Sawai Group Holdings Co., Ltd.

Medium-term Business Plan “Beyond 2027”
FY2024 to FY2026

June 6, 2024
4887.T, TSE PrimeINDEX

Contents

01

Review of Medium-term Business Plan “START 2024”

02

Our Vision for 2030

03

Medium-term Business Plan “Beyond 2027”

01
Review of Medium-term Business Plan
START 2024

Review in Period of “START 2024”▌Quantitative Results▌Qualitative Results*1

Revenue

Business

FY2020 Actual

FY2023 Actual

Japanese
generics
business

153.6 billion yen

176.9 billion yen

U.S. business33.6 billion yen

Discontinued
operation–

0.01 billion yen

187.2 billion yen

176.9 billion yen

Newbusinesses
TotalCore operating
incomeConsolidated

Generics market
share*2 /Sales volume34.0 billion yen

23.9 billion yen

Japanese
generics
business

16.1% /
13.3 billion tablets

17.1% /
15.7 billion tablets

Production
capacity

Japanese
generics
business

15.5 billion tablets

18.5 billion tablets

Production
volumeJapanese
generics
business

13.9 billion tablets

15.9 billion tablets

EPS

Consolidated

281.80 yen

312.67 yen

ROEConsolidated

5.8%

6.6%

ROIC

Consolidated

4.3%

4.8%

*1 IFRS standards applied*2 The denominator for calculation the share is the total sales volume in Japanese generics market.

• Non-compliance with GMP in the stability monitoring ofTeprenone Capsules 50 mg “Sawai”

Japanese
generics
business• Increase in production volume due to the strengthened
system for increased production at our existing factories
and partner companies• A better outlook for early establishment of our own
production system with an annual capacity of 20 billion
tablets or more
• Revised distribution cost policy to realize a long-term stablesupplyU.S.
business• In April 2024, withdrew, in principle, from the U.S. businessfor which return on capital has fallen short of the cost ofcapital mainly due to the recording of a large amount of
impairment loss in FY2021

New
businesses• Started taking on the challenge of new businesses
leveraging the strengths we have acquired in existing
businesses in order to achieve the government’s goal of asociety with healthy longevity▌Major factors impacting the results of Japanesegenerics business
Quality-related problems
with products of some
generic drug manufacturers

Supply shortages ofdrugs

Consecutive drug pricerevisionsShoring up drug prices

Impact of rising costs(inflation and weak yen)

Revisions of regulations© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

4

START 2024: Expanding Share in Japanese Generics Market• Succeeded in becoming the first and the only generic drug company to launch generic drugs by leveraging ourstrengths of the sophisticated patent strategy and formulation technology capabilities.
• Launched new 65 products over three years.
▌Revenue from products launchedin the past three years
Products launched in FY2023▌Numbers of products launched in the past three years andsingle-market and strongly competitive products(Unit: millions of yen)

FY2021

FY2022

FY2023

Number of products

32

23

10

Single-market andstrongly competitive
products(included in above)

10

4

2

• Solifenacin
Succinate• Febuxostat• Lenalidomide• Azacitidine• Azilsartan• Azilsartan and
Amlodipine• Daptomycin• Zinc Acetate

Products launched in FY2022
Products launched in FY2021

3,283

9,736
3,714

6,624

6,686

3,259
FY2021

FY2022

FY2023Major products
released(generic name)• Eszopiclone• Duloxetine
Hydrochloride• Teriparatide Acetate• Escitalopram
Oxalate• Levetiracetam• Esomeprazole
Magnesium Hydrate• Iguratimod• Tolvaptan• Aripiprazole© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

5

START 2024: Expanding Share in Japanese Generics Market• Made capital investments of 58.5 billion yen over three years for the acquisition of production facilities fromanother company, the construction of the new solid dosage facility at Daini Kyushu Factory, etc.
• Having a better outlook for early establishment of our own production system with an annual capacity of 20
billion tablets or more
Production started at
Trust Pharmatech(billions of tablets)

In-house production (excluding the volume ofcontract manufacturing)

25

Sales volume (including the volume of contract
manufacturing)

20(Started shipment in Jun. 2023)+3 bil. tablets

New solid dosage
facility at Daini Kyushu
Factory Step 1(Started operation in Jul. 2024)+2 bil. tablets

Production volume (including the volume ofcontract manufacturing)

13.9

15

16.6

15.1

15.7

15.0

14.8

13.3

15.9

10

15.5

15.5

15.5

FY2020

FY2021

FY202218.5

20.5

FY2023

FY202450* Assumptions for production capacity: The current number of products is based on the assumption that the machines continue to operate using two shifts on weekdays.
The volume of contract manufacturing is not included.
© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

6

START 2024: Cultivating New Growth Areas• Started taking on the challenge of new businesses leveraging the strengths we have acquired in existing
businesses in order to achieve the government’s goal of a society with healthy longevity

Digital medical devices business

SWD001

SWD002

SaluDi(non-invasive neuromodulation device)(DTx for NASH*1)(PHR*2 management app)

• Acute treatment of migraine: A medical device,
Relivion ®, obtained the marketing andmanufacturing approval from the Ministry of
Health, Labour and Welfare of Japan in
December 2023.

