. You have announced plans to open 400 new drug & food format stores over the next three years, with a specific focus on the Kanto region. However, the categories of fresh foods and prepared meals are areas that supermarket chains, including the Aeon Group, have already developed to a very sophisticated level. Given this context, particularly considering your affiliation with the Aeon Group, and the fact that the Kanto region is home to a number of supermarkets within the Aeon Group itself, how do you envision differentiating your stores and defining your specific market positioning? Tsuruha [A]: Thank you for your questions. I, Tsuruha, will answer the first question, and Mr. Kirisawa will answer the second. Regarding your question about how to increase the 2.3% of existing store sales, I would say that the first step is to ensure the creation of these integration synergies from the first year. To reiterate, this initiative essentially centers on improving procurement by leveraging economies of scale. The first step involves shelf allocation. Since the unification of shelf layouts and promotional strategies serves as the initial catalyst naturally accompanied by improvements in procurement our primary focus during the first year will be directed toward this area, with the aim of generating synergies as early as possible. Furthermore, we will be focusing on our new private brand products. Additionally, given that the TSURUHA Group still possesses untapped potential regarding the integration of in-store dispensing pharmacies, we intend to bolster the performance of our existing stores by, for instance, increasing the proportion of revenue derived from these pharmacy operations. Kirisawa [A]: Second point, regarding drug & food business. Regarding the differentiation strategy specifically, how we distinguish ourselves from Aeon and the broader, conventional supermarket sector, our fundamental premise is this: the drug & food business model we are pursuing is not designed to compete head-on with traditional supermarkets. So, it is not a full-line food SM, but a decent selection of food items for everyday shopping. The lineup is designed to offer a variety of products, mainly daily necessities and fresh produce, that can be used in everyday life, so it is important for us to be close by and to be able to meet the needs of our customers. Furthermore, we recognize the need to cater to consumer demands for time-saving solutions, and, as I mentioned earlier, we intend to operate with a focus on serving customers' everyday shopping needs. Therefore, while there are naturally some cannibalistic parts with supermarkets in terms of food products, we believe that our target is different from supermarkets. Rather than viewing our drug & food business as being identical to a standard supermarket, we intend to compete as a fundamentally different business model. At the same time, we will pursue a strategy of collaboration with Aeon. That's all from me. Wakabayashi [M]: Thank you. We will move on to the participants in the Zoom webinar. Mr. Kawano, please go ahead. Kawano [Q]: I am Kawano from Goldman Sachs. The first is about synergy, which has been mentioned again and again. Since it has been only six months for Mr. Kirisawa, and a mere three months for Mr. Tsuruha, perhaps not much has changed yet. However, regarding the figures you have presented, JPY40 billion over the past three years, and JPY15 billion specifically for this year, could you outline the conditions or factors that might cause these numbers to shift significantly higher or lower? I imagine that certain insights have emerged more clearly over these last three to six months; therefore, I would appreciate it if you could share any observations you have regarding the associated risks, or, conversely, any indications that the results could exceed current expectations.

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Tsuruha [A]: I, Tsuruha, will answer the first question. As Mr. Miyake mentioned earlier, we are planning to integrate the core system in three years, and we believe that the integration of this system will lead to the consolidation of various operations and organizations. We expect to see some additional organizational synergies here, but this will only happen after the integration of the core systems, so Phase 1 is to make sure that the supply chain, in particular, will be fully integrated in the next three years. In Phase 2, we would like to add synergies in SG&A expenses. The rest is a matter of negotiation, so there may be synergies ahead of time if supply chain-related negotiations proceed quickly. That's all from me. Kawano [Q]: Regarding the integration of your core systems a topic that has been under discussion for some time am I correct in understanding that you intend to proceed gradually and cautiously to avoid causing any disruption, as attempting to execute such a large-scale integration within a single year would result in a substantial increase in investment costs? Tsuruha [A]: Well, to be honest, even three years is quite a tight timeframe or rather, I would consider it to be on the faster side. While it goes without saying that the sooner the better, the figure of three years represents our commitment to making our utmost efforts to somehow achieve integration within that timeframe. Kawano [Q]: Thank you. The second point is regarding page 27 of the slide shown at the end of the mediumterm plan. As for cash allocation, for the current fiscal year, you anticipate generating annual operating cash flow of approximately JPY110 billion. With your capital expenditures projected to be in the range of JPY60 billion to JPY70 billion, you intend to allocate a significant portion of your remaining funds toward overseas investments and your strategic alliance initiatives. notably high ratio, the combined total of these payouts ultimately results in a figure that aligns right around the average. Since the first three years are expected to generate a fair amount of cash flow, I thought it might be a good idea to allocate a slightly larger portion of those returns to the investors. Did you set this allocation because there might still be some M&A in the future, and you want to keep it because you want to strengthen overseas as well? What is your idea of cash allocation for six years? Miyake [A]: I, Miyake, will answer the questions. As you say, we believe it is important to return profits through dividends, but we will also build a foundation over the next three years. In addition to investment in growth and investment in stores, we are thinking quite a bit about the investment in DX. Only after these aspects are in place, as Tsuruha mentioned earlier, will organizational synergies and further synergies emerge in Phase 2. To achieve this, we will first focus on the proper integration of our core systems and digital systems. We are also considering investments in overseas business infrastructure and M&A. We understand that there may be some dissatisfaction with the dividend payout ratio and other aspects of our business, but we would like to maintain a good balance. We have set up this cash allocation so that shareholder returns will increase considerably in the fourth year, and we expect to see further increases once the foundation building is completed, especially in the fourth year and beyond. That's all from me. Kawano [M]: Thank you. Wakabayashi [M]: Thank you. Next, Mr. Takahashi, please go ahead.

