Integrated Report

AUTOBACS SEVEN INTEGRATED REPORT 01 02 Profile Philosophy AUTOBACS SEVEN operates the AUTOBACS retail chain, Japan’s largest scale specialty retailer of AUTOBACS has always been committed to providing customers goods and services for cars, and is the one-stop solution to customers’ needs for everything about with the best solutions for their car lifestyles and creating a rich and their car lifestyles from the purchase of cars and their goods, to daily maintenance, statutory safety inspections and maintenance, and car replacement. Buoyed by customer support over many healthy automotive society years for its brand message “Anything about cars, you find at AUTOBACS,” we maintain the big- gest share of the domestic automotive goods market. We are also pursuing global expansion and new businesses, such as car dealers, BtoB, and the Internet business, by leveraging the know-how Mission and human resources acquired through our domestic AUTOBACS business. We constantly create a new car lifestyle culture Value Creation Strategy Contents 21 Overview by Segment 23 Domestic AUTOBACS Business 27 Overseas Business Our Goal Messages from Management 29 Car Dealer, BtoB and Internet Business 01 Profile/Philosophy/Mission 13 Top Message 03 Vision Becoming a 100-year Company 19 Finance & Accounting Officer Q&A 04 Value Three Values Provided to Customers 05 Corporate Value Creation Process Foundation of Value Creation 07 Challenges and Growth Trajectory 09 Five-year Rolling Plan 31 Our Approach to Sustainability 43 Brand Management 11 Financial & Non-financial Highlights 33 ESG: HR Development and 44 Corporate Governance Work-style Reforms 37 ESG: Environmental Conservation 49 Messages from Outside Directors 39 ESG: Community and Society 51 Directors and Audit and Supervisory Board Members 41 ESG (Feature): Business Continuity Efforts in Response to the Impact of COVID-19 Cautionary Note Regarding Forward-Looking Statements Data Portions of this report that are not based on historical facts — areas addressing strategy, future business developments, and other topics regarding the future — reflect information available at the time this report was prepared and management’s judgment. Explanation of Names 53 Domestic Business Formats & Major Consolidated Subsidiaries Within this report, “AUTOBACS SEVEN Co., Ltd.,” “AUTOBACS SEVEN” and “the Company” refer to the non-consolidated entity, while “the Company Group” refers to the consolidated entity. “AUTOBACS” is a brand name, but also refers to individual retail stores and the entire retail chain of the AUTOBACS SEVEN Group. The terms “Chain” and “AUTOBACS 54 Corporate Profile/Share Information chain” refer to the entire franchise chain that operates AUTOBACS stores. 03 04 Vision Value Becoming a 100-year Company Three Values Provided to Customers Over more than 45 years, in parallel with advances in the motorization of Japan, AUTOBACS SEVEN has provided cus- The AUTOBACS Group offers their core values: the value of safety and security (to meet demand for “comfortable use of tomers with the best solutions for their car lifestyles and contributed to increasing the enjoyment and convenience of cars”), the value of experience and discovery (to meet need to “enjoy going out by car”), and the value of contribution to living with cars. The AUTOBACS Group aims to become a “100-year company” that is indispensable to society by con- self-expression and satisfaction (by helping people “be more themselves with their beloved cars”). Based on these three tinuing to address issues facing society, automobiles, and people’s lives and creating a rich and healthy automotive soci- core values, we promote the development of innovative products and services and store formats. ety, in order to help resolve social issues stemming from cars. 2050 Creating Our Future Together We face the issues of society, automobiles, and people’s lives and create a brighter, more vigorous future. Our energy comes from our customers. Be more of yourself with beloved cars We will steadily grow, day by day, as individuals and as a company, as we continue to shine. Self- Car sports equipment, garage expression equipment, and ARTA-related products, etc. We constantly create a new car lifestyle culture Recent times have seen major transformations in society and people’s lives, in addition to cars, against the backdrop of changes in the global environment, increasingly complex social issues, technological innovations, and diversification of people’s values. Demand for In particular, the spread of COVID-19 has changed what is comfortable use of Experience Enjoy going out considered “normal” around the world. a car Safety and by car Cars are an important part of the infrastructure supporting and our daily lives, so we are committed to providing the