• Phase 3 study started in January 2024 for
Digital Therapeutic App for NASH* thatentered into a development and marketing
license agreement with CureApp, Inc.

• Promoting introduction to medical facilities tostrengthen cooperation with regional medicalcare providers and generic drugs business(Adopted by 1,340 medical facilities as ofApr. 30, 2024).

• Depression: Application for approval will beconsidered after the completion of clinicalstudies in the US.
*1 NASH: non-alcoholic steatohepatitis *2 PHR: Personal Health Record

Health food businessNew drug businesses (Orphan diseases)

Foods with Functional Claims

Orphan drugs• Continue to market two products, “Triple Seikatsu Shukan ”(Triple lifestyle habits) and Kukkiri Ryoku Ai” (Sharp eyesight).

• Strengthening the internal evaluation structure and continuing toconsider expanding the pipeline.

• Continue to develop products and services in the pre-disease andprevention field.

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

7

START 2024: Summary of Financial Strategies• Conducting strategic investments including capital investment for future growth
Forecast
R&D expenses(Generic drugs business)

R&D investment/
acquisitions

ActualMain points

73.6 billion yen[Japan]• R&D investment for launched products
during the three-year period ending in
FY2023• R&D investment for products to belaunched after FY2024[U.S.]• R&D investment in the discontinued
operation

69.6 billion yen[Japan]• Acquisition of production facilities fromanother company• Production capacity expansion of existing
factories and replacement of facilities[U.S.]• Construction of new factories for the
discontinued operation

2.8 billion yen• Development of SWD001• Acquisition of rights and development of
SWD002• Launch of health food business• Development of orphan drugs

Approx. 45 billion yen

Approx. 30 billion yen(e.g., products)

Approx. 70 billion yen
Capital investment

New businesses(Planned investment
amount)Shareholder returns

Japan: Approx. 60 billion yen
U.S.: Approx. 10 billion yen

30 billion yen

17 billion yen or more in total
dividends over three years
Conducting consistent, ongoing dividends
with target of 130 yen/share annually andpayout ratio of 30%

17.1 billion yen
in total dividends
over three years• Conducting consistent, ongoing
dividends of 130 yen/share annually© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

8

Recognizing Issues to Achieve Long-term Vision• Establishing a sustainable business model• Establishing a reliability assurance system and improving compliance and governanceJapanese generics
business• Increasing the utilization of our production facilities (in which we have already invested) toquickly eliminate drug supply shortage and to further drive our growth and making further
expansion of our production capabilities• Steadily developing and launching new products to support our growth• Further reducing costs and creating production capacity• Continuously implementing the cost policy to achieve a long-term stable supply andimplementing cost control• Promoting collaboration and cooperation with other companies

New businesses• Taking ongoing measures to quickly monetize each business

Financial capital policy• Increasing ROE by improving capital efficiency

Sustainability efforts• Strengthening human capital which is a main source of our value creation© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

9

02

Our Vision for 2030

Sawai Group Corporate Philosophy▌Sawai Group Corporate Philosophy

Always putting healthier lives first
This philosophy embodies our desire to contribute to the health of as many people as possible as a healthcare corporate groupwhich develops sustainably alongside society with the generic drugs business as our core business. We will mobilize thestrengths of all Group employees under the new system to pursue the challenge of meeting the expectations of all stakeholders.

▌Sawai Group Mind
Sawai Group will serve every stakeholder wholeheartedly.

Wholeheartedness

Sawai Group will continue the challenge to improve access to healthcare for more people.
Sawai Group aspires to play a pivotal role in healthcare through contribution to society.

Challenge

Aspiration© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

11

Our Vision and Material Issues for Sustainability• As a social infrastructure dedicated to safeguarding the lives and health of the people, we ensure a consistent
supply of high-quality generic drugs and become a leading presence in the industry.
• We contribute to the resolution of social issues and the development of society by providing products andservices that encompass the areas of disease prevention and diagnosis, with generic drugs at the core.

Sawai Group Vision 2030
The World We Want to Build

Our Ideal State

A world where more people can receive healthcare services
and live a full life with peace of mind among society

A company with a strong presence that continues to contribute topeople's health by providing a multifaceted mix of products andservices based on scientific evidence that meet individual needs

New Businesses

Generics
business

Health foodbusiness▌Material issues leading to value creation

Treatment

Digital medical devices business

Orphan drug
development

Primary care field

Diagnosis

Specialty

Diseaseprevention

Improvinghealthcare
accessContributing
to healthcare
financing

Contributing
to extensionof healthy life
expectancy

Developing
talent▌Material issues as the foundation of sustainable growth
Environmentallyfriendly businessWork styles/
motivation,
respect forhuman rights

Corporate
governance© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

12

Business Environment Outlook: Trends and Technologies• We focus on the following themes concerning social trends and technological evolution▌Changes in trends▌Evolution of technology

A more aging society, shift in values from treatment
to prevention/presymptomatic illness

Increasing elderly population

Advances in technological innovations such as
new modalities, AI, and robots

New modalities

Labor shortages due todeclining workforce

AI

Emphasis on prevention of disease
and presymptomatic illness state
DigitalIncreasing medical costs

