Financial Results Meeting: FY Ended March 2013

Transcription

1 Financial Results Meeting: FY Ended March 2013 (April 1, March 31, 2013) May 10, 2013 Kintetsu World Express, Inc. 0

2 Contents Summary of Business Results for FY ended March 31, 2013, and Forecast for FY Ending March Financial Summary 03 Highlights for FY ended March 31, Year over Year Comparisons of Consolidated Net Sales, Cost of Sales, and SGA Expenses 05 Freight Cost Ratio for Air Freight Exports Revenue 06 Consolidated Balance Sheets (1) 07 Consolidated Balance Sheets (2) 08 Consolidated Cash Flow Statements 09 Consolidated Net Sales by Business Segment 10 Consolidated Net Sales and Operating Income by Region 11 Operating Margins by Region 12 Highlights by Region 13 Consolidated Operating Results by Quarter 14 Consolidated Earnings Forecast for FY Ending March Consolidated Net Sales Forecast by Business Segment & Region for FY Ending March 2014 New Medium-Term Management Plan Ready for the Next! Phase2 17 Review of the Previous Medium-Term Management Plan (FY2010 FY2012) 18 Goals and Background of the New Medium-Term Management Plan 19 Concept of the New Medium-Term Management Plan 20 Outline of the New Medium-Term Management Plan 21 New Medium-Term Management Plan Numerical Targets 22 New Medium-Term Management Plan - Net Sales Targets by Business Segment - 23 New Medium-Term Management Plan - Net Sales and Operating Income Targets by Region - 24 New Medium-Term Management Plan - Freight Volume Targets - 25 New Medium-Term Management Plan Key Strategies and Policies-1 26 New Medium-Term Management Plan Key Strategies and Policies-2 27 New Medium-Term Management Plan Key Strategies and Policies-3 28 Strengthen Core Competences 29 New Medium-Term Management Plan - Investment Plan - 30 Dividends Supplemental Materials 32 Recent Events 33 KWE Group s Global Network 34 Freight Volume by Region (Air Freight) 35 Freight Volume by Region (Sea Freight) 36 Air Freight Export Volume by Destination 37 Industry Verticals (1) KWE Japan: Air Freight 38 Industry Verticals (2) KWE Japan: Sea Freight 1

3 Financial Summary Shipments (thousands) Weight (1,000 tons) Volume (1,000 TEU) Amount ( million) Item FY ended March Yrover Yr(%) Yrover Yr(%) Air freight exports (Weight) 473 (4.8) 442 (6.6) Air freight imports (Shipments) 1,300 (1.9) 1,252 (3.8) Sea freight exports (Volume) Sea freight imports (Shipments) Net sales Consolidated 264,403 (1.2) 247,977 (6.2) Non-consolidated 90,677 (2.2) 78,874 (13.0) Operating gross profit Operating income Ordinary income Income before income taxes and minority interests Net income Consolidated 43, ,969 (1.2) Non-consolidated 18, ,258 (4.5) Consolidated 13, ,295 (3.8) Non-consolidated 3, ,086 (4.5) Consolidated 14, ,208 (4.3) Non-consolidated 5, , Consolidated 14, ,170 (5.2) Non-consolidated 5, , Consolidated 9, ,134 (4.3) Non-consolidated 4, , FY ended March 2013 Forecast ( Revised forecast at 2013/2/7) 250,000 13,200 14,000 8,800 FY ended March st half of the FY ended March FY ended March (Yen-U.S.Dollar Conversion Rate) Indicator FY ended March 2012 FY ended March 2013 EPS BPS 2, , ROE 13.1% 11.0% 2

4 Highlights FY Ended March 31, Despite the effort of sales cost reduction, KWE Japan didn t achieve the profit target due to the decreased air freight volume. Operating margin improved to 3.9% from 3.6% a year earlier. Only automotive, LCD, smartphone related products had been booming. Sales cost had been well controlled by ad-hoc rates from air carriers. 2 Air freight in overseas remained sluggish, sales and profit decreased in almost all regions. Average operating margin in overseas kept 5.9% a year earlier. While sea freight showed some growth, air freight fell below the previous year in many regions. Operating income in Europe increased from a year earlier, but sales and profit decreased in all regions. Some subsidiaries in Japan experienced difficulties. 3

