Marui Group Co., Ltd. (8252) Earnings Call Transcript & Summary

Now that it's time, we would like to begin Marui Group, Marui IR Day 2025. Thank you very much for coming and participating in your very busy schedule. Today's content, these are the 3 topics that we have for you. Each content, we will have the presentation and Q&A. Today, Marui Group Head office, we are here at the co-creation communication space. co-creation lounge is where we are speaking from that opened in September. Also from Misaki Investment, Mr. Nakagami is joining us remotely. Later, we will be showing you the video in our homepage. So we would like to begin. First, so Marui Unite, President, Mr. Yamane, President, Representative Director of Marui Unite and Sarasa Yonenaga, Executive Officer and Brand Manager, new Chair Corporation. So Mr. Yamane, please.

As shown on the screen here is today's agenda. So I would like to cover the first part. I'm in charge of the Marui Unite and the DX initiative. Yonenaga from Muture will explain. We will focus on two topics. First, how our Lifestyle app contributes to main card adoption and second, how our development process. First half myself and second half Ms. Yonenaga. First, let me explain how the app contributes to the main card adoption. I was engaged from the 7 years ago for the app. So I would like to explain some of the efforts. I will begin with our efforts to drive main card adoption, followed by our upcoming initiatives to support customers Suki. As shared in our earnings disclosure, we have set main card adoption rate as a new KPI toward fiscal year 2031. We have defined this as achieving a 33% or higher household share. The average annual cash spending by EPOS cardholder is estimated to be JPY 1.15 million. If this spending were entirely conducted with EPOS Card, it would represent approximately 33% of household expenditures. Moreover, JPY 1.15 billion level is consistent with the total annual credit card usage estimated from third-party surveys. This level represents what customers can achieve simply by shifting their spending from multiple credit cards to EPOS Card. For this KPI, we have set the household share 33% based on spending, excluding rent. Based on the average household spending patterns of EPOS members, if customers use EPOS Card for recurring payments, e-commerce and smartphone payments, these alone account for 27% of household spending. By adding just another 6% from other spending, customers can reach 33%. Since the previous midterm plan, we have been advancing a strategy to maximize household share. And shifting from bank account transfers, we have promoted the use of EPOS Card for rent, telecommunications and utility payments. As a result, during the previous midterm plan, rent payments increased 1.9x, recurring payments increased 1.5x and assets under custody at tsumiki Securities increased 7.2x. In shifting away from cash spending, e-commerce usage increased 1.7x and smartphone payment usage increased 2.8x, showing steady expansion. As a result, the main card adoption rate, meaning the proportion of customers who exceed a 33% household share now stands at 22%. In addition, LTV for main card customers is more than 8x higher than for non-main card customers. When breaking down the main card adoption rate between app members and non-app members, app members show a rate of 27%, which is 2.3x higher than non-app members, demonstrating that the app is a strong driver of EPOS Card's main card adoption. I would now like to explain our initiatives for driving main card adoption through the app. At the time of planning, many apps in the industry focused primarily on functional elements such as payment notifications, function providing apps. In contrast, our goal was to create an experience providing app, a Lifestyle app that supports customers' lives by enhancing their experience of managing money. The code name at the time was Lifestyle app, and that term continues to be used within the company. In managing money, the top concern customers have when using credit cards or cashless payments is fear of overspending. At that time, the industry's conventional thinking was that preventing overspending with discourage card usage and negatively affect revolving payments. We took a completely different approach. We believe that by immediately notifying customers when they spend more than expected, they would feel be assured and actually increase their usage of EPOS Card. This was a totally different approach. This led to the creation of a UX that eliminates the anxiety of overspending. Customers receive real-time notifications as soon as they make transaction with charges reflected immediately in the statement. We also introduced a feature called Meyasu Alert which allows customers to set a monthly spending guideline and receive notifications when they exceed it. This provides transparency into how much they have spent and enables them to quickly notice and address overspending. Furthermore, if a customer does overspend, we offer options such as installment or revolving payments with simulation function. Next, we focus on household budgeting. Many people find keeping a detailed household leisure burdensome and often give up. Yet customers consistently told us that they still want to keep their spending under control. What they truly want to know is simply how much their spending falls outside the easily manageable fixed costs. For many customers, traditional household budgeting apps feel excessive and too much. Prevailing view in the industry was that if customers successfully control their spending, card usage would decline. We took the opposite stance if EPOS Card enables customers to manage their spending comfortably, even if spending decreases overall, they will consolidate more of their payments on to EPOS. This led to the creation of our