Nippon Express Holdings, Inc. · TSE:9147
Nippon Express — Q2 2022 Earnings Presentation
50 slides from Nippon Express's earnings presentation, Aug 10, 2022
Slide 1: Financial Results Presentation for Q2, Fiscal Year Ending December 2022
Financial Results Presentation for Q2, Fiscal Year Ending December 2022 August 10, 2022 NIPPON EXPRESS HOLDINGS, INC. Investor Relations Promotion Group Corporate Planning Division
Slide 2: Presentation of FY2021 results on converted 12-month basis
I. Financial Results for Q2, FY2022 Regarding Presentation of Fiscal Year Ended December 2021 (Previous Year) Results Consolidated statements of income for the fiscal year ended December 2021 represent results of Nippon Express Co., Ltd. Results converted to a 12-month basis (*estimates). *2021 resu
Slide 3: Financial Results for Jan-Jun, FY2022
I. Financial Results for Q2, FY2022 A Financial Results for Jan-Jun, FY2022 (100 million yen, %) (rounded down to 100 million yen) Overview (Consolidated, Key Consolidated Business Indicators) Current-Year Prior-Year Results Item Results (Jan-Jun 2021) Difference Difference 1H Forecast Difference Pr
Slide 4: Japan and Overseas Results
I. Financial Results for Q2, FY2022 B Japan and Overseas Results (100 million yen, %) (rounded down to 100 million yen) Prior-Year Results Difference Segment Item Current-Year Results Difference (Jan-Jun 2021) YoY (%) (Jan-Jun 2022) YoY Pro Forma Revenues 9,845 9,191 654 7.1 Japan Total Segment Inco
Slide 5: Results by Reportable Segment (YoY)
I. Financial Results for Q2, FY2022 C Results by Reportable Segment (YoY) (100 million yen, %) (rounded down to 100 million yen) Prior-Year Current-Year Current-Year Current-Year Results Difference Segment Item Difference Results Results Results (Jan-Jun 2021) YoY (%) YoY (Jan-Mar 2022) (Apr-Jun 202
Slide 6: Results by Reportable Segment (vs. Previous Forecast)
I. Financial Results for Q2, FY2022 D Results by Reportable Segment (vs. Previous Forecast) (100 million yen, %) (rounded down to 100 million yen) Segment Item Current-Year Results 1H Forecast Difference Progress (Jan-Jun 2022) (Announced May 12) Revenues 7,254 7,051 203 102.9 Japan Segment Income 3
Slide 7: Breakdown of Revenues
I. Financial Results for Q2, FY2022 E Breakdown of Revenues and Operating Income 1) Revenues 800 Jan-Dec 2020 Jan-Dec 2021 ★ Revenue increase from (100 million yen) (99) +744 business activities ★Breakdown of revenue from 600 ⇧1,716 business activities by segment 13,000 400 ⇧110 ⇧217 ⇧217 ⇧248 ⚫ Jap
Slide 8: Breakdown of Operating Income
I. Financial Results for Q2, FY2022 E Breakdown of Revenues and Operating Income 2) Operating income (100 million yen) ⇩84 Employment system reform 700 Adjustment of prior- Impact of ⇩6 period differences in Ukraine Environment provision for ⇧0 Increase in investments retirement benefits Impact of f
Slide 9: Forecast for FY2022
II. Financial Results Forecast for FY2022 A Forecast for FY2022 (100 million yen, %) (rounded down to 100 million yen) Prior-Year Full-Year Previous Item Difference Difference Results Difference Difference Forecast Forecast YoY YoY (%) (Jan-Dec 2021) YoY YoY (%) (Jan-Dec 2022) (Jan-Dec 2022) Pro For
Slide 10: Forecast for 2H FY2022
II. Financial Results Forecast for FY2022 B Forecast for Fiscal Year Ending December 2022 2H Forecast (100 million yen, %) (rounded down to 100 million yen) Revised 2H Prior-Year Item Difference Difference 2H Forecast Difference Difference Forecast Results YoY YoY (%) (Announced May 12) YoY YoY (%)
Slide 11: Japan and Overseas Results Forecast
II. Financial Results Forecast for FY2022 C Japan and Overseas Results Forecast (100 million yen, %) (rounded down to 100 million yen) Prior-Year Results Segment Item Forecast Difference Difference (Jan-Dec 2021) (Jan-Dec 2022) YoY YoY (%) Pro Forma Revenues 19,616 18,458 1,157 6.3 Japan Total Segme
Slide 12: Forecasts by Reportable Segment (Jan-Dec)
II. Financial Results Forecast for FY2022 D Forecasts by Reportable Segment (Jan-Dec) (100 million yen, %) (rounded down to 100 million yen) Prior-Year Results Segment Item Full-Year Forecast Difference Difference Previous Forecast Difference Difference (Jan-Dec 2021) (Jan-Dec 2022) YoY YoY (%) (Ann
