Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Feature: Manufacturing at the SENKO Group

Entry into the Products
Business

Manufacturing at Chuo Kagaku (1)Chuo Kagaku’s approach to product development is founded on a constant focus on how food culture and consumers’
lifestyles can be improved through food containers, a goal that it embraces as its mission. In product development, which canbe broadly divided into material development and container shape and design,
Chuo Kagaku emphasizes the primacy of materials. As a result, the company isable to create products that communicate a friendly, approachable ambiancewhile stimulating consumers to purchase them; examples of this ability include its
creation of the first microwave-safe containers and its development of productsthat retain an attractive appearance even when printed on (thanks to a glossy
surface and design that attracts consumers’ attention). It also engages in three
types of recycling–chemical, material, and thermal–while giving top priority tocustomers’ safety and peace of mind.

The SENKO Group recently launched a new Products Business Promotion HQ. to draw
on its involvement in an array of supply chains, from manufacturing to sale, which is a
key strength of its flagship Logistics Business.
This business will entail an effort to strengthen SENKO’s manufacturing operations
centering Chuo Kagaku Co., Ltd., which recently became part of the Group.

Review ofBusinesses

Chuo Kagaku became a consolidated subsidiary during the fourth quarter of the year, during which ProductBusiness revenue totaled 10,604 million yen for an operating loss of 180 million yen. During the fiscal year
ended March 2023, Chuo Kagaku generated operating profit of 446 million yen on operating revenues of
48,505 million yen.
Products Business(fiscal year ended March 2023)

Percentage of total revenue

Products Business(fiscal year ended March 2023)

Revenue (hundreds of millions of yen)

106

Products Business(fiscal year ended March 2023)

Operating loss

(hundreds of millions of yen)

Products
Business

1.5%

Businesses and history
During the more than 60 years that have passed since its 1961 establishment as a pioneering food packaging
and container manufacturer dedicated to supporting rich and fulfilling food culture through a focus on theconcepts of “protection, support, and variability,” Chuo Kagaku has played an essential role in people’s lives bymeeting the needs of society in every era. Lifestyles have changed significantly over time, but the company’s
food packaging and containers have served as essential products in a variety of settings thanks to its ability tosupply products that meet the needs of each era by ensuring consumer safety and peace of mind from thefactory floor to the dining room table while making possible convenient lifestyles, safeguarding food producthygiene, maintaining quality, and providing variability.

Commitment to its philosophy
Chuo Kagaku has embraced “Ingenuity from Everyone” as its corporate philosophy. This philosophy has been
passed down intact from founding president Koji Watanabe, and at its essence calls on all employees to think
for themselves. Behind that philosophy lies a desire for each and every employee to offer up ideas in a varietyof business settings as if they were an executive, including not only improving the company's performance, butalso ensuring safety and peace of mind for themselves andcustomers.

Market environment in the company’s businessdomains
Currently, plastic is facing numerous challenges. That said,
this tough, lightweight, and inexpensive material plays anessential role in food distribution and embodies food culture
itself. Accordingly, Chuo Kagaku is working to make all
possible improvements through its businesses in order tominimize the material’s environmental impacts.

17

SENKO INTEGRATED REPORT 2023

Manufacturing at Chuo Kagaku (2)Supplying products that draw on its strengths

Chuo Kagaku’s strengths include the technological and design capabilities that allow it to perceive market needs quickly andstart developing materials to meet them as well as the human resources who make that possible. Backing up thosetechnological capabilities are the accumulation of expertise in each process andsupply chains that let the company realize customer feedback immediately acrossoperations extending from the procurement of raw materials and other inputs
from suppliers to material development, marketing (product planning anddevelopment), manufacturing, quality control and assurance, sales, logistics (bymeans of which products can be delivered directly to customers), and subsequent
recycling. To date, the company has drawn on these strengths to supply a broad
range of containers and other products. Going forward, it will continue to leveragethese strengths to supply a variety of products.

