Evolving into a Total Healthcare Company
and a Regional Healthcare Infrastructure
—Growth Strategy of the New Mid-Term Management Plan for FY2030
The SUGI Pharmacy Group has developed a new Mid-Term Management Plan starting in FY2026, the Group’s 50th anniversary year, to achieve sustainable growth through the improvement of corporate value.
SUGI Holdings Co., Ltd.
Representative Director & President
Katsunori Sugiura
SUGI’s Unwavering Spirit and Management Philosophy
FY2025 Strengthens Foundations for the Next Stage of Growth and Drives Business Growth
—Sales of
1 Trillion Yen Achieved One Year Ahead of Schedule
In today’s Japan, the social and economic environment is undergoing significant change, driven by
factors such as an aging and declining population, which is expanding demand for medical and nursing care,
as well as by growing labor shortages, rising prices, and increasing diversity in values and lifestyles.
Consumer purchasing behavior is also becoming more polarized, with a clearer distinction between
price-oriented consumption and value-seeking purchasing, such as for quality and convenience. As a result,
the services required are becoming increasingly diverse and sophisticated.
At the same time, in the retail and healthcare industries, we are shifting from an era when growth was
fueled by increasing the number of stores and expanding sales floor space to one in which the quality of
stores, namely their productivity and the value they provide, has become the key driver of growth. While
these changes are forcing many companies into significantly transforming their businesses, we see them as a
major opportunity for our Group, which is rooted in local communities and supports people’s health
and daily lives, to further expand the role we are expected to fulfill.
Our Group has advanced services that can respond closely to the needs of each customer and patient by
leveraging our nationwide store network, wide variety of experts, and strong digital infrastructure. In
addition, we have expanded our business foundation through M&A and strategic partnerships. Through
integration with the former I&H (Hanshin Dispensing Group), which joined the Group in September 2024,
we have broadened our network of experts and relationships with medical institutions in the dispensing
domain, thereby strengthening our capacity to deliver more advanced healthcare services. Furthermore, by
making KNOCK ON THE DOOR a consolidated subsidiary, we have enhanced our ability to handle highly
specialized pharmaceuticals, including those for rare diseases. We are also deepening collaboration across
a wide range of areas, including merchandise, logistics, and digital utilization, through our capital and
business alliance with Seki Yakuhin and our comprehensive partnership with TRIAL Holdings. These efforts
are enabling us to strengthen our competitiveness in both merchandise sales and dispensing services.
Through these initiatives, we achieved our net sales target of 1 trillion yen, as set in the Mid-Term Management Plan with FY2026 as its final year, one year ahead of schedule. This achievement was made possible by the dedicated efforts of our employees and the continued support of our customers, business partners, shareholders, and all other stakeholders. We extend our sincere gratitude to all of them.
Core Strength of the SUGI Pharmacy Group
—Integrated Healthcare Support Combining a Nationwide
Store Network and Digital Capabilities
The greatest strength of the SUGI Pharmacy Group lies in its ability to combine a nationwide network of
stores, a wide variety of experts, and a robust digital infrastructure to create a business platform that
enables continuous support for each individual.
Across the network of more than 2,300 stores nationwide, a diverse range of experts such as pharmacists,
nationally certified dietitians, and beauty advisors provide not only pharmaceuticals and daily
necessities but also comprehensive support, from health consultations to primary and secondary prevention
advice.
Furthermore, as a tool that connects in-store customer touchpoints with digital capabilities, we are
promoting the use of a digital communication ledger, which manages each customer’s consultation
history, health status, and purchasing history in an integrated manner.
In addition, centered on the SUGI Pharmacy app, which had reached 15.67 million downloads as of the end of
February 2026, we leverage diverse digital touchpoints such as the SUGI Smartphone Medicine Service app and
SUGIsapo Walk+ app, to deliver information and services at the right time in line with each
customer’s and patient’s daily behaviors and needs. In this way, we provide continuous and
comprehensive support, spanning health promotion, everyday shopping, and medical and medication support.
This ongoing connection, combining in-store expertise with digital convenience, represents a unique competitive advantage of our Group and forms the foundation of our role as a healthcare infrastructure that supports the health of local communities.
Total Healthcare Strategy Driven by the SUGI Pharmacy Group
The Total Healthcare Strategy is the core strategy that represents the SUGI Pharmacy Group’s
overall initiatives to support customers and patients throughout their lives, with health and medical
care as the central focus. Over the course of a lifetime, the support individuals require evolves, from
primary and secondary prevention stages for maintaining health to medical treatment and medication, and
further to nursing care and daily life support. Our Group views this continuum across the three
categories of “self-care,” “medical care and medication,” and “elderly
nursing support and daily life support,” and seeks to realize a consistent care cycle that supports
the health of local communities throughout their lives.