household budgeting UX by simply paying the EPOS Card spending it automatically categorized into fixed and nonfixed. We created a EPOS Card care based on concept the world's easiest household budgeting tool. By freeing customers from the household budgeting, we aim to encourage them to consolidate their payments with EPOS for the purpose of household management. For fixed cost, we intentionally designed the UI so that bank items remain visible when they're paid with EPOS, prompting customers to want to complete these gaps by switching to EPOS Card. Even with all of these UX enhancements, so we face concern with customers actually use. During interviews when we explained the service provided by EPOS, some customers would ask why we hadn't told them earlier. It became clear that there was a significant information gap. Traditionally, the industry, we ourselves in the past relied on e-mails, push notifications and adding icons to promote our service awareness. However, these methods often fail to effectively reach. We then considered the approach leveraging gamification, which fits naturally with the mobile app experience to spark curiosity and lead customers to engage. This is how our service recognition UX called Quest was created. Immediately after downloading the app, the home screen is empty and minimist as customers complete Quests, which are small tasks that help them discover or experience EPOS services, items appear in the room and the space of Epokke, the EPOS Card mascot forms over time. Through an enjoyment experience, customers naturally deepen their understanding of EPOS and credit usage and begin using services that fit their needs. We now have explained 3 UX concepts behind the app. Throughout this development, we stayed true to our philosophy of co-creating credit, focusing on eliminating customer anxiety and reducing informational asymmetry by transparently presenting options. This approach was the exact opposite of the prevailing industry mindset. By removing fear about credit card usage and eliminating the information asymmetry between customers and us, the app contributes to increasing household share and achieving main card adoption. As a result of these efforts, when comparing transaction volume growth over the past 10 years with fiscal year 2014 set to 100, EPOS Card has significantly outperformed the industry as a whole. Moreover, the gap has widened further since the launch of the Lifestyle app. Next is the comparison of the proportion of the installment and revolving payments related to the total transaction volume. Over the past 10 years, the gap between EPOS Card and industry average has widened. The introduction of installment conversion and the rollout of the app have contributed to this improvement. From here, I will explain our upcoming initiatives to support customers Suki. First, let me share the latest updates on our cards that support Suki. As discussed in our earnings presentation, the number of collaboration card projects has increased from 88 a year ago to 130 and the number of cardholders has expanded from 1.01 million to 1.26 million. Going forward, we will further enhance the app experience to support customers Suki. Starting this fiscal year for members of the Studio UG card, we introduced a feature that allows users to customize their app home screen with the character Gokigen Panda which appears on the card design. In conjunction with the Quest feature I explained earlier, customers can explore convenient EPOS functions and services and new character items are added to their home screens as they progress. After launch, we compared Quest usage rates among new cardholders. For Studio UG card members, the usage rate was 9% higher than the other new members. The initiative has been well received by our customers. Within this year, we will roll out home screen customization for 3 additional collaboration card projects with large membership bases, and we plan to further expand to more projects going forward. For our collaboration cards that support Suki, we will introduce a Suki Premium offering. Credit limits will be raised to the same level as old card members, and we will offer original goods based on usage as exclusive benefits. We will also enhance the UX within the app to promote premium engagement. Let me now explain our upcoming UX initiatives for supporting Suki. In addition to the UX developments introduced earlier, we will build distinctive services that integrate digital and physical experiences, services and that competitors cannot easily provide to drive main card adoption. Our aim is for the app to establish a unique position used both because it makes managing money easier and because customers love using it for their Suki. Furthermore, when customers feel in control of their household budget through better money management, it creates a positive cycle where they can spend on the things they love, the Suki with confidence and peace of mind. Through the app, we will continue contributing to the realization of the economy driven by the customer Suki. Next, let me share our outlook for the app membership. By fiscal year ending March 2031, we plan for app members to account for 75% of all EPOS members and 85% among members who use their card for shopping. Finally, here is our main card adoption plan towards fiscal year ending March 2031. The current main card adoption rate is 22%. If we rely only on existing initiatives, it would rise to 26%. However, by introducing new measures such as Suki Premium and Gold from the start, we expect to raise the rate to 34%. Further expansion of the app membership and enhancement of the app UX will enable us to achieve that required 35% main card adoption rate to reach JPY 10 trillion in transaction volume. Next, I'd like to ask from Muture to discuss the evolution of our development process.