Manufacturing at Chuo Kagaku (3)-2Company
overview

Manufacturing principles and focus

China business: A key segment for Chuo Kagaku

Chuo Kagaku saw the potential in the Chinese market, which is home to the world’s largest population, early on and launchedits business as the country’s only foreign-based plastic food packaging and container manufacturer in 1994. Today, a quarterof a century later, its technological capabilities, design appeal, and commitment to delivering quality that ensures safety andpeace of mind as a Japanese company have earned it the trust of customers in the
Chinese market. Plastic food packaging and containers play an essential role inpeople’s dietary lives, but the need for environmental responsibility grows greaterwith each passing year in China, too. By developing environmentally friendly
materials and products and offering a broad line of environmentally responsible
products, Chuo Kagaku meets its customers’ needs as a general manufacturer ofpackaging and containers.
Going forward, it will strive to expand the scale of its operations as a core SENKO
business as it continues to export containers manufactured in China to othercountries worldwide, with a particular focus on Southeast Asia.
Principal environmentally
responsible products of Chuo
Kagaku’s Chinese business•Heat-resistant biodegradable plastic (T-PLA) (developed using proprietary technology from the Chinese business)•Products that meet various market needs, for example biodegradable plastic bags and molded-pulp containers•Paper containers (non-plastic containers that are manufactured in-house)•Cutlery manufactured by a joint venture using natural materials (recently launched)

Manufacturing at Chuo Kagaku (4)Synergies with the SENKO Group

Chuo Kagaku became part of the SENKO Group in December 2022. The
acquisition is expected to yield synergistic effects since the company’s philosophy
resonates with the SENKO Group’s commitment to improving consumer
convenience. One such effect of particular significance will be the streamlining of
the businesses operated by the Group, which has a core focus on logistics, throughstrengthened relationships and partnerships with its customers.
A secondary effect will be to empower Chuo Kagaku’s employees to pursue more
ambitious dreams thanks to access to the SENKO Group’s capital, which will boost
their motivation in a meaningful way. Going forward, Chuo Kagaku will work to playa central role so that it can contribute to the Group’s new Products Business.
SENKO INTEGRATED REPORT 2023

18

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Feature: Manufacturing at the SENKO Group

Chuo Kagaku’s manufacturing facilities

Environmental initiatives at Chuo Kagaku

Chuo Kagaku operates eight plants in Japan and three in China. The facilities manufacture food packaging
and containers with processes ranging from sheet molding to container forming, while thoroughly managing
safety and hygiene.

Sheet molding

02

Sheet molding

Raw materials are added to a mixer andextruder to manufacture raw sheet material
that will be used to produce food packaging
and containers while adding various additives.

Raw material
hopper

Mixer

Extruder03

Winding of raw sheet

The raw material is wound by awinder in the quantities
required for the next process.

Container formingto
06 Supply
cutting machine

Containers areformed by applying
dies to raw sheet togive it the desired
shape.

Infrared heaterDie-forming
machineDie-formed containers
are sent to a cutting
machine.

Cutting machineDie

Raw sheet

07 Cutting

Forming
Blade

Meeting customers’ needs
Chuo Kagaku leverages extensive experience andexpertise to offer an array of food packaging andcontainer products that meet customers’ needs,
starting with the development of safe, environmentallyfriendly materials.

2013

2020

About
222,000 tons

2030 target*Estimates are based on Chuo Kagaku’s collection of ESG
data, disposal of used products, and other information.
Specific values may change going forward, for example
due to the revision of categories used in calculations.

Products

08

Increase in proportion of environmentally
responsible products soldIncrease in volume of functional containers soldMeasures to reduce food waste(versus
FY2013)

100%
-5
7
%

×

8

×

2. Environmentally responsible materials and products

05 Container
forming

Raw sheet produced by the
sheet molding process is
supplied to a die-forming
machine.

About
284,000 tons

Transition to lighter-weight PSP,
OPS, and C-APG products

Development of environmentally
responsible materials and products

46%
reductionby 2030About
411,000 tons

Additives
Raw sheet

04 Supply of raw sheet●Greenhouse gas (CO2) emissions
by Chuo Kagaku

Transition to C-APG for PET products

Resource recycling

Unused raw materials andrecycled offcuts discarded at theplant are combined for use in
the manufacturing process.

Automatic packaging of cut
containers

Cut containers are inspected for misaligned cuts
and other defects and then packaged if none arefound.

09 Packing and shipment

Packed cartons are loaded onto product-specificpallets. A specialized machine scans the barcodeson the cartons’ labels and sends them on to theshipment process.

SENKO INTEGRATED REPORT 2023

Chuo Kagaku has established its own Basic Policy on the Environment andCorporate Code of Conduct, and it’s implemented an environmental
management system to help ensure it complies with local environmental laws
and ordinances.
In addition, the company is taking a range of steps to help realize acarbon-neutral society and meet the Japanese government’s target (of reducing
greenhouse gases by 46% from FY2013 levels by 2030), including by utilizing
recycled materials and biomass-derived raw materials, adopting lessenergy-intensive manufacturing processes, boosting shipping efficiency,
reducing plastic waste, and developing products that help decrease food waste.

