SUGI Pharmacy Group Striving to Serve as the “Main Framework Underpinning Local Healthcare” to Contribute to Everybody’s Healthy, Rich Lifestyles
SUGI Holdings Co., Ltd.
Representative Director & President
Katsunori Sugiura
External Environment Surrounding the SUGI Pharmacy Group’s Business Operations and the Group’s Response Policy
In FY2023, the COVID-19 restrictions on face-to-face interactions and travel were lifted, allowing our daily life to finally return to normal. As a result, there were some positive changes, such as the resumption of economic and social activities and a gradual economic recovery. However, the military conflicts in Ukraine and the Middle East caused resource prices to continue to rise. Coupled with the weak yen, such events led commodity prices to remain high, making consumer spending depressed. On the other hand, inbound demand showed signs of recovery. Some predictions suggest that the number of foreign visitors to Japan in 2024 will exceed the number in 2019, before the onset of the COVID-19 pandemic. The FY2024 real GDP is expected to show positive growth, but there are signs of slowdown from FY2023, making the situation remain unpredictable.
In the drugstore industry, we believe that M&A between major drugstores and intensifying competition will rapidly eliminate many players from the market, leading to an oligopoly throughout Japan. In the prescription dispensing pharmacy industry, the revision of dispensing fees is increasingly severe year by year, and there is an ongoing trend of a shift to DX* in pharmacy operation, as indicated by electronic prescription and online medication instructions. Following the national policies of “family pharmacy” and “medical DX,” we need to focus on communication with customers, home-visit prescription dispensing services, and the shift to DX.
In these circumstances, we understand that we operate in one of the few growing industries in Japan, a country experiencing an aging population and lower birthrate. In tandem with an increase in aging population, the number of those with interest in their health and beauty is growing, making us expect that the healthcare industry will further expand. Guided by the Total Healthcare Strategy, we would like to explore a wide variety of possibilities and actively cooperate with entities sharing the same ambitions as ours.
Recently, the SUGI Pharmacy Group was newly joined by the
Kampo counseling company NIHONDO Co., Ltd. and the
prescription dispensing pharmacy chain operator Hikari Pharma
Co., Ltd. In addition, we announced (through a press release in
February 2024) our alliance with I&H Co., Ltd. with an eye on the
company joining our group as a subsidiary in the future.
By integrating the business know-how and resources of
each company within the SUGI Pharmacy Group, we will
accelerate our business growth and work together to develop
into a healthcare company trusted by local citizens.
Domestic consumption will continue to decline due to a declining birthrate, aging population, and shrinking population. The SUGI Pharmacy Group continues to actively manage companies engaged in new business operations, such as overseas expansion. While providing our cultivated know-how, products, and services for local partner companies in Asian countries, which will grow further from now on, and cooperating and collaborating in a wide variety of forms, we are aiming to become the “Main Framework Underpinning Local Healthcare” not only in Japan but also in foreign countries.
SUGI Pharmacy Group’s Commitment to Creating Value by Leveraging Its Features and Advantages
The SUGI Pharmacy Group boasts a wide variety of experts,
such as pharmacists, nationally certified dieticians, beauty
advisers, nurses, and registered pharmaceutical distributors.
Of particular note are as many as 4,000 pharmacists.
Affected by the continuing shortage of pharmacists, many
prescription dispensing pharmacies and drugstores are
being forced to secure pharmacists urgently. In addition,
supermarkets, convenience stores, and EC businesses are
making inroads into the field of prescription dispensing,
making it even more challenging to secure pharmacists.
Despite this trend, we steadily secure pharmacists, and this is
one of our great advantages.
We are confident that this has resulted from the fact that
we have always been taking on the challenge, since the
dawn of the drugstore industry, of realizing our growth by
developing a chain of prescription dispensing drugstores.
Our unwavering dedication to prescription dispensing that
we have continued since our foundation presents a specific
vision with local communities, and also with pharmacy
students and pharmacists working actively who would like
to place a focus on each patient, and stirs empathy among
them. This gives us a great advantage in terms of recruitment.
