An ability to make proposals for the logistics needs of any type of business model

Transcription

1 Annual Report Yusen Logistics Snapshot 1 Integration Progress Business Snapshot Yusen Logistics Co., Ltd. was established in October 2010 from the integration of Yusen Air & Sea Service Co., Ltd. (YAS) and NYK Logistics (Japan) Co., Ltd. in Japan. This followed discussions regarding the restructuring and integration of YAS, which is centered on the air freight forwarding business, and the logistics business of Nippon Yusen Kabushiki Kaisha (NYK), which is centered on land transport, warehousing, distribution, and ocean freight forwarding. Since 2011, overseas businesses have been progressively integrated. In April 2012, Chinese and Malaysian entities were made consolidated subsidiaries, largely completing the integration of overseas businesses. Yusen Logistics has now launched a medium-term business plan under the banner "GO FORWARD, Yusen Logistics" for the period until March 31, Under this plan, we will strive to provide a broad range of logistics services globally. Our overarching aim is to become a total logistics provider operating globally with world-class scale and quality. Integration Strengths Yusen Logistics (Formerly Yusen Air & Sea Service) Air freight forwarding NYK Logistics Ocean freight forwarding Contract logistics Air freight forwarding Ocean freight forwarding Contract logistics Mission Maximize enterprise value by contributing to the development of the global economy and earning the confidence of customers through the provision of sophisticated, high-quality logistics services. Vision A total logistics provider operating globally with world-class scale and quality.

2 8 Yusen Logistics Co., Ltd. Values Customer Centric Quality / Gemba* Focused HR-oriented Management Environmental Management Intensity Innovation Integrity * Gemba is a Japanese word meaning operational frontline. Business Portfolio Amid ongoing globalization, customer logistics needs are diversifying and becoming increasingly complex and sophisticated. There is a need for a one-stop service to respond to these needs. We aim to bolster our ability to provide such a service without over-concentrating on a particular region or business. As a result, we have developed a business portfolio that is well balanced in terms of regions and businesses. 19% 9% 16% Year ended Mar (Upon integration) 8% Net Sales by Geographical Segment 14% 48% 13% 25% Japan Americas Europe East Asia South Asia & Oceania Year ended Mar (Actual) 27% 22% * Includes consolidation adjustment * Due to rounding, the total does not equal 100%. 6% Freight Sales by Business 23% 39% Year ended Mar (Upon integration) Year ended Mar (Actual) 38% 72% Air freight forwarding Ocean freight forwarding Logistics 24% * Due to rounding, the total does not equal 100%.

3 Annual Report Three Strengths of Yusen Logistics An ability to make proposals for the logistics needs of any type of business model Yusen Logistics can make optimal logistics strategy proposals for any type of business or business model. We accurately identify the special nature and issues surrounding the logistics services needed by different companies based on our extensive expertise and experience amassed over more than 50 years in business and a market-centric approach rooted in 3D Management. An ability to respond flexibly Air freight forwarding is a field where we have long been strong. The organic integration of ocean freight forwarding and logistics businesses through the business integration has rounded out our capabilities. We are now able to provide total logistics solutions to customers' increasingly sophisticated, varied and global needs. We can respond flexibly to customer needs no matter what the region or the nature of the logistics service required. A global network based on five regions We have a global network built around five regions: Japan, Americas, Europe, East Asia, and South Asia & Oceania. Within this network, we have logistics locations and local subsidiaries in 37 countries and regions around the world (as of March 31, 2012). With this group network, we can meet customers' needs in any region. And with the operational knowhow we have amassed in Japan for delivering high-quality logistics services, we are able to provide consistent and detailed services close to customers anywhere in the world.

4 10 Yusen Logistics Co., Ltd. Yusen Logistics Snapshot 2 Medium-Term Business Plan From Integration to Fusion and Dramatic Progress 1 INTEGRATION 2 FUSION Fusion of Employee Awareness 3 DRAMATIC PROGRESS Business Strategy Toward World-Class Total Logistics Provider YAS* NYK Logistics Fusion of Organizations Fusion of Governance Sales Strategy Area Strategy Completion of Integration Completed integration following the consolidation of companies in China, Malaysia and elsewhere in April * Yusen Air & Sea Service Fusion of Operation Promote Fusion of employee awareness, organization and governance, in order to maximize synergies, share corporate values worldwide within the Yusen Logistics (YLK) Group and aim to achieve its goals. For Dramatic Progress Establish 3D Management that positions business, sales and area strategies as three basic strategies, and aim to be a total logistics provider operating globally with world-class scale and quality.