■Chuo Kagaku initiatives to reduce greenhouse gas emissions(FY2030 targets)

Winderof raw
01 Additionmaterials

19

1. Environmental management

Formed containers aresupplied to a cutting
machine, which cuts rows of
products at once.

Chuo Kagaku is working to develop and increase use of the following environmentally responsible materials and products to help
reduce CO2 emissions and food waste:•TALFA, the manufacture of which generates about 49% fewer CO2 emissions (compared to the company’s polypropylene) by using
natural talc procured directly from a mine located adjacent to Haicheng Chuo Kagaku in China•C-APG, the manufacture of which generates about 27% fewer CO2 emissions (compared to the company’s A-PET) by allowing usedplastic beverage containers to be recycled into plastic food packaging and containers•MAPKA, a material that uses paper as its principal raw material and generates about 41% fewer CO2 emissions (compared to thecompany's polypropylene) thanks to its use of at least 50% biomass materials•Biomass-derived materials, the manufacture of which generates about 7% fewer CO2 emissions (compared to the company's CF orCT) along with bio-CF and bio-CT by using sustainable, plant-based organic resources•Lightweight containers made of foamed materials, which help reduce environmental impacts by lowering the amount of petroleum
resources used in containers•Functional containers (gas-barrier packaging and airtight packaging technologies), the development of which helps reduce foodwaste by lengthening shelf life

For more information about Chuo Kagaku, please see the URL to the right. >>>URL

https://www.chuo-kagaku.co.jp/

More about SENKO Group manufacturing
Okumura Co., Ltd.

URL

https://www.okumura-int.co.jp/

This respected manufacturer of slippers was founded more than 120 years ago. It sells high-value-added products
developed based on its philosophy of soothing, healing, and conditioning through a network of sales channels that
extends beyond department stores, chain stores selling miscellaneous products, and drugstores to encompass premium
interior furnishings shops, resort hotels, and high-end restaurants.

Takano Machinery Works, Co., Ltd.

URL

https://www.takanokikai.co.jp/

Since its founding in 1976, Takano Machinery Works has manufactured and sold printing machinery and sold printing
materials. It focuses on selling plates for letterpress printing and on manufacturing water-developed plate-making
equipment, and it ships more plate-making equipment to domestic customers than any other Japanese manufacturer.
It also supplies about 30% of the Japanese market for photosensitive resin plates.

SENKO INTEGRATED REPORT 2023

20

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Relationship between Business Activities and the SDGs
The SENKO Group aims to resolve social challenges
and create new value through its businesses, basedon the core approach that economic activities can beachieved with a healthy global environment and agood relationship with local communities.

SDGs and the business activities of the SENKOGroup, which fosters professional development
and supports consumers’ lifestyles

Priority
SDG
themes of
the
SENKO
Group

Trade / Oil sales / Sales of
convenience goods, food, andalcoholic beverages, etc.

Nursing and housework services /Fitness / General wholesale andretail / Childcare / Restaurant
operations / Agriculture, etc.

Crefeel Koto

Business Support

Trading &Commerce

Living Support

Traffic safety / Human
resources training / Children’s
Traffic Park, etc.

Logistics consulting / IT solutions / Contact center
operations / Temping services / Hotel operations /Real estate, etc.

Priority
SDG
themes of
the
SENKO
Group

Logi stics
Shipping / Storage /In-factory operations /Logistics processing /International logistics, etc.

Products

Manufacture of food containers /Manufacture of housewares, etc.

Economic level
Providing new value for society through business operations

Businesses that nurture people and support their daily lives

Through our businessactivities, we look to resolve
social issues throughinitiatives that interconnect
with sustainability measuresand to contribute to therealization of a barrier-freesociety.

Society level

We promote dialog and cooperation with the local community and various stakeholders
associated with the SENKO Group to build a good relationship with society.

