#1CValueAct Capital Transforming Seven & i Holdings into Global Champion 7-Eleven February 2022 www.valueact.com/presentations 1#2Disclaimer This document has been prepared by ValueAct Capital Management, L.P. ("ValueAct Capital"). ValueAct Capital is providing this document for informational and discussion purposes only. The views expressed herein reflect the opinions of ValueAct Capital as of the date hereof. ValueAct Capital reserves the right to change or modify any of its opinions expressed herein at any time and for any reason and expressly disclaims any obligation to correct, update, or revise the information contained herein or to otherwise provide any additional materials. All of the information contained herein is based on ValueAct Capital's independent research and analysis and publicly-available information, which may include, but is not limited to, publicly available disclosures, earnings calls and other Company-hosted events open to the public, news articles and other media reports, sell-side analyst reports, independent research projects conducted by third parties, and publicly-available databases. The materials in this document have not been prepared or endorsed by the Company and may not be attributed to the Company in any way. The information expressed herein is unaudited, reflects the judgment of ValueAct Capital only through the date of this document, and is subject to change at any time. Facts have been obtained from sources considered reliable but are not guaranteed. ValueAct Capital recognizes that there may be confidential or otherwise non-public information with respect to the Company that could alter the opinions of ValueAct Capital were such information known. This document does not purport to contain all of the information that may be relevant to an evaluation of the Company, Company securities, or the matters described herein. ValueAct Capital disclaims any obligation to correct, update or revise these documents or to otherwise provide any additional materials to any recipient of these documents. Please see the end of the document for additional important disclaimers 2#3ValueAct Believes Transforming Seven & i Holdings into Global Champion 7-Eleven Can Accomplish The Following: 1 2 3 4 Fix the corporate governance system that has persistently failed to align to shareholder interests Remediate the dysfunctional management environment and low employee morale Increase the focus on key competitive and sustainability risks which will have consequences for the Company and its stakeholders over decades More than double the share price and substantially increase long term corporate value 3#4The Strategic Transformation: A Four Step Process 1 Announce a bold strategy to truly focus on 7-Eleven and to restructure the non-core businesses without limits 2 3 4 Complete the sale of Sogo & Seibu and announce intention to separate Ito- Yokado through a sale or spin-off with plans to rapidly restructure the company to focus on its food retail operations Exit the remaining non-core businesses while maximizing value and paying due consideration to stakeholders until the convenience store operations are all that remain Operational review of 7-Eleven outside of Japan, including the US expense base and fresh food opportunity, as well as the international growth opportunity, culminating in new targets and a roadmap to achieve them 4#5The Governance Transformation: Board & Org Structure 1 Transition to a Board with a majority of Outside Directors that can objectively assess strategy, from a majority of Inside Directors with conflicts of interest 2 Transition to a globally coordinated management structure focused on 7- Eleven, from a complex holding company management structure 5#6Contents Introduction 7-11 Transformation Needed at Seven & i 12-23 The Strategic Transformation 24-40 The Governance Transformation 41-58 Shareholder Input Needed 59-63 Appendix 1: ValueAct Capital Stewardship 64-69 Appendix 2: Analysis & Glossary 70-72 6#7CValueAct Capital Introduction 7#8ValueAct's History of Stewardship Over 21 Years Significant Board Experience and Partnership with Company Leadership In 21+ years... 104 53 86 Core Investments Public Board Committees Seats Served On 6 Public Proxy Letters Contest Long-Term Active Role in the Stewardship Community We partner with other institutional shareholders to propose and shape policies of responsible corporate governance that are being adopted by more and more public companies every year. Present Affiliations ⚫ Council of Institutional Investors (Corporate Governance Advisory Council) • Commonsense Corporate Governance Principles • Investor Stewardship Group (Founding Member, Board of Directors) • Stanford Rock Center for Corporate Governance (Case Study Authors) Sources: ValueAct Capital 00 8#9Seven & i's History of Unsatisfactory Response to Shareholders Investors have repeatedly expressed similar feedback on strategy and performance; management has not provided strategic clarity or responded with real action, instead deflecting criticism with performative dialogue Abrdn (Aberdeen Standard Investments) Votes Against Directors "All directors should be responsible on company's poor performance of the speed of restructuring. abrdn a TOKIO MARINE ASSET MGT Tokio Marine Voted against the re-election of President Ryuichi Isaka and Katsuhiro Goto. Source a abrdn on restructuring Abrdn "We exited Seven & i due to slow progress non- We think the board's actions are not reflective of good governance and they should be responsible." Source 2015 2019 2020 2021 performing businesses in spite of our continued engagement." Source 2022 THIRD POINT Third Point requests that the Company sell its underperforming (namely Ito-Yokado). Source FRANKLIN TEMPLETON INVESTMENTS operations חום THIRD AVENUE MANAGEMENT Franklin Templeton "...depressed valuations seem to indicate the market is ignoring the firm's strong overseas operations, defensive domestic business, underleveraged balance sheet and continued scope for restructuring progress." Source Third Avenue Management "Finally, it is our view that if the U.S. 7-Eleven business were to be valued independently at a multiple similar to publicly-listed comparable companies, the undervaluation of Seven & I would become glaringly clear." Source ARTISAN PARTNERS Artisan Partners "address the distinct differences between the company's valuable convenience store assets and the company's other retail businesses." Source 9#10Presentation Context • Over the past year of engaging with Seven & i Holdings ("the Company”, “Seven & i”) in private dialogue, ValueAct Capital ("VAC", "we") observed slow, convoluted decision- making relative to the strategic imperative to truly focus and transform. The Company continues to pursue an ambiguous strategy rather than clarifying unequivocally that transforming into a global champion 7-Eleven is the strategic purpose. We lost faith in management's ability to set the strategic course without input from shareholders On January 25, 2022 ValueAct released an open letter addressed to the Seven & i Board of Directors. The letter requested the Board (1) Allow the Company's Outside Directors to formally and promptly seek direct input from top shareholders on key issues of