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Message To Investors

To our Shareholders and Investors:

During the six months of the fiscal year ending March 31, 2019, the economic environment was plagued by ongoing uncertainties ahead due to factors that have included effects of political developments overseas, yet gradual economic recovery held course amid underlying strengths in corporate earnings. Moreover, the logistics industry continues to face a severe business environment partially due to tightening of the domestic labor market, which is in addition to an upward trend with respect to small parcel volume partially due to expansion of the e-commerce market brought about by rapidly changing styles of consumption.

Under such circumstances, the Yamato Group has been striving to enhance its management foundations in order to continue achieving sustainable growth and thereby enable the Group to keep providing high-quality services based on "KAIKAKU 2019 for NEXT100" medium-term management plan, which while "reforming working styles" is centered on management, focuses on reforms in the three areas of "structural reform in the Delivery Business," "reform of revenue and business structure geared to achieving discrete growth," and "reform of Group management structure geared to achieving sustainable growth."

In the Delivery Business, we promoted our initiatives to rebuild our 'last mile' network that include adequate pricing initiatives and enhancement of collection and delivery systems to live up to the trust and expectations of customers in order to strike a balance between regaining profitability and expanding collection and delivery capacity. As a result, our financial performance was firm due to rise in TA-Q-BIN unit price, despite increasing expenses related to our reform initiatives.

In the non-delivery businesses, we continuously took steps to expand our existing service offerings by enlisting the strengths of Group companies, while also drawing on Group-wide ties as we aggressively promoted solution sales geared toward addressing customers' business challenges.

Our consolidated financial results for the period under review are as follows.

(Millions of yen)

Item For the six months ended
September 30, 2017
For the six months ended
September 30, 2018
Change Growth (%)
Operating revenue 729,802 789,131 59,329 8.1
Operating profit (12,887) 23,435 36,323 -
Ordinary profit (12,600) 22,756 35,357 -
Profit attributable to owners of parent (12,087) 9,981 22,069 -

As mentioned above, operating revenue amounted to 789,131 million yen, up 59,329 million yen from the year-ago period. This is largely attributable to an increase in the TA-Q-BIN unit price, and despite a decrease in TA-Q-BIN delivery volume amid promotion of structural reforms in the Delivery Business. Operating expenses amounted to 765,696 million yen, up 23,006 million yen from the year-ago period. This is largely attributable to an increase in personnel expenses incurred in promoting systemic improvements and other initiatives, and despite a decrease in commission expenses associated with lower TA-Q-BIN delivery volume.

As a result, operating profit amounted to 23,435 million yen, up 36,323 million yen from the year-ago period.

Meanwhile, due to a situation where Yamato Home Convenience Co., Ltd. was found to have inappropriately billed employees of our corporate clients for moving services, the above consolidated financial results factor in an estimated effect of the incident amounting to 3,104 million yen, based on investigation results.

Initiatives for the entire Yamato Group

  • 1. 
    The Yamato Group has been taking steps on a Group-wide basis to develop an upbeat working environment, which is more "employee-friendly" and "rewarding," centered on the "Office for Reforming Working Styles" established in Yamato Transport Co., Ltd., and its "Working Styles Innovation Committees" in its respective Group companies, as a means of placing utmost priority on "reforming working styles" in order to practice "inclusive management," a Yamato Group founding principle. Moreover, we have been pursuing our "Value Networking" design, on the basis of creating business models for generating a high level of added value through the combined efforts of our respective businesses, while at the same time contributing to growth strategies and international competitive strengths of the Japanese economy. Meanwhile, we are also taking steps to forge a robust corporate culture that acts as a foundation for business creation and development.
  • 2. 
    We continued to drive initiatives geared toward forging a more robust corporate culture. To that end, we worked on enhancing the efficiency and dependability of operations, in part by improving our transport systems and by using our information technology network to enable visual monitoring of operating volumes. Moreover, we actively engaged in CSR-related activities linked to Yamato Group business endeavors, such as through safety and environmental measures, and efforts to prosper communities.
  • 3. 
    To further evolve our "Value Networking" design, we have been crafting business models that deliver a high level of added value by leveraging the Yamato Group's business network. Also, to address varied customer needs in Japan and overseas, we will make more effective use of our innovative network platform consisting of the "Haneda Chronogate," "Okinawa International Logistics Hub," and respective gateways linking major cities in the Kanto, Chubu, and Kansai regions, in addition to our existing "last mile" network.
  • 4. 
    In our business looking toward global markets, we have been working to forge collaboration among five regions, Japan, East Asia, South East Asia, Europe and the Americas, while strengthening our capabilities in each geographic region to respond to the growth of cross-border logistics. During the period under review, we have been actively promoting efforts to build cross-border networks that provide substantial added value by leveraging our certification under international standards pertaining to small parcel chilled and frozen goods delivery services, such that has already been acquired by eight Yamato Group companies.
  • 5. 
    With the aim of improving customer convenience particularly in the e-commerce market, we have been continuously working to establish an environment that ensures customers ease in picking up their parcels. To that end we have been actively promoting efforts to build an open-type network of parcel lockers primarily in train stations, convenience stores and other such locations, and have worked on other efforts for the development of next-generation logistics services including the utilization of automated driving technologies. Moreover, we have been taking steps that involve digitization and automation of our overall logistics operations in order to address challenges presented by society such as the labor shortage as it intensifies, and in order to better serve the rapidly expanding e-commerce market.

We look forward to the continued support and encouragement of our shareholders and investors as we move to mobilize the collective powers of the Yamato Group and enhance our corporate value.

October 2018

Masaki Yamauchi

Masaki Yamauchi


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