Optimizing the asset portfolio and reviewing the profit structure of core businesses

「As pressure for various costs to rise is expected to continue against a backdrop of exchange-rate fluctuations, labor shortages and persistently high resource prices, the company plans to improve profitability by making logistics facility operations, transportation and delivery, and work processes more efficient and by collecting appropriate charges.」

「To address rising costs, the company worked to improve loading efficiency in domestic truck transportation and adjusted the fees it charged appropriately.」

「Amid rising costs, including labor costs, the company worked to improve the operating efficiency of transportation, delivery and cargo handling operations.」

「Forwarding operations posted lower revenue and income due to declines in ocean and air freight rates. However, profit margins improved through control of procurement costs despite the challenging business environment. The company worked to improve truck loading efficiency in domestic transportation and delivery of home appliances, daily necessities and other products, while also addressing soaring labor and fuel costs alongside cost reductions.」

「By further advancing efforts toward thorough standardization, we will create overwhelming operational capabilities by combining the strengths of people and technology. We will secure a competitive advantage by improving operational quality and further enhance profitability by lowering operating costs.」

「The company decided to transfer the shares of the PC Group because it judged that concentrating management resources on strengthening core businesses and on future growth and new businesses was necessary, and that, to facilitate this, continuously reviewing management resources and promptly implementing corresponding business reorganizations had become more important than ever.」

「Consolidated operating revenue was ¥118.949 billion, down ¥4.740 billion year on year. However, consolidated operating income increased by ¥1.008 billion to ¥8.072 billion, consolidated ordinary income increased by ¥1.585 billion to ¥8.155 billion, and net income attributable to owners of the parent increased by ¥1.539 billion to ¥5.040 billion. This reflected strong performance in logistics for home appliance manufacturers and other operations amid expanded stay-at-home consumption, as well as increased handling volumes from logistics services procuring various raw materials as customers resumed or recovered production activities. Operating income, ordinary income and net income attributable to owners of the parent for the first half were all record highs. Under the Medium-Term Management Plan 2017, the Group has strengthened its underlying earnings power by implementing various measures, including gross profit improvement and the cost reduction program Challenge 20. In addition, it has established a business structure with a portfolio capable of broadly supporting the supply chain from upstream to downstream by leveraging the capabilities of Group companies with different strengths. The Group is steadily evolving into a business structure capable of securing stable earnings even amid heightened uncertainty in the business environment, including the COVID-19 pandemic and US-China trade tensions. The Group believes that these results also reflect the benefits of the structural reforms it has pursued to date.」

「These initiatives are now producing results, with the company having almost achieved its numerical targets for the fiscal year ending March 2020 and reached a point at which a turnaround is in sight.」

「In the logistics business, under the Medium-Term Management Plan 2017, the Group worked to fundamentally strengthen earnings by implementing various measures, including reductions in selling, general and administrative expenses and other costs and gross profit improvement measures. Operating revenue was ¥178.178 billion, up ¥271 million year on year, while operating income was ¥8.360 billion, down ¥122 million. Factors included increased handling of food ingredients and other cargo in warehouse operations, which remained at a high level, increased handling in logistics operations for home appliance manufacturers, and the launch of new logistics operations for pharmaceutical products and home appliance manufacturers. These gains were offset by lower volumes resulting from slower international cargo movements and higher storage and transportation costs caused by greater-than-expected fluctuations in logistics volumes for home appliance retailers before and after the consumption tax increase.」

「Under the Medium-Term Management Plan 2017, the Group worked to fundamentally strengthen earnings in the logistics business by implementing various measures, including reductions in selling, general and administrative expenses and other costs and gross profit improvement measures. Operating revenue was ¥119.196 billion, up ¥2.770 billion year on year, and operating income was ¥5.772 billion, up ¥667 million, reflecting increased handling of food ingredients and other cargo in warehouse operations, which remained at a high level, increased handling in logistics operations for home appliance manufacturers, increased volumes in logistics operations for home appliance retailers ahead of the consumption tax increase, and the launch of new logistics operations for pharmaceutical products and home appliance manufacturers, among other factors.」

「Although the business was affected by changes in the external environment, including lower volumes of air transportation of electronic components, semiconductors and other products as air freight market conditions deteriorated, lower logistics volumes for home appliance retailers due to continued adverse weather, and higher labor costs resulting from labor shortages, the Group worked under the Medium-Term Management Plan 2017 to fundamentally strengthen earnings in the logistics business. In addition to implementing various measures, including reductions in selling, general and administrative expenses and other costs and gross profit improvement measures, the Group benefited from project transportation of automotive-related cargo in its air transportation operations and high storage balances resulting from increased handling of coffee beans, a major warehouse cargo. Consequently, operating revenue was ¥58.765 billion, up ¥1.412 billion year on year, and operating income was ¥2.743 billion, up ¥429 million.」

「Under the Medium-Term Management Plan 2017, the Group worked to implement various measures aimed at fundamentally strengthening earnings in the logistics business, including reducing selling, general and administrative expenses and other costs and implementing gross profit improvement measures. In addition to these measures, strong performance in domestic and international forwarding operations, growth in the volume of healthcare cargo storage and handling operations, an area currently being prioritized, and increased volumes in transportation and delivery operations for home appliance retailers resulted in operating revenue of ¥233.404 billion, up ¥8.561 billion year on year, and operating income of ¥9.844 billion, up ¥3.988 billion.」

「Under the Medium-Term Management Plan 2017, the Group worked to implement various measures aimed at fundamentally strengthening earnings in the logistics business, including reducing selling, general and administrative expenses and other costs and implementing gross profit improvement measures.」

「Under the Medium-Term Management Plan 2017, the Group worked to implement various measures aimed at fundamentally strengthening earnings in the logistics business, including reducing selling, general and administrative expenses and other costs and implementing gross profit improvement measures.」

「Under Medium-Term Management Plan 2017, the Group implemented measures to improve gross profit, including greater efficiency in each business, and reduced costs such as general and administrative expenses in pursuit of fundamentally stronger business earnings power. As a result, revenue and profit increased year on year.」

「First, under the policy of fundamentally strengthening business earnings power, the Group will work on sweeping cost reductions and stronger sales capabilities. In addition, it will restrain non-essential investment and recover equity through a review of inefficient assets, thereby rebuilding the financial base.」

「First, under the policy of fundamentally strengthening business earnings power, the Group will work on sweeping cost reductions and stronger sales capabilities.」

「Continuing, deepening and accelerating the competitiveness enhancement project, and fully leveraging existing assets」

「In addition to simultaneously pursuing the existing initiatives of top-line growth through stronger Group synergies and productivity gains through business improvement and standardization, the Group will promptly undertake a more thorough review of the profit structure of its core businesses and its business portfolio, thereby seeking to expand cash flow through higher earnings and achieve the numerical targets for the fiscal year ending March 2018, the final year of the plan.」