strategy and governance, and (2) Form an independent committee to assess strategic alternatives On February 3, 2022 Seven & i issued a public response that created confusion in the media, but we understand that it denied both of ValueAct's above requests ValueAct is always open to making progress through constructive private dialogue with its investee companies, including in this case, but the limited receptivity from Seven & i so far requires that alternatives be considered 10#11ValueAct is Seeking Input From Other Shareholders The Seven & i Board is currently composed of a majority of Inside Directors many of whom have inherent conflicts of interests relative to the strategic imperative to transform. This board declined to formally allow the Outside Directors to ask shareholders the following key questions directly, as requested by ValueAct: Do you believe that management has the right strategic vision, structure, ability to execute, and openness to pursuing strategic alternatives, or are changes needed? Do you believe the recently announced Medium-Term Management Plan is the optimal way to create corporate value from a medium to long-term perspective? Do you believe that there are alternative strategies or ownership structures with superior risk-adjusted potential that should be pursued? If so, what are the alternatives? Do you believe that the Board should form a "Strategic Review Committee” of Outside Directors to assess these alternatives? The Board of Seven & i has denied the Outside Directors formal permission to listen to shareholders promptly and to consider strategic alternatives independently. Therefore, we believe shareholders should now consider an additional question: What kind of shareholder intervention is necessary to fix Seven & i's corporate governance system and transform the Company for the benefit of all stakeholders? 11#12CValueAct Capital Transformation Needed at Seven & i Holdings 12#13Seven & i Holdings Today: Unfocused Holding Company of Diverse Retail Businesses, Many Facing Secular Headwinds SEVEN &i HOLDINGS SEVEN&i HLDGS. Ikebukuro Shopping Park Financial HAPPY TOWN HAPPY'S TENMAYA Ito Yokado nissen, ISP 池袋ショッピングパーク YORK FOODS SE BU Denny's SOGO het oOSHMAN'S shopping Service 7 セブン ファーム BANK セブン銀行 ぴあ ヨークベニマル Seven Culture Network Seven Culture Network Co,.Ltd. 株式会社セブンカルチャーネットワーク ah 株式会社 ライフコーズ アカチャンホンポ 4 BARNEYS QOQ NEWYORK Loft FCTI TOWER RECORDS 2 セブン&アイ・クリエイトリンク Create Link Francfranc ELEVEN &HLDGS.#97✯ セブン&アイト 特例子会社 Ⓡ 株式会社ダイイチ エテル Daiichi 13#14Seven & i Holdings Today: 15 Years of Limited Value Creation Indexed TSR TSR % p.a. 1,400 1,300 Seven & i Holdings +4.6% 1,200 Walmart +10.2% 1,100 Pan Pacific +12.5% 1,000 President Chain +13.1% 900 FAST Retailing +13.9% 800 McDonalds +15.6% 700 Casey's +15.8% 600 Couche-Tard +18.5% 500 400 300 200 100 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 14 Sources: FactSet (prices as of 1/20/2022), VAC analysis Memo: Assumes dividends are reinvested back into company stock#15Seven & i Holdings Today: Slow Pace of Change, Many Structural Issues Identified for Years Have Not Been Fixed 100 Day Plan Announced in 2016 (Medium-Term Management Plan) Status 6 Years Later Investment Ito-Yokado ROIC still below WACC Efficiency Low return on capital expenditures Sogo & Seibu ROIC still below WACC M&A Low return on acquisition price (Sale could address this) Special Losses "Our response to underperforming businesses presents issues" Special losses continue Sources: Public company documents, VAC analysis 15#16Seven & i Holdings Today: 97% of Group Profit Generated by Core 7-Eleven Convenience Store Operations Seven & i Business Segment % of Group Operating Profit(1) Business Area Core to Seven & i Holdings? Domestic convenience store operations 57% Convenience stores (7-Eleven) Core Overseas convenience store operations 40% Convenience stores (7-Eleven) Core Superstore operations 6% General merchandise and grocery Non-Core Department and specialty store operations -2% Department and various specialty Non-Core All others: financial services, others, corporate, eliminations ATMs, credit cards, -1% Non-Core various others Sources: Public company documents, VAC analysis (1) Current fiscal year, reflecting latest full year company guidance released 1/13/2022 16#17Seven & i Holdings Today: Core 7-Eleven Business is Strong, but the Non-Core Businesses Weigh on Overall Performance Strong 7-Eleven Franchise ELEVEN Weighed Down By Non-Core Businesses Return on Invested Capital (FY 2021) 19.1% 4.7% -0.2% 5.2% • #1 brand in convenience -7.0% • 70,000+ stores in 18 markets Seven & i Department Superstores Overseas Domestic • Serves 65 million customers daily Holdings / Specialty 7-Eleven 7-Eleven Stores Sources: Public company documents, VAC analysis 17#18Seven & i Holdings Today: MTMP Omits Key Ambitions in the Core 7-Eleven Business That Would Drive Major Value Creation 7-Eleven Value Driver Part of MTMP? Earnings Target? International expansion Fresh food innovation × Global digital convenience strategy × × Expense efficiency opportunity in US Long-term strategy for US gas stations Source: Seven & i Holdings Medium-Term Management Plan (2021) ४ * ५ 18#19Seven & i Holdings Today: MTMP Allocates >30% of CAPEX (~¥770 billion / $7 billion) to Support Non-Core Businesses, Even Though the MTMP Does Not Expect ROIC > WACC Outside the Core Medium-Term Management Plan Capital Allocation FY22 - FY26 MTMP Cumulative Capex (% Total) Non-Core Businesses 31% 69% 7-Eleven Sources: Public company documents, VAC analysis Memo: Non-Core businesses include Superstores, Department stores, Financial services, Group investments, and other businesses 19#20Focus is Urgently Needed to Ensure That 7-Eleven Can Win in the Coming Decades Core Business Competition is Intensifying Inside Amazon's secret 'Bowser' project to build thousands of cashier-less Go stores in the suburbs: Talks with oil giant BP, 10,000 gas stations, and Walgreens-style retail pharmacies Source: Business Insider Article Eugene Kim Jan 27, 2022, 2:00 AM JUST WALK OUT Groceries Scan your app to enter WINE & SPI amazongo 20#21Focus is Urgently Needed to Ensure That 7-Eleven Can Win in the Coming Decades Core Business Competition is Intensifying DIVE BRIEF Gopuff raises another $1B to fuel rapid growth Published July 30, 2021 Source: Grocery Dive Article Courtesy of Gopuff Jeff Wells Lead Editor gopuff in y 21#22Focus is Urgently Needed to Ensure That 7-Eleven Can Win in the Coming Decades Core Business Competition is Intensifying DoorDash launches online Dash Mart convenience stores to sell snacks and groceries DoorDash wants a slice of the grocery market By Nick Statt | @nickstatt | Aug 5, 2020, 12:50pm EDT f SHARE Source: The Verge Article DOORDASH 22 22#23Seven & i Holding's urgent strategic imperative is to transform into global champion 7-Eleven and to address its structural issues in line with key stakeholder interests#24CValueAct Capital The Strategic Transformation 14 24#25ValueAct Engagement With Seven & i on Strategic Initiatives ValueAct has presented specific value-creating initiatives to Seven & i's management and Board that would result in over 40% higher earnings per share and 45% higher return on invested capital compared to the Company's