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Management Vision and Mid-term Management Plan of SG Holdings Group

Management vision

Each group company constructs its business platform and creates new value.
Corresponding to the changes in customers' needs and market circumstances, we will continue to evolve and succeed in the very long term. To this end, we will try to create value and make efforts in establishing the second, third and fourth pillar of our business.

2010-2012 mid-term management plan "Second Stage Plan"

Second Stage Plan of the mid-term management plan: first year's results

During FY 2010, the first year of the mid-term management plan's "Second Stage Plan," we focused on expanding the group's domain of operations and strengthening its earnings base. This included strengthening of the home delivery business' earning base and concentrating management resources in important areas of business operation, accelerating moves toward development of second-, third- and fourth-pillar business operations. Despite these aggressive initiatives, operating revenues grew 0.7% against the previous fiscal year to ¥894.3 billion, and operating income rose 0.2% against the previous fiscal year to ¥30.3 billion.
Looking toward the next fiscal year, we plan to proceed at an increased pace with the Second Stage Plan by improving management operational speed, strengthening our ability to respond to the various challenges posed by the changing business climate, and enhancing our level of corporate governance.

Data on operations of the SG Holdings Group (consolidated)

We deployed operations in three business domains: deliveries, logistics, and other businesses. The group as a whole slightly increased both operating revenues and operating income over the previous fiscal year.


Results by business segment

Deliveries

In deliveries, favorable growth over the previous fiscal year was seen in the volume of products handled through Hikyaku Courier, e-collect payment-on-delivery service, and others. In contrast, Hikyaku Cool Express and Hikyaku Mail Express saw a decrease in volume compared with the previous fiscal year. In order to enhance our transport and delivery infrastructure within the expanding consumer market (courier market), we established small-scale business locations integrated into local communities and assigned them seven-digit delivery outlet codes, changed the invoice form design, introduced collection/delivery and transport of cargo between shops, and took other measures in order to build a strong operating base.
As a result, operating revenues for this segment rose 0.7% over the previous fiscal year to ¥780.9 billion.

Logistics

Through "total logistics solutions" proposals featuring integrated logistics operations in Japan and abroad, we strove to expand our business operations in this segment. Improved customer relations supported strong growth in shipment volumes for apparel items, cosmetics, and other such products. With the additions of newly acquired group companies Sagawa Logistics Partners, Sagawa Silox Shanghai and Sagawa Silox Qingdao in February 2010, we utilized group synergy to advance business operations.
Starting on March 21, 2010, management of domestic air cargo operations, previously handled by Sagawa Global Logistics, was moved to Sagawa Express.
These changes led to operating revenues of ¥50.0 billion in this segment, a 3.7% decline from the previous fiscal year.

Other

In automobile-related operations, sale of new vehicles, as well as maintenance and repair of specially equipped vehicles and other operations, resulted in healthy growth. Furthermore, we forged new business partnerships with Tonami Transportation Co., Inc. in automobile maintenance, and with Ryobi Holdings Co., Ltd. in maintenance.
In real estate operations, with the goal of increasing sources of revenue, we set about on development of logistics facilities in Kashiwa City (Chiba Prefecture) and in the Koyasu district of Yokohama City (Kanagawa Prefecture).
These initiatives as well as our tireless efforts to build a solid foundation for growth in other business operations resulted in operating revenues of ¥63.3 billion for this segment, achieving 4.2% growth over the previous fiscal year.

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