By pushing forward with our strategic dominance of
setting up new stores in specific areas, we are expanding
our operating scale in the metropolitan areas of Kanto,
Chubu and Kansai. In FY2023, we also actively opened
stores designed to meet the needs of tourists visiting Japan.
In FY2023, we newly set up 144 stores, a considerable
increase from 107 stores in the previous fiscal year, indicating
that we remained one of the industry’s leaders in terms
of the number of annual store openings. As of the end of
February 2024, the number of stores of the entire SUGI
Pharmacy Group reached 1,718. The percentage of prescription
dispensing stores, which is one of our advantages,
increased to 81.8%, one of the highest figures among major
drugstore operators. This serves as a source for creating
value when we implement the Total Healthcare Strategy.
We would like to contribute as a reliable “family pharmacy”
that can underpin all the health stages of customers, from
birth until the end of their life. To that end, not only are we
establishing new stores, but we are also actively renovating
existing stores to enlarge their dispensing rooms and
waiting rooms. We will continue to ensure that pharmacists
and other in-store experts can fully demonstrate their
capabilities in order to contribute to the realization of
sustainable, comprehensive community care centering on
medical institutions.
We are also reinforcing our commitment to digitalization. We provide app services for customers to enjoy even more comfortable and healthier lives. These services are increasing customer satisfaction and leading app users to visit physical stores or use other services, resulting in the generation of a virtuous circle. Striving to reflect comments from customers, we continue to improve the functions of the SUGI Pharmacy app, boasting more than 12 million downloads and leading our digitalization strategy. By providing information and coupons for individual customers according to the segment, we are aiming to raise the quality of customer experiences and the level of customer satisfaction. In addition, by reinforcing our ability to present proposals regarding products and services so that each customer will become even more satisfied, we are striving to deepen our ties with them. We are also aiming to establish an environment in which customers can feel “SUGI Pharmacy on the Palm Anytime and Anywhere” by ensuring that customers can use their smartphones or shopping carts as checkout machines at physical stores, as well as by enabling customers to check stores’ product lineup, prices, and inventory outside the stores and place an order on our EC website.
Not only do we provide online counseling services, but wealso use digital devices at stores to present proposals in thefield of beauty items and proposals regarding lifestyles,thereby increasing customer satisfaction.
By establishing an environment in which each in-store
employee can fully demonstrate their capability, we can
help them improve their working style and enable them to
concentrate on communication with customers, which
leads to even better customer satisfaction. We will actively
proceed with DX in order to generate value for customers
and all the other stakeholders. In the SUGI Pharmacy
Group, we will further consolidate our strengths as sources
for generating such value. To underpin community healthcare
and contribute to local communities, we will continue
to address the five themes and 16 priority issues that we
have set, proceed with sustainability management, and
commit to realizing a sustainable society.
SUGI Pharmacy Group’s Total Healthcare Strategy
Representing the entire vision of our various initiatives, the Total Healthcare Strategy serves as our operating foundation. Guided by the strategy, in which “health and medical care” is set as the key phrase, we provide support for customers and patients regardless of their health condition while addressing the aging population and lower birth rate confronting Japanese society and taking advantage of digital technology created one after another in its continuous evolutionary process. From birth until the end of life, human life is frequently supported by medical care and medicine in various situations. Using such medical care and medicine, people strive to treat disease and injury, address changes caused by aging, and maintain their good health. Under the Total Healthcare Strategy, we divide human life into the following three phases: the “self-care” period with a focus on primary prevention and secondary prevention to maintain a healthy life; the “medical care and medication” period, when people develop diseases and receive treatment for their symptoms in the acute phase or the chronic phase; and the “elderly nursing support and daily life support” period. This strategy shows our commitment to local residents’ lifetime efforts for disease prevention and health management, thereby striving to contribute to their good health through a full lineup of care. With our prescription dispensing drugstores serving as the hub, we would like to establish a healthcare network by forming partnerships with physical facilities, such as health checkup centers, nursing facilities for senior citizens, and fitness centers, and ensuring cooperation with local governments while making full use of DX. Such a network will provide us with a platform for using the physical and the digital seamlessly with a focus on local communities. The platform will enable us to ensure points of contact with customers regardless of their health condition and provide the most appropriate product and service for each customer.