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Takahashi [Q]: My name is Takahashi from Mizuho Securities. I apologize for not being able to visit the venue today. Thank you for your detailed explanations. First, I would like to ask Mr. Kawano's question from a different angle. I frankly feel that the 7% ROE set forth in the medium-term plan is quite low. Since the shares were exchanged, I would assume that there has been a significant increase in net assets. I believe that a comprehensive financial strategy must take such factors into account; in that sense, I suspect that a great many investors would view a dividend payout ratio of 35% or indeed, the overall approach to shareholder returns inclusive of this figure as insufficient when evaluated from the perspective of ROE. So, of course, the next three years will be spent building a foundation, but looking at the next six years and beyond, what are your plans for the net assets that have been inflated? I would be very interested to know your thoughts in this area. One more point. You mentioned earlier in the cash allocation section that you are going to do more M&As. Both your companies have demonstrated robust growth through M&A to date; and, of course, as the industry undoubtedly moves further toward consolidation in the future, I fully expect your firm to emerge as a definitive leader in this restructuring process. On the other hand and this is merely my own conjecture I imagine it must be quite a challenge to continue bringing new partners into the fold while simultaneously striving to maximize synergies. Could you clarify your stance regarding future M&A activities? Specifically, is your approach to remain proactive, for instance, by actively pursuing deals whenever potential opportunities arise? Or will you prioritize establishing a solid foundation first specifically, by fully realizing synergies and consolidating the operational bases of both current entities before setting your M&A strategy back in motion? Of course, I don't think this is something your company can control, but I would be very interested to hear your thoughts on this area as well. Miyake [A]: I, Miyake, will answer the questions. As you noted, given that our equity capital has reached a substantial level approaching JPY880 billion to JPY900 billion our ROE has, in the wake of the merger, currently declined to a range of around 4.8% to 7%. Given that it is a listed subsidiary of Aeon, we will naturally be giving careful consideration to various aspects of capital policy, including dividends, share buybacks, and other related measures, as we move forward. Above all, recognizing that we currently face relatively high impairment charges and significant amortization expenses for goodwill, our primary objective is to enhance overall profitability and boost our net income for the fiscal year. Prior to our integration, the former TSURUHA Group targeted a ROE of 10%; therefore, we are committed to generating synergies that will allow us to rapidly approach that benchmark, thereby making a substantial improvement in our ROE figures. Therefore, in the third year, we will be making various investments, and to a certain extent, 7% may seem a little conservative, but we have set a target for ROE. For other M&As as well, by establishing a unified infrastructure for core systems and DX investments in the Phase 1of building the infrastructure, we will work to create a core system, infrastructure, and structure that can withstand the addition of other M&A firms to the same consortium concept. In light of this, once we have a proper infrastructure, core system, and DX infrastructure in place, we will create a core structure that can withstand the arrival of new groups, and of course, we will continue to consider M&A opportunities, including those in other industries as well as overseas, if opportunities arise. That's all from me. Takahashi [M]: Thank you. Wakabayashi [M]: Thank you. Next, Mr. Matsuo, please go ahead. Matsuo [Q]: Thank you. I am Matsuo of SMBC Nikko Securities. Let me ask you two questions as well. I would like to ask you primarily on stores.