Medium-Term Management Plan ("MTMP") We shared detailed research on these initiatives in the first half of 2021, prior to the release of the MTMP. Seven & i declined requests to discuss our input in detail until after the release of the MTMP, a missed opportunity for alignment After the release of the MTMP, we discussed and presented our plan side by side with the Company's plan. Individuals from the Seven & i Board and management expressed that our ideas would improve corporate value. Nevertheless, we saw neither decisions from top leadership nor public comments showing the necessary drive to tackle key issues and focus In the recent public letter from Seven & i Holdings, management wrote, "We understand ValueAct has not expressly presented any strategic plans that the Company believes will contribute to enhance our corporate value." With this context, we are presenting our strategic plan here. We invite ideas with superior value from other stakeholders, and expect with this dialogue the plan may improve further 25#26Seven & i Holdings or Global Champion 7-Eleven? Strategy of true focus on 7-Eleven creates significantly more corporate value SEVEN&I HOLDINGS SEVEN&I HLDGS. ELEVEN Current strategy promises By FY Feb 2026 EPS: 533 yen per share + OR Global 7-Eleven potential By FY Feb 2026 . EPS: 748 yen per share • 7-Eleven EBITDA: 850 billion yen + • 7-Eleven EBITDA: 1 trillion yen ● Valuation: Low multiple conglomerate • Valuation: High multiple global champion company Sources: Public company documents, VAC analysis Memo: Adjusted EPS calculated as (pre-tax profit + amortization of goodwill + one-time items) x (1 - tax rate) / shares outstanding. + 26#27Four Step Process to Transform Seven & i Holdings 2 3 4+ Announce a bold strategy to truly focus on 7-Eleven and to restructure the non-core businesses without limits Complete the sale of Sogo & Seibu and announce intention to separate Ito- Yokado through a sale or spin-off with plans to rapidly restructure the company to focus on its food retail operations Exit the remaining non-core businesses while maximizing value and paying due consideration to stakeholders until the convenience store operations are all that remain Operational review of 7-Eleven outside of Japan, including the US expense base and fresh food opportunity, as well as the international growth opportunity, culminating in new targets and a roadmap to achieve them 27 22#28Step 1. Bold Strategy of True Focus on 7-Eleven Major valuation uplift opportunity if Seven & i Holdings chooses focus over diversification Conglomerate Average: 11x P/E Forward P/E (Calendar Year 2022) Focused Retail & Quick Service Restaurant Company Average: 22x P/E 26.1x 25.1x 21.7x 20.5x 17.7x 15.4x 12.9x 13.4x 11.5× 11.8x 10.7x 9.4x 34.6x Mitsubishi Heavy NTT Hitachi Itochu Seven & i Holdings Kroger Pan Pacific Couche- Tard Casey's Walmart President McDonalds Chain FAST Retailing 28 Sources: Public company documents, Capital IQ (as of 2/3/2022), VAC analysis Memo: Multiples adjusted for one-time expenses and goodwill amortization#29Step 2. Complete the Sale of Sogo & Seibu Sogo & Seibu has property value estimated by a leading advisory firm at 480-550b yen, indicating upside to the possible ¥200b sale price reported in the press. However, the most important priority is completing a 100% sale as soon as possible, with due consideration for affected stakeholders, to allow management to focus on 7-Eleven due to the competitive urgency. Sogo & Seibu Valuation Under Two Strategic Alternatives 49 billion yen Value to Seven & i Holdings (Status Quo Business Value) Sources: Public company documents, VAC analysis > 200 billion yen Value to Third Party Buyer (Unlocking Property Value) Memo: Business value estimated as 5x FY Feb 2020 EBITDA, sale price based on media reports, real estate appraisal value based on leading global advisory firm analysis 29#30Step 2. Separate Ito-Yokado With Restructuring Plan Heavy transformation is required to reposition Ito-Yokado for the long term. The steps to concentrate the operations on food retail and find better owners for much of the owned real estate can be best accomplished as a separate company Ito-Yokado Can Become A Sustainable Business By Focusing on Food Retail Seven & i is not the best owner for the low ROIC tenant business. It is worth more to property specialist Significant losses in non- food retail operations 23b yen 28b yen 20b yen 24b yen Tenant Operations EBITDA Contribution Food Retail EBITDA Contribution Non-Food Retail EBITDA Contribution Ito-Yokado Total EBITDA Sources: Public company documents, VAC analysis Memo: Assumes Ito-Yokado food retail operations earn York-Benimaru level of profitability and sales per square meter. Assumes rent expense per square meter is the same across the Ito-Yokado food and non-food square footage. 30#31Step 3. Exit Remaining Non-Core Businesses Chart a path towards a standalone entity that is laser-focused on 7-Eleven growth and profitability SEVEN &i HOLDINGS ✓ SEVEN&I HLDGS. セブン&アイHLDGS. 特例子会社 BARNEYS nissen, NEWYORK ❤5K TOWER RECORDS Francfranc 株式会社 セブンカルチャーネットワーク ELEVEN ah アカチャンホンポ Seven Culture Network Seven Culture Network Co,.Ltd. ヨークベニマル Denny's BANK セブン銀行 Loft ELEVEN R 31#32Step 3. Exit Remaining Non-Core Businesses Limited group synergies - A leading global consultancy estimated Seven & i group synergies at less than 4% of FY21 operating profit, not significant enough to justify the significant conglomerate discount Group Synergies (JPY bn) Synergies % FY21 Operating Profit 14 bn yen Seven Premium The Seven & i subsidiaries focused on - food retail have significant standalone scale enough to have robust private label product innovation and procurement leverage. Standalone competitors with less scale have strong capabilities in these areas <4% Centralized procurement Loyalty program Sources: Public company documents, consultancy analysis, VAC analysis Memo: Operating profit adjusted for amortization of goodwill. Synergies analyzed between Seven-Eleven Japan, Ito-Yokado, and York-Benimaru, where the greatest synergies were expected FY2021 32 32#33Step 3. Exit Remaining Non-Core Businesses Limited group synergies - subsidiaries' underperformance relative to standalone competitors suggests that any benefits of group synergies are outweighed by the holding company's lack of focus. 