SG : Results Presentation for Fiscal Year Ended March 31, 2021（with footnote）

SG Holdings Co., Ltd.

Results Presentation for

Fiscal Year Ended March 31, 2021

April 30, 2021

1.	Summary of results	11-19
for the fiscal year ended March 31, 2021
2.	Outlook for the fiscal year ending March 31, 2022	10-16
3.	Progress of the Mid-term Management Plan	17-27
4.	Appendix	28-34
	Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

1

Highlights of the fiscal year ended March 31, 2021

The Group handled the increase in volume, caused by the expansion of the e-commerce market, with stable quality by bringing forward the full-scale operation of the transfer center established in X FRONTIER. In the Logistics Business, the overseas freight forwarding business undertook many new contracts by exhibiting the Group's presence amid the global container shortage caused by the novel coronavirus (COVID-19). The Group's performance was steady primarily due to these factors.

• (Industry)
• • The e-commerce market grew rapidly due to the impact of COVID-19, and the number of BtoC packages increased significantly
  • Delivery methods diversified, such as non-contact delivery and non-face-to-face delivery, due to the spread of COVID-19
  • In addition to the lack of air cargo space, the global container shortage led to tight supply-demand balance in air and marine cargo
• (Overview of the fiscal year ended March 31, 2021)
• • The change in sales mix continued as COVID-19 spread
  • • BtoB decreased despite being on a recovery trend, and BtoC increased due to the expansion of the e- commerce market
    • The average unit price increased slightly year-on-year due to the continued increase in BtoC packages
  • Capacity increased with the full-scale operation of X FRONTIER's transfer center
  • The Logistics Business handled the emergency transportation of personal protective equipment overseas in the first half of the fiscal year, and secured marine and air cargo space while the volume of goods of existing customers recovered and the supply-demand balance tightened in the second half of the fiscal year)

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

2

Summary of consolidated financial results

(Units: billion yen)	FY2020/3	FY2021/3	YoY change
Operating revenue	1,173.4	1,312.0	111.8%
Operating income	75.4	101.7	134.8%
[Operating margin]	[6.4%]	[7.8%]
Ordinary income	80.5	103.6	128.7%
Net income attributable to owners	47.2	74.3	157.2%
of the parent
EBITDA	98.8	128.1	129.6%

Note Amounts less than 100 million yen are rounded down.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

3

• Results of the Group (YoY comparison)

•	Operating revenue:	+138.5 billion yen
•	Operating income:	+	26.2 billion yen
•	Ordinary income:	+	23.1 billion yen
• Net income attributable to owners of the parent:	+	27.0 billion yen
•	EBITDA:	+	29.2 billion yen

Analysis of changes in operating revenue

			+72.4	+6.1	(4.5)	(Units: billion yen)
	+56.7	+4.4		Proceeds	Other
			from real
+3.3
	TMS(2)	Logistics	estate sales
		Business (3)
Unit price	Total
number of
	packages
	handled
						1,312.0
1,173.4
			Breakdown of other
			- Delivery Business	(4.9)
			(excluding for unit price, total number of
			packages handled, and TMS)
			- Other Businesses	+0.4
FY2020/3						FY2021/3

Notes (1) Amounts less than 100 million yen are rounded down. (2) TMS: Transportation Management System. A value-added transportation service other than express package delivery service utilizing the Group's logistics network. (3) Excludes TMS sales

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

4

• Results

• Average unit price

:

644 yen [100.4% YoY]

• Number of packages handled : 1,403 million packages [106.7% YoY]

• TMS

:

+93.2 billion yen [105.0% YoY]

(Reference) Increase/decrease in days:

Weekdays +5, Saturdays (1), Sundays and holidays (5)

Analysis of changes in operating income

(Units: billion yen)

+138.5

(37.9)

(69.4)

Increase in

personnel

expenses

(2.8)

(2.1)

Increase in

Increase in

Other

outsourcing

depreciation and

expenses

amortization

Increase in

101.7

operating

75.4

revenue

FY2020/3

FY2021/3

Note Amounts less than 100 million yen are rounded down.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

5

• Results

•	Operating revenue	:	+1,312.0 billion yen [111.8% YoY]
•	Personnel expenses	:	443.3 billion yen [109.4% YoY]

• Increase in number of packages handled and temporary expenses such as COVID-19 compensations

• Outsourcing expenses

:

578.8 billion yen [113.6% YoY]

• Increase in the Logistics Business's outsourcing expenses
  [177.0% YoY]

• Depreciation and amortization :

26.0 billion yen [112.3% YoY]

• Increase in depreciation and amortization of X FRONTIER

Results by segment

(Units: billion yen)	FY2020/3	FY2021/3	YoY change
Total operating revenue	1,173.4	1,312.0	111.8%
	Delivery Business	955.4	1,014.9	106.2%
	Logistics Business	135.8	207.8	153.0%
	Real Estate Business	16.2	22.8	140.7%
	Other Businesses	66.0	66.4	100.7%
Total operating income	75.4	101.7	134.8%
	Delivery Business	59.8	71.4	119.5%
	Logistics Business	2.0	12.7	617.8%
	Real Estate Business	7.8	11.3	143.3%
	Other Businesses	4.3	4.2	97.9%
	Adjustments	1.3	1.9	144.7%

Notes (1) Amounts less than 100 million yen are rounded down. (2) Due to part of the "Other Businesses" being changed to "Delivery Business" from the fiscal year ended March 31, 2021, the comparison was made by reclassifying the figures for the previous fiscal year according to the change.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

6

<>

Delivery Business, Logistics Business, Real Estate Business

<> Other Businesses

(Changes in measurement method for business segment profit and loss)

The Company has changed the allocation method of the Delivery Business and Other Businesses from the fiscal year ended March 31, 2021. This is based on actual business activities and management methods.

