Nippon Express Holdings, Inc. · TSE:9147
Nippon Express — Q2 FY2020 Earnings Presentation
48 slides from Nippon Express's earnings presentation, Oct 30, 2020
Slide 1: Financial Results Presentation for Q2, Fiscal Year Ending March 2021
Financial Results Presentation for Q2, Fiscal Year Ending March 2021 October 30, 2020 Nippon Express Co., Ltd. Investor Relations Promotion Group Corporate Planning Division
Slide 2: Contents
Contents I. Financial Results for Q2, FY2020 IV. Nippon Express Group Business Plan 2023 KPIs A. Financial Highlights for Q2, FY2020 P.2 A. Nippon Express Group Business Plan 2023 KPIs of Growth Strategy P.21 B. Japan and Overseas Results P.3 for Core Businesses C. Results by Reportable Segment P.4
Slide 3: Financial Highlights for Q2, FY2020
I. Financial Results for Q2, FY2020 A Financial Highlights for Q2, FY2020 1. Overview (Consolidated) (100 million yen) (rounded down to 100 million yen) FY2020 FY2019 1H Forecast Item Difference Difference Progress Cumulative Cumulative (Announced Difference YoY YoY (%) July 31) (%) Q2 Results Q2 Re
Slide 4: Japan and Overseas Results
I. Financial Results for Q2, FY2020 B Japan and Overseas Results (100 million yen) (rounded down to 100 million yen) FY2020 FY2019 1H Forecast Segment Item Difference Difference Progress Cumulative Cumulative (Announced Difference YoY YoY (%) (%) Q2 Results Q2 Results July 31) Revenues 8,280 9,023 (
Slide 5: Results by Reportable Segment
I. Financial Results for Q2, FY2020 C Results by Reportable Segment (100 million yen) (rounded down to 100 million yen) FY2020 FY2019 1H Forecast Segment Item Difference Difference Progress Cumulative Cumulative (Announced Difference YoY YoY (%) (%) Q2 Results Q2 Results July 31) Revenues 5,610 6,10
Slide 6: Breakdown of Revenues
I. Financial Results for Q2, FY2020 D Breakdown of Revenues and Operating Income 1. Revenues (100 million yen) Correction of prior-period revenues 10,500 ★Breakdown of revenue ⇧7 decrease from business 10,400 activities by segment 10,300 ★ Revenue l Japan: (189) Impact of foreign decrease from l Ove
Slide 7: Breakdown of Operating Income
I. Financial Results for Q2, FY2020 D Breakdown of Revenues and Operating Income 2. Operating Income Impact from ★ Breakdown of operating income increase Correction of (100 million yen) change of prior-period Impact of from business activities by segment retirement revenues foreign [Presented as Jap
Slide 8: Forecast for FY2020 (Revised)
II. Financial Results Forecast for FY2020 A Forecast for FY2020 (Revised) (100 million yen) (rounded down to 100 million yen) Full-Year Full-Year Forecast FY2019 Difference Difference Forecast Difference Item (Announced Results YoY YoY (%) (Announced [Difference %] October 30) July 31) ー Revenues 20
Slide 9: Japan and Overseas Results Forecast
II. Financial Results Forecast for FY2020 B Japan and Overseas Results Forecast (100 million yen) (rounded down to 100 million yen) Full-Year Forecast [Reference] Segment Item FY2019 Difference Difference (Announced FY2021 Results YoY YoY (%) Interim Target October 30) Revenues 17,052 18,097 (1,045)
Slide 10: Forecasts by Reportable Segment
II. Financial Results Forecast for FY2020 C Forecasts by Reportable Segment (100 million yen) (rounded down to 100 million yen) 2H Forecast FY Forecast FY2020 Segment Item 1H FY2020 FY2020 Revised FY2019 July 31 FY2019 July 31 Results Difference Difference Revised Difference Difference Forecast Resu
Slide 11: Breakdown of Revenues (Forecast)
II. Financial Results Forecast for FY2020 D Breakdown of Revenues and Operating Income 1. Revenues (100 million yen) ★Breakdown of revenue decrease from business activities 21,000 by segment l Japan: (152) l Overseas total: +23 l Security Transportation: (21) Correction of l Heavy Haulage & Construc
Slide 12: Breakdown of Operating Income (Forecast)
II. Financial Results Forecast for FY2020 D Breakdown of Revenues and Operating Income 2. Operating Income ★Breakdown of revenue decrease from (100 million yen) Provision for business activities by segment Impact from retirement benefits [Presented as Japan domestic and Overseas business] change of
Slide 13: Change in Total Non-Consolidated Personnel Expense (Forecast)