1% GMS Pre-Tax ROIC (FY Feb '20) 9% 8% 6% Department Store Pre-Tax ROIC (FY Feb '20) 6% 1% 4% 0% Ito-Yokado Fuji Heiwado Izumi Sogo & Seibu Isetan Mitsukoshi Takashimaya J. Front I Group Company Standalone Company Standalone Company Standalone Company I Group Company Standalone Company Standalone Company Standalone I Company Sources: Public company documents, FactSet, VAC analysis Memo: Pre-tax ROIC defined as operating profit / average invested capital. Invested capital is the sum of net debt, leases, and equity 33#34Step 4. Operational Review of 7-Eleven Outside of Japan Top-down benchmarking suggests significant operating expense inefficiency in the US 7-Eleven operations. As a result, strong gross profit at the store level is not converting into operating profit for Seven & i Corporate EBITDAR % Store-Level Gross Profit US Expense Efficiency 32% 46% US 7-Eleven (CY 2019) Sources: Public company documents, 7-Eleven, Inc franchise disclosure document, VAC analysis Memo: EBITDAR = Earnings before interest, taxes, depreciation, amortization, and rent Couche-Tard (FY April 2020) MTMP Target? N/A FY26 Profit Potential? ~$625m 34#35Step 4. Operational Review of 7-Eleven Outside of Japan Consultancy analysis estimates $625 million of excess cost in US operations, primarily in US corporate headquarters (see chart below), but also in directly owned stores among other areas North American HQ Employees vs. Gross Profit of Leading USA Convenience Chains (Leading Global Consultancy Analysis) US Expense Efficiency Corp. FTEs 5,000 4,000 3,000 2,000 1,000 USA 7-Eleven has -39% more FTEs than the industry average, which on its own accounts for -$500m in excess SG&A costs 7-Eleven Circle K Speedway Murphy Casey's Size reflects system sales 0 $0.0b $1.0b $2.0b $3.0b $4.0b $5.0b $6.0b $7.0b $8.0b Total Gross Profit Sources: Public company documents, LinkedIn, Consultancy analysis. Memo: FTE = full time equivalent employee. Per consultancy: Employees count from 2020 vs. Gross Profit in 2019 or most recent fiscal year. MTMP Target? N/A FY26 Profit Potential? ~$625m 35#36Step 4. Operational Review of 7-Eleven Outside of Japan Expanding 7-Eleven's fresh food offer through Quick Service Restaurant ("QSR") and commissary is a high return way to replace declining foot traffic from fuel and make the business more sustainable 6 7-ELEVEN Get it deliver 29.10 ELEVEN Fresh Food Opportunity LAREDO TACO COMPANY RAISE THE ROOST CHICKEN & BISCUITS Warabeya TEXAS Sources: Public company documents, VAC analysis Memo: FY26 potential based on adding 400 QSR units per year to franchised 7-Elevens x VAC estimate of per-unit economics supported by third-party analysis. Fresh Food Offer (US) MTMP Target? N/A FY26 Profit Potential? ~$300m 36#37Step 4. Operational Review of 7-Eleven Outside of Japan Huge untapped earnings potential to expand 7-Eleven into new countries around the world, currently contributing less than $150m to earnings White Space Outside Japan/US Promote New Market Entry Operational Formats (# of Markets) Consolidated subsidiaries Area licensees 12 Worldwide 7-Eleven Global Brand Comparisons # of Stores # of Markets approx. 7-Eleven 72,000 16 McDonald's approx. 38,000 approx. 100 SUBWAY approx. 35,000 104 Starbucks Coffee approx. 32,000 SEVENS HOLDINGS 83 (As of December 2020) Having the largest store network in the world but only in 16 countries and regions Enormous attractive markets and growth opportunities left for global expansion Copyright (C) 2021 Seven & i Holdings Co., Ltd. All Rights Reserved. 22 Sources: Public company documents, VAC analysis Memo: FY26 potential based on estimate of current earnings (FY21 level) plus 1,100 directly franchised new units per year x SEJ-level per-unit economics International Expansion MTMP Target? N/A FY26 Profit Potential? >$700m 37#38Transformation Leads to >40% Higher EPS Than The MTMP Global Champion 7-Eleven Earnings Per Share Potential ¥748 130 71 38 112 ¥397 ¥533 >40% higher Seven & i PF Speedway (FY 2022) US operational improvement International expansion Non-core exits Organic growth and capital allocation Seven & i potential (FY 2026) Seven & i MTMP (FY 2026) JPY/USD = 115 JPY/USD = 105 JPY/USD = 105 Sources: Public company documents, VAC analysis Memo: Core 7-Eleven earnings drivers included in the appendix. Non-core exits assume businesses are sold at a price based on detailed real estate appraisal, earnings potential following structural reform, and comparable company multiple analysis, with capital then reinvested in the core business. EPS is adjusted for amortization of goodwill and one-time expenses 38#39And >85% Higher Per-Share Value Than The MTMP Global Champion 7-Eleven Value Per Share Potential ¥12,708 1,209 >85% higher 2,211 640 ¥6,848 1,896 ¥5,786 967 Seven & i (Current) Multiple expansion on US operational improvement International expansion current earnings Organic growth and capital allocation Exit non-core businesses Seven & i potential (Feb 2025) Seven & i MTMP (Feb 2025) Sources: Public company documents, VAC analysis Memo: Seven & i current share price as of 2/4/2021 close. Exit P/E is 17x forward EPS. FX assumed to be 105 JPY/USD to align with MTMP. All EPS figures are adjusted for goodwill amortization and one-time expenses. 39#40... And Enables Seven & i to Earn Returns In-Line With Convenience Peers and Outperform the MTMP ROIC Forecast Global Champion 7-Eleven Return on Invested Capital Potential 2.0% 1.3% 0.6% 6.3% 1.6% 11.8% Seven & i PF Speedway US operational improvement International expansion (FY2022) Organic growth and capital allocation Exit non-core businesses JPY/USD = 115 Seven & i potential (FY2026) JPY/USD = 105 8.1% ~45% higher Seven & i MTMP (FY2026) JPY/USD = 105 Sources: Public company documents, VAC analysis Memo: Both Seven & i potential and Seven & i MTMP ROIC figures are adjusted for goodwill amortization. ROIC calculated as NOPAT / (equity + debt) and assumes capital invested in 7- Eleven stays constant from Nov. 2021 levels 40#41CValueAct Capital The Governance Transformation 41 14#42Summary of the Governance Transformation • We believe the governance structure of Seven & i Holdings is dysfunctional, with distant relationships between the holding company and its subsidiaries, an overly complex organizational structure, infighting, and a Board that cannot act independently from management's conflicted interests. Seven & i claims it has built a structure between the holding company and key subsidiaries which enables "smooth decision-making”, most recently in its public response to ValueAct, but there is ample long-term evidence that this is not the case The governance of Seven & i Holdings could improve in two ways that are well accepted as modern global standards: 1 Transition from a majority of Inside Directors with conflicts of interest to a Board with a majority of Outside Directors that can objectively assess strategy 2 Transition from a complex holding company management structure to a globally coordinated management structure focused on 7-Eleven 42#43Distant: Holdings Does Not "Own" Subsidiary Actions US antitrust regulators at FTC alleged the $21 billion Speedway acquisition closed "illegally." Instead of taking ownership at the parent company and standing behind the subsidiary's significant decision, Seven & i deflected blame onto a subsidiary President just months after paying him a $24 million cash bonus 7-Eleven, Inc announces Speedway acquisition close FTC calls the acquisition "illegal" Seven & i deflects responsibility onto SEI May 14, 2021 Press Release Press Release 7-Eleven, Inc Completes Acquisition of 3,800 Speedway Stores May 14, 2021 Press Release May 17, 2021 Statement from FTC Acting Chairwoman Slaughter and Commissioner Chopra on 7-Eleven/Speedway Merger "Parties move forward with illegal transaction" Regarding Media Reports "We were reported by our subsidiary, 7-Eleven, Inc. (Head Office: President and CEO Texas, U.S.A.) that the acquisition was legitimately closed on May 14, 2021... for details, please refer to the public statement issued by 7- Eleven, Inc." Sources: 7-Eleven, Inc press release, Federal Trade Commission press release, Seven & i Holdings press release 43 33#44Distant: No Clear Strategy for Key Environmental Risk Seven & i has not explained its strategy to navigate and play a leadership role in the USA energy transition 7-Eleven US Gas Stations Speedway MTMP & Speedway Plan 7-Eleven will now FOUNTAIN DRINKS PLUS (NL) UNLEADED sell ~10% of Expand installation of EV Chargers 83 motor gasoline consumed in the US +70% 3899 3799 Marlboro DIESEL 549 4399 New Target Timeline No. of installation 2027 8,154 Speedway 2022 (5 years ahead of schedule) 500 units at 250 stores ↓ Over 500units at 250 stores 4,801 Pre-Speedway Acquisition Current Sources: Public company documents, U.S. Energy Information Administration 7-ELEVEN ELEVEN Is 500 EV charging stations at 250 stores (out of 8,154) a strategy? 