5 Annual Report Numerical Targets In the year ended March 31, 2012, our business environment was shaped by the European sovereign debt crisis, slowing growth in Asia, and economic instability in Japan and the U.S. These and other factors stymied the global economy. Coupled with the effects of natural disasters, the logistics market stalled, most notably with regard to freight originating from Japan and Asia. The logistics business in Europe and the U.S. was also hit hard by the prevailing conditions. Because of these outcomes, as well as the yen's sharp appreciation and other factors we are no longer forecasting the economic growth we expected when we announced our plan in March For this reason, we revised our numerical targets in the medium-term business plan in April 2012, as follows: Net Sales, Ordinary Income, Net Income (YLK (Consolidated)) (Millions of Yen) 500, , , ,000 18,500 13,000 9,500 7,500 8,200 5,000 5,500 2, (Actual) Net Sales Ordinary Income Net Income 13 (Forecast) 14 (Initial Targets) 14 (Revised Targets) 3D Management Strategy "3D Management" means to operate business efficiently in three dimensions, namely, by area, business, and customer or industry, and manage them from various aspects, to ensure we generate balanced profits. The Concept of 3D Management Area Strategy HR-oriented Management Americas Europe 3D Management South Asia&Oceania Air Ocean Contract Logistics East Asia Land Transport Japan Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 Organization IT CSR Finance Basic Management Strategy Business Strategy Sales Strategy Environmental Management Intensity Customer Centric Quality/ Gemba Focused Innovation Integrity Value

6 12 Yusen Logistics Co., Ltd. Three Strategies Under 3D Management, we are executing concrete initiatives based on three main strategies: Business Strategy, Sales Strategy and Area Strategy. * Click here for information on specific measures taken in the year ended March Business Strategy Ocean Freight Forwarding Business Handling target FY2013: 1 million TEU Quantitative expansion through service quality and price competitiveness Air Freight Forwarding Business Handling target FY2013: 500 thousand tons Sales expansion through the development of services leveraging the strength of the global network and further quality improvements Toward World-Class Forwarder Sales Strategy Purchasing Strategy Product and Quality Strategy Contract Logistics Business Aim to be No. 1 Kaizen (Improvement) Company Expand synergies with forwarding businesses by strengthening brand power as the No. 1 Kaizen Company Eco-friendly Handling Cost Management Competitive Gemba, front line Strengthen Weakness (SWOT) Assistance for Launch Cultivation of Human Resources Cutting-edge Technology IT Quality Standards

7 Annual Report Sales Strategy Global Operation Organizational operation Strengths connected through a global network Solution Sales Activities Provision of optimized Air freight forwarding logistics solutions through a strategic approach based on marketing by industry Integrated Sales Conduct integrated sales matching customer needs by improving sales in individual businesses and capturing synergies from among air freight forwarding, ocean freight forwarding and logistics businesses Area Strategy Japan Americas Europe East Asia South Asia & Oceania Priority Measures Expand ocean freight forwarding business Develop new transportation services and undertake off-shore business Reinforce sales to global corporations Aggressively sell import and export forwarding services Reinforce sales to global corporations Establish a delivery network within Europe Expand the logistics business within Asia Expand own network Expand business in China Focus investments on emerging countries Expand logistics business within Asia and volume handled between the Americas and Europe * Click here for initiatives taken during the year ended March 2012.