This vision is enabled by a continuous connection that integrates our nationwide network of physical
stores, experts, and digital capabilities. By seamlessly linking in-store and digital touchpoints and
strengthening collaboration with diverse stakeholders such as medical institutions and local
governments, we deliver optimal services tailored to each individual’s health condition and life
stage, thereby building a healthcare infrastructure within local communities.
While advancing this strategy, our Group will launch a new Mid-Term Management Plan toward FY2030. By
further expanding the business foundation we have built to date and evolving into a Total Healthcare
Company, we will realize a healthcare infrastructure that continues to support the lives of people in
our communities over the long term.
New Mid-Term Management Plan Toward FY2030
—Evolution Into a Total Healthcare Company
<Key Highlights of the Mid-Term Management Plan>
| SUGI Pharmacy Group’s strengths |
|
|---|---|
| Strategic transformation toward net sales of 1.6 trillion yen |
|
| Drivers of discontinuous growth |
|
| Value creation and capital allocation |
|
The SUGI Pharmacy Group will launch a new Mid-Term Management Plan starting in FY2026, the Group’s 50th anniversary year. Our aim is not merely to expand in scale. Instead, we will evolve to a new stage of management by shifting from profit-and-loss-driven growth (Growth 1.0/2.0) to Growth 3.0, which pursues both capital efficiency and discontinuous growth through ROIC-driven management. Through this, we aim to achieve net sales of 1.6 trillion yen or more and an ROE of 15% or higher by FY2030, thereby enhancing both the value we provide to local communities and our corporate value.
1. Evolution of Financial and Capital Strategy
Full-scale transition to ROIC-driven management, shift toward an asset-light model, strategic use of debt, and enhancement of shareholder returns
2. Restructuring of the Execution Structure
Strengthening agility through the establishment of CFO and CHRO positions and the appointment of officers responsible for overseas business, legal affairs, and nursing care
3. Growth Strategy: Drivers of Strategic Transformation and Discontinuous Growth
Evolving into a Total Healthcare Company and creating the “SUGI Pharmacy Group economic sphere” through strategic M&A and comprehensive partnerships
We will outline these pillars in the following order: financial and capital strategy, execution structure, and growth strategy.
1. Evolution of Financial and Capital Strategy Toward Achieving Growth 3.0
In the new Mid-Term Management Plan, Growth 3.0 that we aim to achieve represents a fundamental
enhancement in the quality of our management. It marks a shift from a management approach focused mainly
on sales and profit growth to ROIC-driven management, which, while continuing to pursue sales and profit,
places greater emphasis on generating returns on invested capital (ROIC). In other words, this signifies
a paradigm shift for our Group.
Specifically, by executing the following three initiatives in parallel, we will achieve an ROE of 15% or
higher on a stable basis.
●Profitability improvement
Through digital transformation (DX), strengthening private-brand products, and expanding capabilities in
specialty pharmaceuticals*1, we seek to improve the operating profit margin
from the current 4.8% (FY2025 result) to 5.5% or higher (FY2030 target).
●Capital efficiency improvement
We will thoroughly enhance balance sheet and cash flow efficiency by optimizing working capital and
shifting non-current assets toward a more asset-light structure.
●Capital structure optimization
We will lower WACC through the strategic use of debt and enhanced shareholder returns.
*1: Specialty pharmaceuticals: Prescription drugs with a high degree of
specialization, such as those for rare diseases.
Actions to Achieve the Financial Targets
<Net sales growth>
Net sales 1.6 trillion yen or more (CAGR: 10.0% or higher)
Alongside disciplined new store openings, strong same-store sales growth driven by the use of apps, and growth in our prescription dispensing business through enhanced capabilities in specialty pharmaceuticals, we will execute focused investments in adjacent areas related to our core businesses. The term “or more” in our target reflects the potential upside from discontinuous growth driven by large-scale M&A in the future. By combining our solid organic growth foundation with strategic M&A, we will achieve a level of sales growth that differentiates us within the industry.
<Profitability improvement>
Operating income 88 billion yen or more (ratio to sales: 5.5% or higher)
EBITDA 116 billion yen or more (ratio to sales: 7.2% or higher)
Through labor-saving and efficiency improvements driven by DX and AI, together with strengthening private-brand products and expanding capabilities in specialty pharmaceuticals, we will establish a high-profitability business structure. The term “or more” in our targets reflects our expectation of further improvements in profitability through initiatives such as end-to-end data integration with manufacturers and wholesalers, which will promote transformation across supply chain management (SCM).