7-Eleven was the first convenience store to sell gas. Where is that vision now? 44#45Distant: Not Measuring USA Gasoline Retail Scope 3 Emissions Inadequate oversight and lack of attention being devoted to navigating energy transition and opportunity Scope 3 emissions (which Seven & i states accounts for 90% of overall CO2 emissions) are not measured in North America, where gasoline retail business has substantial adverse effects on Seven & i's existing carbon footprint and exposure to climate-related risks (especially following the Speedway acquisition) On the Purchase of Speedway... "The rationale is to acquire convenience stores, but petrol sales will increase as a result," said Kazunori Tsuda, analyst at Daiwa. "With an increased focus on the ESG agenda, there could be investors who will hesitate from investing in Seven & i," he added, saying the company needed to do more to increase its environmental, social, and governance disclosure. Financial Times (Source) SCOPE 1+2 12 companies covered out of 170+ SCOPE 3 10 Japanese companies covered: Seven-Eleven Japan, Ito-Yokado, Seven Bank, ...1 UNMEASURED SCOPE 3 EMISSIONS Scope 3 emissions are not measured in North America. 90% of measured emissions CO2 Emissions (Tonnes) 45 49 1 Other entities covered: Sogo & Seibu, York-Benimaru, York Mart, SHELL GARDEN, Akachan Honpo, The Loft, and Seven & I Food Systems Source: Seven & i, CSR Data Book 2020, p.100, 216#46Distant: Weak Communication With Subsidiaries Weak communication with operating subsidiaries makes the Holding company ineffective "The company is a mess inside" "The weak lines of communication are an organizational issue, said President Isaka when asked about the abnormal timing of the change in President at Seven- Eleven Japan" "There have been persistent communication issues between the holding company and its subsidiaries" "It took the President two months to realize that Seven- Eleven Japan had asked its franchisees to continue to operate during the record-breaking Fukui prefecture snowstorm, despite requests from the franchisees for temporary store closures during this time" Source: Nikkei MJ Article, April 2019. Sources: Nikkei Marketing Journal, VAC summary translation 46#47Infighting: Internal Political Factions Frequently Cited Many employee reviews and news articles cite factions, internal politics, and infighting at Seven & i B 回答者 セブン&アイ・ホールディングスの就職・転職リサーチ 組織体制・企業文化 回答日:2018年08月12日 セブン&アイ・ホールディングス "Political factions are strong. I see how careful my boss is about what he says around his boss" GO セブン&アイ・ホールディングスの就職・転職リサーチ 組織体制・企業文化 回答者: 回答日:2021年09月08日 セブン&アイ・ホール "The company has a very traditional culture with lots of internal conflict" "Former CIO, Suzuki, talks about a bloody battle: The pathology of an organization where anonymous muckraking documents swirl around" セブン 告 DX敗戰 SEVEN HOLDI 10 GOOD! f Sources: OpenWork 1/24/2022, Diamond 1/30/2022 Source: Diamond Article January 2022 part 10 of 15+ 報告する 記事URL 47#48Infighting: Low Employee Morale at Holdings and Group Cos. Seven & i's largest group companies are all below the Japan retail average on employee reviews OpenWork Score Deviation from The Retail Average Score for TSE-Listed Retail Cos. >100Ybn Market Cap Red text denotes percentile rank among 2,948 retail companies registered at OpenWork openwork "OpenWork is a one-stop job and recruitment information platform that utilizes one of Japan's largest databases of company reviews." 11th Percentile Employee Review Score SEVEN & HOLDINGS 28th Percentile 14th Percentile 9th Percentile SEMBU SOGO 5th Percentile Source: OpenWork 1/24/2022 Memo: Average Retail Score = 3.02, Scale of 1-5, 5 being the best ELEVEN セブン‐イレブン ☑ ヨークベニマル -0.12 -0.19 -0.23 -0.26 -0.35 48#49Complexity: Indecipherable Organization Chart Seven & i has over 170 group companies, making it more difficult for management to focus attention and resources on 7-Eleven, which is the overwhelming driver of corporate value Seven & i Holdings Organization Chart formation Management k Management Dept. counting Dept. Finance Planning Dept. Our Customers Business Partners / Shareholders / Communities Operating Companies rate Management Dept. Legal Dept. DX Solution Dept. IT Strategy & Planning Security Infrastructure Dept. Digital Marketing Dept. Public Relations Center PR Strategy & Planning Dept. IT Infrastructure Dept. Premium Quality Control gy & Planning Depe ment Strateg Org Chart Assessment Business leaders report × directly to President? X Clear reporting lines and accountability? Corporate Corporate Corporate Development Division Finance & Accounting Division Corporate Personnel General Affairs Planning & Legal Division Division Security Management Office Secretary Office President Office Auditing Office Nomination Committee Compensation Committee Group DX Strategy & Planning Division Corporate Communi- cation Division Group Merchandise Strategy & Planning Division CSR Management Committee Risk Management Committee Information Management Committee Executive Vice President & Representative Director President & Representative Director Board of Directors Audit & Supervisory Board Members/ Audit & Supervisory Board Audit & Supervisory SEVEN&I HLDGS.Co.,Ltd. General Shareholders' Meeting Sources: Public company documents, VAC analysis "Evidence strongly suggests that diversified firms trade at a discount. [...] The results also suggest that managers of diversified firms resist the restructuring of inefficient businesses when they are ill-disciplined by a weak governance system." Board Members Office "Diversification Discount and Corporate Governance in Japan" Tatsuo Ushijima, Policy Research Institute, Ministry of Finance, Japan, Public Policy Review Vol. 11, July 2015 49#50Complexity: Too Many Different Key ESG Issues To Focus On Diversified business leads to complex ESG risk and opportunity profile with unique issues in each business. Business ELEVEN Convenience Stores Industry SASB Material Topics¹ Fleet Fuel Management Food Waste Management Food Retailers & Distributors Food Safety Product Health & Nutrition GHG Emissions ELEVEN Speedway Oil & Gas - Refining & Marketing Clean Fuel Blends Gasoline Stations (North America) BANK Financial services Hazardous Materials Management Critical Incident Risk Management Customer Privacy Consumer Finance Data Security Selling Practices VAC Evaluation* VAC Evaluation Framework: The Company discloses efforts to tackle the issue ⚫ The Company discloses efforts but there are inadequate or questionable practices The Company does not disclose its efforts Source: Seven & i, CSR Data Book 2020, p.103, 105, 56, 67, 90, 18 (1) Sustainability issues identified by SASB standards as most likely to impact the operating performance or financial condition of the typical company in these industries. 