Increasing home care¥

Robotics© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

13

Business Environment Outlook: Generic Drugs Industry• The FY 2024 drug pricing reform incorporates policies aimed at securing a consistent pharmaceutical supply to address theongoing stability issue, particularly concerning generic drugs. All companies are required to establish a system for the stablesupply of quality-assured pharmaceuticals, secure sufficient capacity for production increase, and implement measures for asustainable industrial structure.
▌Social issues

Rising medical
expenses
Medical expenses¥45.0 trillion (FY2021)

Hyper-aging society
Percentage ofJapanese population
aged 65 or older 29.1%

Need for affordable
and safe drugs

Drug shortage(September 2023)▌Quantitative targets and outline of the drug pricing system reform in April 2024
Quantitative targets

Raising prices of unprofitable drugs

Primary

To achieve a volume share of 80% or more for generics inall prefectures by the end of FY2029.

Repricing of
unprofitable products

Secondary(1) To have the number of components replaced bybiosimilars by over 80% constitute more than 60% of thetotal components by the end of FY2029.

Essential medicines

To raise prices of unprofitable products as requested
by companies exceptionally in response to soaring
costs and supply issues.
To relax requirements for eligible products from 25
years to 15 years after listing.

(2) To achieve a value share of 65% for generics by the end of FY2029.

Corporate assessment

Selective treatment

A system to enhance transparency in companies’ supply system etc. andprovide preferential treatment in drug pricing to companies with provencapability and track record.

A system under which a patient pays a portion (one-fourth) of thedifference in drug price between a generic drug and a long-listed drug
when choosing a long-listed drug that is eligible for selective treatment.

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

14

Achieving Ideal State of Generic Drugs Industry
Outline of the report of the “Study group on the industrial structure to achieve a stable supply of generic drugs, andassociated matters.”• To provide a stable supply of quality-assured generic drugs, we aim to 1 ensure production management and quality
control systems, 2 ensure stable supply capacity, and 3 achieve a sustainable industrial structure.
• We set an intensive reform period of about five years and steadily implement measures to early resolve supply instability andprevent its recurrence, starting immediately with issues that can be addressed.

4

Promotion of collaboration/cooperation among companies• Shifting the business model and implementing a somewhat large-scale production and quality control system can effectively
enhance production efficiency and profitability by boosting market share and optimizing the number of products.
Collaboration and cooperation among companies, division of roles, consortiums, and integration of companies should beconsidered.

To realize a stable supply system in line with these three pillars of 1 - 3 , in the Medium-term Business Plan, “Beyond 2027,”
we will commit ourselves to the key theme, “Establishing a trusted corporate foundation.” Thereby, we expand our in-houseproduction capacity earlier and promote collaboration/cooperation among generics companies to resolve the short supply of drugs.

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

15

Business Environment Outlook: Generics Market• The generics market is expected to experience an average annual growth rate of approx. 0.7 billion tablets per year,
due to the aging population.
• We aim to expand our share in generics market by increasing sales volume at a rate that outpaces market growththrough enhanced production capacity.
Volume(billion tablets)

Estimated expansion ofmarket for drugs with
expired patents (avg)+0.4 billion tablets/year

Generics

150Long-listed drugs
Generic substitution rate
Sawai's market share

100

50

47%

50.6

44.5

53%

46.2

51.6

59%

41.1

58.2

65%

35.3

64.8

69%

31.6

73%

28.1

76%

25.3

77%

24.5

79%

80%

23.6

22.5

81%

70.5

80.6

82.5

16%

89.0

17%

'14

'15

'16

'17

'18

'19

'20

'21

90%
80%

19.7

21.6

21.6

90.5

17%
'22

70%
60%
50%

96.4

92.0

91.7

25%
or moreSawai’s sales
volume

'23

'26

40%
30%

21%

17%

0

'13

100%

83%

81%

Estimated expansion ofgenerics market (avg)+0.7 billion tablets/year

77.0

Generic substitution rates,
Market share+1.25 billion tablets/year

20%
10%
0%

'30

Beyond 2027
Results

Forecasts

The figures are based on in-house estimates (volume, generic substitution rate, and market share include those of categories
andof Information on the availability of generics for each original
drug provided by the Ministry of Health, Labour and Welfare.
: Among original drugs for which a generic drug is available, those whose dosage form or specification is not identical to that of the generics, or those whose price is the same as or lower than thatof the generics, or the likes.
: Generic drugs whose prices are the same as or higher than that of the original drug.
© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

16

Quantitative Targets of Sawai Group Vision 2030
• We have revised our quantitative targets following our withdrawal from the U.S. business and in response to the
expansion of business opportunities in Japanese generics business.
• We have revised both revenue and ROE targets upward for Japanese generics business.
• In addition, we have set ROIC target in line with our shift to management of greater emphasis on capital efficiency.