Human resources andorganization as the foundation

Cooperation with society

Sustainability
Promoting a green
transformation incollaboration withcustomers

Providing resilient
logistics service thatcan withstand natural
disasters

Developing a Living
Support business thatoffers nursing care,childcare, and healthservices

Developing a full line of Manufacturing
lifestyle support
products that support
servicesdietary convenience

Social initiatives
Safety initiatives
Health initiatives

Sustainability of the global environment

21

SENKO INTEGRATED REPORT 2023

Reducing the energy use and carbon
dependency of shipping infrastructure(Adopting liquefied natural gas-powered trucks
and electric trucks)

Recycled plastic
pallets

Building workplaces
that make the most of
human resources’
diversity, individuality,
and abilities

Children’s Traffic Park:A park where kids canraise their traffic safety
awareness while having
fun with their families

Initiatives to raise driverawareness of theimportance of reducing
the number of traffic
accidents

Environmental level
Sustainability

Installing solar powerand energy-saving
equipment at PD
centers

Fostering thedevelopment of people
and business through
SENKO University

Cooperating with the
Osaka Bay
Environment
Restoration Project

Environmental
initiatives

Minimizing the environmental impact of business activities
Recognizing our responsibility for energy consumption and greenhouse gas
emissions as a logistics company, we’re working to maximize understanding
and related reductions.

SENKO INTEGRATED REPORT 2023

22

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

A Message from the President

Providing new value by embracing
large-scale manufacturing as a pillarof growth
SENKO Group Holdings Co., Ltd.
President and Representative Director
Chairperson, Sustainability Promotion Council

our business domains as we pursue manufacturing witha focus on household goods and other familiar lifestyle
products now that Chuo Kagaku Co., Ltd. has become
part of the Group.
At the same time, the risks faced by our businesses
include Japan’s aging population and shrinking birthrate,and it will be necessary to take steps including utilizationof foreign workers in order to deal with the shrinking
labor population, which is expected to decline by 1
million people annually. Our approach will be to expand
our businesses globally through M&As in an effort toaccommodate changes in the market, including bybolstering our overseas businesses with a focus on
growth in the forwarding and trading businesses.

Reorganization
About the Group’s vision (philosophy) andgoals

Approach to changing markets, risks, andopportunities

As a corporate group with highly public businesses
that involve fostering people and supporting their lives,
the SENKO Group has embraced the goal of becoming a“group that creates the trends of the future” by fulfillingits mission of contributing to achieving a genuinely
productive global society by continuously challenging
efforts to create new trends in terms of products andservices that shift the future, with a focus on its physicaland commercial distribution business.

Even as the economic environment in which the Group
operates experiences a gradual recovery accompanied
by a progressive reversion of socioeconomic activities toa “new normal” following the COVID-19 pandemic, ourview is that challenges remain, including abrupt foreignexchange rate fluctuations against the backdrop of
soaring energy and food prices worldwide and fiscal
tightening in Europe and the United States.
While global inflation and rising energy costs drive
concerns about the risk of a downturn in overseas
business conditions, we expect gradual economic
growth thanks to factors including the ongoing recovery
from the pandemic and improvements in theemployment and income environment.

We express that philosophy in our slogan of “Moving
Global: Go beyond logistics, make the world go round,and revolutionize business.” We've earned trust as acompany and contributed to society in general and all of
its people, including shareholders, customers, andemployees, by expanding our business activities toinclude a broad array of logistics operations–not only
manufacturing, but also sales, centering on our logistics
centers, as well as living support.

23

SENKO INTEGRATED REPORT 2023

While rising electricity, fuel, and prime costs will
impact performance, we believe it will be possible to deal
with these challenges by working hard and transitioning
prices to appropriate levels. We're also looking to expand

We revamped some of the structures underlying ourorganization in April 2023. The International Business
HQ., which had been part of SENKO Co., Ltd., ourlogistics operating company, was transferred to SENKOGroup Holdings, and its name was changed to theInternational Business Operation HQ. These changes
were made to strengthen our management structures bymaking separate departments responsible for domestic
and international logistics, and they're part of an active
effort to spur the globalization of not only Logistics, butalso Trading & Commerce and other business segments.
Our approach will be to take robust action to realize
further growth in international businesses throughstrong partnership among businesses under theleadership of the International Business Operation HQ.