5 Year over Year Comparisons of Consolidated Net Sales, Cost of Sales, and SGA Expenses (Millions of yen) (Millions of yen, %) FY ended March Ratio to net sales 2013 Ratio to net sales Net sales 264, % 247, % Cost of sales 220, % 205, % SGA expenses 29, % 29, % Operating income 13, % 13, % 4

6 Freight Cost Ratio for Air Freight Exports Revenue FY ended March 31, 2012 Six months ended September 30, 2012 FY ended March 31, 2013 KWE Japan 66.9% 62.7% 60.9% The Americas 66.7% 59.3% 61.7% Europe, Middle East & Africa 68.3% 62.6% 63.1% East Asia & Oceania 62.1% 64.5% 64.8% Southeast Asia 75.0% 71.2% 69.8% Group as a whole 66.5% 63.6% 63.3% Carriers had been flexible in offering ad-hoc rate except East Asia and Oceania. As a result, the freight cost ratio showed continued improvement from the previous year for the Group as a whole. 5

7 Consolidated Balance Sheets (1) (Millions of yen) March 31, 2012 March 31, 2013 Change Assets Current assets 83,318 92,151 8,833 Noncurrent assets 42,118 47,964 5,846 Property, plant and equipment 31,661 32, Intangible assets 1,599 1,463 (136) Investments and other assets 8,857 13,988 5,131 Total assets 125, ,116 14,679 Liabilities Current liabilities 40,471 44,259 3,788 Noncurrent liabilities 6,885 3,659 (3,226) Total liabilities 47,356 47, Net assets Total net assets 78,080 92,197 14,117 Total liabilities and net assets 125, ,116 14,679 6

8 Consolidated Balance Sheets (2) Debts Investments (Millions of yen) FY ended March 2012 FY ended March 2013 Change 13,917 14, FY ended March 2012 FY ended March 2013 Change (Millions of yen) FY ending March 2014 (Forecast) 1,992 1, ,799 Main investments (FY ended March 2013) Maintain/strengthen logistics facilities in Japan IT, vehicles, offices, etc. *In addition, capital investment of approximately 4.1 billion yen (To establish a joint venture in India) Main investment plan (FY ending March 2014) Expand and maintain/strengthen logistics facilities ( in Canada, Taiwan, China, Thailand and Indonesia, etc.) IT, vehicles, offices, etc. Depreciation (Millions of yen) FY ended March 2012 FY ended March 2013 Change 2,694 2,

9 Consolidated Cash Flow Statements FY ended (Millions of yen) March 31, 2012 March 31, 2013 Change Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents 11,118 8,855-2,263 (3,820) (8,044) -4,224 (1,396) (1,785) -389 (770) 3,148 3,918 Net increase in cash and cash equivalents 5,130 2,175-2,955 Cash and cash equivalents at beginning of period 30,966 36,096 5,130 Cash and cash equivalents at end of period 36,096 38,271 2,175 8

10 Consolidated Net Sales by Business Segment FY ended March 31 Composition by Business Segment Air Freight Sea Freight Logistics Other Freight transportation Business Segment FY ended March (Millions of yen) Net sales Net sales Yr over Yr Air Freight 159, ,215 (12.0%) Sea Freight 51,241 52, % Logistics 27,659 28, % Other 26,196 27, % Total 264, ,977 (6.2%) *Figures for the FY ended March 31, 2012 are reclassified under the new segments introduced in this period. 9

11 Consolidated Net Sales and Operating Income by Region FY ended March 31 Composition by Region Japan The Americas Europe, Middle East & Africa East Asia & Oceania Southeast Asia Other FY ended March 31 Region Net sales Operating income Net sales Operating income Japan 110,628 4,159 99,324 3,931 The Americas 32,587 2,127 32,206 2,042 Europe, Middle East & Africa 26, , East Asia & Oceania 73,715 5,359 71,565 4,969 Southeast Asia 25,482 1,408 23,894 1,391 Other 1, , Adjustment (6,641) (85) (6,520) (11) Total 264,403 13, ,977 13,295 * Other refers to business not included in reportable segments and mainly consists of supplementary logistics within the Group. (Millions of yen) 10