To begin, we would like to explain the role of the group digital and IT-related companies. Historically, M&C SYSTEMS has been responsible for building our core systems. To further accelerate DX across the entire group, we established Muture in 2022. In addition, Marui Unite established last year served as a specialized in-house development organization responsible for agile development for app and web services. Today, these 3 companies work in close collaboration to drive DX across the group. Muture was established as a joint venture between Marui Group and Goodpatch. I'm Yonenaga, I'm also seconded from Goodpatch to Muture. As a team of digital specialists, Muture plays a key role in identifying new opportunities from a professional perspective and accelerating DX across the group. Goodpatch CEO, Tsuchiya has also joined Marui Group as CDXO working together with Muture to lead this transformation. Our transformation efforts are focused primarily on the 3 areas, as you can see, which I will explain in order. First is the introduction of agile development. When the Lifestyle app was launched in 2021, Marui Group's development framework was primarily based on the waterfall model shown on the left. This is a methodology in which work proceeds step-by-step according to the predefined requirements. In contrast, the agile model involves interactive cycles of building, releasing and improving in small and rapid increments. The waterfall model is best suited for core systems where requirements and end goals are clearly defined and steady execution is essential. Meanwhile, the agile model is better suited for areas such as apps and web services where needs are not fully known in advance and flexibility is required to respond to real-time user feedback. For this reason, we shifted to an agile approach for the Lifestyle app. Next is the establishment of an app and web development organization capable of practicing agile development. Although agile emphasizes speed, rapid development and rapid improvement, this cannot be achieved if decision-making remains slow. Even with an agile team structure, if approvals are dispersed across many decision makers, progress can easily stall. Therefore, the decision-making framework itself needed to become agile. To address this, we established Marui Unite last year as an organization with centralized authority and responsibility for app and web development. We simplified the approval process and consolidated the necessary roles and talent to accelerate product evolution. Members involved in development from EPOS Card and M&C SYSTEMS also participate in Marui Unite in a dual role capacity. Through this consolidation of authority and the co-creative collaboration across departments and organizations, agile development is now functioning effectively and our release frequency has increased. This cross-organizational co-creative way of working is exactly what Marui Group has long pursued. A corporate culture that encourages collaboration beyond organizational boundaries has strongly supported the smooth adoption of agile development. Lastly, let me touch on accelerating in-house development. As the pace of technological innovation, particularly AI continues to accelerate, rapid and accurate technical decision-making is more important than ever before. To ensure that we can determine our own technology road map by aligning business needs with engineering expertise, we are actively hiring digital specialists with engineers at the core. Creating an environment in which these specialists can fully demonstrate their capabilities is also essential. We first redesigned our compensation structure to align with the market standards for digital and engineering talent. We then enhanced our development environment, including supporting AI-driven development to ensure smooth workflows of specialists. In addition, we are proactively expanding hiring channels through event participation for brand awareness and through referral programs. As a result, highly skilled professionals from outside the company are joining Marui Unite one after another. Our Chief Technology Officer, Mr. Sugomori is one such example. He graduated from the University of Tokyo and its graduate school, where he belonged to the Matsuo Laboratory and developed deep expertise in AI. He brings extensive experience, including roles at major global companies and launching start-ups. We also have welcomed Mr. Sato as Head of DX Engineering, who has served as a development leader at major e-commerce companies and start-ups and has strong knowledge in building in-house development organizations. Across the entire group, digital specialists continue to join. At Muture, we are steadily hiring members with expertise in organizational transformation and design. At M&C SYSTEMS, we have strengthened our talent in data analytics and information security as we enhance group's digital foundation. In our co-creation efforts with future generations, we are even seeing cases where students who worked as technical instructors at Life is Tech, one of our co-creation investment partners specialized in digital education, have taken interest in Marui Group and decided to join us. With the evolution of our development process and the expansion of the digital talent across the group, Marui Group companies are now united in driving DX to enhance corporate value. Finally, let me explain our digital and IT investment plan. During the current midterm plan period, we expect to invest JPY 92 billion or 1.4x the annual average compared with the previous midterm plan. Thank you. We would like to go to the Q&A.