Many citizens consult doctors after some health anxiety or worry arises, but such a conventional approach will make it impossible for them to fully enjoy their lives in the super-aging society, which is experiencing the advent of the so-called “100-year life.” We need to continue to support local residents’ healthy lives by ensuring cooperation at each stage with local governments, health insurance associations, medical care and elderly nursing care workers, and players in many other fields. We urgently need to establish a network of players mainly in the medical field and also other industries in order to support communities, senior citizens, and their families. We have already received endorsement from some companies and local governments, leading to the expansion of a healthcare network in various communities. This strategy is also highly regarded abroad, enabling us to cooperate with local companies in Asian countries and proceed with various initiatives. We will continue to work with a wide variety of companies, organizations, and local governments and further accelerate the speed of our efforts toward realizing the Total Healthcare Strategy.
SUGI Pharmacy Group’s Sustainability Management
In 2021, to develop a framework for proceeding with sustainability management, we established the Sustainability Committee and the ESG Promotion Office (presently the Sustainability Promotion Section of the Corporate Branding Department) and set five themes and 16 priority issues (issues of materiality), thereby intensifying our efforts.
An increase in awareness of the SDGs is found in consumers of all generations, but this trend is evident particularly among young Millennial consumers and Generation Z. A familiar example is ethical consumption, meaning a selection of products produced with greater consciousness of the environment and human rights. The world is casting a stern eye on how we address challenges that need to be handled throughout the entire supply chain, such as suppliers’ commitment to human rights. Based on an increase in international awareness of the issue of human rights and also in view of our corporate social responsibility, we formulated the SUGI Pharmacy Group Human Rights Policy in FY2022 and the Supplier Code of Conduct in FY2023, thereby beginning to establish a framework for us to fulfill our responsibility throughout our supply chain.
From now on, we need to ask our suppliers to use raw materials procured in due consideration of human rights. While establishing our own database, we will continue to reinforce our commitment to human rights due diligence, especially in the field of in-house development of products.
We will also continue to focus on recycling resources. Embracing the concept “domestic recycling of domestic resources,” we will fulfill our responsibility as a distributor of many products and make as much contribution as possible in cooperation with many partners. In FY2023 again, we strengthened our commitment to Bottle-to-Bottle Horizontal Recycling, intended to recycle used PET bottles into new PET bottles, with the number of our stores serving as a collection point increasing to a few dozens. Although this project is still on a test run, some stores serving as a collection point for recycling PET bottles are experiencing win-win situations, as indicated by evident increases in the frequency of customers’ visits to the stores, and a good reputation among customers regarding our collection of PET bottles. Meanwhile, to support the recycling of medicine press-through-pack (PTP) sheet waste generated in a large quantity mainly in the field of prescription dispensing, we serve as a collection point.
Running a food drive
Furthermore, we collect uniforms to be disposed of so that they can be upcycled into resources for in-house equipment. We also work with food banks to address the problems of food loss and poverty. By doing so, we will continue to handle social problems step-by-step, which will lead us to contribute to local communities and ultimately to establish a status as a company loved by local communities.
Views on Carbon-Free Management and Progress in Our Commitment
Setting the realization of a carbon-free society as one of our priority issues, we are accelerating our commitment. In the first year of our commitment, we visualized the emissions from Scope 1 (direct GHG emissions), with our focus on the consumption of gas for company cars, and the emissions from Scope 2 (in proportion to the use of electricity) and set a CO2 emissions reduction target to be achieved by 2030. Although we had aimed to reduce CO2 emissions per store by 35% by FY2030 compared to FY2014, we made an upward revision to a 50% reduction at an early phase. In December 2021, we announced our endorsement of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. In line with the disclosures recommended by the TCFD, we have been proceeding with appropriate efforts through the Sustainability Committee and the Board of Directors, such as identifying our risks and opportunities and examining a roadmap toward the reduction of CO2 emissions. Our recent specific efforts to reduce CO2 emissions include installing solar power generation panels on the roofs of dozens of stores under an onsite PPA. While doing so at both existing and newly opened stores, we have discovered that it will be difficult to achieve our CO2 emissions reduction target simply by installing solar panels on the roofs of all our stores. We will not count simply on CO2 free menu services, but rather will try various other schemes without hesitation, such as an off-site PPA, which features “additionality” (for an effect leading to investment in a new renewable energy facility), and self-consignment of renewable energy, thereby striving to fulfill our social responsibility. In FY2024, we already concluded a contract to procure renewable energy for a few dozen of stores through an off-site PPA. We will further accelerate our carbon-free efforts.
