Management Resources
Resource characteristics

Enhancement measures
Logistics solutions

Intellectualcapital

Insight, know-how and IT
infrastructure forming thesource for proposal of optimalsolutions

Intellectual capital such as insight and know-how accumulated
within the Group as we have met the diverse requirements ofcustomers since the Group was founded, and IT infrastructure
supporting the promotion of DX are significant management
resources that are essential for the Group’s growth, leading to
the resolution of fundamental issues faced in logistics.
GOAL plays a central role in this, serving to provide advancedlogistics solutions by connecting the Group’s management
resources.

Source of value-added
creation

Humancapital“Our employees” are one of the Group’s most importantmanagement resources. We propose optimal order-madesolutions by understanding needs and discovering wants ofcustomers through day-to-day communication. The Group’s
strength is GOAL playing a central role to resolve customers’
logistics issues based on information gathered byapproximately 26,000 SALES DRIVERs. The information
gathering capability of SALES DRIVERs and the problemsolving capability of GOAL are the source creating added
value.
Furthermore, we will strive to create workplaces in which
diverse personnel are able to work without prejudice basedon gender, age, disability or nationality to realize theenhancement of corporate value.

Partners supporting businessgrowthPartnercompanies

The Group actively coordinates with partner companies inlong-haul transportation and the last one mile delivery. This
enables dynamic responses according to the number of
express delivery packages and the creation of a businessmodel in which profitability is not affected by changes in thenumber of packages. Strategic alliances have been built not
only with fellow transportation companies, but also bypartnering with companies in different businesses such as ITcompanies. We believe it is necessary to rely on our own
strength as well as build business partnerships with partners
in a wide range of industries to meet the diverse needs ofcustomers and also achieve sustained growth.

Express package
delivery services

TMS

Real estate

GlobalFull digitalizationof invoice
information• Enhancement of logistics solutions through the accumulation of insight and know-how(SGH platform)

Approx.

Consolidated number ofemployees

Approx.

14millionNumber of SALES DRIVERs

94,087 26,000• Development of solution personnel(including partner employees: 41,819)

Employee engagement survey

Approx.

• Evolution of logistics solutions through DX(as of August 2023)

million

GOAL members

We will accumulate insight and know-how for making order-made logistics solutions combining the resources of the Group andpartner companies centered on GOAL to address customers’ logistics issues, and enhance logistics solutions. Furthermore, we areengaged in the development of new services according to changes in needs and lifestyles.

Based on the Group’s common IT infrastructure, we will further promote DX and evolve logistics solutions through partnerships withother companies in the same industry and other industries including start-ups and utilization of technologies such as IoT, AI androbotics.

Number of LINE friends

Smart Club members

14

Other

(IT, payment, etc.)

Common Group IT
infrastructure(Completed in April 2022)

Approx.

3PL

Environment for
Employee engagement
leveraging employees(positive responses)(positive responses)

500 57 54％％

We will strengthen GOAL personnel, DX personnel and global personnel supporting the enhancement of logistics solutions. We areproceeding with the early development of junior personnel through Group-wide job rotation and the mid-career hiring of personnel
with specialized knowledge. For DX personnel in particular, we are placing priority on the development of personnel handling thecreation, planning and proposal of services.

• Development of operational personnel
We are continuously engaged in maintaining and retaining personnel handling on-site operations. In addition, we will seek to increase
productivity by reviewing operations utilizing IT and the latest technology, and promoting the optimization of assignment of personnel.

• Establishment of the workplace environment
Percentage of female
employees

33.5％

Long-haul transportation
partner companies

Approx.

310

Delivery supporters

Approx.

3,600

companies

Percentage of female
managers

13.3％

Companies providing
services together(Japan Post, Seino Holdings,
Japan Freight Railway,
CBcloud, etc.)

Local governments withagreements

478

TMS partner companies

Approx.

1,620

To develop and retain personnel, it is necessary to provide a good workplace environment. Therefore, we will respect diversity &inclusion (D&I), and continuously implement initiatives for the transformation for workstyles and organizational culture centered on thepromotion of active participation of women.

• Strengthening of coordination with partner companies
We will strengthen our transportation network by strengthening coordination with partner companies supporting our transportation
infrastructure. By sharing each other’s challenges and requirements through Appropriate Transaction Promotion Meetings, we will
create sustainable and good relationships. Also, we aim to expand and strengthen competitive services and our network by actively
promoting alliances with diverse partner companies.

• Creation new value through collaboration
We will engage in the development of new services and resolution of social issues with a variety of partners including start-ups, othercompanies in the same industry and local governments. We will expand efforts such as partnerships with start-ups through our“HIKYAKU LABO” open innovation activities and participation in field trials through partnerships between industry, government andacademia.

(Open innovation activities)*In principle, the figures shown are figures for FY2022

Management Resources

Resource characteristics

Financialbase

Enhancement measures

Operating marginSound financial structure
The Group will increase earning capacity and stabilize its
financial base to further enhance medium- to long-term
corporate value by striving to balance investment aimed atfuture growth, stable and continuous returns to shareholders
and internal reserves for the future.

