Management Policies of Nippon Express. March 2007

Transcription

1 Management Policies of Nippon Express March 2007

2 1. Our Group's Business Framework 1. Our Group's Business Framework Nippon Express Group Overseas Japan Asia-Oceania Europe Americas Domestic transport International transport Sales/ other services 1

3 2. Business Efforts Overseas 2. Business efforts overseas A. Pursuing active investment Efforts in the Asia-Oceania region 1) Began construction on Baraki International Logistics Town Bldg. 1 (June 2006) 2) Launched new warehouses in Ho Chi Minh City and Hanoi, Vietnam (July 2006) 3) Opened logistics warehouse in Budapest, Hungary (September 2006) 4) Acquired marine transport agency business in Taiwan (November 2006) B. Expanding geographical scope of operations 1) Established new company in Tijuana, Mexico (April 2006) 2) Established new company in St. Petersburg, Russia (July 2006) 3) Opened our branch in Poland to launch business operations (October 2006) 4) Established new company in the Philippines specializing in domestic distribution and warehousing (October 2006) 5) Established Nippon Express (Middle East) LLC in Dubai, UAE (January 2007) C. Expanding business through alliances 1) Partnered with ANA and Japan Post to launch joint venture (ANA & JP Express) (April 2006) 2) Began sales of Arrow Box China (July 2006) 3) Started door-to-door transport service to 80 cities in China from locations throughout Japan (September 2006) 4) Tied-up with logistics subsidiary of Dongfeng Motor Group Company Ltd. (China) (February 2007) 2

4 Business Locations in India after Acquisition of Indian Agency 2. Business efforts overseas Nippon Express India Business Locations Bangalore Delhi Chennai Mumbai Kolkata Pune Cochin Hyderabad Trivandrum Coimbatore 2 locations 1 location 4 locations 4 locations 1 location 1 location 1 location 1 location 1 location 1 location Total:10 cities 17 locations 2006 GDP : US$854.4 billion 2005 GDP growth rate : 9.0% Japanese companies operating in India : 328 3

5 2005 International Air Transport Association (IATA) Rankings 2. Business Efforts Overseas 2nd among air forwarders worldwide 1st among air forwarders in the Asia-Pacific region 349 business locations In 204 cities In 37 countries Approx. 14,000 employees overseas U.K. Netherlands 3 16 Belgium 5 14 Germany 6 Spain 22 9 Hungary France 3 Hong Kong 8 U.S.A. Thailand 10 1 Philippines 4 Malaysia Mexico 13 7 Singapore 5 Indonesia 22 Brazil Ranking of Group companies in their respective countries 4

6 2. Business Efforts Overseas Nippon Express Group Locations in China 19 Group companies with 71 locations in 30 cities (as of December 31, 2006) 5

7 Nippon Express Domestic Route Network for Automotive Logistics in China 3. Business efforts overseas 6

8 3. Business Efforts in Japan 3. Business Efforts in Japan A. Personnel 1) Moving temporary staffing operations in-house acquired temporary staffing business of Shimomura Business Works Goals:Steady supply of temporary workers Reduced outflow due to outsourcing New business expansion through outside sales 2) Tendency of reducing nationwide employees and hiring local employees Personnel Composition as of January 2007 Units: persons Difference Drivers / workers Nationwide employees 3,321 3, Local employees 17,071 16, Subtotal 20,392 20, Office personnel Nationwide employees 15,629 15, Local employees 4,713 4, Subtotal 20,342 20, All personnel Total 40,734 41,

9 3. Business Efforts in Japan B. Goods and Services 1) Accelerating warehouse construction to expand 3PL business Invested 30 billion in warehouse during this FY, mostly done by next FY end. Increasing the total storage space at our domestic commercial warehouses by about 10%. Principal investments Location Use Scale (m2) Scheduled completion Chiba Air cargo 16,668 June 2006 Tokyo Trunk room 22,737 January 2007 Osaka Commercial warehouse 47,242 April 2007 Kanazawa Commercial warehouse 18,965 April 2007 Yokohama Research facility 10,860 February 2007 Kyoto Logistics center 14,536 August 2007 Tokyo (sublease) Truck terminal 38,481 May 2006 Tokyo (sublease) Commercial warehouse 56,710 December ) Established Real Estate Development Division (October 2006) Goals:Efficient utilization of Company-owned real estate Studied possible conversion and disposal of owned real estates ex) Shinjuku Branch facility will be changed into leased office 8