As a result, the performance for previous fiscal year has changed as follows:

	Fiscal year ended	Number of employees
	March 31, 2020		as of March 31, 2020
	Operating income (billion yen)	(within, number of partner employees)
	Before	After		YoY	Before	After	YoY
	change	change		change	change	change	change
Delivery	58.7	59.8		+1.1	58,732	78,017	19,285
Business		[18,145]	[36,208]	[18,063]
Other	5.4	4.3		(1.1)	22,762	3,477	(19,285)
Businesses		[19,551]	[1,488]	[(18,063)]

Overview of results by segment

Delivery Business

• The overall number of packages handled increased as the increase in BtoC packages surpassed the decrease in BtoB packages, which is on a recovery trend
• Although efforts to receive appropriate freight tariffs continued, the increase in average unit price was marginal due to the increase in relatively compact BtoC packages
• The early full-scale operation of X FRONTIER's transfer center enabled stable service quality despite the increase in volume, while contributing to improving productivity of the overall transportation network through decrease in driver waiting time, etc.
• Continued to promote remote work and initiatives such as online sales as measures to address COVID- 19

Logistics Business

• In the first half of the fiscal year, emergency international shipments of personal protection equipment increased
• In the second half of the fiscal year, the profitability of freight forwarding in general increased due to the recovery in the volume of goods of existing customers and the securing of container space in the midst of tight supply-demand balance in both air and marine transportation due to the impact of the shortage of marine containers

Real Estate Business

• Sold real estate according to plan (inclusion in private REITs)

Other Businesses

• Vehicle sales decreased, while cash-on-delivery settlement increased

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

7

Consolidated Statement of Cash Flows

Major cash flow items
	As of	As of
(Units: billion yen)	March 31, 2020	March 31, 2021
Cash flows from operating activities	53.5	121.2
Cash flows from investing activities	(61.5)	0.5
Free cash flows	(7.9)	121.7
Cash flows from financing activities	(24.3)	(121.9)
Net increase (decrease) in cash and cash	(32.9)	0.4
equivalents
Cash and cash equivalents at end of the year	68.7	69.1

Notes (1) Amounts less than 100 million yen are rounded down.

(2) Free cash flow = cash flows from operating activities + cash flows from investing activities.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

8

◼ Consolidated cash flows
• Cash flows from operating activities	121.2 billion yen
	Major components:
	Income before income taxes	111.7 billion yen
	Depreciation and amortization	25.8 billion yen
	Net changes in accrued bonuses
	(parenthesis indicates decrease)	3.9 billion yen
	Gain/loss on sale of investment securities
	(parenthesis indicates gain)	(11.3) billion yen
	Net changes in trade notes and accounts receivable
	(parenthesis indicates increase)	(32.7) billion yen
	Net changes in inventories
	(parenthesis indicates increase)	7.9 billion yen
	Net changes in trade notes and accounts payables
	(parenthesis indicates decrease)	17.3 billion yen
	Income taxes paidn	(21.8) billion yen
• Cash flows from investing activities	0.5 billion yen
	Major components:
	Purchases of property, plant and equipment	(59.1) billion yen
	Purchases of intangible assets	(5.7) billion yen
	Proceeds from sales of shares of subsidiaries and associates	69.7 billion yen
• Cash flows from financing activities	(121.9) billion yen
	Major components:
	Proceeds from long-term bank loans	20.0 billion yen
	Repayment of long-term bank loans	(22.1) billion yen
	Cash dividends paid	(21.3) billion yen
	Purchase of shares of subsidiaries	(88.3) billion yen

Consolidated Balance Sheet

		As of	As of
(Units: billion yen)	March 31, 2020	March 31, 2021
Current assets	270.8	303.6
	Cash and deposits	68.7	69.1
	Accounts receivable and	155.9	187.8
	other receivables
	Inventories	28.8	30.7
	Other current assets	17.4	15.8
Non-current assets	501.8	486.6
	Property, plant and	321.6	352.8
	equipment
	Goodwill	4.0	4.0
	Other non-current	176.1	129.7
	assets
Total assets	772.7	790.2

		As of	As of
(Units: billion yen)	March 31, 2020	March 31, 2021
Liabilities	349.6	385.4
	Accounts payable	62.7	79.7
	Interest-bearing debt	131.7	123.7
	Other	155.1	181.8
Net assets	423.0	404.8
	Portion attributable to	383.9	398.3
	owners of the parent
	Non-controlling	39.1	6.5
	interests
Total liabilities and net	772.7	790.2
assets

Note Amounts less than 100 million yen are rounded down.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

9

• Equity ratio

• Equity ratio: 50.4% [+0.7 points from the previous fiscal year end]

1.	Summary of results	11-19
for the fiscal year ended March 31, 2021
2.	Outlook for the fiscal year ending March 31, 2022	10-16
3.	Progress of the Mid-term Management Plan	17-27
4.	Appendix	28-34
	Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

10

Initiatives for the fiscal year ending March 31, 2022

Fiscal 2019-2021Mid-term

Management Plan

Second Stage 2021

1. Advance in logistics solutions
2. Optimal performance of management resources
3. Promotion of digitalization and latest technologies
4. Expansion of global business
5. Competitive advantages from inclusive corporate culture
6. Higher governance standard

Note GOAL is a registered trademark of SG Holdings Co., Ltd.