50#51Complexity: Business Partnerships Have Been Bungled Long history of weak execution in business partnerships including with H2O, Mandai, Odakyu, and Izumi Partnership with H2O (2016) Sale of Dept Stores S point Others • H2O to take over Introduction of S Strongest Kobe, Takatsuki point to 7-Eleven and Seishin stores stores in Kansai Area department store in Kansai x SEJ store network Partnership with Mandai (2015) • • Operational Collaboration The areas of logistics, human resource development, and joint product development. Financial services related to point schemes and settlement systems 3 ---> 2 stores Was Execution Followed-through? Yes but it took 2 years No Major Update H2O ended up partnering with Lawson in 2021 LAWSON Sources: Public company RETAILING STATION documents, VAC analysis Was Execution Followed-through? No Major Update Mandai ended up leaving for new partner in 2021 NOW FRESH Mandai IN O 51 RETAILING#52Complexity: Collaboration Challenges Cited in 7Pay Failure Several media reports suggest that Seven & i's governance structure, which makes collaboration and communication across group companies difficult, contributed to the 7Pay failure July 2019: Seven & i launches the "7Pay" payment service TOKIO MARINE ASSET MGT Just days after the launch, the payment service is hacked, and 38 million yen is stolen from accounts 7pay August 2019: the Company shut down 7Pay. Opposed the re-election of Ryuichi Isaka and Katsuhiro Goto due "the occurrence of security issues and after-the-fact disclosure." Source Nikkei Business Oct 8, 2019 "Trying to guess what Seven-Eleven Japan wanted, without engaging in dialogue with its leaders, led to 7Pay problems" "The Company says there is collaboration within the Group, but in reality, it is difficult to commercialize 7Pay unless Seven-Eleven Japan approves." "The app's convenience was prioritized over its security because the 7Pay developers assumed that is what Seven-Eleven Japan wanted." Source: Nikkei Business Article Sources: Public company documents, Nikkei Business, VAC analysis Memo: Nikkei business article as translated by VAC 52#53Board: Not Independent, Not Positioned to Drive Change Seven & i Board has majority of Inside Directors; the Board cannot independently assess strategy. Amajority independent board is critical for corporations where crucial transformation is long overdue Seven & i Holdings Board of Directors Board Independence Scorecard 13 Outside Directors 5 Inside Directors 8 × ✓ Majority Outside Directors? Sources: Public company documents, VAC analysis (1) No publicly disclosed Lead Independent Director with specific responsibilities, including being the point of contact for shareholders Lead Independent Director or Chairperson¹? 53#54Inside Directors: Interests Conflict with a Strategy to Transform Seven of eight Inside Directors inherently have interests in the subsidiaries in which they have overlapping executive or board roles. The subsidiary interests conflict with the interests Seven & i's shareholders and stakeholders to whom Directors should owe fiduciary duty. Allegiance solely to Holdings? Subsidiary Affiliation Subsidiary Title Inside Director 1 (President) Inside Director 2 (Vice President) Inside Director 3 Inside Director 4 Inside Director 5 Inside Director 6 Inside Director 7 Inside Director 8 × ✓ Sources: Public company documents, VAC analysis BANK Seven & i SE BU SOGO Asset Management × × ELEVEN Seven & i Financial Center Japan ELEVEN USA ELEVEN Japan Director Director Director President & Rep. Director Senior Managing Executive Officer President & CEO President & Rep. Director 52 54#55Outside Directors: Big Gaps in Key Skills Need to be Filled? Outside Directors bring some relevant skills to Seven & i Holdings but additional outside perspectives could make the Board more effective at supporting and overseeing management Seven & i Holdings Outside Director Skills Representation No 2 3 4 4 4 LO 5 5 LO LO LO 5 1 1 0 0 0 O Legal, Risk Management Public Company Large Scale M&A Digital & E- Commerce Capital Markets Gender Diversity Non- Japanese Climate Business Retail Chief Exec Diversity Portfolio Operations Transformation Yes 3 2 1 1 Finance & Audit Sources: Public company documents, VAC analysis 55#56Seven & i Holdings or Global Champion 7-Eleven? SEVEN & HOLDINGS SEVEN&i HLDGS. ELEVEN Ⓡ Seven & i Current Governance • Board: Majority Inside Directors, with no independent Board leadership Org Structure: Complex holding company structure with over 170 subsidiaries OR Proposed Global Governance Board: Majority Outside Directors, with independent Board leadership Org Structure: Globally coordinated management intently- focused on 7-Eleven 56#57Board Structure: Global Standard Independence Needed? From a Board with majority of Inside Directors with conflicts of interest to majority of Outside Directors with relevant skills and experience to monitor strategy and management Seven & i Holdings Board of Directors 13 Global Standard Board LO 5 8 00 Majority Outside Directors? Outside Directors More Outside Directors with relevant skills and experience needed to support management through transformation Lead Independent Director or Chairperson? Inside Directors Inside Directors, many of whom are conflicted, cannot independently assess strategy and hinder transformation Relevant skills to oversee management Sources: Public company documents, VAC analysis 40 57#58Management Structure: Simplification Needed? Transformation from a complex Holding Company management structure to globally coordinated management intently focused on opportunities and risks of 7-Eleven Current Org Chart Representative Global Org Chart (Convenience Stores) Our Customers Business Partners/Shareholders/Communities Operating Companies Corporate Corporate Corporate Development Division & Accounting Division Division Group DX Strategy & Planning Division Corporate Group Merchandise Division Strategy & Planning Division Security Management Office Secretary Office President Office CSR Management Committee - Risk Management Committee Information Management Committee Executive Vice President & Representative Director President & Representative Director Auditing Office Nomination Committee Compensation Committee SEVEN&I HLDGS Co,Ltd. Board of Directors Audit & Supervisory Board Members/ Audit & Supervisory Board Audit & Supervisory Board Members Office General Shareholders' Meeting Sources: Public company documents, VAC analysis Business Leaders Functional Leaders Executive Vice President of Operations, North America Executive Vice President of Operations, Europe Business Leaders Functional Leaders President & CEO Executive Vice President of Chief Technology Officer Chief Marketing Officer Operations, Chief People Officer Chief Financial Officer Commercial Optimization Representative Global Org Chart (Retail) President and CEO, US President and CEO, International President & CEO President and CEO, Smaller Business Line Head of