Matsuda: FY2024 was the important first year aimed at transitioning to the new business model established by the Company, and I highly commend the active implementation of strategic M&As. This is not simply business expansion, but also a strategic investment from a long-term perspective, and the management team is making decisions with strong resolve. In addition to promoting a policy of expansion while balancing the accelerator and brakes, it is important to operate in such a way that each measure steadily leads to results. In particular, in order to maintain our speed of growth, we must thoroughly review unprofitable businesses and strive to continuously improve ROE.

 

Koizumi: I was appointed as an Outside Director of AUTOBACS SEVEN in 2021. At the time, I promoted the establishment of the Six Networks and the enhancement of the Five Business Infrastructures under the Five-year Rolling Plan in order to provide services particularly tailored to car usage scenarios. These initiatives absorbed the initial M&A costs and rising labor costs in FY2024, leading to increased sales and profits exceeding the targets of the plan. In particular, the steady progress of the three key strategies to “create touch points,” “develop and supply products and solutions,” and “establish new business domains” can be considered a solid foundation for future growth. The increased number of locations is expected to increase customers going forward, which I believe will contribute to medium- and long-term growth. With regard to capital efficiency, while ROIC and ROE have both improved, I recognize that PBR falling below 1.0 is an ongoing issue.

 

Kanamaru: We got off to a good start in FY2024 by achieving our targets while making various preparations for the future. I feel that employee motivation has increased, and a positive atmosphere has been cultivated throughout the organization. Going forward, I would like to keep a close eye on the progress of how various initiatives can bear fruit.

At Board of Directors meetings, regular reports are given on the progress of the Medium-term Business Plan, and Outside Directors are also given the opportunity to express their candid opinions. The management team takes such feedback and suggestions from Outside Directors seriously. Going forward, I hope to continue the highly transparent disclosure of information while making the relationship between each strategy clear.

 

Kamoi: At Board of Directors meetings, regular reports are given on the progress of the Medium-term Business Plan, and Outside Directors are also given the opportunity to express their candid opinions. The management team takes such feedback and suggestions from Outside Directors seriously. Going forward, I hope to continue the highly transparent disclosure of information while making the relationship between each strategy clear. I was appointed as an Outside Director of AUTOBACS SEVEN in June 2025. When I was offered the position of Outside Director, I spoke with other Outside Directors who briefed me on what kind of thinking guides their participation in management. In addition, during the onboarding process, I was given the opportunity by the Corporate Planning Department to gain a deep understanding of the Company’s strategies and issues in relation to the details of the 2024 Medium-term Business Plan.

The domestic market is undergoing major changes such as digitalization of points of contact with customers and the increased use of software in vehicles, and the declining population is expected to bring about a reduction in the number of vehicles sold. Amidst this business environment, the Company established in the 2024 Medium-term Business Plan that it will pursue diversification by making active investments aimed at a new growth stage and focusing on exploring new business domains.

When promoting the plan, the management team communicates thoroughly with the leaders overseeing operations on site and strives to disseminate policies and strategies. However, in order to ensure complete implementation of the plan, it is essential to enhance the organization-wide effectiveness of implementation. Specifically, we have thus far been in a stage of expansion and growth centered on a strong AUTOBACS Business, but moving forward, particularly to the stage of creating new businesses, will require even stronger market analysis skills, strategic planning skills, and problem-solving skills. In addition, homogenous discussions only among people who share the same culture and experiences will not lead to transformation. It is important to bring in new perspectives by actively recruiting human resources from outside the Company with skills and experiences not found within, and recruiting and promoting human resources with diverse backgrounds.

It is also important to work to strengthen the supply chain. I would like to see reassessments of whether it is suitable for the operation of new businesses, whether it is sustainable, and whether its digital infrastructure is robust and flexible.

 

Koizumi: Securing and developing human resources is extremely important in order to explore and expand into new business areas with a view to achieving target net sales of 500.0 billion yen in FY2032. As the Company shifts its business model from goods to services, I appreciate that it has made efforts to secure and develop certified mechanics from an early stage.