[Operator Instructions] So the first question Mr. Kanamori from Okasan Securities.

This is Kanamori from Okasan. Can you hear me?

Yes, we can hear you fine.

One request. This time, the main card holding, you have the great number here for the main card. For the IR activity, fact book is what you provide, the card usage like Suki supporting card, you have the rate shows. Going forward, the household share, main card adoption, the 33% or more main card adoption definition is what you have. As of today, it's 22%, and you want to target 35% in the target. Going forward, every year, main card holding share, will you be disclosing that going forward every year in your results?

Thank you for the question. I would like to answer that question. With IR, we will consult and discuss proactively. Also, it's a question, I guess. LTV this much it's like 8.4x difference with the non-main holder, the level is totally different. The usage, you will be -- the growth rate will be totally different for you as well. the household, 33% or 35% this target, if it achieves a 35%, your fee income, how would it be presented? And what form that we can have visibility, we are concerned about the visibility, rent and the other payment on Page 11, you have in the circle on Page 11, you can drop it to the P&L. We can tie it to each other somewhat like the rent guarantee, et cetera, for the items for rent.

But if you add on top of each other in the variable part, you have to have all the variable with you for your P&L, what will be the benefit for you P&L-wise for yourselves was not very clear. What's the image that I should be looking for? Main card holding rate goes up, your company's handling and then fees and income will be a totally different playing field? Or where should we be focusing our attention, if you can give us your guidance, please?

Thank you for the question. I would like to respond to that, if I may. In terms of the household share expansion, shopping, it's going to be sent in how much expansion we see in shopping. Household share going up, the shopping affiliate fee also increases for us. If the household share goes up, as we explained, in terms of installment, revolving payment also can happen. So that usage also -- so we have a double decker with our income increasing is what we expect to see. Directly, the main card holding rate to break it down to profitability will be difficult, but shopping handling and revolving payment, we would be disclosing those numbers. So maybe you can confirm it through that.

We will take next question Morgan Stanley Securities, Takemura.

This is Takemura from Morgan Stanley MUFG Securities. I have a couple of questions. The first question is regarding the overspending alert function and the household budget management functions, these functions are very interesting. The question I had is that at the very beginning, your approach was completely different from the norm in the industry. That's what you mentioned. But afterwards, your competitors, are they adding the similar functions to the apps? Are they following suit afterwards? That's my question. In addition to that, the other companies, your peers and competitors, are they promoting the main card adoption at the core of their strategy? Are they pursuing a similar direction? If we can hear your views on that, that would be helpful. Next is regarding the development structure or the team. So those apps are playing important roles in your strategy. That's what I understood. In terms of the development structure you have comparing against the other competitors, do you think that your development capabilities are better than the others? Or do the others also have the similar development structure as yours? And if you can hear your views on those, that would be appreciated.