Initiatives for the fiscal year ending March 31, 2022

Delivery Business

• Strengthening of solutions such as TMS centered on GOAL®
• Continued efforts to receive appropriate freight tariffs
• Increased capacity and strengthened transportation network through X FRONTIER
• Improvement of productivity through implementation of digitalization and promotion of work style reforms

Logistics Business

• Enhancement and expansion of entire supply chain including oversea 3PL
• Expansion of global freight forwarding network
• Expansion of services to and from Japan, such as cross border e- commerce

Real Estate Business

• Development of facilities for strengthening logistics functions
• Continued sales of real estate

Other Businesses

• Improvement of service quality as services ancillary to logistics
• Development of new functions and services in coordination with logistics

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

11

Consolidated earnings and dividend forecast

			FY2021/3	FY2022/3			FY2022/3	Comparison
			earnings	YoY change		Mid-term
			results		with plan
	(Units: billion yen)	forecast			Management Plan
	Operating revenue	1,312.0	1,325.0	101.0%		1,230.0	107.7%
	Operating income	101.7	107.0	105.2%		80.0	133.8%
	[Operating margin]	[ 7.8% ]	[ 8.1% ]		[ 6.5% ]
	Ordinary income	103.6	108.5	104.7%		84.5	128.4%
	Net income attributable to	74.3	74.0	99.5%		49.0	151.0%
	owners of the parent
	EBITDA	128.1	137.0	106.9%		109.0	125.7%
		Interim	18 yen	18 yen
	Dividend per	Year-end	17 yen	18 yen	-
	share
		Total	35 yen	36 yen

Notes (1) Amounts less than 100 million yen are rounded down. (2) Assumptions for the earnings forecast for the fiscal year ending March 31, 2022: Average unit price of 647 yen and 1,403 million packages to handle in Delivery Business. (3) A common stock split on a 2-for-1 basis was carried out on November 1, 2020. The dividend per share for the fiscal year ended March 31, 2021 assumes the split had been carried out at the beginning of the fiscal year.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

12

• Forecast for the fiscal year ending March 31, 2022 (YoY change)
  Forecasts for the fiscal year ending March 31, 2022 were formulated based on the results for the fiscal year ended March 31, 2021, and the current situation.

•	Operating revenue:		+12.9 billion yen
•	Operating income :		+5.2 billion yen
•	Ordinary income :		+4.8 billion yen
• Net income attributable to owners of the parent:		(0.3) billion yen
•	EBITDA:		+8.8 billion yen
• Expected average unit price	647 yen	+ 3 yen

• Expected number of packages handled

1,403 million packages ± 0 million packages

• Dividend forecast
• • A 2-for-1 common stock split was implemented effective on November 1, 2020. The dividend per share for the fiscal year ended March 31, 2021 assumes the above split had been carried out at the beginning of the fiscal year.
  • The breakdown of the interim dividend of 18 yen is a normal dividend of 13 yen and a special dividend of 5 yen

[Reference] Breakdown of year-on-year change in operating expenses

•	Personnel expenses:	(15.8) billion yen
•	Outsourcing expenses:	+27.1 billion yen
•	Depreciation and amortization:	+3.9 billion yen
•	Other:	(7.6) billion yen

Analysis of changes in operating revenue forecast

				(9.2)					(billion yen)
			+14.5
								(5.9)
			+8.8
				Proceeds
	+4.8	Logistics		from real		Other
	estate sales
			Business(2)
		Unit price	TMS
			9,909
	1,312.0									1,325.0
				Breakdown of other
				- Delivery Business	+3.4
				(except for Unit price, Total
				number of packages handled,
				and TMS)
				- Other Businesses	(9.4)
	FY2021/3								FY2022/3

Note (1)Amounts less than 100 million yen are rounded down. (2) Excludes TMS

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

13

• Earnings forecast for the fiscal year ending March 31, 2022

•	Average unit price:	647 yen [100.5% YoY]
• Number of packages handled:	1,403 million packages [100.0% YoY]
•	TMS:	102.0 billion yen [109.5% YoY]

Analysis of changes in operating income forecast

	+15.8	(27.1)		(billion yen)
+12.9				+7.6
	Decrease in		(3.9)
	personnel
Increase in	expenses	Increase in	Increase in	Other
	outsourcing
operating
	depreciation and
	expenses
revenue
	amortization
101.7				107.0
			Breakdown of other
			- Decrease in cost of real
			estate sold	+5.1
FY2021/3				FY2022/3

Note Amounts less than 100 million yen are rounded down.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