12 Operating Margins by Region 8.0% 7.0% 6.0% 5.0% 5.4% 5.2% FY ended March and % 6.3% 7.3% 6.9% Japan 5.8% 5.5% The Americas Europe, Middle East & Africa East Asia & Oceania Southeast Asia 4.0% 4.0% 3.8% 3.0% 2.0% 2.4% 2.0% 1.0% 0.0% 2012 / / / / / 2013 Consolidated Japan The Americas Europe, Middle East & Africa East Asia & Oceania 2012 / 2013 Southeast Asia 11

13 Highlights by Region Japan Air freight exports declined 14.4%, and imports fell 4.5%. The negative impact of fuel surcharges amounted to 350 million (the previous year : 510 million ). Some domestic subsidiaries suffered a slump due to sluggish air freight volume. The Americas Sea freight imports remained positive due to shift from air freight and boom in automotive-related product, but air freight, especially imports, showed a sharp drop. Europe, Middle East & Africa Major countries including Germany suffered a downturn. On the other hand, South African subsidiary and Russian subsidiary contributed with expanding sea freight and logistics business. Profit exceeded the previous year but didn t reach the target. East Asia & Oceania Logistics business showed a positive trend, but air/sea freight volume was stagnant. Southeast Asia While sea freight remained positive due to increases in equipment shipments and automotive-related products, air freight exports decreased due to lower volume of electronic products and shift to sea freight. 12

14 Consolidated Operating Results by Quarter (Millions of yen) 70,000 Consolidated Net Sales by Quarter (Millions of yen) Consolidated Operating Income by Quarter 65,000 60,000 55,000 50,000 1Q 2Q 3Q 4Q FY March 2011 FY March 2012 FY March 2013 (Millions of yen) Net sales 1Q 2Q 3Q 4Q FY ended March ,587 69,324 (132,912) 67,772 (200,684) 67,004 (267,688) FY ended March ,923 68,111 (136,034) 64,622 (200,656) 63,747 (264,403) FY ended March ,192 63,011 (127,203) 60,664 (187,867) 60,110 (247,977) Operating income 1Q 2Q 3Q 4Q FY ended March ,266 2,675 (4,942) 3,427 (8,369) 3,530 (11,898) FY ended March ,382 3,278 (6,660) 3,631 (10,291) 3,533 (13,824) FY ended March ,361 3,383 (6,744) 3,090 (9,834) 3,461 (13,295) Ordinary income 1Q 2Q 3Q 4Q FY ended March ,461 2,938 (5,399) 3,580 (8,979) 3,852 (12,831) FY ended March ,668 3,418 (7,086) 3,971 (11,057) 3,790 (14,847) FY ended March ,676 3,685 (7,361) 2,868 (10,229) 3,979 (14,208) Numbers inside ( ) are cumulative figures from the first quarter. 13

15 Consolidated Earnings Forecast for FY Ending March 2014 The First Year of the New Medium-Term Management Plan (Millions of yen) Item FY ended March 2013 (Results) FY ending March 2014 (Forecasts) Yr over Yr (%) Yr over Yr (%) Net sales 247,977 (6.2) 270, Operating gross profit 42,969 (1.2) 46, Operating income 13,295 (3.8) 14, Ordinary income 14,208 (4.3) 14, Income before income taxes and minority interests 14,170 (5.2) 14, Net income 9,134 (4.3) 9,

16 Consolidated Net Sales Forecast by Business Segment & Region for FY Ending March 2014 Net Sales by Business Segment Air Freight Sea Freight Logistics Other Net Sales by Region Japan The Americas Europe, Middle East & Africa East Asia & Oceania Southeast Asia Other FY ending March 2014 (Forecast) (Millions of yen) FY ending March 2014 Business Segment (Forecast) Net sales Composition Air Freight 153, % Sea Freight 58, % Logistics 29, % Other 28, % Total 270, % Freight transportation FY ending March 2014 (Forecast) Region (Millions of yen) FY ending March 2014 (Forecast) Net sales Operating income Japan 103,500 4,120 The Americas 34,400 2,100 Europe, Middle East & Africa 27, East Asia & Oceania 80,100 5,200 Southeast Asia 30,000 1,950 Other 1, Adjustment (6,900) (90) Total 270,000 14,500 15