Thank you for your question. To the first question, the overspending alarm and budget -- household budget management functions, whether others are following suit. Well, for sure, the overspending alert or the household budget management, we were the first one, but the other companies, they are gradually releasing those functions on apps. But when we look into the details when it comes to the household budget control and management, well, the users will have to add the tags and make the settings or they have to link with the other household budget management tools. At the time of our development, we considered that as well, but it wasn't really appreciated by the users. The users mentioned that if that's the case, I'm not going to use it because it's too troublesome. And we ended up with having the one that we just released with better functions. So we believe that others -- our competitors' functions are similar, but different totally. And for the other companies focused on the main card adoption rate, of course, the main credit card, it is important to follow the main card adoptions. So other companies are working to increase the main card adoption rate. But as we mentioned in the latter half of the presentation, we are working on the business to support Suki. As part of that, we are promoting the main card adoption rate. So we are taking a completely different approach, and that's where the difference lies. And in the latter half, in terms of our development structure, on our side, we are bolstering the internal development capabilities. We have been changing the ways in which we develop. The other companies who are ahead of us, there are some of them. They were ahead of them. But as a latecomer, we are enjoying some sort of benefits and strength because we are a latecomer. We are separating the companies and change the compensation schemes to hire engineers. And this is what we are able to do because we are a latecomer. The other financial companies out there who were ahead of these initiatives, they ended up so much. They were jealous because the organization of engineers, they have to adopt the same compensation scheme as the head office. That's why they were struggling. Well, we'd like to tap into these kind of benefits as a late comer.

[Operator Instructions] There are no further questions. So we will close the Q&A and go to the next content. We would like to talk about the Suki from Marui Group, Unite support, Mr. Ishioka and from Marui Suki support event, Ms. Inui. Similarly, Marui supporting Suki Ms. Ishikawa. EPOS Card, Shinjuku Marui EPOS Card Center, Sachiko Matsumoto Initially, Ishioka would like to give you a presentation. As we mentioned, we would like to talk about the personnel.

Once again, the Unite support for the Suki support, a company to help the economy driven by customers, Suki. I would like to add some comments. Event goods card combination. We said that it was a self-autonomous unit. We have changed the naming to focus on the card itself. So we now talk business that supports Suki. I would like to talk about what the group is doing for you. So I'll be looking forward to it. We want to have a vision that Suki drives itself as a strategy to support the business that supports Suki is what we are advancing. As we mentioned in earnings presentation, this business is supported by competitive advantages that are difficult for others to imitate. If you focus only on card itself with the character content printed on it, other companies can easily copy that. And many such products already exist in the market. However, what truly defines our business is total experience, we provide combining the world of Suki that we can be felt through events and merchandise along with the employees who can connect with customers Suki. These elements are grounded in the capabilities that we have developed. This becomes our first priority limitation. In addition, our unique corporate culture forms the very platform that creates businesses supporting Suki. This becomes the second layer of competitive barrier. The organization that advances this business is Suki Support unit promotion office to which I belong. And in fact, it has a distinctive structure. Only 5 dedicated members are fully assigned to the promotion office to formulate strategy. Most members belong to the promotion office while concurrently serving in their existing departments, actively collaborating with EPOS Card and other group companies as part of their respective business. In this way, we promote the Suki support business through a cross-organizational structure that directly connects strategy with execution. It is our corporate culture mentioned earlier that enables us to build such a structure effectively and naturally. Our culture encourages people to work across organizational boundaries, which is what makes it possible for us to advance the business that supports Suki as one group. Since the establishment of this promotion office, we have conducted extensive data-driven analysis and formulated business strategies from a long-term perspective. Based on these strategies, we are planning the nationwide expansion of events and shaping the direction of our original merchandise offer. Regarding nationwide expansion, our Suki support events, which has been held primarily within Marui stores will now be expanded. EPOS Card share is currently 16% in the Tokyo Metropolitan area where Marui stores are concentrated, but only 5% in other regions. If we raise the share outside this region to the same level, the potential number of new members is 9 million, exceeding our current total membership. By expanding event-driven member acquisition nationwide, we aim to significantly accelerate new customer growth. Our plan is to double the number of Suki support events to 2,600 per year by fiscal year 2031, which will contribute to achieving 800,000 new collaboration card members. As for original merchandise, we will broaden our target beyond traditional types of [Foreign Language] incorporating pet, sports and the uniquely personal Suki each individual cherishes. This will allow us to create merchandise with a high level of originality products only Marui can deliver. We aim to achieve JPY 12 billion in sales from original merchandise by fiscal year 2031, more than 20x current level. This is an ambitious target, yet we believe it is achievable by fully leveraging our strengths. One such strength is that our merchandise is planned by employees who are themselves fans because they love the content, they deeply understand fan psychology and reflect that in the product. Another strength is our culture of co-creation with customers built through decades of private brand product development and co-creation and retail. I combine this co-creation expertise with the passion of our fan employees, we can design merchandise that delivers a far superior value. These strengths have all been nurtured through the unique corporate culture I mentioned at the beginning. And it is our people who sustain this culture to expand Suki support unit, we rely on our talent who have developed retail expertise over many years, expertise in event planning, product development and sourcing, customer-centric service and member acquisitions, et cetera. In the next chapter, members who possesses these expertise and directly support the Suki support unit will explain their actual initiatives. From here, we will introduce the people driving the Suki support unit structured into 3 parts based on their respective role.