(Reference) Change in Total Non-Consolidated Personnel Expense (Forecast) Special *Presented on an expense basis allowance (100 million yen) payments ⇧12 Employment system reform ⇧7 Impact from change of the period applicable to bonus payment ⇩46 Overtime Other factors reductions effect ⇧1 2,588 ⇩35
Slide 14: Japan Segment
III. Segment Overview, FY2020 A. Japan Segment (100 million yen) Vs. FY2019 Q2 Highlights FY2020 Q2, Item Difference Results FY2019 Difference Although the impact of COVID-19 was smaller compared to Q1, steel and automobile cargo movement was (%) sluggish, resulting in lower volumes in both the rail
Slide 15: The Americas Segment
III. Segment Overview, FY2020 B. The Americas Segment (100 million yen) Vs. FY2019 FY2020 Q2, Q2 Highlights Item Difference Results FY2019 Difference 1 (%) Warehouse, automobile transportation, and air cargo sales, etc., were affected by the COVID- 19 lockdown, resulting in lower revenues. In partic
Slide 16: Europe Segment
III. Segment Overview, FY2020 C. Europe Segment (100 million yen) Vs. FY2019 FY2020 Q2, Q2 Highlights Item Difference Results FY2019 Difference 1 (%) Revenues increased year on year due to air export freight forwarding volume and spot performance related to e-cigarettes; however, apparel cargo movem
Slide 17: East Asia Segment
III. Segment Overview, FY2020 D. East Asia Segment (100 million yen) Vs. FY2019 FY2020 Q2, Q2 Highlights Item Difference Results FY2019 Difference 1 (%) In China, where the country has contained COVID-19 successfully, customers have resumed operations. As a result, we received orders for the emergen
Slide 18: South Asia & Oceania Segment
III. Segment Overview, FY2020 E. South Asia & Oceania Segment (100 million yen) Vs. FY2019 FY2020 Q2, Q2 Highlights Item Difference Results FY2019 Difference 1 (%) We saw strong demand for chartered transport for emergency COVID-19-related shipments, etc. in Singapore, Thailand, and other markets. M
Slide 19: Security Transportation Segment
III. Segment Overview, FY2020 F. Security Transportation Segment (100 million yen) Vs. FY2019 FY2020 Q2, Q2 Highlights Item Difference Results FY2019 Difference 1 (%) The volume decline in cash collection and delivery service, which had been affected by COVID-19 at the beginning of Q2, recovered sig
Slide 20: Heavy Haulage & Construction Segment
III. Segment Overview, FY2020 G. Heavy Haulage & Construction Segment (100 million yen) Vs. FY2019 FY2020 Q2, Q2 Highlights Item Difference Results FY2019 Difference 1 (%) Orders for shutdown maintenance and plant construction were strong. Meanwhile, volume was sluggish. Revenues 119 138 (19) (14.0)
Slide 21: Logistics Support Segment
III. Segment Overview, FY2020 H. Logistics Support Segment (100 million yen) Vs. FY2019 FY2020 Q2, Q2 Highlights Item Difference Results FY2019 Difference 1 (%) Continuing from Q1, sales unit price declines in petroleum and LP gas, the impact of U.S.- China trade frictions on our LS business, and lo
Slide 22: Business Plan 2023 KPIs of Growth Strategy for Core Businesses
IV. Nippon Express Group Business Plan 2023 KPIs A Nippon Express Group Business Plan 2023 KPIs of Growth Strategy for Core Businesses Japan*1 Overseas*2 Item Revenues FY2020 FY2019 1H, Difference FY2020 FY2020 FY2019 Difference FY2020 1H, Results Results (%) Forecast 1H, Results 1H, Results (%) For
Slide 23: Strategy to Enhance Domestic Businesses in Japan
IV. Nippon Express Group Business Plan 2023 KPIs B Strategy to Enhance Domestic Businesses in Japan Major Initiatives Improve Profitability Further Back Office Personnel Reassignments Leveraging Company Strengths (Personnel, Vehicles) to the Fullest, ・91 employees during 1H (50 in block, 41 at head
Slide 24: Cost Reduction Measures
IV. Nippon Express Group Business Plan 2023 KPIs Progress in FY2020 Back Office Cost Reductions C Cost Reduction Measures (as of September 30, 2020) Cumulative Enhancing FY2020 FY2020 FY2020 2H [FY2019 Japanese FY2023 FY2019 FY2020 1H Cumulative Targets Forecast + Domestic Targets Results [YoY] Fore
Slide 25: Cost Reduction Measures: Pursuing RPA
IV. Nippon Express Group Business Plan 2023 KPIs C Cost Reduction Measures Pursuing RPA Reasons behind RPA adoption Create more time for core tasks, including creative planning, business activities, etc. ⇒ Improve productivity and quality, reduce costs, and create potential new businesses. Numerical