17 New Medium-Term Management Plan Ready for the Next! Phase 2 FY Ending March 2014 FY Ending March

18 Review of the Previous Medium-Term Management Plan (FY2010 FY2012) 1. Create a Strong Asia (focused investment of management resources) The first and second year results substantially exceeded targets. We Management 2. Sell a Strong Asia (create a sales structure that fosters competition) will seek to achieve final year targets. 3. Strengthen core competencies (human resources, quality, IT) Strategy 4. Ensure thorough compliance and strengthen a management system for the environment The first and second year results substantially exceeded targets, but didn t reach the final year s target due to the decreased global transportation demand. Net sales billion Net sales Operating income Net income Net sales billion 10.0 billion 5.8 billion Net sales billion 11.8 billion 12.0 billion 7.8 billion Net sales billion 7.0 billion Net sales billion 13.8 billion 9.5 billion 15.0 billion 9.5 billion Net sales billion 13.2 billion 9.1 billion Mar 2011 (Original plan) Mar 2011 (Results) Mar 2012 (Original plan) Mar 2012 (Results) Mar 2013 (Original plan) (The 1st year) (The 2nd year) (The 3rd year) Mar 2013 (Results) 17

19 Goals and Background of the New Medium- Term Management Plan Operating Challenges Increasing competition in Asia from European and North American logistics companies Imbalance in business domains and commodities (verticals) Ongoing globalization of customers activities Secure KWE s competitive position on par with leading European and U.S. competitors KWE will take advantage of the growing Asian market Expand sea freight & logistics businesses and build strategic verticals Strengthen business operations, particularly in emerging countries 18

20 Concept of the New Medium-Term Management Plan Global Logistics Partner 19

21 Outline of the New Medium-Term Management Plan Vision Increase corporate and shareholder values by establishing stronger customer partnerships Provide superior services to ensure customer satisfaction as a Global Logistics Partner Slogan Ready for the Next! Phase2 Targets by March 2016 Net Sales: billion yen Operating Income: 18.0 billion yen Volume Targets: Air freight exports (Weight) 600,000 tons Sea freight exports (Volume) 550,000 TEUs Optimize overall revenue portfolio through a more balanced portfolio of business domains and commodities handled Key Strategies Expand KWE s presence in emerging countries Strengthen off-shore sales structure and activities; establish best in class operations to maximize operational effectiveness and high quality services Strengthen Core Competences(Human Resources IT Risk Management Operations Quality) 20

22 New Medium-Term Management Plan Numerical Targets billion Average annual growth rate over three years Net Sales: 10.0% Operating income: 10.9% \330.0 billion billion \247.9 billion \14.2 billion \13.2 billion \9.1billion Net Sales Ordinary income Operating Income Net income \270.0 billion \14.5 billion \9.2 billion \290.0 billion \16.0 billion Operating income/ordinary income(plan) \10.1 billion \18.0 billion \11.2 billion Mar 2013(Results) Mar 2014 (Plan) Mar 2015 (Plan) Mar 2016 (Plan) 0 21

23 New Medium-Term Management Plan - Net Sales Targets by Business Segment - Air Freight Sea Freight Logistics Other ( billion) billion 10.9% 11.4% 21.2% 33%UP 127.3% 137.0% 163.3% billion 10.5% 11.7% 26.0% % 122.1% 51.9% 0.0 Mar 2013 (Results) Mar 2016 (Plan) 22