With the domestic market expected to shrink going forward, global expansion is an important growth driver. While overseas businesses have struggled in the past, the system has been revamped under Mr. Horii, transitioning from a vertically-divided regional headquarters-based system to a dual-axis system based on retail and wholesale.

I look forward to future development, focusing on the restructuring of the global strategy. I also look forward to seeing innovative evolution achieved through the impressive brand strength of the AUTOBACS Business.

 

Matsuda: While it is great news that business performance is improving, in order to ensure steady growth going forward, it is important that we accurately analyze which measures are proving effective and further develop our strengths. It is also essential that we engage in constant, thorough communication so that employees feel a sense of accomplishment. The FY2032 target of 500.0 billion yen in net sales is not a figure that we can achieve by merely building on the current situation. The management team will be required to reach beyond individual strategies for a grand vision for achieving non-consecutive growth and a strong will to support it.

Koizumi: In the four years since I was appointed as an Outside Director of AUTOBACS SEVEN, the transformation of the automotive industry has accelerated, with the further diversification of customer needs and the transformation of the concept of cars themselves. To achieve top-line growth in the mature domestic market, I feel that highly accurate directional guidance is being provided by our current efforts, which are expanding and strengthening engagement with customers through new services and the used car business in addition to goods and statutory safety inspection services.

 

Matsuda: In April 2024, the franchise chain package was revised based on the idea of franchisees and the Company both focusing on retail with a view to regrowth across the AUTOBACS Group. While this is a major change carrying the risk of franchisee withdrawal, I see its bold implementation as a deeply meaningful initiative. Within the Company, it has been praised as a “change that only Mr. Horii could achieve.”

We are currently actively promoting growth-oriented investments, with investment decisions being made with a focus on profitability. While this is an important perspective, simply making repeated safe investments will not lead to fundamental change, even if they lead to an expanded size. In order to launch new businesses and drive transformation, we must make decisions from a broader perspective, including that of whether the Company possesses the necessary functions and human resources.

 

Kanamaru: Changing the franchise chain package was a huge decision for the Company. At present, the changes are proceeding smoothly and management has not faced any obstacles. However, we must continue to monitor what changes occur to franchisees’ business performance going forward, and how they affect the Company’s business performance.

It is also important to continuously confirm trends in customer satisfaction, and whether service quality is maintained and improved. I would like to keep a close eye on whether these reforms lead to a “win-win” relationship that is profitable for both franchisees and the Company.

Koizumi: The Company’s purpose of “ensuring the safety of our communities while driving and enriching customers’ lives” and its direction of evolution as to become a company that is “dedicated towards providing you the joy of going out” were presented based on deliberations by the executive side in discussions at the Board of Directors meeting related to the long-term vision “Beyond AUTOBACS Vision 2032.” At the Board of Directors meeting, Outside Directors also presented many opinions on the concreteness of growth drivers aimed at achieving the target of 500.0 billion yen in net sales, and whether we can present a persuasive narrative to investors, taking into consideration alignment between the purpose and business strategy, their relationship with the Company’s strengths and competitive advantages, and future market trends.

I believe that we should consider whether our current purpose is adequate for the move toward the “integrated mobility after-sales market player” as a familiar maintenance hub, and establish a new purpose if necessary.

 

Matsuda: We must clarify which areas will be developed in order to achieve non-consecutive growth. In order to do so, in addition to presenting the resolve to transform AUTOBACS as an impact, sharp-edged message, it is important that we organize our vision and direction into a concrete and compelling narrative and communicate it repeatedly. If this equity story convinces investors of profitability, we can expect to enhance corporate value.

In addition, even if changes to the Company are not noticed internally, gaining recognition externally will increase employee awareness and motivation, creating vitality throughout the organization. I would like the management team to disseminate information even more actively in order to create such a positive cycle.

 

Kamoi: I have served as the Chief Executive Officer of multiple companies. During my time in office, I put a lot of effort into the external dissemination of information. While the purpose of this was to gain the understanding of external parties, I also had a strong desire for employees to recognize the company’s direction and values. In truth, I remember disseminating information with an awareness that was 40% external and 60% internal. I expect the AUTOBACS SEVEN management team to further strengthen internal and external dissemination with the same perspective.