best possi- Tire and vehicle inspections, Security Lifestyle goods, drones, ble services to protect the safety and security of our customers. drive recorders, Discovery campers, electric To this end, the COVID-19 pandemic provided a valuable oppor- maintenance products, motorcycles, etc. safety inspections, etc. tunity to rethink our raison d’etre, which is to continue operating our business while giving full attention to the pandemic and thus contribute to local communities and society. To face these environmental changes and turn them into new growth opportunities, we established the “2050 Creating Our Future Together” vision as part of our mission—“We constantly create a new car lifestyle culture.” We aim to deepen relation- ships of trust with all of our stakeholders, while continuing to create new value in our quest to become a “100-year company” that is always sought after by society. AUTOBACS SEVEN is a company that fosters a culture of car enjoyment and is a professional in the car industry. In these roles, we will continue leveraging our knowledge, technological capabilities, and know-how, accumulated over 70 years since our foundation, to offer superior-quality products and services tailored to the lifestyles and life stages of customers, and thus Professional & Friendly deliver sustainable growth. We aim to create the kind of stores that encourage customers to visit time and time Representative Director and Chief Executive Officer again by having them feel at ease in relying on us as car professionals and always see- Kiomi Kobayashi ing our stores as a friendly place where they can freely seek advice. 05 06 Corporate Value Creation Process The business model for the domestic AUTOBACS business, which is our mainstay, is based on a franchise organization In order to constantly create a new car lifestyle culture in the future, we will closely monitor social needs and develop- with 585 domestic stores operated by 78 franchisees, including 17 consolidated subsidiaries. Serving as the franchise ments in automobile technology, as well as changes in people’s values, and thus continue providing value that reflects the headquarters, AUTOBACS SEVEN provides the approach for providing value to customers, while franchisees deliver a times and is close to people’s lives. sense of security and an enriched car lifestyle through interaction with customers. Accordingly, our strengths are the franchisees and suppliers that underpin our domestic AUTOBACS business and the capabilities of each and every staff mem- ber working at our stores. These strengths are the source of our industry-leading brand power. As of March 31, 2020 Business Environment (Opportunities and Risks) Domestic Three Values Provided by Car Dealer, BtoB and Internet Business AUTOBACS to customers Opportunities Domestic AUTOBACS Business Overseas Business • Changes in automotive goods Car Dealership BtoB Business Internet Business market accompanying technological advances • Preventing accidents from Self-expression aggressive driving of oth- Store MD/product Purchasing, Support/ ers and increases in safety AUTOBACS SEVEN CO., LTD. Marketing development/ and service distribution, and guidance for awareness deployment development wholesale franchisees • Stable demand for statutory safety inspections Experience Safety and • Growth of online shopping and Security market Discovery Wholesale Wholesale Wholesale Wholesale Wholesale Retailing and Services Risks • Declining birthrate, aging pop- Franchisees Corporations Wholesale ulation, reduction of working Overseas Imported Car population Partners Business Retailing Subsidiaries Dealers Subsidiaries • Intensification of competition Domestic Subsidiaries in automotive goods retail market Social Responsibility in Retailing Business Processes • Customer retention by manu- Retailing Retailing Wholesale and Wholesale facturers and dealers and Services Services and Services • Rise in purchase prices and Customers We offer quality products and services tailored to distribution costs Corporate Corporate Customers Customers Customers Customers customer lifestyles and life stages. • Natural disasters, infectious Customers Customers diseases • Abnormal weather Community We contribute to safe and secure lives of Overseas local residents Opportunities Three 1 2 3 Car Culture • Economic growth and pop- strengths We actively propose enriching lifestyles in ulation increase in emerging supporting Network of franchisees and stores with No. 1 brand power in Group of professionals harmony with cars. economies AUTOBACS strong community ties automotive goods • Trust in Japanese brands brand • Rapid growth of online shop- Environment, Human Rights, Diversity ping market Stock Keeping We contribute to creating

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