Corporate Affairs Chief Financial Officer Head of Global Governance, Chief Legal Officer and Corporate Secretary Global Chief Technology Officer and Chief Development Officer Chief People Officer 58#59CValueAct Capital Shareholder Input Needed on Seven & i Strategy and Governance 59#60Seven & i's History of Unsatisfactory Response to Shareholders Investors have repeatedly expressed similar feedback on strategy and performance; management has not provided strategic clarity or responded with real action, instead deflecting criticism with performative dialogue Abrdn (Aberdeen Standard Investments) Votes Against Directors "All directors should be responsible on company's poor performance of the speed of restructuring. abrdn We think the board's actions are not reflective of good governance and they should be responsible." Source a TOKIO MARINE ASSET MGT Tokio Marine Voted against the re-election of President Ryuichi Isaka and Katsuhiro Goto. Source a abrdn Abrdn "We exited Seven & i due to slow progress on restructuring non- 2015 2019 2020 2021 performing businesses in spite of our continued engagement." Source 2022 THIRD POINT Third Point requests that the Company sell its underperforming operations (namely Ito- Yokado). Source FRANKLIN TEMPLETON INVESTMENTS חום THIRD AVENUE MANAGEMENT Franklin Templeton “...depressed valuations seem to indicate the market is ignoring the firm's strong overseas operations, defensive domestic business, underleveraged balance sheet and continued scope for restructuring progress." Source Third Avenue Management "Finally, it is our view that if the U.S. 7-Eleven business were to be valued independently at a multiple similar to publicly-listed comparable companies, the undervaluation of Seven & I would become glaringly clear." Source ARTISAN PARTNERS Artisan Partners "address the distinct differences between the company's valuable convenience store assets and the company's other retail businesses." Source 60#61Dialogue With Shareholders Has Been Performative Shareholder survey commissioned by Seven & i in 2021 is misleading and does not facilitate true strategic feedback. In fact, the data is likely to confuse or mislead the Board. Questions do not allow investors to communicate ideas about strategies outside the scope of the MTMP Nested responses create confusion about the respondent's true meaning Illustrative Question From Seven & i Survey Q3: What are your thoughts on reforms at Seven & i Holdings' business and stores at large commercial centers, with regard to workforce optimization, reviewing unprofitable stores? a. Positive: The company's strategy of focusing on core businesses with high profitability is significant and highly evaluated. b. Neutral: Although this will have a temporary impact on earnings, we believe that their strategy is to capture both risk and opportunity. c. Negative: Please tell us more about improving productivity through Al orders and expanding customer contact points using DX. d. Others Sources: Proxy solicitor survey sent on behalf of Seven & i, VAC analysis 61#62Outside Directors Should Ensure the Company Actually Responds to Shareholder Feedback vs. Simply "Hearing” It With BOD's majority of Inside Directors, the Outside Directors have been prevented from playing the key role envisioned by Japan's Ministry of Economy, Trade and Industry (METI) Outside Director Responsibility According to METI: "Engage in dialogue with investors and reflect their perspectives in the Board of Directors' discussions Through dialogue with investors, outside directors should understand the capital market's perspective on how investors view the company's situation, listen to the opinions of investors, and consider what may be useful for the company's sustainable growth and enhancement of corporate value over the medium to long term. In addition, they are expected to listen to the opinions of investors and reflect those that may be useful for the company's sustainable growth and improvement of medium to long-term corporate value in discussions at the Board of Directors meetings, and to act as a window (interface), so to speak, with investors." -- 2020 "Practical Guidelines for Outside Directors “, METI Source, p.42 Sources: METI (Japan's Ministry of Economy, Trade and Industry) 62 42#63ValueAct is Seeking Input From Other Shareholders The Seven & i Board is currently composed of a majority of Inside Directors many of whom have inherent conflicts of interests relative to the strategic imperative to transform. This board declined to formally allow the Outside Directors to ask shareholders the following key questions directly, as requested by ValueAct: Do you believe that management has the right strategic vision, structure, ability to execute, and openness to pursuing strategic alternatives, or are changes needed? Do you believe the recently announced Medium-Term Management Plan is the optimal way to create corporate value from a medium to long-term perspective? Do you believe that there are alternative strategies or ownership structures with superior risk-adjusted potential that should be pursued? If so, what are the alternatives? Do you believe that the Board should form a "Strategic Review Committee” of Outside Directors to assess these alternatives? The Board of Seven & i has denied the Outside Directors formal permission to listen to shareholders promptly and to consider strategic alternatives independently. Therefore, we believe shareholders should now consider an additional question: What kind of shareholder intervention is necessary to fix Seven & i's corporate governance system and transform the Company for the benefit of all stakeholders? 63#64CValueAct Capital Appendix 1: ValueAct Capital Stewardship 64 59#65ValueAct Capital invests more than $15 billion on behalf of some of the world's largest institutional investors. We have now been in business for over 21 years. We have made over 100 core investments and have held 53 public company board seats. We have been active investors in Japan since 2017 and believe in the long-term success and future growth of Japanese industry. We currently serve on the boards of JSR and Olympus and are investors in Nintendo and 7&i. O 65#66Relationships & trust. ValueAct Capital Values Transparency & respect. Responsibility & long-term thinking. We place great value on our relationships with current and former portfolio companies, as well as with the institutional investor community. We always consider what is in the best interest of the company and all stakeholders. Our team culture promotes openness, shared learning and shared rewards. We succeed or fail together. We apply this same approach to working with our portfolio companies. We believe in investing for the long term and managing companies for the long term. This requires integrity, a deep understanding of industry structure and business strategy, and a consideration of relevant social, ethical and environmental issues. 