Item

Business*1

Vision 2030
for FY2030

FY2023Results(as of June 2024)

Vision 2030
(as of May 2021)

Generics business176.9 billion yen

300 billion yen

260 billion yen

New businesses

0.01 billion yen

10 billion yen

80 billion yen

Total

176.9 billion yen

310 billion yen(including 60 billion yen
of U.S. business)

Generics business

17.1% /
15.7 billion tablets

25.0% or more /24 billion tablets

20.0% or more /20 billion tablets

In-house production capacity Generics business18.5 billion tablets

25 billion tablets
or more23 billion tablets
or moreRevenue

Generics market share*2 /Sales volume

400 billion yen

ROEConsolidated

6.6%

13% or more

10% or more

ROIC

Consolidated

4.8%

10% or more–

*1 IFRS*2 Denominator for share calculation is the total volume of the domestic generic drug market.

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

17

03

Medium-term Business Plan “Beyond 2027”

Positioning of Current Medium-term Business Plan
• During the current Medium-term Business Plan period, we pave a path towards achieving “Sawai Group Vision 2030” with“establishing a trusted corporate foundation” as the basis.
• We expand our in-house production capacity earlier and promote collaboration/cooperation among generics companies to resolve
the short supply of drugs.
• In the generics business, we concentrate management resources on quality assurance and production capacity enhancement. In
addition to the growth during the current Medium-term Business Plan, we establish a framework to drive growth forward in thenext Medium-term Business Plan period.
• With a view to long-term growth, we continue investment in growth areas where synergies with our generics business are
expected.
• We promote management focused on related KPIs based on the “Basic policy of reviewing business portfolio and capital policy”
released in January 2024.
2021-2023

2024-2026

2027-2030

Sawai Group Vision
2030
The
World We
Want to
Build“START 2024”
1) Expanding share in the Japanesegenerics market
2) Withdrawing from the U.S. business3) Cultivating new growth areas

Our IdealStateMedium-term Business Plan
“Beyond 2027”
1) Establishing a position as a trusted
company
2) Capturing opportunities steadfastly andestablishing sustainability in the generics
business3) Reviewing business portfolio and capital
policy to promote business management
focused on related KPIs

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

19

Key Themes• We set “establishing a trusted corporate foundation” as the basis for “Beyond 2027.”• In addition, we have set key themes for “business strategy” and “business foundation” to drive further growth.

Key themes for business strategy

Key themes for management base1

Achieving steady growth in thegenerics market

1Creating talent that underpins
sustainable growth2

Establishing sustainability of thegenerics business

2

Working on sustainability initiatives

3

Continuing investment in growth
areas

3

Improving capital efficiency

Establishing a trusted corporate foundation© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

20

Establishing Trusted Corporate Foundation• We take the administrative penalty we received last year very seriously. Placing top priority on recovering trustof patients and medical professionals, we will fully comply with laws and regulations and implement thoroughrecurrence prevention measures.

Carrying out Corporate Culture Reform Project*
Reassessing the existing products from manufacturing andquality perspectives, and implementing corrective measures
Implementing recurrence prevention measures in the
Manufacturing Division
Implementing recurrence prevention measures at Kyushu Factory
Implementing recurrence prevention measures at the Reliability
Assurance Division* The progress of the Corporate Culture Reform Project is kept updated, as needed, on the following website: https://www.sawai.co.jp/important_news/detail/17© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

21

Establishing Trusted Corporate Foundation• Introducing systems and strengthening personnel structure to establish a system for reliability assurance.
▌Effects of and amounts invested in the systems being introduced
Effects

Current status

Future plans

Amounts
invested• We have not yet introduced QMS
to any of our factories.
• We are currently compiling therequirements at each of ourfactories.

• We plan to commence
deviation/CAPA operations in
April 2025.
• We then plan to expand theapplication of QMS to otheroperations such as
modifications.

140 million yen

We plan to introduce MES/LIMS toexisting facilities of Daini Kyushu
Factory.
(Start of operation scheduled forApril 2026.)

1,200 million yen

We plan to introduce MES tofactories to which MES have notyet been introduced in FY2027
and later during the period of thenext Medium-term Business Plan.
(Sanda, Kyushu, Yachi (Trust
Pharmatech))

2,400 million yen(FY2027and later)

We plan to introduce LIMS to
Sanda, Sanda Nishi, and Kyushu
factories.
(Start of operation scheduled forJuly 2026.)

1,200 million yen

Improved reliability of data

Quality Event Management
System (QMS)• Controls the shipment of products that have yet toundergo a deviation processing• Prevents data falsification by controlling access rights• Enables tracking of fraudulent activities• Prevents “omissions and errors” with an alert function

Manufacturing Execution
System (MES),
Laboratory Information
Management System (LIMS)

Improved accuracy of records• Enable real-time recording• Prevent the replacement of records or do-overs of
inappropriate testing▌Strengthening personnel structure
Head Office: Strengthen the personnel structure of Quality Assurance (QA)
and Regulatory Affairs (RA)Factories:

Strengthen the personnel structure of Quality Assurance (QA)
and Quality Control (QC)

• Status of MES introduction:
MES have been introduced to fivefactories(Kashima, Kanto, Sanda Nishi,
Seima (Trust Pharmatech), the
new facility at Daini Kyushu
Factory (completion scheduled forJune 2024))• Status of LIMS introduction: LIMS
have been introduced to fivefactories(Kashima, Kanto, Yachi (Trust
Pharmatech), Seima (Trust
Pharmatech), the new facility at
Daini Kyushu Factory (completion
scheduled for June 2024))