<Capital efficiency improvement>
ROE 15% or higher
We will break down ROE into the three elements of the DuPont analysis—(1) net profit margin,
(2) total asset turnover, and (3) financial leverage—and achieve a level of 15% or higher by
establishing clear improvement initiatives for each element.
(1) Improving net profit margin
We will enhance profitability by improving the operating profit margin from the current 4.8% to 5.5% or
higher through initiatives such as boosting store productivity through DX and AI, increasing the share of
private-brand products, strengthening our specialty pharmaceutical capabilities, and advancing SCM
transformation.
(2) Improving total asset turnover (enhancing asset efficiency)
We will systematically improve total asset turnover by reducing working capital through rigorous
inventory management and optimization of payment cycles, shifting real estate assets off-balance-sheet
through an asset-light approach, and enforcing disciplined investment decisions using ROIC as the hurdle
rate.
(3) Optimizing financial leverage
While maintaining a credit rating of A- or higher, we will build an optimal capital structure through the
strategic use of debt. Under the financial discipline of maintaining a net D/E ratio of 0.6x or below and
net interest-bearing debt/EBITDA of 3.0x or below, we will strategically utilize financial leverage.
Through improvements across these three elements, we will achieve an ROE of 15% or higher by FY2030. At
the same time, with respect to ROIC, which reflects the earning power of our business itself, we will
maintain a level that consistently exceeds our cost of capital (WACC) and expand the ROIC spread, thereby
achieving true corporate value creation.
<Capital structure optimization: Setting and utilizing debt indicators>
Net interest-bearing debt/EBITDA 3.0x or below
Net D/E ratio 0.6x or below
To sustain proactive growth investments, we will maintain robust liquidity and financial buffers while securing substantial debt capacity, enabling us to respond flexibly to future investment opportunities, including large-scale M&A. At the same time, to preserve our strong credit profile with a rating of A- or higher, we will strictly control both indicators within a predefined conservative threshold. Through these measures, we will balance the maximization of capital efficiency sought by equity investors with the stable financial foundation valued by debt investors, thereby establishing an optimal capital structure.
Capital Allocation
Disciplined Capital Allocation of 340 Billion Yen + α Over Five Years for
Corporate Value Maximization
To realize value creating management, over the five-year period of this Mid-Term Management Plan
(FY2026–FY2030), our Group will allocate a total of approximately 340 billion yen plus additional
capacity across three areas under strict guidelines: (1) growth investments, (2) shareholder returns, and
(3) maintenance of financial soundness.
Rather than relying solely on organic operating cash flow as in the past, we will expand both the quality
and scale of investment resources by combining balance sheet optimization through an asset-light approach
with the strategic use of debt. This represents the evolution of our capital strategy under the current
Mid-Term Management Plan.
2. Restructuring of the Execution Structure: A New Leadership Team
To ensure steady execution of the new Mid-Term Management Plan, the Group has significantly strengthened
its leadership team beginning in FY2026.
This new Mid-Term Management Plan is not simply a declaration by myself. It represents the collective
commitment of our entire leadership team, integrating the financial and capital strategy developed under
the CFO, the human asset strategy redesigned under the CHRO, and the respective business strategies
driven by executive officers of SUGI Holdings and directors of SUGI Pharmacy.