14

• Earnings forecast for the fiscal year ending March 31, 2022

•	Operating revenue:	1,325.0 billion yen [101.0% YoY]
•	Personnel expenses:	427.5 billion yen [96.4% YoY]
•	Outsourcing expenses:	606.0 billion yen [104.7% YoY]
•	Depreciation and amortization:	30.0 billion yen [115.2% YoY]

Consolidated earnings forecast (six months ending September 30, 2021)

			FY2021/3 1H	FY2022/3 1H	YoY change
			results	earnings forecast
	(Units: billion yen)
	Operating revenue		634.8	660.0	104.0%
	Operating income		52.4	46.0	87.6%
	[Operating margin]		[ 8.3% ]	[ 7.0% ]
	Ordinary income		52.7	46.5	88.1%
	Net income attributable to owners		37.2	32.0	85.8%
	of the parent
Note Amounts less than 100 million yen are rounded down.
				Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.
					15

• Forecast for the six months ending September 30, 2021 [YoY change]

•	Operating revenue:	+25.1 billion yen
•	Operating income:	(6.4) billion yen

• Decrease in operating income is mainly due to scheduling real estate sales in the second half of the fiscal year

•	Ordinary income:	(6.2) billion yen
•	Net income attributable to owners of the parent:	(5.2) billion yen

Overview of forecasts by segment

		FY2021/3	FY2022/3			FY2022/3	Comparison
		earnings	YoY change		Mid-term
		results		with plan
(Units: billion yen)	forecast			Management plan
Total operating revenue	1,312.0	1,325.0	101.0%		1,230.0	107.7%
	Delivery Business	1,014.9	1,031.0	101.6%		988.9	104.3%
	Logistics Business	207.8	223.5	107.6%		160.0	139.7%
	Real Estate Business	22.8	13.5	59.1%		14.4	93.8%
	Other Businesses	66.4	57.0	85.7%		66.7	85.5%
Total operating income	101.7	107.0	105.2%		80.0	133.8%
	Delivery Business	71.4	83.5	116.8%		62.8	133.0%
	Logistics Business	12.7	10.5	82.4%		4.7	223.4%
	Real Estate Business	11.3	7.0	61.9%		6.1	114.8%
	Other Businesses	4.2	4.0	95.0%		4.8	83.3%
	Adjustments	1.9	2.0	102.1%		1.6	125.0%

Notes (1) Amounts less than 100 million yen are rounded down. (2) Part of the "Other Businesses" was changed to "Delivery Business" from the fiscal year ended March 31, 2021. The mid-term targets are figures prior to changing segments.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

16

• YoY change by segment

- Operating revenue	+12.9 billion yen
		Delivery Business	+16.0 billion yen
		Logistics Business	+15.6 billion yen
		Real Estate Business	(9.3) billion yen
		Other Businesses	(9.4) billion yen
- Operating income	+5.2 billion yen
		Delivery Business	+12.0 billion yen
		Logistics Business	(2.2) billion yen
		Real Estate Business	(4.3) billion yen
		Other Businesses	(0.2) billion yen
		Adjustments	+0.0 billion yen

• Delivery Business: Assumptions for the earnings forecast
  Number of packages handled and sales mix used in calculation are roughly the same as the previous year.
  Average unit price is +3 yen due to the effort to receive appropriate freight tariffs.
• Logistics Business: Assumptions for the earnings forecast
  The rise in sea freight due to the container shortage and the rise in air freight due to the shift from sea freight to air freight are assumed to continue during the first half of the fiscal year.

1.	Summary of results	11-19
for the fiscal year ended March 31, 2021
2.	Outlook for the fiscal year ending March 31, 2022	10-16
3.	Progress of the Mid-term Management Plan	17-27
4.	Appendix	28-34
	Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

17

Medium- to long-term strategy of the SG Holdings Group
		Third Stage 2024
		To Sustainable
		Growth
		To sustainable
		April 2022 - March 2025
	Second Stage 2021	growth
	FY23/3 to FY25/3
	Enhancement of
	management platform
First Stage 2018	FY20/3 to FY22/3	1	Advance in logistics solutions
Enhancement			2	Optimal performance of
of Resources			management resources
FY17/3 to FY19/3			3	Promotion of digitalization
			4	Global strategies
			5	Competitive advantages from
			inclusive corporate culture
		6	Contribution to SDGs
		Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.
				18

• The year ending March 31, 2022 is the final year of "Second Stage 2021"

Trend of the Delivery Business

Stably increased operating margin by responding to environmental changes

				1,014.9	1,031.0
Operating revenue	Total number of packages handled
	955.4
				8.1%
Unit price	Operating margin	903.6
	644
	824.1		641
738.1					647
		613		1,403	1,403
	1,326	1,307	1,315	7.0%
1,276
	6.2%

6.3%

	549	6.1%
5.4%
	511
17/3	/3	/3	20/3	/3	/3
18/3	19/3	21/3	22/3
					(For cast)
	First Stage 2018			Second Stage 2021	(Forecast)

Enhancement of transportation infrastructure Initiative (Enhancement of personnel and partner

companies)

Environmental	Express package
change	delivery crisis

Opening of X FRONTIER

Increase of productivity through digitalization

Hike in	Global spread of COVID-19
consumption
tax rate

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

19

• Flexible response to environmental changes in the core Delivery Business
• • Controlled the number of packages handled considering the capacity
  • Continued the efforts to receive appropriate freight tariffs
  • Strengthening of network represented by X FRONTIER
  • Work reform and increase in productivity through digitalization, etc.

