Q1 Please describe the historical background behind the formation of Circle K Sunkus.
Q2 How far has integration between Circle K and Sunkus progressed?
Q3 What is Circle K Sunkus' management strategy?
Q4 What can you tell us about Circle K Sunkus' corporate governance measures?
Q5 What can you tell us about the Company's social contribution activities?
Q6 Can you comment on your environmental activities?
Q7 What is your approach to shareholder returns?
Q8 When is your fiscal year-end?
Q9 When is your next earnings announcement?
Q10 Where can I find the Company's latest earnings information?
Q11 When is your Monthly Business Report updated?
Q12 How many Circle K Sunkus stores are there and what is the Company's operating area?
Q13 How many consolidated subsidiaries does Circle K Sunkus have?
Q14 How can I obtain Annual Reports and the Investors' Guide?
Q15 How do I contact Circle K Sunkus?
Q1.Please describe the historical background behind the formation of Circle K Sunkus.
A1 Ever since opening its first store in 1980, Circle K has expanded its store network centered on the Chukyo region, while Sunkus has done the same in the Tohoku region and Hokkaido, building on its strong base in the Kanto region. Over the years, Circle K and Sunkus have both steadily grown into middle-market convenience store chains with over 2,000 stores each. All that changed, however, as the convenience store industry matured and came to be dominated by a few major convenience store operators. Aiming to remain an industry leader, CIRCLE K JAPAN Co., Ltd. and SUNKUS & ASSOCIATES INC. formed an equity and business alliance in October 1998, which saw the two companies combine their management resources, expertise and strengths, while integratinged systems to lower development costs.
Two years into this alliance in July 2001, C&S Co., Ltd. was established as a holding company comprising the two companies. Under the banner of "Integration With Decentralization," C&S highlighted the individuality of Circle K and Sunkus, while integrating operations in areas where significant benefits could be derived. These efforts met with a measure of success. However, amid a protracted slump in Japan's economy, the C&S Group has concluded that it must adopt a strategy that calls for further integration to stay on top of the rapid changes taking place in the maturing convenience store industry. This thinking guideding our decision to proceed with the a three-way merger between C&S Co., Ltd., CIRCLE JAPAN Co., Ltd. and SUNKUS & ASSOCIATES INC.
On September 1, 2004, Circle K Sunkus Co., Ltd. was formed through the three-way merger, with CIRCLE K JAPAN Co., Ltd. designated as the surviving company. Following the merger, Circle K Sunkus Co., Ltd. was listed on the first sections of the Tokyo and Nagoya stock exchanges (stock code 3337).
Q2.How far has integration between Circle K and Sunkus progressed?
A2 Since the merger in 2004, Circle K Sunkus first worked to promote integration in every division, with the exception of franchise agreements.
In July 2007, Circle K Sunkus completed the integration of vendor and logistics networks in every product category. Integration benefits from unifying all product categories and standardizing food ingredients were approximately ¥3.4 billion over the three-year period after the merger. By leveraging the completion of this integration, Circle K Sunkus took aggressive product development initiatives to unify the rice ball, original baked good, and original dessert brands each chain had developed individually into new hallmark Circle K Sunkus brands. And in November 2008, the Company began integration in the last remaining area, franchise agreements, starting with new stores. Unifying these agreements will not only enhance operational efficiency, but will also allow us to structure operations so that the same store developers and supervisors can take responsibility for both store brands.
Q3.What is Circle K Sunkus' management strategy?
A3 The convenience store industry is facing an increasingly challenging business environment defined principally by fiercer competition transcending traditional industry lines, and diversifying customer needs amid changes in Japan's social structure prompted by its aging population and falling birthrate. In this climate, the Company is prioritizing growth in operating income as a percentage of sales and quality improvements at individual stores, over simply expanding total store sales and the store network. In this manner, Circle K Sunkus has decided to shift to a management strategy premised on an "intensive focus on quality" in order to bolster sales capabilities. See "Management Strategy" for more information.
Q4.What can you tell us about Circle K Sunkus' corporate governance measures?
A4 With a particular emphasis on relationships with shareholders, Circle K Sunkus views all people and organizations involved in its operations, including shareholders, franchised storesfranchisees, customers, local communities, business partners and employees, as key stakeholders. While building strong relationships with every stakeholder by providing proactive disclosure, and ensuring compliance in all activities, Circle K Sunkus will implement measures to further improve corporate governance, such as putting in place and cementing a highly transparent internal control system that encompasses risk and compliance management systems. These steps will underpin efforts to enhance corporate value. See "Corporate Governance" for more information.
Q5.What can you tell us about the Company's social contribution activities?
A5 Leveraging a network of over 6,000 stores across Japan, Circle K Sunkus not only conducts fundraising activities at stores, but also provides emergency relief supplies and financial assistance in response to earthquakes and other major disasters. The Company also promotes social contribution activities in a broad range of fields by contributing a portion of earnings generated by its activities to NPOs. See "Social Contribution Activities" for more information.
Q6.Can you comment on your environmental activities?
A6 Circle K Sunkus is committed to continuously implementing environmental activities together with all its stakeholders, including not only Head Office employees, but also through its nationwide network of more than 6,000 stores. See "Environmental Activities" for more information.
Q7.What is your approach to shareholder returns?
A7 Circle K Sunkus regards dividends as the most important means of returning earnings to shareholders. Circle K Sunkus' basic policy is to return profits to shareholders based on earnings growth, while building up retained earnings to bolster the operating base as necessary to sustain business growth into the future. More specifically, Circle K Sunkus considers the maintenance of stable dividends its first priority, and takes a multifaceted approach to returning earnings to shareholders, including through dividend growth and share buybacks, while carefully monitoring its medium-term earnings outlook, capital expenditure plans and financial position. We aim to payout at least 30% of net income as dividends.
Please click here to see dividend trends.
At a meeting held on October 10, 2006, the Board of Directors passed a resolution to acquire up to ¥5.0 billion in treasury stock. Shares of treasury stock purchased between October 11, 2006 and December 19, 2008 in line with this resolution were as follows.
Total number of shares purchased: 2,387,600 shares
Total cost of purchase: ¥4,999,969,300
Q8.When is your fiscal year-end?
A8 Our fiscal year-end is the end of February each year.
Q9.When is your next earnings announcement?
A9 Please see our "IR Calendar" for the schedule of future announcements of business results.
Q10.Where can I find the Company's latest earnings information?
A10 A list of all materials disclosed in tandem with the announcement of earnings results can be found on the "Earnings Presentations Materials" page.
Q11.When is your Monthly Business Report updated?
A11 Our Monthly Business Report is usually updated around the 12th of each month. Please click here to see our latest Monthly Business Report.
Q12.How many Circle K Sunkus stores are there and what is the Company's operating area?
A12 Please click here to see our "Number of Stores.".
Q13.How many consolidated subsidiaries does Circle K Sunkus have?
A13
Consolidated subsidiaries of Circle K Sunkus Co., Ltd. had are seven consolidated subsidiaries companies as of February 28, 2009.
For details, please see our "Subsidiaries and Affiliates.".
Q14.How can I obtain Annual Reports and the Investors' Guide?
A14 Please click here to see our Annual Report or Investors' Guide. For a print copy of the latest Annual Report or Investors' Guide, please submit a request using our "Contact Us" page.
Q15.How do I contact Circle K Sunkus?
A15
Please click here to contact the Investor Relations Section.
Answers to frequently asked questions can be found on our "FAQs" page. Please look at this section before contacting us.