Meanwhile, our total CO2 emissions from Scope 3, which overs all the activities in all the phases of a supply chain, ranging from product procurement to manufacturing, sales, logistics and disposal, mark approximately 1.7 million tons, more than 10 times the emissions from Scope 1 and Scope 2. However, it is difficult for the SUGI Pharmacy Group alone to reduce the emissions from Scope 3. We need to ensure cooperation with various companies, figure out ideas from scratch together with them, and carry out demonstrative experiments promptly in a trial and error manner. While adding value to products with less CO2 emissions by avoiding unnecessary packaging and using vegetable oil ink, we need to demonstrate ingenuity and make efforts in sales so that such products will appeal to customers. Needless to say, we must refrain from distributing unnecessary sales campaign items or creating unnecessary point of purchase advertising. We also need to work together to improve the accuracy in forecasting the units of sales, avoid unnecessary purchases, reduce returns and disposals, and ensure cooperation between the manufacturing, distribution, and sales functions. It is also important to accelerate our commitment to recycling resources toward reducing waste by, for example, collecting PET bottles and helping them to be recycled into new PET bottles. When meeting with suppliers, we are asking them to work together with us toward reducing the emissions from Scope 3. We are calling on them to engage in mid- and long-term cooperation or figure out ideas while establishing a consortium or other frameworks.
Photo session at a press conference of the Challenge Carbon Neutral
Consortium
In FY2023, we strode our first step by joining the Challenge Carbon Neutral Consortium and conducting a demonstration experiment to display, promote, and sell environmentally friendly products from participating companies. We still need to formulate an ideal vision from a future perspective and consider many things from scratch. Although we have not yet set a specific path, we endeavor to address environmental problems through out-of-the-box alliances. In this regard, we would like to receive guidance from partners in a wide variety of fields.
Human Asset Strategy
As indicated by rapid digitalization, the aging population and
lower birthrate, the advent of the so-called “100-year life,” and
changes in workers’ views on careers, the environment
surrounding companies is changing greatly. Acknowledging
employees as capital, we believe that human resources grow
into key players for creating value. We will make an active
investment in our human assets so that we can enhance our
corporate value. Based on this approach, we will link our
management strategy with our human asset strategy to
promote personnel system reforms, ensure that the right staff
members are assigned to the right positions, proceed with
health and productivity management, and improve employee
engagement.
While visualizing personnel data, we will prepare a human
asset portfolio in order to visualize how many employees with
what types of skills are needed by business units and departments
and clarify the gaps between the ideal and the real.
Based on the portfolio, we will take measures to close the gaps,
such as hiring new employees by other methods than employing
new graduates simultaneously, relocating existing employees,
obtaining external human assets, establishing alumni
networks, and employing experts and specialists even more
actively. Moreover, we will continue to pursue a work environment
in which employees, who constitute our most important
asset, can continue to work healthily and happily as long as they
like. The SUGI Pharmacy Group has been selected as an
outstanding entity in terms of health and productivity manageant
ment for the sixth straight year. However, we cannot boast
ourselves yet as the health and productivity management
leader among the many companies applying for the selection.
We will provide support for employees to quit smoking so that
the current percentage of smokers at more than 11% will fall
below 10%. Toward improving employee engagement, we will
enhance their work-life balance and establish a workplace
environment where everybody can fully demonstrate their
ability by, for example, strengthening specific health guidance
to reduce lifestyle-related diseases, providing training to reduce
mental health issues, increasing the response speed of our
consultation hotline system, improving the percentages of paid
leave and parenting leave taken, and reducing overtime.