↓

Flexibly responding to changes in the environment while balancing the above four points led to a stable increase in operating income margin

Evolution of logistics solutions: GOAL® initiative (1)

[Case Study] Transportation of COVID-19 vaccines x TMS

• Undertook contracts for storage and distribution processing of equipment as well as transportation to vaccination facilities, for equipment such as vaccines and syringes that arrived at local governments.

Pharmaceutical
companies'
vaccines	Storage and		Transportation
	distribution processing

200+

contracts

(As of April 30)

	Vaccine distribution center
Warehouses						Continuous-
	Orders				type
in Japan	Storage	Repackaging	Distribution
vaccination
	received
					center
Referigerated	Receipt and	Organizing	Packaging of		Delivery by day
transportation	storage of	orders from	vaccines,	TMS	prior to
vaccination
	refrigerated	vaccination	package
	vaccines and	facilities	inserts,		date
Needles and	needles, etc.		needles,
		syringes, etc.			Refrigerated
syringes
					storage
				System
Warehouses				design
in Japan

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

20

• GOAL® initiatives (1)
  Transportation of COVID-19 vaccine
• • The Group conducted over 1,000 business negotiations with local governments nationwide regarding the transportation of vaccines from local governments to vaccination sites
  • By utilizing the facilities operated by the SG Holdings Group nationwide, the Group undertook bundle contracts including storage (temperature control), repackaging and delivery to vaccination sites
  • As of April 30, undertook over 200 contracts
  • In order to respond to increasing needs of local governments, the Group will promote standardization and systemization of operations to create a system enabling swift responses

Evolution of logistics solutions: GOAL® initiative (2)

[Case Study] Antenna installation x Nationwide transportation x TMS Supplying for 5G telecommunication infrastructure construction

Factory

before

Crane truck		Construction site
	located 200km away
	Transportation to construction site
✖10 vehicles	Ex. ：200 km✖10 vehicles	✖10 sites
Total 2,000km

					Smooth logistics
	Factory	Transportation	Relay center	Crane truck		Construction site
after	with trailers
		✖10
	✖1 vehicle			✖10 sites
		vehicles
		Ex. 100km×1 vehicle		Ex. 100km x 10vehicles	Approximately 45% decrease in
			Total 1,100km	transportation distance

40 thousand sites to be constructed		Placed 14 relay centers nationwide
Delivered to remote
（As of March 31, 2021）		for order-date delivery
		islands by ship

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

21

• GOAL® initiatives (2)
  Antenna Installation and Transportation (Example of Special Transportation by TMS)

• Efficient installation of antennas nationwide through TMS

1. Arrangement of vehicles according to location by utilizing the nationwide TMS network
2. Established relay centers in order to separate logistics from factories to relay centers and logistics from relay centers to installation sites
3. Responded to emergency transportation
4. Implemented installation and transportation to remote islands by ship transportation

Maximizing the value of management resources (1) : X FRONTIER

Effect

Number of packages

handled per day

Achieved over 135% of

expected level

[Schedule]

End of January 2020

Facility completed, partial operation of warehouses on 5-6F

October 2020 -

Start of operation of 1-2F transfer center

January 2021 -

Start of operation of 3-4F transfer center ⇒March 2021

Full operation

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

22

• X FRONTIER
• • The facility went into full operation in the fiscal year ended March 2021, and has achieved higher than anticipated performance at 135% of the expected level. It provided stable service in response to the increase in number of packages resulting from the expansion of the EC market
  • In addition to responding to continuously expanding express package delivery needs, considering a medium- to long-term network strategy based on the effect of X FRONTIER.

Maximizing the value of management resources (2) :

Establishment of express package delivery infrastructure

Enhancing express package delivery infrastructure by expanding facilities to respond to increasing

transportation needs

Jun. 2021

Kitami

Feb. 2022

Oct. 2019

Musashino

Higashimurayama

Sep. 2020

Musashimurayama

Sep. 2021

Nagareyama

May 2022

Nov. 2020

Setagaya

Inzai

Completed

Oct. 2022

Yokohama

Midori

Planned

Aug. 2021

Mar. 2022

Sep. 2021

Higashiosaka

Odawara

Sagamihara

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

23

• Development of express package delivery infrastructure
• • Enhanced existing facilities and developed new facilities to respond to the increase in transportation needs
  • Strengthened collection and delivery functions by strategically developing sales offices in locations throughout Japan, in addition to strengthening transfer functions through X FRONTIER

Promoting digitalization (1): Initiatives to Date

Improving driver productivity through digitalization

• Operation optimization tools (image)

* Image

packages collected and	per hour (YoY change)
Number of	delivered

Collection and delivery time (YoY change)

* Image

packages delivered

per hour

Number of

8:00

8:30

9:00

9:30

10:00

10:30

11:00

11:30

12:00

12:30

13:00

13:30

14:00

14:30

15:00

15:30

16:00

16:30

17:00

17:30

18:00

18:30

19:00

19:30

20:00

- Visualization of productivity improvement of	- Visualization of each driver's delivery
each team in sales office	status in 15-minute increments