Launching the Products Business Promotion
HQ. as a new business
The Products Business Promotion HQ. was launched inJune 2023. The Group’s flagship Logistics Business isinvolved with an array of supply chains, frommanufacturing to sales. Drawing on that strength, welaunched the Products Business as our fifth corebusiness, augmenting Logistics, Trading & Commerce,
Living Support, and Business Support, and acquired Chuo
Kagaku Co, Ltd. through a tender offer for its shares.
The decision was driven by the expectation that theacquisition of the company, a manufacturer of foodpackaging and containers, would serve to improvelogistics while expanding sales channels, in part due tothe significant overlap in customers between Chuo
Kagaku and the SENKO Group.
As we move to embrace large-scale manufacturing, weplan to expand the domain of household goods in the
future, and we see considerable promise in productcategories handled in large volumes by the Group, forexample apparel. Reflecting the large number of inquiries
from manufacturers in Southeast Asia concerning capitaland operational tie-ups and related topics, the Products
Business Promotion HQ. will work with the newly formed
International Business Operation HQ., which is responsible
for business domains other than logistics, to actively
pursue manufacturing on the global stage.

Building on 20 consecutive fiscal years of
rising revenue and 14 consecutive fiscal
years of rising ordinary profit
During the fiscal year ended March 2023, the Groupgenerated revenue of 696.3 billion yen, up 73.1 billion
yen from the previous year. Operating profit rose 760
million yen to 25,540 million yen, while ordinary profit
rose 50 million yen to 26,150 million yen.
Despite a variety of challenges including an abrupt
decline in logistics volume from January to March 2023,
the Logistics Business realized its 20th consecutive fiscal
year of increased revenue and its 14th consecutive fiscal
year of increased ordinary profit as efforts to grow sales
and revise prices combined with contributions from new
subsidiaries to fuel performance.
SENKO INTEGRATED REPORT 2023

24

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

A Message from the President

At the same time, continuous progress in M&As helped
boost revenue, and ongoing development by logistics
centers also contributed to increased sales. Although
we're planning for revenue of 790 billion yen andoperating profit of 29 billion yen during the fiscal year
ending March 2024, we expect to exceed future revenue
targets thanks in part to potential large-scale M&As.

Focusing on sustainability management
In the face of calls to realize a sustainable society on a
global scale, companies can no longer earn praise fromsociety just by generating profits.
The Group strives to deliver new value by connecting
people and society through its various businesses in linewith its basic policy of helping realize a sustainable
environment and society and working to achievesustained growth for the Group.
Companies are being called upon to manage theiroperations in a way that values environmental protection
and diversity, which is one of the values embraced by theGroup’s corporate philosophy, among other priorities,

and one of the characteristics that distinguishes theGroup is its concerted pursuit of sustainability activities,
for example in an effort to realize sustainable
management throughout its supply chains, including
both customers and Group companies.
Also distinguishing the Group is its pursuit ofpioneering human resources education at Crefeel Koto,in which it invested three times the profit it was
generating at the time, some 30 years before
expressions like human capital gained currency. Similarly
defining are the Group’s efforts to augment ESG
management with a health (H) component so that
employees’ health can be maintained and improved not
only during their employment with the company, but
throughout their lives.

Increasing SENKO’s corporate value
Unfortunately, our price-to-book ratio (PBR) is on
track to fall below 1, but we will continue working torealize management founded on awareness of capitalcosts and share value. Since PBR can be considered to be

the product of return on equity (ROE) and price-earnings
ratio (PER), it's necessary to foster awareness of theneed to improve profitability (ROE) and PER (shareprice).
With regard to improving profitability, we will boost
our operating profit margin from the current level ofabout 3.7% to 4.5% by achieving operating revenue of 1
trillion yen and operating profit of 45 billion yen in
FY2027, the final year of our Medium-Term Business
Plan.
With regard to increasing our share price, we’re
working to maintain and improve payout ratio levels.
With regard to the payout ratio, our basic policy
concerning the allocation of profits declares, “While
securing the internal reserves necessary for futurebusiness development and to bolster our management
structure, ... [we will issue] stable dividends that arelinked to business results.” Our goal is to maintain apayout ratio of at least 40% by FY2027. Our goal is toincrease PBR beyond 1 as our profitability and shareprice increase.

We will also dedicate resources to explaining our
growth strategy in detail so that investors can recognize
the Group’s future potential. Furthermore, reflecting thefact that securing human resources will be one of thegreatest management challenges for SENKO, we will
strive to become a group that attracts a diverse range ofhuman resources who feel motivated while enjoying
individual growth by publicizing not only conventional
financial information such as the scale of our assets, butalso the human side of our operations, including an
employee-friendly workplace environment with benefits
such as childcare facilities at logistics centers, while
introducing cultural and sports activities.
The Group will continue to realize sustained growth
while treating changes in the business environment asopportunities, embracing the challenge of new fields andtechniques, and working to improve corporate value sothat it can meet the expectations of investors andshareholders.