8 14 Yusen Logistics Co., Ltd. Yusen Logistics Snapshot 3 Medium-Term Business Plan Progress: Promoting Fusion of Operations for Maximizing Synergies We announced "GO FORWARD, Yusen Logistics" at the end of March 2011 as our first medium-term business plan for the YLK Group following integration. Our aim is to be a total logistics provider operating globally with world-class scale and quality, with three keywords guiding this transformation: integration, fusion and dramatic progress. * Click here for overview of Medium-Term Business Plan. We targeted completion of the integration stage of this transformation by the end of March This was largely completed following the consolidation of companies in China, Malaysia and elsewhere. We are now moving from the integration to the fusion stage, where we will take the following actions to set the stage for much higher growth in the stage of dramatic progress. Fusion of Employee Awareness Group value sharing (integrity, innovation and intensity) Strengths Air freight forwarding Promote a change of mindset to become a total logistics provider operating globally Fusion of Organizations Unify organically, streamline and link the IT systems of integrated companies Air freight forwarding Improve organizational management by each regional headquarters Fusion of Governance Establish 3D Management Rebuild the global compliance system * Click here for more details on 3D Management. Following organizational and system integration, our employees around the world will proceed with fusing expertise, knowledge and other less tangible aspects of our operations to enable us to provide a detailed response to customers' logistics needs. By doing so, we aim to achieve the numerical targets of the medium-term business plan.

9 Annual Report Yusen Logistics Snapshot 4 Yusen Logistics Financial Highlights Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Years Ended March 31 Millions of Yen Thousands of U.S. Dollars Results of Operations Net sales \309,004 \160,788 \123,453 \167,460 \187,518 \182,617 $3,759,625 Cost of sales 257, ,514 92, , , ,278 3,130,500 Gross profit 51,708 36,274 31,326 38,797 45,782 44, ,125 Selling, general and administrative expenses 45,436 31,327 29,016 34,223 35,566 33, ,814 Operating income 6,272 4,947 2,310 4,574 10,216 10,438 76,311 Income before income taxes and minority interests 6,673 5,887 3,004 2,859 12,178 11,514 81,192 Net income 2,526 3,621 1,545 1,083 7,271 6,722 30,737 Thousands of Millions of Yen U.S. Dollars Sales by Geographical Segments Japan \83,761 \77,635 \61,227 \72,337 \87,355 \82,757 $1,019,113 Americas 70,056 13,471 10,782 16,696 17,758 17, ,365 Europe 76,822 15,022 11,888 20,564 21,417 19, ,683 East Asia 39,884 31,705 22,315 33,079 35,185 39, ,266 South Asia and Oceania 42,440 25,742 19,332 26,958 28,520 26, ,367 Inter-segment sales/transfers (3,959) (2,787) (2,091) (2,174) (2,717) (2,735) (48,169) Net sales 309, , , , , ,617 3,759,625 Consolidated to nonconsolidated ratio (times)

10 16 Yusen Logistics Co., Ltd. Millions of Yen Thousands of U.S. Dollars Financial Position Current assets \93,907 \60,883 \52,690 \47,245 \66,558 \58,300 $1,142,559 Current liabilities 52,580 22,538 21,462 17,193 32,716 29, ,740 Equity (Note 2) 57,708 53,164 51,668 49,501 57,725 51, ,130 Total equity (Note 3) 79,558 55,360 53,663 51,249 59,614 52, ,982 Total assets 151,115 88,363 81,443 75,733 98,366 89,567 1,838,612 Net cash provided by operating activities 2,719 5, ,213 8,127 9,048 33,078 Free cash flows (Note 4) (11,182) 6,970 (796) 4,394 5,255 6,139 (136,050) Yen U.S. Dollars Per Share Data Basic net income (Note 5) \59.91 \85.85 \36.63 \25.68 \ \ $0.729 Cash dividends (full year) (Note 5) Net assets (Note 5) 1, , , , , , Key Ratios Gross profit to net sales Operating income to net sales Cost of sales to net sales Selling, general and administrative expenses to net sales Net income to net sales Return on equity (ROE) Net income to total assets Asset turnover (times) Equity ratio (Note 5) % Other Year-End Data Number of shares outstanding (Note 5) 42,220,800 42,220,800 42,220,800 42,220,800 42,220,800 42,220,800 Notes: 1. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of \82.19 to $1, the approximate rate of exchange at March 31, Equity (\57,708 million in 2012) = total equity - minority interests. 3. From the fiscal year ended March 31, 2007, total equity includes minority interests in accordance with the enforcement of Japan's Corporate Law. 4. Net cash provided by operating activities + net cash used in investing activities 5. These figures do not include any adjustments for the execution of a 2-for-1 stock split in April The above figures included treasury stock of 50,484 shares in 2007, 50,236 shares in 2008, 50,212 shares in 2009, 50,296 shares in 2010, 50,734 shares in 2011 and 50,862 shares in On April 1, 2006, the Company executed a 2-for-1 stock split.