Regarding Kiddleton Force, our newly introduced AI operational application, we adopted a phased, region-by-region rollout strategy to avoid the operational risks associated with a nationwide launch. Although we initially experienced software bugs and varying compliance rates on the ground, we have continuously implemented system improvements.

As a result, in the United States, we phased out our legacy system (CCX) at the end of June and successfully completed the full transition to a Kiddleton Force-managed structure in July. In Canada, CCX will be shut down at the end of July, marking a complete transition to Kiddleton Force starting in August.

As previously announced, we expect operations to normalize from August onward (the third quarter). This refers to recovering our key KPI – monthly visits to mini-locations – back to pre-merger levels of approximately 15,000 visits per month.

During the transition period up to now, the dual operation of both CCX and Kiddleton Force created an added burden. The need to maintain certain tasks on CCX while simultaneously adapting to Kiddleton Force served as a bottleneck to recovering our visit count.

However, following the full transition to Kiddleton Force in the United States this July, visit numbers have shown a clear recovering trend. Notably, in the period starting July 21, just ahead of the full normalization in August, daily visit counts across each day of the week have reached their highest levels since the system integration issues occurred last November.

Furthermore, alongside the transition to Kiddleton Force, operational measures such as rigorous hands-on management from headquarters and the introduction of an incentive scheme for field merchandisers (rounders) have also contributed to the recovery in visit frequency.

By maintaining this established management structure throughout the second half of the fiscal year, we expect the full normalization of our operations to proceed as planned.

Regarding the realization of cost synergies, which was one of the primary objectives of the integration, initiatives were temporarily paused until system issues and the transition to the new system settled down. This served as the reason why fixed costs in our North American business remained higher than originally projected. However, now that we have a clear line of sight toward operational normalization, we will resume these measures in the third quarter starting in August and work to realize the originally anticipated cost synergies.