Autobacs Seven : Integrated Report

AUTOBACS SEVEN

Integrated Report 2021

MESSAGE FROM TOP MANAGEMENT	VALUE CREATION	STRATEGY

Content s

01	Contents, Editorial Policy	Strategy	ESG
02	Vision, Philosophy	13	Five-year Rolling Plan	34	ESG
		17 Message from the Finance &	DATA
Message from Top Management		Accounting Officer
	65 Financial and Non-Financial
03	Message from Top	21	Topic
	Highlights
	Management		Business Continuity Initiatives
		67	Domestic Businesses, Major
			in Response to COVID-19
				Consolidated Subsidiaries
Value Creation
Business Activity	68	Company Overview, Stock
09 A History of Value Creation
23	Domestic AUTOBACS Business		Information
11 Our Value Creation Process
27	Overseas Business
		30 Car Dealership, BtoB and
			Online Alliance Business
		33	Other Business

Cautionary Note Regarding Forward-Looking Statements

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

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 chain"refer to the entire franchise chain that operates AUTOBACS stores. The "AUTOBACS Group"refers to total consolidated and franchise chain operations.

01 AUTOBACS SEVEN Integrated Report 2021

BUSINESS ACTIVITY	ESG	DATA

AUTOBACS SEVEN Vision

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. We will steadily grow, day by day, as individuals and as a company, as we continue to shine.

As of 31st January, 2018

Philosophy

AUTOBACS Chain Management Mission

AUTOBACS has always been committed to providing

customers with the best solutions

for their car lifestyles and creating a rich and healthy

automotive society.

Our Ideal as a Company

Professional & Friendly

AUTOBACS continues to contribute to communities and societies, aiming to be a trusted

entity recognized as a professional and friendly organization by our stakeholders.

The Values Provided by AUTOBACS to Customers

Self-

expression

Safety Experience

and and

Security Discovery

AUTOBACS Code of Conduct and

Guidelines for Action

All our staff members at AUTOBACS SEVEN aim to grow together while deepening relationships of trust with stakeholders through our corporate practices. To ensure this, we comply with our Code of Conduct and Guidelines for Action.

WEB

AUTOBACS Code of Conduct and Guidelines for Action

https://www.autobacs.co.jp/en/company/absvision.html

AUTOBACS SEVEN Integrated Report 2021 02

MESSAGE FROM TOP MANAGEMENT		VALUE CREATION	STRATEGY

Message from Top Management

Representative Director and

Chief Executive Officer

Kiomi Kobayashi

Remaining Steadfast in Our Commitment to Challenge at the AUTOBACS Group -

Creating New Car Lifestyle Values for a Future in Motion

In pursuit of our mission to inspire the continuous development of new and exciting car lifestyles, we at the AUTOBACS Group continue to uphold our Vision 2050 - Creating Our Future Together.

Today, the environment surrounding automobiles is facing a once-in-a-century transformational period. To meet this challenge, we boldly continue to act as car industry professionals, leveraging the knowledge, technological capabilities, and expertise we have cultivated over the past 70 years since our founding.

03 AUTOBACS SEVEN Integrated Report 2021

BUSINESS ACTIVITY	ESG	DATA

A Year of Defining Priorities Amid a Rapidly Changing Environment Due to COVID-19

The year ended March 2021 was a year impacted deeply by the pandemic. Our priority, first and foremost, is to protect the health of our customers, business partners, and employees while we continue to take measures to prevent the spread of the virus. With the reaffirmation that cars are a vital part of the transportation infrastructure in our daily lives, this in turn impressed upon us the need to protect the safety and security of cars in times such as these.

At our retail stores and service pits, we employed and maintain strict guidelines around hygiene management while minimizing direct contact with our customers. At our offices, we required employees to work from home whenever a state of emergency was declared. We continue to promote teleworking through non-emergency months as well. While we adopted remote working some time ago, the spread of COVID-19 accelerated the process more than we had imagined. Our preparations however allowed us to implement our responses swiftly and promptly.

We also prioritized protecting the business of our AUTOBACS chain stores. To support the franchisees, we granted either reduction or exemption of payments based on individual store characteristics, payment deferral for product fees, or offered financing if needed. In terms of support for stores, we dispatched office staff to help in operations. We also aided in responding to customer inquiries,

taking reservations, and responding to other calls coming into the stores. At other times, we provided guidance to stores through online meetings.

Another major change caused by the pandemic was the increased need from customers for non-contact transactions. In response, we redesigned our official AUTOBACS.COM website in July 2020 to improve usability and allow customers to pay in advance online and pick up products in stores. In October 2020, we also released an upgraded version of our AUTOBACS app. The redesign featured improved startup speed and usability for a more comfortable booking experience. The new version of the app also provides alternative login methods, as well as the ability to self-register vehicle information conveniently by scanning the two- dimensional barcode on your vehicle inspection certificate.

At the same time, we have taken a fresh look at the value proposition at our physical stores. Consumers looking for products that are unavailable online, or who are unsure of either what the best product is for their car or its use, are likely to visit stores in person to find the right product for them and ask for advice. We also see many customers who buy tires online but prefer to leave installation to the professionals.

While we are in the current process of executing our Five-year Rolling Plan which defines the direction of our group

for the next five years, the wake of the recent COVID-19 pandemic required us to revisit the importance of responding to the changing needs of the times.

If we use a tree as an analogy to describe our entire Five-year Rolling Plan, our cross-industry network are the roots of the tree. Our historical foundation is the trunk, and the blossoms represent the touch points with our customers which we aim to see each business come into full fruition. However, simply offering everything on our own or investing

to develop superior technologies and services will not be fast enough to improve customer convenience amid changing purchase behaviors and use of cars. It is therefore precisely at this time of industry turmoil where we need to collaborate with diverse partners, combining strengths and advantages to overcome these challenges. In this way, by co-creating through strong partnerships, the path to creating new markets can be paved.

As one measure in support of this approach, we entered a comprehensive business alliance with BS-SummitBusiness Cooperative, a nationwide network for automobile maintenance, in August 2020. By combining the resources of the roughly 600 AUTOBACS Group locations and the member factories of the BS-Summit Business Cooperative, and by strengthening the local maintenance networks, we are building a system to provide high-quality services to car users.

AUTOBACS SEVEN Integrated Report 2021 04