Slide 26: Cost Reduction Measures: Pursuing SSC (Accounting)
IV. Nippon Express Group Business Plan 2023 KPIs C Cost Reduction Measures Pursuing SSC (Accounting) Consolidated operations to SSC and generate effectiveness at branches n Consolidate operations (payments, billing, collections, etc.) at SSC n Upgrade existing systems and adopt new systems FY2020 In
Slide 27: Employment System Reform Initiatives
IV. Nippon Express Group Business Plan 2023 KPIs D Employment System Reform Initiatives Overview Human Resource Reinforcing Workplace Salary/Wage System Evaluation System System Capabilities • Employee categories • Equal labor, equal pay • Evaluate roles • CSR • Competency and • Extend retirement •
Slide 28: ESG-Oriented Business Management KPIs
IV. Nippon Express Group Business Plan 2023 KPIs E ESG-Oriented Business Management KPIs (Efforts to Implement Long-Term Vision) Target FY2017 FY2019 Aug 2020 FY2023 (cumulative) 468,069 t 414,884 t 152,391 t -24,000 t Indicator -53,185 t * FY2018 FY2019 FY2020 1H FY2023 Women: 48.2% Women: 50.5% Wo
Slide 29: Restructuring Business Portfolios
IV. Nippon Express Group Business Plan 2023 KPIs F Restructuring Business Portfolios Initiatives to select and focus on core businesses Nippon Express Group High-Profit Businesses M&A, Alliances (inorganic growth strategy) Sale of Business Non-Core Core Businesses Businesses Low-Profit Businesses Q2
Slide 30: Return to Shareholders
V. Return to Shareholders A Capital Policies • ROE: 10％ • Dividend payout ratio: Over 30% • Total return ratio: Over 50% (cumulative total 2019-2023) • Equity ratio: Target 35% B Key Indicators (100 million yen) Dividend Acquiring treasury shares Dividend payout ratio Total return ratio 400 200.0% 1
Slide 31: Supplemental Documents
Supplemental Documents The information presented in this document provides data trends for each category. However, the data used is pre-close data and may differ from figures presented in our financial reports. Please be aware that this document has been produced to provide a better understanding of
Slide 32: Changes Due to External Environmental and Other Factors
(Appendix 1) Financial Results for Q2, FY2020 A Changes Due to External Environmental and Other Factors Impact on consolidated results Variable factors Reference (Q2, cumulative) Operating income: +¥1.57 billion Unit price per ℓ [FY2019 Q2/Previous forecast] Impact of change l Light oil : ¥79.40 [¥1
Slide 33: Changes Due to External Environmental and Other Factors
(Appendix 1) Financial Results for Q2, FY2020 A Changes Due to External Environmental and Other Factors Impact on consolidated results Variable factors Reference (Q2, cumulative) Change due to employment system l Japan : ¥(0.38) billion reform Operating income: l Security Transportation : ¥(0.05) bi
Slide 34: Changes Due to External Environmental and Other Factors
(Appendix 1) Financial Results for Q2, FY2020 A Changes Due to External Environmental and Other Factors Impact on consolidated Variable factors results Reference (Q2, cumulative) Revenues/Operating Income l Japan : ¥(31.09) billion/¥(10.96) billion l The Americas : ¥(1.62) billion/¥(0.65) billion Re
Slide 35: Impact of COVID-19 on Sales by Business
(Appendix 1) Financial Results for Q2, FY2020 B Impact of COVID-19 on Sales by Business (Non-Consolidated) FY2020 Q1, Results July 2020 August 2020 September 2020 1H Total (100 million yen) (rounded down to 100 million yen) 10 0 (10) (20) (30) (40) (50) (60) Heavy Small-lot Chartered Marine Harbor A
Slide 36: Volume in Priority Industries: Domestic
(Appendix 1) Financial Results for Q2, FY2020 C Volume in Priority Industries (YoY Sales) (Unit： % ) Domestic Priority Industries Electric and Electronics Apparel 20.0 -13.8 -1.2 13.7 9.3 0.0 -2.7 -4.7 -8.5 5.0 18.3 -11.9 10.0 13.0 -8.2 -10.0 0.0 -10.0 -20.0 -20.0 -30.0 -30.0 -40.0 -40.0 Apr May Jun
Slide 37: Volume in Priority Industries: Overseas
(Appendix 1) Financial Results for Q2, FY2020 C Volume in Priority Industries (YoY Sales) (Unit： % ) Overseas Priority Industries Electric and Electronics Apparel 20.0 15.1 14.7 17.2 20.0 7.9 6.4 10.0 -7.0 -5.2 10.0 -1.1 -5.4 -21.5 -19.9 0.0 0.0 -32.0 -10.0 -10.0 -20.0 -20.0 -30.0 -30.0 -40.0 -40.0