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The first point concerns your plans to open new stores ranging from 200 to 300 tsubo in size across the Kanto and Kinki regions. Regarding your existing operations, specifically, in the case of TSURUHA in Hokkaido and the Tohoku region, or WELCIA in other areas, while Kanto is a stronghold region, how do you view the outlook for these other regions? Also, you are planning a net increase of about 40 stores this fiscal year, and you will continue to focus on the net increase. Please update that since you previously commented that the number of stores would remain flat and there would be no net decrease. The second point concerns impairment losses: while a figure of JPY10.8 billion was recorded in the fiscal year just ended, how do you view the outlook for the current fiscal year? Also, you made a comment earlier about the cannibalization of stores, but now, a few months after the integration, what is your view of the current cannibalization? That's all from me. Tsuruha [A]: I, Tsuruha, will answer the first question, and Mr. Miyake will answer the second. In terms of store openings, we will mainly open stores in so-called urban suburbs. the reality is that, as a group, the TSURUHA Group currently operates in a number of regions facing population decline; therefore, amidst the ongoing population contraction across Japan, we plan to concentrate our future store openings in areas that still possess a relatively robust population base. Ideally and given that both TSURUHA and WELCIA specialize in suburban-style store formats we intend to proactively open new locations in areas where there is a strong local presence of people. On the other hand, we also have companies like Kokumin, which is part of the WELCIA Group, that actually have strong station-front locations, so our policy is basically to open stores where consumers are, while keeping those locations in check. Regarding net store growth, while we do anticipate a modest net increase, somewhere in the range of 30 to 40 locations, this represents a shift compared to the net growth of around 100 stores we have achieved in the past. Moving forward, while we will certainly continue to open new stores, our intention is to proceed with a rigorous "scrap-and-build" strategy, carefully balancing new openings with the closure of existing locations. So, to answer your question, we are not too concerned about the net increase, but the net increase as a result. It was my answer to the first question. Miyake [A]: Your second question was regarding the impairment. If you look at the full year forecast for the fiscal year ending February 2027, ordinary income is expected to be JPY98.1 billion and after-tax income will be JPY41.5 billion, and the difference between the two is very large. For one thing, regarding the impairment losses you are concerned about, there were indeed a significant number of such losses recorded in prior fiscal years specifically involving properties that were constructed in-house. Consequently, our projections indicate that impairment losses stemming from these specific areas will continue to emerge to a certain extent through the current and upcoming fiscal years. However, we anticipate that from the third year onward this situation will improve, and the volume of impairment losses will begin to decline. Since the ratio of selfdeveloped properties differs between TSURUHA and WELCIA, I will refrain from providing specific details at this time; however, my response is that while the total amount of impairment losses will be lower than in the current fiscal year, they will nonetheless continue to appear to a certain degree. Another factor that is visible in the low net income, JPY41.5 billion, is the amortization of goodwill. In connection with the recent integration, annual amortization expenses for the goodwill generated amount to JPY22 billion; additionally, there is a portion of goodwill totaling approximately JPY2 billion that the TSURUHA Group held prior to the integration. Consequently, the combined goodwill amortization expense totals just under JPY25 billion. Regarding this expense, typically, when an expense is recorded, it generates a tax benefit meaning that taxes are reduced because taxable profit decreases. However, in the specific case of this goodwill, it is generally understood that such a tax benefit cannot be realized. Consequently, this factor causes the after-tax profit to appear lower than it otherwise would. Support Japan Tollfree