I am Inui from the Event Development section Event Business division. Thank you for the opportunity. In our Suki supporting event, our own employees handle the entire process planning, store operation, membership guidance and card insurance. I am responsible for event planning, and I would like to share specific initiatives through the example of an event that we created together with the fans. I have always enjoyed watching game streaming videos, particularly those featuring indie game. I these games are typically developed by small teams or individuals with limited budget, yet they offer unique stories and gameplay that highlight the creators' individuality. With their accessibility through digital downloads and growing popularity via live streaming, they have continued to attract fans. Among these works, I was captivated by Angels of death, it's unfolding mysteries and compelling characters through them. At the same time, I noticed the tremendous enthusiasm among viewers leaving comments, which made me realize that many others were equally moved. I want to support the title through my job, so I conducted further research. I learned that no recent events have been held and the 10th anniversary was approaching. I reached out directly through the creator's website to ask whether we could collaborate on a 10th anniversary event. The publisher responded positively saying that they also wanted to realize something special for the anniversary and even presented multiple creative ideas. However, due to budget constraints, it was difficult to implement everything as proposed. When I brought this challenge back to the team, a member suggested why don't we raise funds through funding. We decided to gather production funding for the exhibition through a crowdfunding campaign. The result far exceeded our expectations against target of JPY 4 million, we raised JPY 45 million. Even before the event was held, we received numerous messages such as thank you for making this project happen and we are excited to experience the event, which created both pressure and motivation to make the event a big success. Because the crowd funding outcome was much stronger than anticipated, we had to quickly expand the elevated project. Ultimately, we were able to deliver an extraordinary event that brought the world of the title to life far beyond our plans. One of the most memorable exhibits we created the final scene of the story. As a fan myself, I was deeply move, especially when I witnessed visitors become emotional and even cry at the display. Also, we created a unique interactive experience called Kamadon that we created an iconic moment from the story with actors, guests could take commemorative photos using instant film Cheki and become a custom case for special piece or merchandise. We pared 400 sets. The publisher provided tremendous support for the project, and they told us that thanks to Marui's proposal, they were able to realize an event on a scale far greater than originally planned. Many customers visited the venue multiple times. Some were emotionally moved by the recreated scenes that they cried saying how happy they were to have discovered the work they love, sharing heartfelt messages of gratitude for the exhibition itself seen these reactions made us worthwhile of our hard work. For me, personally, this experience reinforced the belief that events planned from the perspective of fans allow us to truly stand beside our customers. When we do so, the event resonates. And so going forward, I intend to apply everything I learned from this in the next proposal. Now I would like to hand over to Ms. Ishikawa from the event operations team, who will talk about the Suki supporting events.