Current statusPlan

56 persons

80 persons (143% vs. the current number)(by FY2026)

465 persons

570 persons (123% vs. the current number)(by FY2026)© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

22

Establishing Trusted Corporate Foundation• We continue self-assessment on approval certificates. Also in GMP audits of in-house factories, we ensure objectivity and improve audit levelby being accompanied by a third-party organization. In addition, we establish a solid structure to promote such audits by reporting the results
periodically (quarterly) to the Board of Directors of Sawai Group Holdings.
• While increasing the number of employees in a phased manner, we will work to transform the composition of the workforce to include more
employees with higher technical expertise by providing them with enhanced training programs.

▌Assessment of approval certificates
Assessment of certificates of approval
KPI: Progress rate (%) = Number of products with their approval
certificates assessed/planned number of products (%)▌GMP audit
GMP audit by the Quality Assurance Department of the Head
Office (eight factories of the Company)
KPI: Progress rate (%) = Number of factories with their GMP
audit completed / planned number offactories▌Employee education

Current status
Self-assessment is underway in response to thenotification from MHLW (self-assessment on all
products to be completed by October 31, 2024)

Current status
Once/year at each factory

Current statusPlan
We will continue self-assessment of certificates ofapproval on all products.

Plan
Twice/year at each factory (Accompanying
organization: NPO-QA Center for the 1st round,and outside GQP/GMP experts for the 2nd round)* We are also planning to report the results of theaudits by regulatory authorities and othermanufacturing/sales companies to the Board of
Directors of Sawai Group Holdings.

PlanRate of increase in hours spent on education(Targets: Employees engaged in GMP-related operations,
including manufacturing and quality control)
KPI: Rate of increase (%) = Hours spent on education per
employee / hours spent on
education in 2023

The results of FY2023 are rebased to 100%.

We will increase hours of education each year
during the period of the Medium-term Business
Plan by implementing measures to improve
efficiency, such as increasing the number of
personnel and introducing systems.

Number of employees certified to have certain proficiency levels(manufacturing and testing)
KPI: Number of employees / productBased on the certification criteria set by the factoriesof the Company, the number of employees on the left
represents the number of persons certified per
product in manufacturing and testing in FY2023.

We will increase the number of highly skilled
personnel by giving them well-planned educationand opportunities to accumulate experience.
© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

23

Business Strategy 1 & 2: Achieving Steady Growth and Business
Sustainability in Generics Market• Capturing current growth opportunities without fail, while making sustainable contribution to society as social
infrastructure with the pride of being a leading player in the generics industry.

Specific measures•

Develop and launch new products
steadily•

Improve the utilization rate and increase
production at production facilities in which
we have made investments•

Expand market share of profitableproducts•

Provide peace of mind and added valuethat medical professionals and patientsneedEstablishment of businesssustainability•

Sell at reasonable prices•

Manage unprofitable products•

Conduct research and development inview of products’ lifecycles

Establishing a business model that allows
for a stable supply of generic drugs, which
are integral part of social infrastructure,over the many years to come•Continue to expand production capacity inthe period of the next Medium-term
Business Plan and beyond

Steady growth
Capturing current growth opportunities byleveraging the production capacity expanded
through investments during the period of theprevious Medium-term Business Plan andpaying close attention to the tailwind
generated by reform of the drug price system

Growth investments•

Continue to make top-tier R&D
investments in the Japanese generics
industry (for the development of new
products and the improvement of existingproducts)•

Refurbish production facilities with top-tierproduction capacity in Japan•

Expand production capacity during theperiod of the current Medium-term
Business Plan (through measures such as
capital investments and alliances withother companies)•

Expand production capacity during theperiod of the next Medium-term Business
Plan and beyond (through measures suchas capital investments and alliances withother companies)© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

24

Key theme for business strategy 1
Steady growth in the generics market

Steady Development and Launch of New Products• Planning to launch more than 44 new products in the next three years.
• Turning our technological capabilities into brands, underpinned by a group of technologies developed through the
pursuit of “ease of taking,” “ease of handling,” and “high quality,” such as “SAWAI HARMOTECH®” and “QualityHug.”• Continuing to outperform industry peers through our strategy of leveraging our intellectual property strengths andcomprehensive R&D abilities built on our drug formulation development capabilities, aiming to expand profits in thegenerics business as a whole.
▌New product launch plan

FY2024FY2025

FY2026

Number of ingredients

7

7

13

Number of products

12

10

22

Original drug market(billions of yen)

135.0

101.5

200.0

We also aim for launching single-market products other than those listed above© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

25

Key theme for business strategy 1
Steady growth in the generics market

Improving Utilization Rate and Increasing Production at Production Facilities We
Have Invested in and Increasing Production• Increasing utilization at Trust Pharmatech and the new solid dosage facility at Daini Kyushu Factory andimproving production efficiency at existing factories for early resolution of the drug supply shortages• Aiming for both increasing and improving revenue by promoting these efforts▌ Production volume forecast for Trust Pharmatech and the new solid dosage facility at Daini Kyushu Factory
Production
capacity

FY2023
ActualFY2024FY2025

FY2026

Trust Pharmatech

3,000 million

240 million

900 million

1,800 million

2,400 million

New facility at Daini
Kyushu Factory*

2,000 million—

300 million

900 million

1,600 million* We will commence Step-2 investments during FY2024 to meet growing demand. The production capacity after the investment is expected to reach 3,500 million tablets(vs. initially planned 3,000 million tablets).