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Because of these factors, when you look at ordinary income and net income, you may be concerned that there may be a large amount of impairment, but this is not the case. The reality is that these numbers are primarily a result of the tax burden appearing somewhat heavier than usual, rather than stemming from impairment issues. That's all from me. Matsuo [Q]: Thank you. Am I correct in understanding that you do not view store-level cannibalization as being particularly high? Miyake [A]: Yes. Regarding store cannibalization, we do take it into consideration to a certain extent. In this context, we naturally take into account factors such as store impairment losses and losses associated with store closures. Specifically, the penalties for early lease termination. We take those aspects into consideration. However, please understand that this matter involves elements of negotiation, as well as considerations regarding the impact on local communities and our employees. While also taking into account the competitive landscape, we are carefully evaluating these various factors, which will ultimately influence the figures reported as extraordinary losses. Therefore, while we are certainly keeping a close watch on the situation, we ask for your understanding that the specific financial figures involved have not yet been finalized. Matsuo [M]: I understand. Thank you for your detailed explanation. Wakabayashi [M]: Thank you. Next. Mr. Nishizawa, please go ahead. Nishizawa [Q]: This is Nishizawa from BofA Securities. Thank you. I would like to ask you two questions. One thing I would like to ask is if you could tell us what the different strategies are in the current mediumterm plan when we look at the TSURUHA Group and the WELCIA Group. If there is any. Based on the assumptions for the current fiscal year, it appears that WELCIA is demonstrating stronger performance in existing stores, and its medium-term plan projects a more robust improvement in gross profit margins. Given that there may be some degree of variance involved, I would appreciate it if you could clarify any specific differences that may exist in this regard. Secondly, regarding the gross profit margin for this fiscal year, I believe that both groups expect the same level of improvement in the gross profit margin for H1 and H2. I had assumed that as time went on and negotiations progressed, the synergies would become increasingly apparent. However, based on what is currently visible and factored into your projections, should we expect the degree of improvement to be roughly the same for both the first and second halves of the fiscal year? Is there another factor? Is this the point where you don't know because you are in the middle of negotiations? I would also appreciate it if you could share your outlook regarding the gross profit margin for the current fiscal term. Tsuruha [M]: I, Tsuruha, will answer the first question. Am I correct in understanding that your question concerns the differences in existing store growth trends between the TSURUHA Group and the WELCIA Group? Nishizawa [Q]: Regarding both existing-store performance and overall strategy, including gross profit margins, I believe that both companies are operating on the same basis and pursuing similar approaches. However, if there are any specific areas where you perceive a difference, I would appreciate it if you could point them out. Tsuruha [A]: Thank you. First, as was explained earlier, we will be carrying out renovations to our drug & food format stores, primarily at WELCIA Pharmacy locations. While our fundamental strategy naturally remains aligned with the Group's medium-term plan, we are also addressing specific differences between the two companies. For instance, this includes disparities in the ratio of stores featuring in-house dispensing pharmacies, as well as differences in the category breakdown of our respective PB product portfolios, such as the fact that TSURUHA previously held a significant number of PB products in the pharmaceutical sector, Support Japan Tollfree

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which we are now introducing to WELCIA. Given these and other structural differences in our product categories, we intend to integrate the strengths of both companies and move forward by adopting the best practices from each side. Within the framework of this approach, we anticipate that the growth trajectory of our existing stores may be perceived somewhat differently going forward. Regarding WELCIA, given that factors such as tobacco sales and loyalty points have now cycled through, I believe it is essential to take these specific elements into account particularly when making YoY comparisons. That's all for the first question. Second question is regarding the difference between H1 and H2 in terms of synergies. Nishizawa [Q]: Regarding your plans for the current fiscal year, specifically how you are projecting gross profit margins, and the fact that you appear to be anticipating an equal degree of improvement in both the first and second halves could you please clarify the nuances behind these figures? For instance, does this reflect a somewhat conservative approach to your projections, or is there a possibility that the H2 figures could increase further as a result of ongoing negotiations? Miyake [A]: I, Miyake, will answer. As negotiations are indeed taking place throughout both the first and second halves of the year, we ask that you understand our projections as being balanced; they reflect the expectation that these negotiations will be finalized sequentially over time. Nishizawa [Q]: Am I correct in understanding that you are including what you can see at the moment? Miyake [A]: Yes. Fundamentally, we proceed sequentially with negotiations, specifically regarding manufacturers and aspects of our PB business and our current situation is that we are formulating our plans based on the concrete prospects that have emerged from these ongoing discussions. Nishizawa [M]: I understand. Thank you. Wakabayashi [M]: Thank you. We are very sorry. As we have run out of time, we will conclude the Q&A session here. Thank you for your questions. This concludes the financial results briefing for the fiscal year ended February 2026 and the medium-term management plan of TSURUHA HOLDINGS, INC. Thank you very much for joining us today. Tsuruha [M]: Thank you. [END]

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Document Notes 1. 2. 3. 4.

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Portions of the document where the audio is unclear are marked with [inaudible]. Portions of the document where the audio is obscured by technical difficulty are marked with [TD]. Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides an answer from the Company, or [M] neither asks nor answers a question. This document has been translated by SCRIPTS Asia.

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