Slide 38: Initiatives to Reduce Costs in Japan and Overseas
(Appendix 1) Financial Results for Q2, FY2020 D Initiatives to Reduce Costs in Japan and Overseas (Details for Q1, FY2020 and Beyond) 1. Cost Reduction Measures (Japan, Overseas) Air Cargo Railway and Motor Small-lot Facility Usage Transportation Ocean Cargo transportation Shipment Charges • Reduce
Slide 39: Changes Due to External Environmental and Other Factors (Forecast)
(Appendix 2) Financial Results Forecast for FY2020 Changes Due to External Environmental and Other Factors (Forecast) Impact on Consolidated Results Variable Factors Reference (Full-year forecast) +¥3.28 billion Unit price per ℓ [Yearly average in FY2019/ Previous forecast] Impact of change (cost de
Slide 40: Changes Due to External Environmental and Other Factors (Forecast)
(Appendix 2) Financial Results Forecast for FY2020 Changes Due to External Environmental and Other Factors (Forecast) Impact on Consolidated Variable Factors Results Reference (Full-year forecast) Correction of excessively recorded Revenues and Operating Income l Japan : +¥0.78 billion [Q2] revenues
Slide 41: Changes Due to External Environmental and Other Factors (Forecast)
(Appendix 2) Financial Results Forecast for FY2020 Changes Due to External Environmental and Other Factors (Forecast) Impact on Consolidated Variable Factors Results Reference (Full-year forecast) Provision for retirement benefits Operating income: l Japan : ¥(0.74) billion [Q1] (insufficient provis
Slide 42: Changes Due to External Environmental and Other Factors (Forecast)
(Appendix 2) Financial Results Forecast for FY2020 Changes Due to External Environmental and Other Factors (Forecast) Impact on Consolidated Variable Factors Results Reference (Full-year forecast) l Japan Revenues : ¥(42.17) billion Operating income : ¥(14.00) billion l The Americas Revenues : ¥(3.8
Slide 43: Export Air Freight Weight Originating From Japan
(Appendix 3) Export Air Freight Weight Originating From Japan Export Air Freight Weight Originating from Japan 100,000 86,953 30.0% 86,178 Nippon 80,228 Express Export Weight Nippon Express Share 80,000 26.6% 28.0% 63,449 60,000 54,590 53,249 26.0% 26.6% 26.8% 49,298 47,370 45,094 37,192 40,000 25.3
Slide 44: Export Freight (Air Freight Forwarding)
(Appendix 4) Export Freight (Air Freight Forwarding) (Unit： t /chargeable) Originating 2018 2019 2020 Region Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full FY Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full FY Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full FY Japan 90,513 94,814 89,545 99,401 374,273 75,277 67,156 60,847 65,084 2
Slide 45: Export Freight (Marine & Harbor Transportation)
(Appendix 5) Export Freight (Marine & Harbor Transportation) (Unit：TEU) 2018 2019 2020 Originating Region Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full FY Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full FY Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full FY Japan 51,887 58,722 62,703 75,280 248,592 53,755 60,126 63,141 64,458 241,
Slide 46: Change in Non-Consolidated Income (FY2020 Q2 Cumulative)
(Appendix 6) Change in Non-Consolidated Income (FY2020 Q2 Cumulative) (100 million yen) (rounded down to 100 million yen) Decrease in *Increase and decrease in the graph is on an income basis vehicle Impact of Other chartering and change in expenses subcontracting unit fuel costs price +41 +258 +8 O
Slide 47: Change in Non-Consolidated Income (FY2020 Forecast)
(Appendix 6) Change in Non-Consolidated Income (FY2020 Forecast) (100 million yen) (rounded down to 100 million yen) *Increase and decrease in the graph is on an income basis Impact of Other Decrease in change in expenses vehicle chartering unit fuel and subcontracting price +89 costs +17 +308 Opera
Slide 48: Disclaimer
No information contained in this document is intended to solicit purchase or sale of the Company’s shares. Views, forecasts, and other forward-looking statements contained in this document are based on the Company’s assumptions, judgments and beliefs in light of the information currently available t
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