<New executive roles> (SUGI Holdings)
| Position | Name | Responsibilities and experience |
|---|---|---|
| CFO (Chief Financial Officer) in charge of corporate strategy, finance and accounting |
Makoto Kasai |
Mission: Driving the Mid-Term Management Plan, M&A, company-wide adoption of ROIC-driven
management, optimization of capital allocation, and enhancement of engagement with capital
markets Career summary: After working at a consulting firm and an investment advisory firm (as an analyst), he joined the Company in 2007. |
|
CHRO (Chief Human Resources Officer) in charge of human capital, administration, and risk management |
Shigeki Mori |
Mission: Human resources strategy, development of next-generation leaders, strategic construction
of a human assets portfolio, and company-wide risk management Career summary: After serving as Head of General Affairs and Human Resources and as President of a business subsidiary at a major retail company, he joined the Company in 2017. |
<Expansion of Executive Officer Team> (SUGI Holdings; new appointments only)
| Position | Name | Responsibilities |
|---|---|---|
| In charge of nursing care business | Toshiyuki Azeo |
Drawing on experience in overseas operations and management in the medical sector at a major
general trading company, he oversees medical and nursing care businesses. — Leads the nursing care category of Total Healthcare. |
| In charge of legal affairs | Mari Konagaya |
She brings extensive experience in corporate legal affairs, litigation, and international law,
gained through her career as a lawyer at a boutique corporate law firm and through roles such as
Head of Legal and International Business Risk at an infrastructure company. — Drives legal risk management, including for international projects, and strengthens governance. |
| In charge of overseas business | Kenta Morii |
He has experience in management and business development at overseas bases of a major general
trading company. — Promotes the strengthening of management at overseas affiliates and the expansion of international business. |
| In charge of prescription dispensing business | Toshihiko Asaka |
As a long-tenured member of SUGI Pharmacy, he has driven business operations by connecting
frontline dispensing operations with management. — Promotes higher value delivery by driving the growth of the prescription dispensing business and strengthening capabilities in specialty pharmaceuticals. |
<Expansion of the Board> (SUGI Pharmacy; new appointments only)
| Position | Name | Responsibilities |
|---|---|---|
| General Manager of Logistics Headquarters | Hiroyuki Ando |
Drawing on experience at a major food manufacturer, including leading domestic operations,
managing overseas business companies and investees, and running a logistics company, he has built
strong capabilities in global management and logistics management. — Drives the advancement of logistics infrastructure and optimization of the supply chain. |
| General Manager of New Business Promotion Headquarters | Michiaki Okamoto |
He has held executive officer roles in production and logistics, in addition to experience in new
business development. — Promotes the creation of new businesses to enhance and elevate business value. |
| General Manager of DX & AI Promotion Headquarters | Shigeo Kagami |
Drawing on management experience at global IT companies, he has served as CDXO at a major
financial institution and leading service companies, where he led digital strategy planning and DX
promotion. — Drives DX through the use of AI and digital technologies. |
| General Manager of PB Product Development Headquarters | Takahiro Umetsu |
He has served as a director and head of private-brand (PB) development at a major retail company,
where he led the development of high-profitability private brands and drove merchandising
reforms. — Promotes value enhancement of private-brand products and strengthens the earnings base. |
3. Strategic Transformation Leveraging Our Strengths to Achieve Net Sales of 1.6 Trillion Yen or More
We have pioneered the prescription-dispensing drugstore model and have long provided services that meet healthcare needs. As noted earlier, while leveraging our strengths centered on services that integrate digital capabilities with our network of physical stores, we are committed to evolving from a traditional store-based retail business into a Total Healthcare Company. In addition, by combining our core businesses of drugstores and prescription dispensing pharmacies with adjacent areas such as wellness, inbound tourism, and medical and nursing care, we will realize a comprehensive community care model rooted in our strong local presence. Based on this strategy, the SUGI Pharmacy Group aims to achieve net sales of 1.6 trillion yen or more by the end of FY2030.
Growth Strategy to Evolve Into a Total Healthcare Company
We will further refine our core businesses centered on drugstores and prescription dispensing pharmacies. The cash generated through these efforts will be invested in the creation and expansion of adjacent businesses. By feeding back the new customer touchpoints and business opportunities generated into our core businesses, we will create a virtuous cycle that strengthens our earnings base and enhances profitability. Furthermore, we will accelerate this momentum by expanding our network through M&A and strategic partnerships, thereby driving our evolution into a Total Healthcare Company.
Growth Strategy (1) Refining Core Businesses
· Enhancement of store efficiency and expertise through DX
In our drugstore business, we will further advance the use of digital technology to enhance the efficiency
of store operations, including ordering and inventory management. By introducing AI-enabled initiatives
such as fully automated ordering and call handling, we will reduce the workload of employees. The time
created will be reallocated to higher value-added activities such as customer service and counseling. At
the same time, we will promote the use of AI in customer interactions based on accumulated data. This will
allow us to enhance our ability to provide proposals that respond closely to individual needs and improve
customer satisfaction.
In the prescription dispensing business, we will establish a system that enables pharmacists to focus more
than ever on patient care by advancing automation and centralization of dispensing operations.
Specifically, we will improve operational efficiency by consolidating dispensing functions and integrating
inventory management on an area basis. Furthermore, we will leverage AI for automatic recording during
medication instruction and for role-playing exercises using AI as a simulated patient, thereby enhancing
staff skills and professional expertise. Through these initiatives, we will achieve both the enhancement of
professional capabilities and improvements in productivity, thereby further strengthening the
competitiveness of our prescription dispensing business.