24 New Medium-Term Management Plan - Net Sales and Operating Income Targets by Region - Japan The Americas Europe, Middle East & Africa East Asia & Oceania Southeast Asia Other Net Sales by Region ( billion %) Operating Income by Region ( billion %) Other 0.7% 9.4% 28.1% 10.1% 12.7% 39.0% 33%UP billion 104.3% 180.0% 157.1% 108.2% 131.0% 111.4% billion 12.7% 33.3% 8.2% 12.5% 32.7% Other 0.6% Other 2.6% 10.5% 37.3% 4.7% 15.4% 29.5% 36%UP 13.2 billion 83.8% 189.8% 121.4% 210.9% 129.3% 131.3% 18.0 billion 14.6% 33.4% 7.3% 14.6% 28.5% Other 1.6% 0.0 March 2013 (Results) March 2016 (Plan) 0.0 March 2013 (Results) March 2016 (Plan) 23

25 New Medium-Term Management Plan - Freight Volume Targets - Japan The Americas Europe, Middle East & Africa East Asia & Oceania Southeast Asia (Weight: tons) 700, ,000 Air Freight 36%UP 600,000 tons 17.2% (Volume: TEU) 600, ,000 81%UP Sea Freight 550,000TEU 20.0% 500, , , ,515 tons 13.3% 36.0% 175.5% 142.7% 37.8% 400, , ,429TEU 14.6% 246.4% 195.5% 50.0% 200, , % 16.8% 24.9% 117.5% 120.6% 120.8% 7.8% 15.0% 22.2% 200, , % 46.2% 4.2% 195.1% 10.9% 11.4% 173.2% 23.9% 112.8% 14.9% 0 March 2013 (Results) March 2016 (Plan) 0 March 2013 (Results) March 2016 (Plan) 24

26 New Medium-Term Management Plan Key Strategies and Policies-1 1. Optimize overall revenue portfolio through a more balanced portfolio of business domains and commodities handled (1) Increase Corporate Accounts and expand cargo volume - Focus management resources on Power Lanes (Intra Asia, Asia North America and Asia Europe lanes) - Develop logistics facilities based on customer needs - Expand domains and services offering - Strengthen relationships with preferred carriers (2) Expand sea freight and logistics business - Focus on Power Lanes ; expand cargo volume - Strengthen bonded logistics business in China - Develop large warehouse facilities in Singapore, Malaysia, Thailand and Taiwan, etc. (3) Define and focus on selected industry verticals - Automotive, Healthcare, Hi-tech, Retail, Aerospace, Energy, and Perishable (4) Strengthen import sales activities in key consumer markets - Market and promote Asia Europe and Americas trade lanes more aggressively (5) Improve buying rates and consolidation efficiency - Focus on preferred carriers 25

27 New Medium-Term Management Plan Key Strategies and Policies-2 2. Expand KWE s presence in emerging countries (1) Become best in class service provider in India - Foster sales activities between KWE Group and Gati-Kintetsu Express (2) Increase focus on Asia; further expansion of KWE s services and network - Expand supply of cross border truck services (3) Expand network into new markets - Mexico, Brazil, Bangladesh, Cambodia, Myanmar and Turkey, etc. 26

28 New Medium-Term Management Plan Key Strategies and Policies-3 3. Strengthen off-shore sales structure and activities; establish best in class operations to maximize operational effectiveness and high quality services (1) Handle more off-shore business -Expand off-shore business with Japanese firms and Corporate Accounts (2) 3PL Knowledge management - Provide superior 3PL skills and know-how 27

29 Strengthen Core Competences 1. Human Resources: Identify and promote talent across regional boundaries 2. IT: Ensure sustainability of global IT systems and Strengthen global IT management structure 3. Risk Management: Promote development of global risk management and enhance compliance 4. Operations Quality: Unify and standardize operations aimed at raising overall efficiency 28

30 New Medium-Term Management Plan - Investment Plan - Main investment Expand logistic facilities ( in Japan, Taiwan, Thailand and Malaysia, etc. ) Open new offices/warehouses, strengthen IT infrastructure, etc. Investment plan: Approx. 5.5 billion a year (Annual average over three years) 29