▌Initiatives for improving production efficiency• Improving yield and expanding scale• Switching to facilities with higher processing capacity(capable of processing at a higher speed)• Realizing unmanned or labor-saving operation of facilities at night
and on holidays• Further improving production efficiency through implementing batch
manufacturing, shortening changeover times, and other measures.
• Optimizing testing efficiency and the layout of facilities by
consolidating testing sites• Unifying packaging units/standards• Shortening facility downtime through the review of maintenance
operations, etc.

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

26

Key themes for business strategy 1 & 2
Steady growth and business sustainability in the generics market

Expanding In-house Production Capacity Towards FY2030• Working for expansion of production capacity forcefully and proactively to resolve the supply shortage issue of generic drugs• Considering making additional investments in a bid to expand our share in the Japanese generics market to 25% or over, such as
constructing in-house factories and forming alliances with other companies• Aiming to expand the production capacity of in-house factories to 25.0 billion tablets by FY2030
New solid dosage facility at Daini
Kyushu Factory
Step 1(Started operation in July 2024)
Production capacity:+2.0 billion tablets(Billion tablets)

30

New solid dosage facility at
Daini Kyushu Factory
Step 2
Production capacity:+1.5 billion tablets

25

22.5

23

24

Sales volume forecasts(including the volume ofcontract manufacturing)

24

19

20

17.1
15.7

15

10

In-house production capacity(excluding the volume ofcontract manufacturing)

18.5

20.5

2023
FY20232024
FY2024

22.0

25.0

2026
FY20262030
FY203050Note: For the current number of items, it is assumed that the machines are kept running in two shifts per day on weekdays for the current number of items. Outsourcing is not included.

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

27

Business Strategy 3: Continuous Investment in Growth Areas• Contributing to the extension of healthy lifespans through new businesses

Business area

Project segments

When to start
contributing tosales revenue

SWD001 (non-invasive neuromodulation device, Relivion ®)• Migraine:• Depression:
Digital medical
devices business

Marketing and manufacturing approval obtained in FY2023.
Sales planned for start in FY2024.
Considerations planned for application for approval in Japan,
after the completion of clinical studies in the US.

SWD002 (DTx for NASH)

FY2024FY2027• Phase 3 study started in January 2024. Launch planned for in FY2027.

SaluDi (PHR app)
• Accelerating deployment to medical institutions to use it as digital sales promotion
material. Continuing consideration for monetization.

Generics export

China and ASEAN region• Consideration underway to expand overseas in cooperation with local partner companies

Health foodbusiness

Foods with Functional Claims

New drug business(Orphan diseases)

Orphan Drugs• Planning to consider future business plans based on the results for the prior periods• Exploration for new pipelines underway

During the current Mediumterm Business Plan period

During the current Mediumterm Business Plan period

Reporting started in
FY2023—© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

28

Strengthening Business Foundation 1:
Producing Talented Personnel to Support Sustainable Growth• Achieving the Group’s mid- to long-term growth through the promotion of talent acquisition and development,
which is most important for business management, amid a decreasing working population.
Material issue

Developing
talentHigh-priority measures

Main action plans• Secure talent for production,
quality assurance, andresearch• Strengthening capability to recruit new graduates and mid-career workers.

• Utilize diverse personnel• Appointing and utilizing diverse talents such as women and the elderly.

• Develop talent with amanagement perspective, etc.

• Continuously developing successor candidates based on the succession
plan.

• Establishing attractive working conditions with an eye on the work
environment.

• Increasing opportunities for dialogue between management andemployees.

Work styles /motivation,
respect forhuman rights• Reform corporate culture(create an open atmospherein the company)• Regularly investigating employees’ engagement and implementing
measures for improvement.

• Promote inclusion, diversity,and equity (ID&E)• Reaching for 100% utilization of childcare leave.

• Encourage flexible work styles• Supporting employees’ independent career development through internal
job postings and parallel career paths within the company.

• Enhance engagement in thehuman rights area

• Continuously developing female department heads and managers.
• Introducing a system to work from remote locations.

• Implementing education and training on the human rights area using elearning and other tools.
• Utilizing the corporate ethics helpline.
© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

29

Strengthening Business Foundation 2:
Initiatives for Sustainability; Environmentally Friendly Production• Reducing total emissions volume 46% compared to FY2013+α level by 2030. Achieving net zero by 2050.
CO2 emissions( -Co2)80,00069,50569,75260,00051,70037,50040,00020,0000

0FY2013

FY2023ResultFY2026Plan

FY2030Plan

FY2050
Plan▌Key measures• Utilize non-fossil certificates.
• Increase capital investment in energy saving equipment
such as energy saving air conditioners.
• Introduce further solar power generation.
• Consider switches to energy sources with lower
environmental loads (e.g. from heavy oil to gas).

