Management Plan

In May 2025, we announced Transformation Plan 2028 (outline), our Group's medium-term management plan whose target year is the fiscal year ending March 31, 2028.

This is a plan to provide a series of services, from the acceptance of orders for various products to delivery, billing, and settlement, to internal and external companies with logistics at the core of the services, and to deliver various products to general consumers as a sales platform company, thus improving customer satisfaction and expanding our business.

• 1.Basic policy under the Group's medium-term management plan
• 2. Outline of the Plan
• 3. Human resource initiatives
• 4. Numerical targets (consolidated)
• 5. Financial plan
• 6. Dividend policy

1.Basic policy under the Group's medium-term management plan

Our Group has been advancing management that is focused on customer convenience, based primarily on our desire to meet any request our customers might have. In restructuring our business, we have changed the name of our corporation and established a new Group Corporate Philosophy (our purpose), "Fulfill even the smallest wishes of local people," to express the kind of entity that our Group can be to contribute to society and also to reflect our long-held aspirations. We value relationships between people and would like to continue operating a humane business which can enrich the everyday lives of customers and people in local communities, even if just a little.

Based on this idea, we are now operating business mainly in the Tokyo metropolitan area, Kansai, and Kyushu, with a focus on Anything Liquor Store Kakuyasu, our flagship brand, and our delivery of liquor and other products to eating and drinking establishments and households from more than 250 business sites. We plan to expand our business to domains other than liquor sales and offer a wide variety of products and services by developing a platform that enables us to deal in products from other companies, in addition to our own products. The goal of this plan is to enable our Group to continue to grow sustainably and increase its earning power by leveraging our logistics system which enables us to respond meticulously to customer requests, which has been supported by customers.

The business environment surrounding our Group has been difficult, reflecting both the decrease in the adult population and the decrease in liquor consumption per adult. The impact of these factors is still minor in the Tokyo metropolitan area, Kansai, and Kyushu, where our Group operates. However, to further consolidate our strength, we are positioning the next three years as the period of our second foundation, during which we will restructure our businesses and firmly build a new foundation.

2. Outline of the Plan

(1) Growth strategy based on business restructuring

Sales to eating and drinking establishments are more than 70% of the sales of our Group. These transactions involve as many as approx. 45,000 facilities. As a result of the restructuring of our business, HitoSmile Co., Ltd. ("HitoSmile") will also deal in products other than liquor. We will start by dealing in ingredients and consumables used at eating and drinking establishments and other facilities, among other products, thus expanding product categories, and we will make efforts Group-wide to increase average customer spend at eating and drinking establishments and improve the efficiency of deliveries.

Further, by dealing in products other than liquor that are intended to be used by eating and drinking establishments, we will try to approach facilities that are mainly for dining, such as cafes, with which we had only a small number of transactions, and also improve the operating rate of our delivery bases. We will enhance products for general households one by one and create systems that will lead to the promotion of consumption more than ever, such as the introduction of a regular delivery system focused on food.

As a Group-wide initiative, we will use mergers, acquisitions and alliances with other companies, in addition to the organic growth of HitoSmile, to increase the products we offer. Through these activities we will pursue the acquisition of more customers and the increase of customer satisfaction.

In contrast, HitoMile Logistics Co., Ltd. ("HitoMile Logistics") will leverage its functional capabilities to deliver goods from Group companies and alliance partners, not just from the business sites of Kakuyasu Co., Ltd. ("Kakuyasu"), and also to deliver these products directly to customers. Companies that wholesale products to eating and drinking establishments have decreased the frequency of their deliveries due to the 2024 problems in the logistics industry, and it has become difficult to deliver products every day as our Group does.

Using the HitoMile Logistics delivery centers and Kakuyasu's distribution network in the 23 wards of Tokyo, which is widespread and capillary-like (the Kakuyasu Model), we will build localized logistics systems for handling a wide variety of products that no other company can imitate, and deliver goods to cater to the needs of customers with HitoMile Logistics at our core and in cooperation with Kakuyasu. At present, we are also preparing to deliver goods for other companies using Kakuyasu's light vehicles (kei cars).

To support the above growth strategy, we have built separate marketplaces for eating and drinking establishments and for general households as the foundation for platform.