Equalization of	Improvement of	Improvement of
operations	productivity	profitability
		Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

24

• Increase in driver productivity through digitalization
• • Implementation of detailed monitoring such as productivity of each driver by time band
  • Realized appropriate personnel and vehicle allocation, improvement of productivity and standardization of operations by visualizing information
  • Improving working environment by analyzing drivers' collection and delivery results and reviewing delivery rout

Promoting digitalization (2): Future initiatives

To increase productivity of the last one mile and reduce redelivery rate

• Automation of resorting of collection and delivery order ■ Prediction of whether recipients are present/absent using electricity

					data
- Map display of						Prediction: Absent
collection and
delivery sites on map
- Automatic creation of		Navigation to next	Route navigation	Prediction: Present
collection and
	collection/delivery site
delivery route					equipped with function to
					predict whether recipients
					are present/absent
						Prediction: Present
			minutes

Working		Distance
hours	traveled (CO2)
STEP 1	STEP 2	STEP 3
Automation of resorting
Map display of	Automation of resorting
collection and delivery
collection and	collection and delivery order
order
delivery	(route optimization without
(route optimization with
addresses	manual address entry)
manual address entry)

Absence

rate

STEP 4

Automation of resorting of collection and delivery order (present/absent prediction)

Nationwide	Field	Digitalization of	Access to
rollout on Sep. 1	experiment	delivery slips	electricity meters

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

25

• Working towards increasing productivity of the last one mile and reducing redelivery rate
• • Realized reduction of workload, equalization of operations and reduction of environmental impact through the digitalization of delivery slips and utilization of external data
  • 1. Automation of resorting collection and delivery order
    • Automatic setting of collection and delivery routes based on road conditions, etc. in each area in addition to information on collection and delivery sites
    • Realized reduction of work hours and distance traveled regardless of drivers' proficiency enabling collection and delivery in an efficient order
    1. Consideration of using electricity power data to predict presence/absence of recipients
    • Implemented field expriments and so forth, considering the dissemination of smart meters to households
    • Seek possibility of further improvement in operational efficiency through various methods

Global Strategy

Cross-bordere-commerce

• Developing business to Chinese and ASEAN e-commerce markets
• Expanding alliances with influential local business operators

• Further development of markets and entry

	into other businesses through the
EXPOLANKA	expansion of alliances with influential local
business operators in each country
	• Improving procurement capabilities towards
	existing carriers and new carriers
	Overseas network
	28 countries and regions
	(As of March 31, 2021)

Expansion of international logistics through strategic alliances

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

26

• Global strategy
• 1. Cross-bordere-commerce:
  • Work on developing Chinese and ASEAN markets and expanding alliances to strengthen international logistics arriving to and departing from Japan
  1. EXPOLANKA:
  • Work on strengthening competitiveness and expanding customer base in each country through organic growth and expanding strategic alliances

Contribution to SDGs

Aiming to reduce CO2 throughout the entire supply chain

								Continuous reduction of
Number of environmentally friendly vehicles		environmental impact
Natural gas		Hybrid vehicles	(vehicles)		GHG emission intensity
		13,154
Clean diesel vehicles	Electric vehicles 11,974		(consolidated operating revenue)
17
			10,289	16			0.47	0.48
						0.42
8,080	9,172	16	16					0.38	0.35
			9,089
16				7,908
		6,266
	5,073
3,990
93		305	595	1,202	1,799
3,981	3,778		3,412	2,848	2,249
FY 2015	FY 2016 FY 2017	FY 2018	FY 2019	FY 2015	FY 2016 FY 2017 FY 2018 FY 2019

For 10% reduction in

CO2 emissions

Replace approximately 7,000 light vehicles with electric vehicles

by 2030

Note GHG emission intensity: Scope 1+2 (t-CO2) / consolidated operating revenue (million yen)

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

27

• Working towards the realization of sustainable society
• • The Group has been working on the reduction of CO2 throughout the entire supply chain from the past, and has continuously reduced its environmental impact
  • In particular, the Group's core company Sagawa Express has actively introduced environmentally friendly vehicles ahead of the industry
  • As one of the initiatives aimed at further reducing environmental impact, the Group has set a target to replace all of approximately 7,000 light vehicles it owns with electric vehicles by 2030

1.	Summary of results	11-19
for the fiscal year ended March 31, 2021
2.	Outlook for the fiscal year ending March 31, 2022	10-16
3.	Progress of the Mid-term Management Plan	17-27
4.	Appendix	28-34
	Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

28

Summary of consolidated financial results (single quarters)

	Q1	Q2	Q3	Q4	Full year
(Units: billion yen)
FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change
Operating revenue	317.6	109.1%	317.2	106.9%	347.1	112.8%	330.0	118.8%	1,312.0	111.8%
Operating income	27.7	147.7%	24.7	134.4%	36.0	134.5%	13.1	115.1%	101.7	134.8%
[Operating margin]	[8.7%]		[7.8%]		[10.4%]		[4.0%]		[7.8%]
Ordinary income	28.8	149.7%	23.9	121.9%	37.2	129.7%	13.6	105.8%	103.6	128.7%
Net income
attributable to owners	17.2	170.3%	20.0	169.6%	25.8	161.2%	11.1	120.3%	74.3	157.2%
of the parent
EBITDA	34.0	138.4%	31.2	129.8%	42.5	130.5%	20.3	115.4%	128.1	129.6%

