Maruwa Unyu Kikan : Notice Concerning Formulation of Medium-Term Management Plan

1. Medicine & medical logistics business

With many of its customers merging with another business, the Group is optimizing its logistic network across the country and rebuilding its logistics centers to reflect all the latest technological innovations and prepare itself to not only deal with the customers who have grown larger in scale as a result of a merger but also respond to a possible increase in demand in a post-COVID-19 market.

1. Securing a more diverse pool of talent as the Group grows larger in scale, and ensuring the optimum allocation and training of human resources.
   To secure and train the human resources necessary to drive future business expansion, the Group is committed to diversifying its employment channels to enable mid-career hiring of industry-ready recruits instead of relying heavily on the conventional practice of hiring new graduates, to promoting strategic human resources development that takes into consideration the skills and manpower required to drive business expansion, and to ensuring the proper allocation of human resources and the prevention of employee turnover by using the Talent Management scheme that is aimed at making the best use of human resources.
2. Active efforts to introduce DX to enhance operational productivity in each business domain and the back office
   Based on the findings from the proof-of-concept phase that was initiated through the previous medium-term management plan and is still continuing now, the Group makes active efforts to introduce DX to enhance operational productivity, including the enhancement of transportation operations by introducing the AI- based technologies such as the automated vehicle dispatch service and the freight/vehicle request system, the establishment of an e-commerce platform, the optimization of the back office operations through system integration, the introduction of robotics in the center operations, and the optimization of the supply chain through smart logistics enabled by the Cross-ministerial Strategic Innovation Promotion Program (SIP) initiated by the Cabinet Office.
3. Concentrated investment of management resources in businesses that have growth potential and high capital efficiency, and revitalization/restructuring of businesses
   For optimum reinvestment of management resources acquired through businesses, the Group measures the growth potential and capital efficiency of each business and concentrates management resources in core businesses, thereby accelerating business growth. Furthermore, it uses the return on invested capital (ROIC) tree to identify business-specific improvement drivers that can help revitalize poorly performing businesses and restructure unprofitable businesses.
4. Creating shared value with the society through business activities and implementing corporate governance reform
   To fulfill its responsibility as a logistics company listed on the Prime Market, the Group is committed to not only reducing its greenhouse gas (GHG) emissions but also improving environmental/social value through its business activities. It also promotes the "AZ-COM Maruwa Support Network," through which it collaborates with its partners on the basis of relationships of mutual support, and utilizes the "AZ-COM BCP Network" to provide safe, secure, and stable logistics even in times of emergencies and to create a robust logistics network. These efforts signify the Group's determination to carry out its duties as a public instrument that serves the society.
   Looking ahead to the next generation, the Group is also implementing corporate governance reform to achieve enduring success.

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3. Consolidated earnings targets

• For details of the medium-term management plan, please refer to materials distributed at the presentation for institutional investors and analysts scheduled to be held on May 24, 2022. The Company plans to post the distributed materials on its website after the presentation.

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