ROE

9.4

24.1

Equity ratio

Free cash flow

％%

61.2%

193.4

• Promotion of growth investment
We will seek to continuously enhance corporate value by directing internal reserves to growth investments such as facilities, vehicles
and DX required from a medium- to long-term perspective.

• Realization of stable dividends
Our dividend policy in the Mid-Term Management Plan is to keep a consolidated payout ratio of 30% or higher and increase dividends
from the previous year and to ensure shareholders continue to hold the Company’s shares due to stable dividends.

billion yen• Enhancement of logistics infrastructure

Number of locations

Logistics
facilitiesandmobility

Nationwide network
The Group is a corporate group with 1,462 locations
throughout Japan. We constantly review our network andequipment to increase transportation efficiency and improve
productivity. We also contribute to the realization of asustainable society by introducing environmentally friendly
technologies and equipment and reducing CO2 emissions.

Against the backdrop of the expansion of the e-commerce market, etc., we anticipate that demand for express package delivery services will expandin the medium to long term. We will actively invest in infrastructure related to transportation networks in order to continue to provide stable, highquality service even if the volume of goods increases. (There are plans to build a large transfer center in Amagasaki-shi, Hyogo in July 2026)

1,462(including Sagawa Expresslocations: 427 sales offices, 22transfer centers, 403 small stores)

Total warehouse floor area
(Sagawa Global Logistics)• Optimization of transportation network
Number of vehicles

27,435

Approx.

The optimal network and format of logistics facilities are changing day to day, corresponding to changes in lifestyles and demographics. The
Group will engage in the reallocation of locations from a medium- to long-term perspective, and also aims to create sustainable logistics
infrastructure by promoting improvement of efficiency of operations utilizing advanced technology. Furthermore, we will actively proceed tointroduce environmentally friendly logistics facilities.

• Diverse mobility combinations

1.48

We will proceed to invest according to changes in the business environment such as introducing environmentally friendly vehicles for the 27,000vehicles that form the basis for the Group’s transportation capability. The plan is to raise the percentage of environmentally friendly vehicles from
64.1% in FY2022 to 98.0% by 2030. In addition, we will promote the modal shift switching to transportation with lower environmental impact,
such as ferries and railways.

million sqm

Customer base spanning allindustries and areas

Customers

Environmentalresources

The Group provides services to over one million companies,
meeting the logistics needs of diverse industries and domains.
With the stay-at-home demand and changes in lifestyle during
the COVID-19 pandemic, companies that had previously only
conducted in-person sales through stores, etc. entered thee-commerce channel, expanding change in distribution
routes, leading to the emergence of new markets and theexpansion of markets ranging from food to pharmaceuticals.
The Group recognizes that target industries and domains areexpanding, therefore we will provide solutions leading to theresolution of customers’ issues and their business growth byincreasing products and services in response to these.

Promotion of environmental
initiatives leading the industry
Promotion of decarbonization is recognized as a priority issue
for a corporate group handling social infrastructure in the formof logistics. The Group has been leading the industry withinitiatives to reduce environmental impact since the 1990s,
such as switching to environmentally friendly vehicles. We
also implement preservation activities in the forests we own.

• Expansion of customer base through the enhancement of logistics solutions

Number of customers using services

1

million companies

Percentage ofenvironmentally friendly
vehicles including EVs

64.1

%

Renewable energy
percentage in electric
power used

27.8

Against the backdrop including the “2024 problem” for logistics, outsourcing in-house transportation to specialized logistics
companies such as our Group is on the rise, and new business opportunities are being created in a wide range of areas in the logistics
market. By continuing to provide logistics solutions meeting these new needs centered on GOAL, we aim to enhance our logistics
solutions and expand our customer base.

%• Realization of decarbonization through the reduction of the Company’s CO2 emissions
Area of forests owned

862

ha

Number of eco-friendly
uniforms used(FY2002-2022)

3.5Approx.

million(equivalent to 17.4 million PET bottles)

We aim to be carbon neutral in 2050 by promoting the measures mentioned in the Decarbonization Vision mainly through introduction ofenvironmentally friendly vehicles and renewable energy. We will promote a wide range of measures, including such initiatives as introducing
environmentally friendly logistics facilities, “green purchasing” selecting products with little environmental impact, and circulation of resources
through eco-friendly uniforms.

• Contribution to the reduction of customers’ Scope 3 CO2
We will contribute to the reduction of customers’ Scope 3 CO2 emissions by contributing to creation of efficient supply chains for customers
through logistics such as the reduction of the number of vehicles required for transportation. Furthermore, we will promote the development ofservices required for the realization of a carbon-free society such as visualization of CO2 emissions related to transportation and the combinationof diverse modes of transportation with low environment impact.

• Forest preservation and creation of carbon credits
We are engaged in maintaining the forest cycle through forest preservation projects by Sagawa Forestry. Furthermore, we will utilize carbon
credits created through forests to offset the Group’s CO2 emissions.
*In principle, the figures shown are figures for FY2022