31 Dividends Annual dividends (yen) 11.7% 10.0% Cash dividends per share, consolidated payout ratio 9.8% 27.9% 18.9% 13.7% 13.2% 14.6% Targeting 20% consolidated payout ratio Consolidated payout ratio 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 30 5% 0% 5% 0% /3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 (Plan) (Forecast) Cash dividend per share Consolidated payout ratio 30

32 Supplemental Materials 31

33 Recent Events (November 2012~) November German subsidiary obtained Good Distribution Practice (GDP), a certification of pharmaceutical logistics December January February March April Indonesian subsidiary opened Pulogadung warehouse Mexican subsidiary commenced its operation Indian subsidiary opened Delhi Air Operation Office Indian subsidiary opened Aurangabad Warehouse Vietnamese subsidiary opened Ho Chi Minh warehouse Thai subsidiary opened the Eastern Seaboard third warehouse Taiwanese subsidiary acquired AEO Certification Held an Indian logistics seminar in Tokyo Brazilian subsidiary commenced its operation Ho Chi Minh warehouse (3,500 m2 ) Eastern Seaboard third warehouse (1,404 m2 ) Indian logistics seminar in Tokyo 32

34 KWE Group s Global Network 31 overseas countries, 209 cities, 357 locations (as of March 31, 2013) Other business (2 companies) Japan (9 companies) Includes KWE Japan and 3 equity method affiliates Europe, Middle East & Africa (15 companies) Includes 1 equity method affiliate KWE Group The Americas (5 companies) Southeast Asia (12 companies) Includes 1 equity method affiliate East Asia & Oceania (25 companies) Includes 2 equity method affiliates Logistics facilities 172 locations overseas (994,502 m²) 31 locations in Japan (206,738 m²) Acquired ISO 9001 certification (22 subsidiaries) Acquired ISO14001 certification (11 locations worldwide) Acquired TAPA certification (18 locations worldwide) 33

35 Freight Volume by Region (Air Freight) (Weight: tons) Air Freight Exports 473,722 Yr over Yr 93.4% 442, % (Shipments) 1,500,000 1,200,000 航空輸入 Air Freight Imports Yr over Yr 1,300, % 1,252, , % 181,321 Southeast Asia 102.2% 900, , % 511,990 East Asia & Oceania 90.4% 96.8% 85.6% 600, , , % 109, , % 122, % 342, ,998 Europe, Middle East & Africa The Americas Japan 2012/ / /03 年度累計 /03 年度累計 34

36 Freight Volume by Region (Sea Freight) (Volume: TEU) Sea Freight Exports (Shipments) 航空輸入 Sea Freight Imports 290,906 Yr over Yr 104.6% 121.2% 304,429 Yr over Yr 220, % 113.0% 228,207 Southeast Asia 99.5% 99.9% 97.6% East Asia & Oceania Europe, Middle East & Africa 112.5% The Americas 104.9% 103.3% 101.5% Japan 107.1% 2012/ / / /03 35

37 Air Freight Export Volume by Destination (Composition ratio: %) 100 To Southeast Asia 80 To East Asia & Oceania To Europe, Middle East & Africa To the Americas 20 To Japan 0 From Japan From The Americas From Europe, Middle East & Africa From East Asia & Oceania From Southeast Asia 36

38 Industry Verticals (1) KWE Japan: Air Freight - Based on net sales of top 100-ranked companies - Air freight composition KWE Japan s Air Freight Export Composition, FY Ended March 31, 2013 KWE Japan s Air Freight Import Composition, FY Ended March 31,

39 Industry Verticals (2) KWE Japan: Sea Freight - Based on net sales of top 100-ranked companies - Sea freight composition KWE Japan s Sea Freight Export Composition, FY Ended March 31, 2013 KWE Japan s Sea Freight Import Composition, FY Ended March 31, 2013 General merchandise /Other 33.0% Electronicsrelated Items 37.2% Machinery-related products 5.7% Medical and Automobile-related Chemical products products Fashion and 10.0% 5.7% Textile products 8.4% 38

40 Kintetsu World Express, Inc. Website: * The information contained herein does not constitute an offer to solicit investment which can only be made by formal prospectus. The forward-looking statements contained herein are not intended to assure or guarantee future performance. Actual results may vary from that projected herein. 39