SENKO GHD value creation model
INPUT

The SENKO Group’s business modelMoving Global■Manufacturing capital●Group companies: 176●Living and Business Support Businesses
Number of operating companies: 41●Total storage floor space: 4.47 million m2●Total number of group vehicles (tractor
heads): 6,960●Number of ships under management: 72■Natural capital●Energy utilization (crude oil equivalent):
183,421 kl■Social relationship capital

Pursuit of a diverse array of businesses
through domestic and international networks●Group companies: 176●Living and Business Support Businesses
Number of operating companies: 41●Number of facilities: 727 (669 in Japan and58 overseas)■Human capitalGobeyondlogistics

Make theworld goround

Medium-TermBusiness Plan
(FY2023 to FY2027)●Number of employees: 23,727●Drivers and operators: 16,189●Living and Business Support
Number of employees: 3,138■Intellectual capital●Logistics expertise(Crefeel Koto, SENKO’s in-house training
facility)●Consulting and system proposal
capabilities(200 information SEs and 100 logistics SEs)

■Financial capital●Total assets: ¥581,850 million●Equity ratio: 27.6%

Newbusinesses

w
Ne insts domaw
BusineNe ainsssm
Suppordotw
Ne ains
Living S
mupportdo

ProducTrading&
Comme
rce
Logistics

B

Revolutionize
businessusiness
Formulabasetion and ex
to strengthen a ecution of str
atnd enhance fun egies
ctionsdse ct
rea pac
In l imcia
soon
ati thdw
un
Fo r groof

OUTPUT
Key issues (materialities)

OUTCOME[Long-term social value]

Logistics

E

Revenue¥475.8 billion

Operatingprofit¥23.7 billion●Realization of healthy, fulfilling lifestyles●Development of resilient social and industrial
infrastructure●Contributions to the realization of a sustainable
society[Short- and medium-term social value]

Environment•Climate change measures•Circular economy

S

Trading & Commerce

S

Social/Safety•Diversity and inclusion •Safety•Responsible procurement structures

Governance

Health¥2.4 billion■Natural capital●CO2 emission reductions: 4,065 t-CO2●Modal shift ratio: 64.7%●Number of solar power installations: 29●Solar power generation: 22,158,000 kWh
Revenue¥39.0 billion

Operatingprofit¥200 million

Business Support

H•Infectious disease measures•Management of employees’ physicaland mental health¥159.8 billion

OperatingprofitLiving Support

G•Risk management•Compliance •Information disclosure

Revenue

Contributions to the SDGs and carbon neutrality●Realization of connections between businesses●Design based on new values●Realization of connections with the world (society)towards a better future

Revenue¥10.7 billion

Operatingprofit¥1.3 billion

Revenue¥10.6 billion

Products
Operating-¥200 million
loss■Social relationship capital●Cumulative number of visitors to Crefeel Koto
Children’s Traffic Park: 174,019●Number of annual participants in traffic safetyclasses: 518■Human capital●Number of participants in educational and training
programs at Crefeel Koto: 1,300●Cumulative number of graduates of SENKO
University: 360●Number of female employees: 5,040●Percentage of management positions held byfemales: 10.7%●Percentage of jobs held by people with disabilities:
2.02%■Intellectual capital●Number of patents in Products Business: 58*Figures are current as of March 31, 2023, or indicate March 2023 results.

25

SENKO INTEGRATED REPORT 2023

SENKO INTEGRATED REPORT 2023

26

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Medium-Term Business Plan
Overview of the Medium-Term Business Plan

Examples of progress made under the Medium-Term Business Plan

Under the basic policy of “striving to achieve sustained growth by supplying new value to people and society throughthe deepening and creation of businesses,” the SENKO Group formulated a five-year Medium-Term Business Plancovering FY2023 to FY2027.
We will take steps to achieve the goals set forth in the Medium-Term Business Plan and realize further growth inkeeping with the following four connection-related slogans:In keeping with the Medium-Term Business Plan, we’re working to further expand and globalize existing businessdomains in our Logistics and Trading & Commerce Businesses. We will progressively implement initiatives geared tocreate and foster the development of growth businesses in the Living Support, Business Support, and new Products
Businesses. Initiatives (1) through (3) below provide examples of measures undertaken during FY2023.