• Understand the current water usage and consider further watersaving.
• Consider a switch from thermal recycling to material recycling.
• Reduce both total emissions and emissions per tablet by
improving efficiency with larger lot sizes.

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

30

Strengthening Business Foundation 2:
Initiatives for Sustainability• Addressing ESG issues including measures to address climate change, promotion of ID&E, and strengtheningof corporate governance, as a healthcare corporate group which develops sustainably alongside society.
Issues to address

Quantitative targets, etc.

Key measures through FY2026• Utilize non-fossil certificates.
• Increase capital investment in energy saving equipment such as energy saving
air conditioners.

E

Environmentallyfriendly production

Compared to FY2013+α level,• Introduce further solar power generation.

• 46% reduction of total emissions volume (FY2030)• Consider switches to energy sources with lower environmental loads (e.g. fromheavy oil to gas).

• Net zero CO2 emissions (2050)• Understand the current water usage and consider further water saving.

3% reduction of water usage intensity (compared to
FY2023)• Consider a switch from thermal recycling to material recycling.

Waste plastic recycling rate of 65% or more (2030)• Work with business partners to develop raw materials that are both low carbon
and low cost.

• Seek to transform waste into valuables.

• Strengthen information gathering to introduce new technology more actively
than ever before.

Employee engagement indicator score of 4.50

S

Talent development,
work styles /motivation, respectfor human rights

Ratio of women in managerial positions of 15% or more
Ratio of women in department heads or upper positionsof 10% or more
Men’s utilization of childcare leave of 100%
Percentage of employees with disabilities of 2.85%
Initiatives on human rights due diligence• Support employees’ independent career development.
(systems that enable employees to transition to new positions voluntarily,
opening of a career consultation counter, etc.)• Implement onboarding measures to prevent the resignation of young employees.
• Continuously develop female leaders.
• Enhance childcare environment further by introducing new leave options forchildcare purpose, and other measures.
• Increase recruitment of people with disabilities.
• Understand the human rights practices of business partners and work together.
• Spread the understanding that respecting human rights leads to corporate
sustainability.
• Strengthen the Risk Management Committee and the Compliance Committee.

G

Deepening
corporate
governanceStronger risk management/compliance
Strengthening of supply chain management
System formulation ensuring trust in non-financial
information• Review purchasing GL of Sawai Pharmaceutical, and revise it into the Group’spurchasing GL.
• Grasp business partners’ ESG practices through questionnaires to them.
• Document the calculation process for non-financial information and conduct risk
assessment.
• Enhance information security.
© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

31

Strengthening Business Foundation 3:
Initiatives to Improve Capital Efficiency• Using KPIs more conscious of capital cost to improve capital efficiency.
• Revising shareholder return and dividends policy.

Proactive use of KPIs conscious of capital cost

• Set a target ROE surpassing capital cost
• Set a target ROIC surpassing WACC
• Set target net DE ratio and shareholders’ equity to total assets• Clarify the investment criteria with an awareness of profitability,
cash flow and capital cost by the Group Investment Committee• Further enrich ESG leading to sustainable growth and capital
cost reduction• Invest in non-financial capital, including intellectual capital andhuman capital• Pursue efforts on periodic analysis of PBR and PER, andcontinuous improvement measures

Shareholder return and dividends policy
after revision
The Company's basic policy for shareholder
return is to provide stable and continuous
dividends, taking into account overall
medium- to long-term profit levels, DOE, etc.
while balancing shareholder returns withinvestments that will lead to new growth,
including R&D and capital investments thatwill contribute to future corporate valueenhancement. We aim to improve capitalefficiency and enhance shareholder returns
by flexibly purchasing treasury sharesbased on free cash flow, market trends, andother factors.

(“Basic policy of reviewing business portfolio and capital policy” (Released on January 17, 2024))© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

32

Strengthening Business Foundation 3:
Initiatives to Improve Capital Efficiency• Breaking down the initiatives into KPIs for each department and into key measures at the field level, aiming forachieving the target of capital efficiency improvement as a whole company.
Key measures• [Existing products] Expand Market share of
profitable products• Provide peace of mind and added value that
medical professionals needHigh-quality sales
expansion• [New products] Execute stable development
and launch• Sell at reasonable prices

KPIs

Drivers

Sales volume/Market share in generics industry

Price per tablet/Price decline ratio
Unit price

Revenue• Manage unprofitable products

Cost control• Consider and commence production capacity
expansion toward FY2030

Percentage of unprofitableproducts• Reduce variable costs (multi-source
purchasing)

Variable costs per tablet• Increase utilization rate of invested production
facilities• Improve production efficiency(expansion of scale and laborsavings/automation)• Control the increase of SG&A expenses

Mid- to long-term
corporate valueenhancement• Maintain and enhance the competitiveness of
personnel• Strengthen reliability assurance structure

Financial leverageutilization• Sell idle assets and cross-shareholdings• Review investment criteria to make proper
investment decisions• Implement management conscious of stock
price and cost of capital(establish targets related to BS)