In addition, as part of our commitment to human rights, we will
strengthen our efforts to improve psychological safety within
our organizations. The “chain of smiles,” meaning employees’
smiles leading to customers’ smiles, is a key concept in realizing
our Management Philosophy. In other words, if store employees
and partners feel more motivated, it will lead to their
greater contribution to customers, better work performance,
and ultimately higher productivity.
Psychological safety is important when we think about
motivation. If our employees feel greater psychological safety, it
will help them to be true to themselves in their daily lives, say
what they would like to say, take on bold challenges, and take
kind and courteous actions for customers. We have a hotline for
employees to call about any workplace concerns and worries.
With the number of calls exceeding 1,400, we were recently
featured in the media as one of the best Japanese companies in
terms of the whistleblowing environment.
To immediately inspect a whistleblowing case, we have established the Area Human Resources Departments, thereby increasing our response speed and effectiveness. Moreover, to realize the theme “Focus on Each Individual,” we are striving to ensure that employees can hold consultations with their supervisors more easily. In addition, we are emphasizing the initiatives of store visits by all officers and direct employee interviews by the President. In FY2024 again, we will continue to strengthen our efforts to increase psychological safety.
DX Strategy
Our DX strategy originates from our determination to make our customer services even more fulfilling by enhancing our productivity and improving customers’ lifetime value. It is safe to say that person-to-person interactions, which cannot be digitalized, through counseling and other customer services represent our strongest point. To what extent can we present new value by using digital technology? To what extent can we realize not only the digitalization of operations but also the reforms of organizations, operating processes, and even our corporate culture? By addressing these questions, we will make us even more competitive and establish our superiority. Of particular note is competitive superiority. Various industries are experiencing the phenomenon of new players’ grabbing a considerable market share at once and reversing the market by taking full advantage of digital technology. In some industries, there is a shift in purchasing behavior toward EC, accompanied by a shift in companies’ focus from physical stores to EC. Companies failing to keep up with this trend have been eliminated from the market. It will become even more important not only to improve some operations through digitalization but also to enhance customers’ lifetime value by utilizing DX for establishing points of contact with customers and ensuring continuous ties.
Accordingly, in line with the principle “SUGI Pharmacy on the Palm Anytime and Anywhere” to expand the scope of our points of contact with customers and deepen their impact under our DX strategy, we periodically enhance and renovate the functions of the SUGI Pharmacy app. The app distributes information on disease prevention and health maintenance, unifies management of customer information through ID integration, and provides coupons based on customers’ purchase histories, enabling us to establish one-to-one relationships without placing stress on customers. For customer services at physical stores, we will also reinforce digital communication. For example, we will keep a digital record of requests presented by customers and samples provided to customers in the field of cosmetics and use the record for sales promotion on the SUGI Pharmacy app. We will also compile a record of counseling services provided by our nationally certified dieticians. In the future, we would like to create a ledger of digital communication with customers to realize unified management of their health condition.
By realizing the concept “SUGI Pharmacy on the Palm Anytime and Anywhere” and digital communication, we endeavor to provide customers with opportunities to experience the physical and the digital seamlessly. For customer experience through digital tools, the SUGI Pharmacy app, boasting 12 million downloads, will play a major role. Presently, the SUGI Pharmacy app annually draws a total of approximately 350 million visitors to physical stores.
Our future challenges include how our physical stores will handle an explosive increase in needs expected to be induced by the digital. We will proceed with our commitment to digitalization to carefully address an explosive increase in the number of customer service opportunities, take an approach different from a mere extension of our conventional measures, and further raise the quality of services provided at physical stores. We believe that no companies can survive the future if they cannot handle such challenges. Deeply appreciating our fortune to have opportunities to take care of our challenges, we will ensure that FY2024 is a year when each management leader tackles the challenges based on the recognition that they are their own challenges.