Medium-Term Business Plan slogans

Example (1): Opening logistics centers throughout Japan

Connecting supply chains

Connecting the world

Go beyond logistics
Moving beyond the framework of
conventional logistics businesses
Connecting supply chains

Make the world go round
Becoming an international business thatconnects the world by undertaking
business activities worldwide

Connectedness
Connecting all businesses

Connecting to the next generation

Revolutionize business
Providing new value
Connecting all businesses in the world

Passing the baton
Becoming a business where the next generation of
employees, who will be responsible for the future,
can grow and flourish professionally

Our Logistics Business team is accelerating efforts to open
logistics centers to facilitate an expansion of the business.
Seven facilities began operating in 2022: Saitama PD Center(Iwatsuki-ku, Saitama) and Sendai-kita PD Center (Rifu-cho, Miyagi
Prefecture) in April, Kasai No. 2 PD Center (Edogawa-ku, Tokyo) in
May, ACROSS TRANSPORT Sapporo Center (Kitahiroshima, Hokkaido)
in July, Ayase Logistics Center (Ayase, Kanagawa Prefecture) inAugust, and Kita-Kobe PD Center (Nishi-ku, Kobe) and Keiyo PD
Center (Ichihara, Chiba Prefecture) in December.
Saitama PD Center

Example (2): Opening new outlets in the Living Support Business
In April 2022, Keihanna Helper Station Co., Ltd. changed its nameto Care Terrace Co., Ltd. and opened Twinkle Kashiba, a privatehouse-type nursing home that also offers day service.
Venus Corporation, which operates a nursing care business,
opened Venus With, its first small-scale, multifunctional home-careservice in Sakai, Osaka Prefecture, in December 2022. The facility is
supporting the lives of local residents by combining home-visit
nursing care with small-scale, multifunctional home care to provide
an integrated mix of services including outpatient, inpatient, andhome-visit components.

Venus With

Key issues identified by the Medium-Term Business Plan
As a corporate group with highly public businesses that involve fostering people and supporting their lives, we will
work to address five key issues: (1) expanding and deepening existing businesses, (2) creating and fostering thedevelopment of growth businesses, (3) implementing ESG+H (health) management, (4) practicing more sophisticatedmanagement, and (5) increasing motivation and realizing personal growth among employees.

27

1 Expanding and deepening existing
businesses

In the Logistics Business, we will work to expand our businesses in growth domains such as
drugstores, online sales, and chain stores and advance into new business segments such as logistics
center operations and chemicals. In our Trading Business, we will expand our businesses bydeveloping new products, pursuing international businesses, and entering into M&As.

2 Creating and fostering thedevelopment of growth businesses

In our Living Support Business, we will pursue safe and secure businesses while aiding in therecovery from the pandemic. In our Business Support Business, we will expand related businesses,
including in real estate and temporary staffing. At the same time, we will lay the groundwork for new
businesses.

3 Implementing ESG+H management

We will implement initiatives to reduce CO2 emissions in an effort to realize carbon neutrality by
2050, offer diversity and inclusion education, strengthen the entire Group’s risk management
structures, and pursue initiatives to boost health through sports and cultural events.

4 Practicing more sophisticatedmanagement

We will introduce investment standards that reflect an awareness of capital costs; strengthen IT
security and employee IT education; pursue research, planning, and development of advanced
technologies for realizing power and labor savings; and create Group synergies throughcollaboration among business groups.

5 Increasing motivation and realizing
personal growth among employees

We will cultivate an organizational culture that encourages employees to embrace ambitious goals
through a program of “challenge and change activities,” revitalize the Group through the exchange of
information and human resources by Group companies, train a new generation of executive
leadership at SENKO University, and expand our employee stock ownership plan.

SENKO INTEGRATED REPORT 2023

Example (3): Earning recognition as a Certified DX Business from the Ministry of Economy,
Trade and Industry
Digital transformation (DX) certification is a program run by the Ministry of Economy, Trade and Industry to certifythat businesses are “DX-ready,” meaning they have prepared to transform their businesses through digital technology.
The Group launched a DX Promotion Project in 2021 to prepare to implement its DX strategy. We earned certification in
February 2023 following a favorable evaluation of various initiatives, including efforts to use AI to forecast freight volume,
computerize payment processing, and foster the development of DX human resources.
Going forward, we will strategically pursue a transformation in our businesses and services through digitalization
while furthering the DX to underpin the reorganization of
the entire Group’s businesses, maintain and strengthenbusiness competitiveness through the use of digital data,
secure new customers, create new businesses throughnew digital technologies, and boost productivity throughuse of digital technologies.