Koizumi: Board of Directors meetings previously contained a lot of deliberation of individual agenda items and reports on execution of duties. Now, however, under the 2024 Medium-term Business Plan, there have been more discussions on how to enhance corporate value by improving “earning power” and more candid and constructive exchanges of opinion.

As an issue for future examination, I would raise the fact that a low portion of total director remuneration is composed of performance-based remuneration (stock remuneration). Formulating an incentive plan linked to the long-term vision and the Medium-term Business Plan is important in more strategically connecting the awareness and actions of the management team, and I believe this is a theme that should be further examined.

 

Kanamaru: As a characteristic of the Company’s Board of Directors, I would raise the fact that Outside Directors are deeply involved in management and actively give advice and recommendations. At Board of Directors meetings, there are many situations in which the opinions of Outside Directors are sought, and information is sufficiently provided by the executive side. We are also given adequate opportunities for conversation with the Chief Executive Officer, allowing for smooth communication.

There are also regular Independent Outside Directors Liaison Meetings, in which discussions are held only among Outside Directors. The content of these meetings is provided as feedback to the Chief Executive Officer, allowing us to share multifaceted perspectives on management issues. As issues made clear in evaluations of the Board of Directors’ effectiveness are also addressed seriously, going forward, we can expect further improvement of effectiveness of the Board of Directors and other meeting bodies, in regards to their ideal state and decision-making process.

 

Matsuda: After Mr. Horii was appointed as Chief Executive Officer, restructuring of the management and executive system has progressed with the abolition of the officer system in 2023 and organizational restructuring in conjunction with changes to the reporting segments in 2024. These initiatives demonstrate a strong conviction toward transformation as a company, and I believe that they will be an important foundation for future growth.

Achieving the target of 500.0 billion yen in net sales will be difficult if we do not maximize our organizational capability. I would like to continue being actively involved by providing necessary advice and recommendations as an Outside Director, with a view to establishing a more robust organizational system with stronger implementation capabilities.

 

Kamoi: The most important factor for enhancing corporate value is how to make the executive system as robust as possible. The Company is trying to transition to a new growth phase, which also changes the skills required of the executive side. I recognize that we are currently in a period of transitioning to a leadership team with strong strategic planning and implementation capabilities. I would like to help build this new stage by offering support from a perspective close to the executive side.

Kanamaru: In recent years, a series of scandals has occurred in automotive-related industries, causing corporate trust to be once again called into question. Having expanded the Group with the addition of new subsidiaries and franchisees, thorough compliance and highly transparent operations are essential in order to maintain the trust of society. From a position with a specialized legal perspective, I would like to help achieve sound corporate management by continuously confirming the status of Group-wide corporate governance systems and risk management and providing advice and recommendations as needed.

 

Koizumi: With M&As being implemented at unprecedented speeds and consolidated subsidiaries increasing, strengthening Group-wide internal control is an urgent priority. As a Full-time Audit and Supervisory Committee Member, I would like to further strengthen defensive governance through required audits and recommendations, and work to create a foundation that supports sustainable growth.

 

Kamoi: The Company provides important services related to the social infrastructure of mobility. Considering Japan’s aging population, active information dissemination will be required to ensure recognition of the Company’s purposes and roles in society, such as mobility and other support for the elderly.

As business diversification progresses, it is essential that we strengthen our governance and human resources strategy. From a human resources perspective, in addition to quantitative indicators such as the ratio of female managers and the acquisition rate of childcare leave, I would also like to see the active external dissemination of the image of diverse human resources thriving with high engagement.

 

Matsuda: Steadily implementing the measures set forth in the Medium-term Business Plan and achieving its targets will be the foundation for sustainable growth. We got off to a good start in the first year of the plan. Going forward, we must accelerate changes by further strengthening our organizational systems and human resources, and further increase the likelihood of achieving our long-term vision of 500.0 billion yen in net sales. I will present suggestions and opinions to that end.