10 3. Business Efforts in Japan C. Finances 1) Established Nippon Express Capital Co, Ltd starts in April Goals: Improved in-group financing capability / Strengthening of 3PL business Order placement receipt, supplier management, inventory control, debt/credit management, logistics risk management, commercial distribution cost control Nittsu Group Financing functions Nippon Express Capital Fund procurement/loans, financial risk control, financing cost control Loans Order placement plan Commercial distribution management functions Order placement plan, order placement Nittsu Shoji Order placement plan, JIT delivery instructions Vendors (multiple) Order placement plan, logistics operational instructions Performance information (warehouse receipt/shipping,inventory) Buyer, production site Exporting country HUB warehouse Importing country VMI warehouse Logistics flow Information flow Finance Nippon Express (business divisions) Logistics functions Transport/distribution operations, warehouse operations, forwarding operations, logistics cost control 9

11 4. Latest Financial Information 4. Latest Financial Information A. Business Results for 3rd Quarter of Term Ending March ) Overview Business results (million yen) Increase (million yen) (Y/Y) Rate of increase (%) Full-term projection ( million yen) Increase (million yen) (Y/Y) Rate of increase (%) Sales 1,398,519 55, ,860,000 66, Operating profit 38,441 4, ,000 1, Ordinary profit 43,569 5, ,000 1, Current profit 24,740 14, ,500 13, ) Factors - Overseas business, heavy haulage and construction, and secured transport continued strong business flow showing from 1 st half. - Multi-service branches handling general domestic cargo and Nittsu Shoji, a sales subsidiary, enjoyed upturns in their business performance. 3) Segment analysis (segmented by location) - Overseas sales; +24.5%,operating profit;+33.2% (Y/Y) - Operating profit in Japan ;+9.1%,operating margin; +2.5%(2.3% last year) 10

12 5. Progress in Implementing Management Plan 5. Progress in Implementing Management Plan Summary as of 3rd quarter end in fiscal year 2006 Business division Assessment Examination of performance Measures to achieve Management Plan goals Global business Overseas sales for 28.1% of total sales (26.3% last year), All three overseas regions enjoyed double-digit growth in sales and operating profit. Undertaking inland logistics, especially automotive logistics, in China. Gaining its shares to subsidize in Nippon Express (China). Expanding in newly emerging area ;India, Russia and Eastern Europe 3PL business warehouse revenues (nonconsolidated) were down YoY; new warehouse investment will increase by March end in Expanding overall 3PL business including financial services. (tie-up with Nippon Express Capital) 11

13 5. Progress in Implementing Management Plan Business division Assessment Examination of performance Measures to achieve Management Plan goals Differentiated services Sales and profit have risen substantially this fiscal year in the heavy haulage & construction and secured transport businesses. Railway forwarding business Highlighted as eco-friendly approach 43% share in this industry Removals business Ecology Kompo" (reusable materials that do not generate waste) Heavy haulage & construction business Increased demand for facility transport under economic recovery Secured transport business Stricter security regulation led to more outsourcing of the transport of cash and other valuables to specialist companies such as ours. Demand for Cash Safety Delivery (CSD) services are increased Small cargo business Achieved efficiency in operations carried out with Group companies. Studying the feasibility of future tie-ups with other companies and outsourcing 12

14 6. Long-Term Management Policies 6. Long-Term Management Policies A. Shift in business mix 1) Truck business Total logistics business including warehousing 2) Carrier business Forwarding business 3) Domestic business focus Diversified international business B. Shareholder return Mainly steady dividends Developing a structure to maintain a higher level of profit, Then, implement reforms to increase shareholder return. 13

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