Our role is to take ideas and passion developed by planners like Ms. Inui and bring the event to life. I will explain the initiatives we take both in venue operations, including EPOS Card membership. Let me share a case study from the Tokugawa Art Museum 90th anniversary event, which I participated. Over approximately 2 months, the event attracted 90,000 visitors. More than half of the museums total annual visitors last year, which was 170,000. It was also generated JPY 3 billion in sales. It also generated JPY 3 billion in sales and 3,200 new card sign-ups, which were outstanding results. The museum expected large crowds and was concerned that their own staff alone would not be able to operate smoothly. Based on the trust built through previous collaborations, they entrusted operations to us. First, in sales floor operations, we leveraged our experience in private brand retail to design zoning that encourages exploration, layouts that ensure safety and flow and display that make customers want to pick up products. For entrance guidance, our goal is to reduce stress caused by waiting or uncertainty. We plan staff allocation and engagement so customers remain comfortable and entertained. For example, while customers wait in line, we handle product lists and explain exclusive purchase bonuses available only at the event. Our staff do not simply manage the line. We make sure to speak to each customer with a smile and ensure the waiting experience itself is enjoyable. In customer service, we focus on being fully aligned with customers' feeling of Suki. To do that, all staff study and deepen their understanding of the content in advance. At the Tokugawa Art Museum event, visitors ranged from history enthusiasts to those who became interested in source through related games. We made sure everyone could recognize and respond to each customer's unique Suki, including not only sword games, but also the stories and history behind them so that every staff member could genuinely interact from the fund perspective. Next, I'd like to speak about how we guide customers toward EPOS card enrollment. Each customer values something different. Some appreciate the appealing card designs or exclusive enrollment gifts that are not sold elsewhere while others are drawn to points or discounts. We listen carefully during the conversation to understand what each person values and provide guidance tailored to what will make them happiest. We also meet many people who did not know about EPOS Card before visiting the event but became interested once they learn more. For example, at the Tokugawa Art Museum event, we offered a collaboration card that automatically donates JPY 1,000 from Marui to the museum upon enrollment. Customers who wanted to continue supporting the museum or who were interested in social contribution also found it very appealing that they could donate their accumulated points. By combining these unique enrollment benefits with EPOS features that best match these customers' needs, we ensure that every customer receives a personalized introduction. Thanks to this approach, our partners shared feedback such as we were nervous because it was the first time running an event like this at the museum, but we are glad we entrusted operations to Marui. You ensure the safe, smooth and customer-friendly environment. Customers also expressed their delight. The staff explained everything so clearly and knowing that I could support cultural heritage and I love made me decide to sign up. Suki supporting events are defined by extremely passionate fans. This is why we always learned the world view of the content deeply and serve customers from the perspective of fellow fans. Being able to help customers fully enjoy both shopping and experience is the greatest source of meaning in my role. Now I'd like to hand over to Matsumoto-san from the EPOS Card Center at Shinjuku Marui, who will explain card issuance operations.