Response to Changes in the Field of Prescription Dispensing
As indicated by the launch of the operation of electronic prescription and the promotion of the online qualification confirmation as a generally mandatory effort, there are various ongoing initiatives beneficial to patients, medical institutions, and pharmacies. While taking full measures, such as establishing the necessary frameworks and response schemes, we have completed the introduction of an online qualification confirmation system, which is used at all our stores. For patients, electronic prescription is beneficial because it enables them to receive medical examinations, prescriptions, and dispensing services based on accurate and real-time information, which will enhance therapeutic effects, and reduce unnecessary medicine through polypharmacy checking. For medical institutions and pharmacies, electronic prescription makes it possible to share the necessary information between different medical institutions, meaning that medical institutions and pharmacies can respond accurately while ensuring safety for the relevant patients. It is also expected that they can reduce labor for data entry and document filing for storage and save storage space. In other words, electric prescription will lead to improved therapeutic effects, reinforced risk management, and enhanced productivity, ultimately resulting in lower total costs of all medical services. We are addressing data health reform, which will enhance patients’ safety and convenience and allow them access to higher-quality medical services, in a well-planned manner. The direction of this policy aligns precisely with the direction of the SUGI Pharmacy Group’s Total Healthcare Strategy. Since the institutional reform is expected to generate great benefits in the field of Japanese medical services, we would like to lead the entire industry in proceeding with the reform. Led by the national government, an institutional reform is in steady progress in the field of prescription dispensing, which is the main business domain of the SUGI Pharmacy Group, in accordance with the Pharmacy Vision for Patients, presented in 2015. This makes us feel once again that our decision to serve local communities by responding to a multiple number of medical institutions in the communities, rather than depend on specific medical institutions, is correct. The drug price revision has not had an insignificant impact on our sales from prescription dispensing. For the revision of the technical fee, we have shifted our focus on operations at pharmacies, from the handling of drugs to communication with customers. We ask individual pharmacists to provide even more support for local patients than they have done so far. Since there is a call to provide home-visit medical care backed by partnerships between players from a wide variety of industries, we also need to simultaneously work on strengthening training programs, including those for improving each pharmacist’s skills, and enhancing operating efficiency through DX. The number of prescriptions filled by the SUGI Pharmacy Group has been on a year-on-year rise. To enable many more patients to use our pharmacies even more comfortably, we are making efforts to reduce the waiting time. While placing our first priority on safety, we are improving our operations, introducing new equipment, raising our efficiency in every aspect, and increasing our operating speed, thereby taking on the challenge of reducing patients’ waiting time. After taking some measures at one of our large-scale prescription dispensing pharmacies, we found a drastic reduction in the waiting time, leading to an increase in the number of filled prescriptions. We will ensure that these measures are shared with other stores so that we can earn further trust from patients.
Mid-Term Management Plan
The year 2026 will mark the 50th anniversary of the foundation of SUGI Pharmacy. How should the SUGI Pharmacy Group be in the memorial year? Having formulated the ideal vision based on a future perspective, we have established the Mid-Term Management Plan. Starting from FY2022, the plan consists of a part for the first two years and that for the second three years. The first two years are for consolidating the foundation for further growth, while the second three years are for growing into a corporate group with sales of 1 trillion yen, with our FY2026 sales target set at 1 trillion yen. The mid-term plan consists of a “growth strategy” and the “reinforcement of the management foundation.” The growth strategy features the three themes of “Deepen operations in the field of healthcare,” “Change customer experience through DX,” and “Expand cooperation and co-creation efforts.” For each theme, we have set the direction that we should take from now. The reinforcement of the management foundation has the three themes of “Data-based management,” “Cost structure reform,” “HR and institutional development,” each of which has been reflected in the strategy to be implemented by the director in charge. In FY2023, we completed the consolidation of the foundation, which we had worked on in the first two years. While fundamentally reviewing various strategies, including those for DX, product development, store openings, overseas operations, and human resources, we proceeded with various experiments and initiatives, which has given us a solid sense that the foundations has been consolidated. FY2024 sees the start of the three years for us to grow into a corporate group with sales of 1 trillion yen. Let me remind you that this mid-term plan presents quantitative targets based on our own growth potential. On the other hand, we expect that the drug and pharmacy industries will experience the acceleration of an oligopoly, with M&A transactions worth hundreds of billions of yen concluded over the next few years. Based on this expectation, we will operate our business with a minimum target of achieving sales of 1 trillion yen.