Note Amounts less than 100 million yen are rounded down.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

29

Results by segment (single quarters)

		Q1	Q2	Q3	Q4	Full year
(Units: billion yen)
FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change
Total operating revenue	317.6	109.1%	317.2	106.9%	347.1	112.8%	330.0	118.8%	1,312.0	111.8%
	Delivery Business	243.2	104.4%	249.2	103.5%	274.2	108.0%	248.1	109.1%	1,014.9	106.2%
	Logistics Business	40.7	129.0%	49.2	139.2%	54.8	155.1%	62.9	188.0%	207.8	153.0%
	Real Estate Business	17.2	159.4%	1.8	104.3%	1.9	104.9%	1.7	100.3%	22.8	140.7%
	Other Businesses	16.3	105.0%	16.8	90.6%	16.1	97.1%	17.1	112.7%	66.4	100.7%
Total operating income	27.7	147.7%	24.7	134.4%	36.0	134.5%	13.1	115.1%	101.7	134.8%
	Delivery Business	15.6	126.8%	18.0	120.8%	29.5	124.8%	8.2	93.0%	71.4	119.5%
	Logistics Business	2.0	399.3%	4.2	555.5%	3.7	475.8%	2.6		12.7	617.8%
	-
	Real Estate Business	8.4	180.8%	1.1	120.4%	1.1	93.4%	0.6	58.1%	11.3	143.3%
	Other Businesses	0.9	92.4%	0.9	68.8%	0.9	137.8%	1.3	114.5%	4.2	97.9%
	Adjustments	0.6	257.7%	0.3	92.2%	0.6	171.0%	0.2	81.8%	1.9	144.7%

Notes (1) Amounts less than 100 million yen are rounded down. (2) Due to part of the "Other Businesses" being changed to "Delivery Business" from the fiscal year ended March 31, 2021, the comparison was made by reclassifying the figures for the previous fiscal year according to the change.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

30

Status of the products and services

Delivery Business: Status of number of packages handled and unit price
			Q1		Q2			Q3		Q4		Full year
(Millions of packages, yen)	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3	YoY change
Total number of packages handled	342		104.7%	344		104.4%	376		108.8%	340		109.0%	1,403	106.7%
	Hikyaku Express (1)	329		105.5%	329		104.8%	361		109.2%	326		109.2%	1347	107.2%
	Other(2)	12		89.0%	14		95.2%	14		100.2%	13		104.8%	55	97.1%
Average unit price	634		100.6%	643		100.1%	650		100.2%	646		100.5%	644	100.4%
e-Collect®	(3): Status of number of packages and value of payments settled
			Q1		Q2			Q3		Q4		Full year
(Millions of packages, billion yen)	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3	YoY change
Number of packages	22		101.6%	22		101.5%	23		103.9%	19		99.7%	87	101.7%
Value of payments settled	246.7		101.7%	253.8		99.3%	273.3		107.2%	225.1		102.0%	999.1	102.6%
Status of TMS
			Q1		Q2			Q3		Q4		Full year
(Billion yen)	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3		YoY change	FY2021/3	YoY change
Sales	21.2		102.2%	23.4		102.1%	24.7		105.1%	23.8		110.8%	93.2	105.0%
Sales by region
(Billion yen)
													FY2021/3	YoY change
Operating revenue														1,312.0	111.8%
	Japan														1,164.5	106.5%
	Overseas														147.5	184.5%

Notes (1) Hikyaku Express shows the number of packages Sagawa Express Co., Ltd. reported to the Ministry of Land, Infrastructure, Transport and Tourism. (2) Other shows the number of packages handled by Hikyaku Large Size Express and other companies. (3) e-Collect is a registered trademark of SG Holdings Co., Ltd.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

31

Breakdown of operating expenses

Major expense items in consolidated accounts

		Q1	Q2	Q3	Q4	Full year
(Units: billion yen)	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change
Total operating expenses	289.9	106.5%	292.4	105.1%	311.1	110.7%	316.8	118.9%	1,210.3	110.2%
	Personnel expenses	109.6	109.3%	109.4	106.5%	110.4	109.6%	113.8	112.1%	443.3	109.4%
	Outsourcing expenses	130.0	104.6%	137.9	106.5%	155.5	114.9%	155.2	129.2%	578.8	113.6%
	Fuel expenses	2.0	74.9%	2.5	86.6%	2.4	85.5%	2.3	97.6%	9.3	85.8%
	Depreciation and amortization	6.2	111.3%	6.4	115.3%	6.4	110.9%	6.8	111.8%	26.0	112.3%
	Other expenses	41.9	106.7%	36.1	96.4%	36.2	99.8%	38.4	106.6%	152.7	102.4%

Major expense items in Delivery Business(2)