Within the event flow, I am responsible for the actual card issuance process. So I'd like to explain what specific initiatives we are taking on. Let me first explain the issuance of the cards. My role is to ensure that customers who have decided to sign up, thanks to the excitement Ishikawa-san and the team have created, maintain that positive feeling all the way through. Card issuance is completed on the customer's own smartphone by downloading the app and entering their information. At times, I support 8 to 10 customers simultaneously as a matter of fact. Providing clear guidance is essential during this process. Let me elaborate on how we explain card usage. We will explain thoroughly to each and every customer. Now let me elaborate on how we explain card usage. First, we address concerns about security. For customers worried about rising fraud, we explain how real-time notifications show exactly where and how much they spend. For those new to credit cards and worried about overspending, we show alert functions that notify them when they exceed a set monthly amount. And when younger customers express uncertainty about payments, we walk them through repayment options using simultaneous, enabling them to choose what feels comfortable. By carefully observing each customer's expressions and reactions, we identify their concerns and provide reassurance through specific features available on the app. Next, we highlight benefits of the card. Since each customer is drawn to different advantages, we tailor our explanation while observing their interest level during the conversation. Many are particularly excited about points. For customers who want to earn more points, we suggest consolidating fixed monthly expenses like utilities to EPOS Card. For instance, on the news, the extraordinary climate is being observed and the bear attacks are rising in number and CO2 emission is one of the major reasons behind this. And the electricity we are using on a daily basis is accounting for the large portion of the CO2 emissions. So those customers who used to feel the climate-related issues as distant issues, we are choosing simple plain language to explain. For customers who care about the environment, we introduced that Minna Denryoku Epos Plan, explaining that simply switching to this plan reduces CO2 emissions through their everyday electricity usage, making environmental action feel personal and achievable. For customers who want to use their points wisely, we introduced point investment, enabling asset building without spending money. While EPOS Card offers many services, we curate the best fit combination for each customer. As a result of this personalized and empathetic guidance, customers tell us, thanks to your clear explanation, my worries are gone, and I can use the card with confidence. And I'm glad I can start making a positive environmental impact easily and affordably. Before joining the card center, I worked 20 years in children's apparel retail, serving customers of all ages. My core belief has always remained the same. I want each guest to leave happy. Now that product has simply changed from clothing to services, I love EPOS Card myself. And I want customers to love it as well. I will continue striving to deliver that through every interaction so that I can bring a smile on the face of customers. Face-to-face card guidance has been an essential Marui Group capability since our founding. This accumulated expertise creates a competitive advantage that cannot be easily replicated by others. Marui Group will celebrate its 100th anniversary in 2031. By refining the people capabilities we have explained today, event planning, venue operation and enrollment guidance and card issuance, we will continue expanding new card sign-ups. Finally, here are our KPIs towards fiscal year ending in March 2031. By leveraging our talent capabilities and unique corporate culture to expand the Suki support unit, we will achieve the group targets of main card adoption rate 35% and 12 million new card enrollments and JPY 10 trillion in group transaction values. That concludes my presentation. Thank you very much for your kind attention.

Now we would like to questionnaire for the promotion of support Suki. First question, Daiwa Securities, Shigeoka-san, please.

This is Shigeoka from Daiwa Securities. Thank you very much for interesting presentation today. So one big question. Event, doubling the number of events and merchandising, the number of headcount could be a bottleneck is the question. Previously, in your presentation, you have given the narrative. For the moment, the event should be selective and the number of events could increase in volume so that your profit could grow. However, the number of events goes above a certain level, there is a limit. So mid- to long term to continue to grow, what is your plan? So first answer that, please.

Thank you for the question. I will be answering that. Event, the number of events that we hold the structure at the moment, on the screen, you can see the number of events, event that support Suki, anime kind of events are included. Besides this, we also have in the store, there are like food events in terms of number of events, focusing on the event that support Suki, other events will be shrinking. Therefore, other events the resources that work on the other events could be shifting to the event that support Suki. So although it seems total is growing, other events will be declining. So the resources involved in the event could be shifting towards the Suki events. That's one. The other, in terms of talent, how we expand our talent is the point. Our company employee, of course, not just event development, they do planning and development of merchandise. We have -- besides in our promotion office at support Suki, there are other people who belong to other departments. We can reallocate these people, mid- to long term, these talent so that office and support Suki unit, the event and goods part could be consolidated maybe. So by doing so, we can reallocate our resources so that internally, we can draw these resources from inside the company. I don't know whether that answered your question.

So we are reallocating the talent internally, more efficient. So your skill talent could be doing a lot of things so that could be efficient. and you can upgrade your power, I guess?