We will enhance our order acceptance, billing operations, marketing functions and headquarters functions. Reflecting the above, in the fiscal year ending March 31, 2026, the first fiscal year of our medium-term management plan, we plan to invest approximately 1,700 million yen (on a consolidated basis), including the initial expenses for the system design, etc. that will form the foundation of our platform. The total amount we will invest in the three years is expected to be around 3,500 million yen.

(2) Growth strategies for existing businesses

The market of liquor sales to eating and drinking establishments, which is our Group's primary source of revenue, has been shrinking as mentioned above and we expect it to be increasingly oligopolized in the future.

Leveraging the strengths of our Group, we will hone the Kakuyasu Model and work to increase the support we receive from our business partners.

We will thus generate profit as one of the players remaining in the market while also accelerating our ongoing investments in digital technologies. We will improve the app and website to increase e-commerce market sales and implement a digital transformation to streamline delivery and operations at each site and the headquarters, thus increasing our earning power.

Further, we believe that there is still room for growth in the Kansai and Kyushu areas. Moving forward, we will open new stores aggressively to increase market share and look for ways to enter cities designated by government ordinance where we can leverage our expertise, such as Sapporo, Sendai, Nagoya and Hiroshima. We will proactively implement mergers and acquisitions to expand our areas and enter new areas as well.

On the other hand, the earning power of Store Sales is reduced at present, as they grew as a source of revenue when the use of eating and drinking establishments by consumers decreased during the coronavirus pandemic, which has ended. Therefore, we will rebuild our in-store sales strategies in consideration of the area, the surrounding environment, the size of the store, the product SKUs, and other factors.

While we have been working to increase the uniformity of our stores to date, we will create selling spaces based on specific areas and needs, including highly specialized stores, stores that have a broad lineup of products from HitoSmile and Kakuyasu, and stores that are located beside delivery bases that are convenient for customers.

(3) Our business segment policy

We will operate as a platform company focused on logistics. When we have established our platform, however, we will consider changing our business segments.

At present, the impact of the business restructuring is as follows.

3. Human resource initiatives

Our Group positions human resources as the driver of our creation of corporate value over the medium- and long-term, and we have formulated a medium-term human resource strategy with human resource management at its core. In response to changes such as the multilateralization of the business environment, the diversification of workstyles, and the intensification of competition for human resources, we will maximize the value of our human resources and achieve sustainable growth and the creation of value for society by setting the following five high-priority tasks.

• Developing a flexible system that facilitates diverse workstyles
• Improving well-being and enhancing communication within the organization
• Supporting employees' independent career formation and enhancing opportunities to take on challenges
• The well-planned development of next-generation management personnel
• Utilizing HR technologies to visualize and strategically use human resource information

By pushing forward with these measures in an integrated manner, we will enable all of our employees to fully demonstrate their capabilities and contribute to the sustainably development of both the company and society while they develop personally, with the goal of maximizing our corporate value.

4. Numerical targets (consolidated)

We regard the fiscal year ending March 31, 2026 to be the preparation period when we will build our platform, which will put pressure on the profits from existing businesses. We position the three-year period of the plan as the preparation period for building the infrastructure for the platform and we would like to make a big leap forward to be a 230-billion-yen company by the fiscal year ending March 31, 2030, which is five years from now.

At present, Kakuyasu's delivery bases have around 30% spare delivery capacity. We will further enhance our delivery capacity further by having HitoMile Logistics secure even more self-employed drivers. While self-employed drivers deliver goods mostly during the daytime on weekdays, deliveries by our Group take place in the evening or later on weekdays and on weekends, which has reduced our competition with other companies. We believe that we can further increase our delivery capacity.

For the fiscal year ending March 31, 2028, we did not set targets for management indicators such as ROE and the capital ratio because the new lease accounting standards will come into effect in that fiscal year. We will consider these management indicators when we see the expected impact the new lease accounting standards will have. We will work on improvements such as the reduction of inventories, other measures to reduce the balance sheet, and the improvement of the capital ratio.

5. Financial plan

We plan to make capital investments of 3,500 million yen during the three years. We will procure funds for these investments at the right time using appropriate methods, including not only procurement from financial institutions but also the raising of capital.

6. Dividend policy

One of the priorities in the management of the Company has been to return profits to its shareholders. Its basic policy has been to maintain stable shareholder returns while maintaining sufficient internal reserves for sustainable growth and adapting to the changes in the business environment.

We will continue to implement this policy, but as our business grows, we will adopt a progressive dividend policy while continuing to pay stable dividends.