		Q1	Q2	Q3	Q4	Full year
(Units: billion yen)	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change	FY2021/3	YoY change
Total operating expenses	238.0	103.5%	240.9	102.4%	256.7	106.9%	250.2	110.0%	986.0	105.7%
	Personnel expenses	96.4	110.7%	94.8	106.1%	96.3	110.6%	98.7	111.6%	386.4	109.7%
	Outsourcing expenses	109.7	99.0%	112.8	99.8%	125.7	105.3%	117.7	111.0%	466.1	103.7%
	Fuel expenses	2.0	76.3%	2.5	87.8%	2.3	87.1%	2.3	95.7%	9.2	86.5%
	Depreciation and amortization	4.4	117.5%	4.4	115.3%	4.4	113.2%	4.8	112.7%	18.1	114.6%
	Other expenses	25.3	99.3%	26.2	101.3%	27.7	103.0%	26.6	101.4%	106.0	101.3%

Notes (1) Amounts less than 100 million yen are rounded down. (2) Due to part of the "Other Businesses" being changed to "Delivery Business" from the fiscal year ended March 31, 2021, the comparison was made by reclassifying the figures for the previous fiscal year according to the change.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

32

Status of employees, vehicles and locations

(Employees, vehicles, locations)		As of March 31, 2020	As of March 31, 2021
Total number of employees		95,291	97,774
[Within, number of partner	Total
[43,928]	[45,753]
employees(1)]
	Delivery Business(2)		78,017	79,902
		[36,208]	[36,839]
	Logistics Business		12,954	13,172
		[5,995]	[6,886]
	Real Estate Business		69	63
		[-]	[-]
	Other Businesses(2)		3,477	3,888
		[1,488]	[1,801]
	Corporate (common)		774	749
		[237]	[227]
Express	Number of major locations	857	864
	Number of vehicles	26,661	26,673
Sagawa
Transfer centers		24	23
	Sales offices		427	428
	Small stores(3)		406	413

Notes (1) Average number of persons during the period. (2) Due to part of the "Other Businesses" being changed to "Delivery Business" from the fiscal year ended March 31, 2021, the comparison was made by reclassifying the figures for the previous fiscal year according to the change. (3) Total number of service centers and delivery centers.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

33

Reference: Outlook for Consolidated Free Cash Flow

Major cash flow items
	FY2021/3	FY2022/3
(Units: billion yen)	actual results	outlook(3)
Cash flows from operating activities	121.2	90.0
Cash flows from investing activities	0.5	[35.0]
Free cash flows	121.7	55.0

◼	Major investments in FY2021/3 (results) (3)	◼	Major investments in FY2022/3 (outlook) (3)
-	Investment related to X	: 34.0 billion yen	-	Vehicle investment	: 15.0 billion yen
	FRONTIER		-	Facility investment (new	: 11.5 billion yen
-	Vehicle investment	: 13.0 billion yen		development)
-	IT investment (new)	: 4.0 billion yen

• Cash flows from investing activities in FY 2021/3 includes proceeds from sales of shares of subsidiaries and associates of 69.7 billion yen.

Notes (1) Amounts less than 100 million yen are rounded down. (2) Free cash flow = cash flows from operating activities + cash flows from investing activities.

(3) Figures are approximate values.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

34

Disclaimer

This document has been prepared to provide corporate information, etc. on SG Holdings Co., Ltd. (hereinafter referred to as "the Company") and SG Holdings Group companies (hereinafter referred to as "the Group"), and does not constitute a solicitation for the shares or other securities issued by the Company in Japan or overseas. Furthermore, this document may not be published or communicated to a third party in whole or in part without the Company's permission.

This document contains forward-looking statements such as the forecasts, plans and targets related to the Company. These statements include but are not limited to those containing the terms "forecast", "prediction", "expectation", "intent", "plan", "possibility", and synonyms thereof. These statements are based on information available to the Company and forecasts, etc. as of the date the document was prepared. Furthermore, these statements were made under certain assumptions (suppositions). These statements or assumptions (suppositions) may be objectively inaccurate or not be realized in the future.

Uncertainties and risks that may cause such a situation include but are not limited to: interest rate fluctuations; decline of share prices; fluctuation of exchange rates; fluctuation of the value of assets held; decline of credit standing; slowing of corporate production activities or personal consumption in Japan or abroad; rise of oil prices; rise of labor costs; low growth of the e- commerce market; failure to realize synergies or occurrence of dis-synergies in the capital and business alliance with Hitachi Transport System, Ltd.; risk of system, administrative, personnel or legal violation risks; occurrence of fraud or scandal; ruin of image or loss of trust due to rumors or gossip; risk of business strategies or management plans not succeeding; new risks associated with the expansion of business, etc.; changes in the economic and financial environment; changes in competitive conditions; occurrence of large-scale disasters, etc.; risks associated with business alliance and outsourcing; decrease of deferred tax assets; and various other factors.

The statements made are current as of the date of this document (or date otherwise specified), and the Company has no obligation or intent to keep this information updated. The future outlook may not necessarily match actual results as a result of these factors.

Furthermore, information on companies, etc. other than the Group shown in this document cites publicly available information, etc. and the Company has neither verified nor does it warrant the accuracy, appropriateness, etc. of such information.

Copyright © 2021 SG HOLDINGS CO., LTD. All Rights Reserved.

35