Mid-Term Management Plan with the Final Year Set on FY2026 (Fiscal Year Ending in February 2027)
Growth strategy
| Deepen operations in the field of healthcare |
|
|---|---|
| Change customer experience through DX |
|
| Expand cooperation and co-creation efforts |
|
Reinforcement of the management foundation
| Data-based management |
|
|---|---|
| Cost structure reform | |
| HR and institutional development |
*SCM: Supply chain management
Reinforcement of SUGI Holdings’ Functions
Our growth strategy features not only the establishment of
new stores but also a great shift toward digital operation,
healthcare, overseas expansion, and M&A. In addition, the
number of our group companies is increasing. In this
background, in FY2024, we will reinforce the functions of
SUGI Holdings and establish a framework to support the
growth of the entire SUGI Pharmacy Group.
As part of the efforts to do so, we will introduce an executive
officer system to strengthen the management and supervisory
functions and clarify the execution responsibility at
SUGI Holdings. We will create the post of executive officer in
charge of “corporate planning and finance” in order to
accelerate the speed of our M&A transactions, investment,
etc. and to reinforce the SUGI Pharmacy Group’s corporate
planning, finance, and M&A strategies. Taking account of the
increasing importance of the management of human assets,
such as experts and those with management skills within the
Group, we will also establish the post of executive officer
responsible for “HR, management, and risks.” In addition, we
will form the posts of executive officers in charge of the
following group-wide affairs: “medical care and prescription
dispensing” to handle prescription dispensing risks and
external affairs; “DX and branding” to proceed with digitalization
and branding; and “overseas operations” to realize
significant business growth in the future.
In the future, we will also create a framework whereby
execution responsibility will be delegated to the presidents of
our subsidiaries.
In this environment, SUGI Holdings is required to provide
speedy business support and visualization business operations.
SUGI Holdings will strengthen its function as the control
center that features a bird’s-eye view of the business situation
of each group company and allocates the necessary management
resources, thereby providing full-out support
Management with Awareness of Capital Cost and Stock Price
Starting from FY2024, we will appoint an executive officer in
charge of corporate planning and finance, thereby strengthening
management with awareness of capital cost and stock
price.
After accurately quantifying our capital cost, we formulate
management strategies and mid-term management plans in
view of changes in the external environment and disclose
their overviews. As for the formulated management strategies
and mid-term management plans, we annually check
and analyze the progress and take the necessary measures
based on our management resource allocation plans, including
those for investing in launching new business, establishing
new stores and associated systems, and developing
human assets. Regarding fundraising for new, large-scale
M&A transactions and business investments, we follow the
financial policy with the enhancement of shareholder value
on our mind. In addition, in order to raise shareholder value,
we will strive to increase ROE and ROIC on a mid- and
long-term basis, return value to shareholders on a continuous
and stable basis, and make investment for further growth.
Setting ROE and ROIC as important indexes for creating
sustainable shareholder value, we will strive to always
improve productivity, total asset turnover ratio, etc. and raise
ROE and ROIC continuously on a mid- and long-term basis.
In the future, we will introduce ROIC as a new index to identify
capital cost accurately, improve business portfolio management
and investment efficiency for setting up new stores, and
allocate management resources, such as those for launching
new business investment, properly. To introduce ROIC, we
have started by visualizing ROIC according to the business
segment as part of our efforts to establish a necessary framework.
We plan to establish links between ROIC and KPIs and
begin trial operations for workplaces. While doing so, we will
accelerate our efforts to form a system for utilizing the ROIC
index and ensure that it takes root throughout the company.
Actually, we have decided to carry out a stock split. The
purpose of the stock split is to lower the stock price per investment
unit, thereby making it easier for investors to invest and
expanding the investor base. We have disclosed our dividend
forecast after comprehensively taking into consideration the
3-for-1 stock split of common stock, our basic policy on shareholder
returns, and our financial condition. The annual
dividend forecast of 35 yen for the fiscal year ending February
2025 is converted to an annual dividend forecast of 105 yen
before the stock split, an increase of 25 yen in real terms from
the annual dividend forecast of 80 yen for the fiscal year
ended February 2024. We will continue to strive to operate in
a way that will allow many shareholders to feel confident and
actively invest in us.