· Strengthening private-brand products
We will strengthen our private-brand portfolio through initiatives such as quality-driven and cost-optimized product renewals, enhancement of our development capabilities, and review of our development processes. This will enable us to raise our private-brand ratio to 16% by FY2030, improve our gross profit margin, and enhance overall profitability.
· Expansion and deepening of trade areas
In the drugstore business, we will continue to open new stores primarily in densely populated areas, particularly within the three major metropolitan regions, while expanding our store network in ways that reflect local characteristics. In addition to new store openings and customer-aligned renovations of existing stores, we will also pursue openings in collaboration with companies from other industries. This will further expand our store network.
· Enhancement of corporate value through ROIC improvement
Our Group is committed to management that emphasizes both profitability and capital efficiency, with the aim of achieving sustainable growth in corporate value. We position return on invested capital (ROIC) as a key indicator and will focus on consistently generating returns that exceed our cost of capital (WACC) by reducing invested capital through asset-light initiatives and improving working capital through the optimization of inventory and procurement.
Growth Strategy (2) Creation and Expansion of Adjacent Businesses
· Expansion of customer touchpoints
In addition to our core businesses of drugstores and prescription dispensing pharmacies, our Group will broaden its initiatives into areas closely linked to these businesses, including wellness, inbound tourism, and medical and nursing care, thereby further expanding customer touchpoints. For example, in the inbound segment, we position our stores as places where customers can experience Japan’s health and beauty. We will accelerate the provision of continuous services by utilizing digital technologies, from information dissemination via social media before arrival in Japan to purchases through cross-border e-commerce after returning home. In the medical and nursing care domains, we will expand our network, centered on our prescription-dispensing drugstores, through collaboration with medical institutions and nursing care facilities. This will increase the number of service delivery sites while enabling us to accumulate key management resources, including data and human assets. Through these initiatives, we will promote seamless support ranging from daily health management to medical and nursing care services.
· Expansion of the business model
We are also advancing the evolution of our business model through the use of digital technologies. By integrating and leveraging diverse information, including purchasing history, health consultations, and daily activity data, we will enhance our ability to provide proposals tailored to individual needs, while also applying these insights to product development and service improvement. Furthermore, based on these data, we will strengthen collaboration with manufacturers and business partners in areas such as product development and sales promotion support, thereby creating new revenue opportunities.
Growth Strategy (3) Expanding the SUGI Pharmacy Group Economic Sphere Through Strategic M&A and Comprehensive Partnerships
To achieve a significant increase in net sales to 1.6 trillion yen or more by FY2030, we recognize the need for discontinuous growth. Strategic M&A and comprehensive partnerships are positioned as key growth drivers to realize this objective. Our Group has recently established three successful patterns in this area. First, the “turnaround model,” demonstrated by the acquisition of former I&H (Hanshin Dispensing Group), a major dispensing company, as a subsidiary in 2024. Second, the “partnership model,” exemplified by the acquisition of shares of Seki Yakuhin, a drugstore operator based in Saitama Prefecture, in 2025. Third, the “comprehensive collaboration model,” represented by the 2026 comprehensive strategic partnership with TRIAL Holdings, a discount store operator, through the use of retail technology. These models have supported our business growth. By leveraging these three successful patterns, we will strengthen both horizontal and vertical collaboration within the drugstore and pharmacy industry. Through this, we will pursue both qualitative and quantitative expansion and extend our core business platforms, such as our apps and supply chain, to external partners, thereby creating the “SUGI Pharmacy Group economic sphere.”
Management Foundation That Supports Sustainable Growth
—Advancing Sustainability Management
To steadily realize these growth strategies, we must not only achieve financial growth but also
integrate environmental, social, and governance (ESG) perspectives into management. As expectations for
corporate responsibility continue to rise in areas such as climate change, human rights, and human
capital, it is becoming increasingly important to create value by integrating financial and
non-financial aspects.
In 2021, the Company established a Sustainability Committee and identified Five Themes and 16 Priority
Issues (Issues of Materiality). While regularly reviewing these priorities, we are advancing
sustainability management in close alignment with our business activities. On the environmental front,
we are advancing initiatives such as decarbonization and resource recycling. On the social front, we
are advancing efforts related to human rights and utilization of diverse human assets. We are also
enhancing governance frameworks, including our growing network of subsidiaries. Through these ESG
initiatives, we are reinforcing a disciplined management foundation across the Group. We believe that
advancing business growth and sustainability in an integrated manner and continuing to be an
indispensable presence in local communities form the foundation for the sustainable growth of our Group
and the enhancement of corporate value.