SENKO INTEGRATED REPORT 2023

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Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Medium-Term Business Plan

Targets and key measures by business segment under the Medium-TermBusiness Plan
Expanding and deepening existing businesses● Expanding existing business domains

Creating and fostering the development of growth businesses● Pursuing additional globalization

Logistics● Further expanding the Living Support and Business Support businesses ● Embracing the challenges of new businesses (manufacturing, etc.)

capabilities and the stability of our directly operated approach

Revenue(hundreds of millions of yen)

Operating profit(hundreds of millions of yen)
Operating profit margin

346

6,450

● Strengthening logistics facilities and vehicle structures andpursuing M&As

Cold logistics

800

delivery network

FY2027
TargetFY2023Results

FY2023Results

Operating profit(hundreds of millions of yen)
Operating profit margin

48

6.0%

5.4%

● Establishing a global network by expanding our facilities

Lifestyle domain● Realizing a fast recovery from the downturn caused by the

COVID-19 pandemic and expanding the number of outlets weoperate● Pursuing M&As in the health, lifestyle, and food domains

2● Increasing our market share by increasing the amount of

FY2027
TargetFY2023Results

FY2023Results

FY2027
Targetshipping space

Business Support
Trading & Commerce
Revenue(hundreds of millions of yen)

1,950

Revenue(hundreds of millions of yen)

Operating profit(hundreds of millions of yen)
Operating profit margin

38

1,598
24

300

Product sales● Strengthening EC sales and expanding the range of unique

FY2023Results

FY2027
TargetFY2023Results

FY2027
Target● Maintaining and increasing trademarks through operation of a

joint venture with a Chinese electronics material trading
company

Operating profit(hundreds of millions of yen)
Operating profit margin

20

1.8%

13

FY2027
TargetFY2023Results

Commerce

1.5%

500

26

107

and increasing market share

Revenue(hundreds of millions of yen)

11.7%

products we offer

Household paper wholesaling

Products

Operating profit(hundreds of millions of yen)
Operating profit margin● Streamlining operations at our three wholesale companies

2.0%

Food domain

0.5%

Marine shipping
FY2027
Target

Health domain

390

International logistics

5.0%

Revenue(hundreds of millions of yen)

● Accelerating facility development and further expanding our

237

4,758

Living Support

Domestic logistics● Expanding orders based on comprehensive proposal

FY2023Results

8.5%

106

FY2027
TargetFY2023Results

Real estate, information, staffing, etc.

4.0%

-1.8
FY2027
TargetFY2023Results

FY2027
Target● Entering new fields● Realizing a fast recovery from the downturn caused by the

COVID-19 pandemic● Pursuing M&As, for example in the staffing business

Revenue targets by segment

Distribution
logistics(Unit: Hundreds of millions of yen)

FY2023

FY2027

Amount of increase

Rate of increase

Food logistics

869

1,150

281

32.3%

Chain store logistics

943

1,250

307

32.6%

Fashion logistics (including EC logistics)

525

650

125

23.8%

Other logistics

506

750

244

48.2%

2,842

3,800

958

33.7%

Chemical logistics

892

1,300

408

45.7%

Housing logistics

617

750

133

21.6%

Other logistics, etc.

407

600

193

47.4%

4,758

6,450

1,692

35.6%

Logistics

Subtotal

Subtotal
Trading & Commerce

1,598

1,950

352

22.0%

Living Support

390

800

410

105.1%

Business Support

107

300

193

180.4%

Products

106

500

394

371.7%

6,963

10,000

3,037

43.6%

Logistics

630

770

140

22.2%

Trading & Commerce

292

430

138

47.3%

922

1,200

278

30.2%

Total
International
revenue*
Subtotal*Above figures include international revenue. *Classifications have been changed based on a careful examination of customers and the nature of newly
consolidated business operations.

29

SENKO INTEGRATED REPORT 2023

Key measures in ESG and groupmanagement
Specific CO2 emissions(land transport business)

Reduce 10% compared to FY2021

Percentage of management
positions held by females

At least 15%● Implementing in-house environmental measures andpromoting modal shift● Reforming programs to take advantage of a diverse workforce

and expanding employment opportunities● Introducing advanced technologies to realize automation andlabor savings● Practicing health management through sports and culturalactivities
We will pay a performance-linked dividend in addition to astable dividend, and we will strive to enhance shareholder
returns while working to further improve the payout ratio.

SENKO INTEGRATED REPORT 2023

30