66#67Microsoft KAR AUCTION SERVICES... BAUSCH Health Boards We Have Served R Rolls-Royce ROYER AMO MOVANCEVERAL CLOS CBRE RTH BARD CATALINA PRAHEALTH SCIENCES Allscripts IMMUCOR. Armstrong CEILINGS SEITELS THE Onshore Seismic Data Company OneSource. MSC Software STE FW AR 21ST CENTURY FOX M OLYMPUS SEAGATE ALTUSPOWER RENEWABLE ENERGY gevity hr Kev3 Media Group KM Sara fee JSR Solega Alliance Data MOTOROLA Adobe MSCI Armstrong FLOORING Gartner acxiom Allison Transmission והויויו ו Willis Towers Watson HANOVER LKQ Corporation AA LeCroy MDS → MENTOR >MISYS Omnicare Per-Sé TECHNOLOGIE SIRVA Trinity Industries, Inc. * Indicates BOD observation rights. 40 67#68ValueAct's History of Stewardship Over 21 Years Significant Board Experience and Partnership with Company Leadership In 21+ years... 104 53 86 Core Investments Public Board Committees Seats Served On 6 Public Proxy Letters Contest Long-Term Active Role in the Stewardship Community We partner with other institutional shareholders to propose and shape policies of responsible corporate governance that are being adopted by more and more public companies every year. Present Affiliations ⚫ Council of Institutional Investors (Corporate Governance Advisory Council) • Commonsense Corporate Governance Principles • Investor Stewardship Group (Founding Member, Board of Directors) • Stanford Rock Center for Corporate Governance (Case Study Authors) Sources: ValueAct Capital 68#69Our broad 'Value Creation Toolkit' and board membership have created unique opportunities to learn and develop a differentiated institutional skill set. Compensation Design & Structure Aligned with Shareholder Value Creation Financial Planning & Analysis سلسلسلي Management Selection Tax & Corporate Structure Strategy & M&A Crisis Management Capital Allocation & Investor Relations ESG Capital Structure 69#70CValueAct Capital Appendix 2: Analysis & Glossary 70#71Transformation Leads to Over 1 Trillion Yen of EBITDA from 7- Eleven Alone, Over 25% Higher Than The MTMP Forecast Global Champion 7-Eleven EBITDA Potential (JPY Bn) 93 59 33 ¥767 131 ¥1,083 >25% higher ¥850 Seven & i PF Speedway (FY 2022) US operational improvement USA fresh food International expansion Organic growth Seven & i potential (FY 2026) Seven & i MTMP (FY 2026) JPY/USD = 115 JPY/USD = 105 JPY/USD = 105 Sources: Public company documents, VAC analysis Memo: US operational improvement refers to $1.25 billion of Speedway synergies and SEI expense efficiencies. Fresh food assumes 400 QSRs added to US 7-Elevens per year. International expansion assumes adding 1,100 per year locations earning Japan-type store level economics. Organic growth captures FX and fuel margin improvement (31 CPG in FY26). 71#72Glossary QSR: MTMP: SEJ: SEI: EPS: ROIC: WACC: OP: EBITDA: P/E: METI: FTC: SASB: ESG: VAC: Quick Service Restaurant Medium-Term Management Plan Seven-Eleven Japan (Primary 7-Eleven entity focused on Japan operations) 7-Eleven, Inc (Primary 7-Eleven entity focused on US operations) Earnings per share Return on invested capital Weighted average cost of capital Operating Profit Earnings Before Interest, Taxes, Depreciation, and Amortization Price to Earnings Ratio Ministry of Economy, Trade, and Industry Federal Trade Commission Sustainability Accounting Standards Board Environmental, Social, and Governance ValueAct Capital 22 72#73Additional Disclaimer Funds and accounts managed by ValueAct Capital (the "Funds") have a beneficial ownership interest, and/or an economic interest, in the securities discussed herein. Nothing in this document should be taken as any indication of ValueAct Capital's current or future trading or voting intentions which may change from time-to-time. ValueAct Capital intends to review the Funds' investments in the Company on a continuing basis and depending on various factors, including without limitation, the Company's financial position, strategic direction, the outcome of any discussions with the Company, overall market conditions, and the pricing of securities, transact in the securities of the Company and reserves the right to take any actions with respect to the Funds' investments in the Company as it may deem appropriate. ValueAct Capital expressly disclaims any obligation to notify others of any such changes. Except for the historical information contained herein, the information and opinions contained in this document constitute forward-looking statements, including estimates, projections and other forward-looking statements, some of which can be identified by the use of forward-looking terminology such as "may," "will," "should," "anticipate,” “expect,” “project,” “intend," "believe," or variations thereon or comparable terminology. Forward-looking statements are inherently unreliable as they are based on estimates and assumptions about exit and valuation multiples, and events and conditions that have not yet occurred, any and all of which may prove to be incorrect. Forward-looking statements are subject to uncertainties and changes (including changes in market valuation multiples, earnings assumptions, economic, operational, political or other circumstances or the management of the particular portfolio company), all of which are beyond ValueAct Capital's control and that may cause the relevant actual results to be materially different from the results expressed or implied by the forward-looking statements. No assurance, representation or warranty is made by any person that any of the forward-looking statements will be achieved, that the Company will be able to avoid losses or that any company will be able to implement its intended activities. Neither ValueAct Capital nor any of its officers, employees, partners, shareholders, affiliates, advisers and agents makes any assurance, representation or warranty as to the accuracy or reasonableness of the forward-looking statements nor have any of them independently verified the forward-looking statements. Due to various risks and uncertainties, actual events or results or the actual performance of ValueAct Capital may differ materially from those reflected or contemplated in such forward-looking statements. 73#74Additional Disclaimer Under no circumstances is this document to be used or considered as an offer to sell or a solicitation of an offer to buy any security, including, without limitation, any interest in any Fund. Nothing within this document promotes, or is intended to promote, and may not be construed as promoting, any Funds. Any offer to purchase an interest in a Fund would only be made at the time a qualified offeree receives the confidential memorandum of such fund. The terms of any investment in a Fund shall be governed by the constituent documents for the relevant fund, which expressly do not include this document. This document should not be construed as, directly or indirectly, seeking any confidential information. ValueAct Capital disclaims any obligation to treat the receipt of such information as confidential, unless done so expressly in writing. No agreement, commitment, understanding, or other legal relationship exists or may be deemed to exist between or among ValueAct Capital and any other person by virtue of furnishing this document. ValueAct Capital is not acting for or on behalf of, and is not providing any advice or service to, any recipient of this document. Before determining any course of action, any recipient should consider any associated risks and consult with its own independent advisors as it deems necessary. 74 74#75VAC ValueAct Capital ® Confidential 2022 ValueAct Capital. 75 75