Cost of sales andSG&A expenses(operating profit/net sales)

SG&A expenses

Employee engagement• Work on ESG• Review payment terms and inventory volume

Capital efficiency
improvement

Fixed costs per tablet

Operating profit
ratio on sales

ID&E indicators
Cash conversion cycle
Investment criteria
Net DE ratio
Shareholders’ equity to total
assetsROIC
Non-financial capital
Mid- to long-termcompetitiveness
Brand value
Financial capital/fixed
assetsWorking capitalturnoverFixed asset turnover
Effective use of
liabilities

ROE

Invested capitalturnover(net sales/invested capital)

Effective tax rate
Financial leverage© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

33

Strengthening Business Foundation 3: Cash Allocation• Strategically allocating funds from operating cash flows of three years and from sales of business and assets,
approximately 190.0 billion yen in total.
• Aiming for mid- to long-term business growth and improved return on capital through active investment thatenables new progress.
PurposeR&D investment(generics business)

Expected generics
business
operating cash flow*
over three
years:
approx. 145.0
billion yen

Flexible financing
capabilities +α
with R&I rating of A-

PolicyApprox. 35.0
billion yen• R&D investment for launching new products,
which are our sources of growth• Renewal of facilities at the factories(27.0 billion yen over three years)

Growth investment:
138.0 billion yen+α* Before deducting
R&D Expenses

Sales of US business,cross-shareholdings, etc.:
approx. 45.0
billion yen

AmountShareholder
returns:52.0 billion yen+αGenerics businessApprox. 78.5
billion yen• Expansion of production capacity(31.2 billion yen over three years)• Investment in systems to strengthen
reliability assurance structure of 3.7 billion yen• Other investments• Investment in new businesses(SG&A expenses for SWD001,
R&D expenses for SWD002,
R&D expenses for exporting generics, etc.)

New businessApprox. 3.5
billion yen +α

Flexible allocation

Approx. 21.0
billion yen +α

Purchase oftreasury shares

Approx. 33.0
billion yen +α• Liquidation of the increase in equity capital dueto the capital increase made at the time of theacquisition of USL, using proceeds from sale of
the US business and cross-shareholdings

Dividends

19.0 billion yen or morein total dividends overthree years• Stable and consistent dividend payments, withoverall consideration of mid- to long-term profit
levels, DOE (targeting 3% or more), etc.

• Expansion of production capacity toward FY2030• Growth investment other than the plan

© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

34

Shareholder Returns Policy• Dividend: Seeking stable and consistent dividend payments, with overall consideration of mid- to long-term
profit levels, DOE, etc.
• Purchase of treasury shares: Repurchasing shares flexibly based on factors such as free cash flow and market
trends as part of our measures to improve capital efficiency and enhance shareholder returns.
START 2024

Beyond 2027

DOE

2.8%

3.0% or above

Purchase of treasury shares

None

33.0 billion yen +αAnnual dividends per share(unit: yen/share)

Total dividends

19.0 billion yen or more
over three years

130

130

130

FY2021ResultFY2022
ResultFY2023Result159*2

FY2024Plan

FY2025Plan

FY2026Plan*2 Based on the price before the stock split on October 1, 2024. The annual dividend amount, adjusted for the stock spilt, is 53 yen.
© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

35

Quantitative Targets (Financial and non-financial)
Vision 2030
FY2030Vision 2030

Business

FY2023ResultBeyond 2027
TargetGenerics
business

176.9 billion yen

219.0 billion yen

300.0 billion yen

260.0 billion yen

New business0.01 billion yen

1.0 billion yen

10.0 billion yen

80.0 billion yen

Consolidated

176.9 billion yen

220.0 billion yen

310.0 billion yen(including 60.0 billion yenof the US business)

Core operating profit

Consolidated

23.9 billion yen

33.0 billion yen——

Operating profit

Consolidated

18.6 billion yen

31.0 billion yen——

Share in the generics
market / Sales volume
In-house production
capacity

Generics
business
Generics
business

17.7%
15.7 billion tablets

20.5%
19.0 billion tablets

18.5 billion tablets

22.0 billion tablets

25.0% or above
24.0 billion tablets
25.0 billion tablets
or more

20.0% or above
20.0 billion tablets
23.0 billion tablets
or moreROE

Consolidated

6.6%

10% or above

13% or above

10% or above

ROIC

Consolidated

4.8%

8% or above

10% or above—

Net DE ratio

Consolidated

0.27

—

—

Shareholders’ equity tototal assets

Consolidated

55.7%

—

—

DOE

Consolidated

2.7%

—

—

Revenue

0.4 or below(benchmark)50% or above(benchmark)3.0% or above(released in
May 2021)(released inJune 2024)

400.0 billion yen© 2024 SAWAI GROUP HOLDINGS Co., Ltd.

36

Caution Regarding Future Outlooks
The information in this document is based on a variety of assumptions,and does not constitute a guarantee or promise of the execution of
measures, future planning, or target figures described.

Contact
Sawai Group Holdings Co., Ltd.
Corporate Communications
E-Mail: ir@sawai.co.jp