Slide 13: Forecasts by Reportable Segment (2H, YoY)
II. Financial Results Forecast for FY2022 E Forecasts by Reportable Segment (2H, YoY) (100 million yen, %) (rounded down to 100 million yen) Segment Item 2H Forecast Prior-Year Results Difference Difference (Jul-Dec 2022) (Jul-Dec 2021) YoY YoY (%) Revenues 7,079 6,816 262 3.9 Japan Segment Income 2
Slide 14: Forecasts by Reportable Segment (2H, vs. Previous Forecast)
II. Financial Results Forecast for FY2022 E Forecasts by Reportable Segment (2H, vs. Previous Forecast) (100 million yen, %) (rounded down to 100 million yen) Segment Item 2H Forecast Previous 2H Forecast Difference Difference (Jul-Dec 2022) (Announced May 12) YoY YoY (%) Revenues 7,079 7,105 (25) (
Slide 15: Breakdown of Revenues (Forecast)
II. Financial Results Forecast for Fiscal Year Ending December 2022 F Breakdown of Revenues and Operating Income 1) Revenues (100 million yen) ★ Revenue increase from Business ★Breakdown of revenue from 27,000 activities business activities by segment Impact of revenue Impact of the NX ⇧2,112 26,000
Slide 16: Breakdown of Operating Income (Forecast)
II. Financial Results Forecast for Fiscal Year Ending December 2022 ⇩84 F Breakdown of Revenues and Operating Income 2) Operating income 1,300 (100 million yen) Rebound Impact of foreign Employment Decrease in increase of exchange HQ relocation ⇧42 system reform provision for expenses Impact of ⇩11
Slide 17: Japan Segment
II. Segment Overview for FY2022 1. Japan Segment (100 million yen, %) April-June 2022 Highlights Vs. FYE Dec 2021 1 Item FY2022 Apr-Jun Results The air transportation business was negatively impacted by semiconductor shortages and stagnant FYE Dec 2021 Difference Difference (%) production activities
Slide 18: The Americas Segment
II. Segment Overview for FY2022 2. The Americas Segment (100 million yen, %) Vs. FYE Dec 2021 1 Item FY2022 Apr-Jun Results April-June 2022 Highlights FYE Dec 2021 Difference Difference (%) Volume declined year on year in the air export freight forwarding business, mainly due to a decrease Quarterly
Slide 19: Europe Segment
II. Segment Overview for FY2022 3. Europe Segment (100 million yen, %) Vs. FYE Dec 2021 1 Item FY2022 Apr-Jun Results April-June 2022 Highlights FYE Dec 2021 Difference Difference (%) Air export freight forwarding advanced, mainly for medical and automobile-related cargo. Although Quarterly Results
Slide 20: East Asia Segment
II. Segment Overview for FY2022 4. East Asia Segment (100 million yen, %) Vs. FYE Dec 2021 1 Item FY2022 Apr-Jun Results April-June 2022 Highlights FYE Dec 2021 Difference Difference (%) Airports, ports, and other major hubs were closed due to the impact of the lockdowns in China, and Quarterly Resu
Slide 21: South Asia & Oceania Segment
II. Segment Overview for FY2022 5. South Asia & Oceania Segment (100 million yen, %) Vs. FYE Dec 2021 1 Item FY2022 Apr-Jun Results April-June 2022 Highlights FYE Dec 2021 Difference Difference (%) Ocean export freight forwarding volume increased year on year due to new contracts. Air export Quarter
Slide 22: Security Transportation Segment
II. Segment Overview for FY2022 6. Security Transportation Segment (100 million yen, %) Vs. FYE Dec 2021 1 Item FY2022 Apr-Jun Results April-June 2022 Highlights FYE Dec 2021 Difference Difference (%) Although the number of Cash Safety Delivery (CSD) services declined due to the impact of retail Qua
Slide 23: Heavy Haulage & Construction Segment
II. Segment Overview for FY2022 7. Heavy Haulage & Construction Segment (100 million yen, %) Vs. FYE Dec 2021 1 Item FY2022 Apr-Jun Results April-June 2022 Highlights FYE Dec 2021 Difference Difference (%) Revenues and profits decreased due to declines in plant maintenance, plant construction, therm
Slide 24: Logistics Support Segment
II. Segment Overview for FY2022 8. Logistics Support Segment (100 million yen, %) Vs. FYE Dec 2021 1 Item FY2022 Apr-Jun Results April-June 2022 Highlights FYE Dec 2021 Difference Difference (%) Quarterly Revenues and profits increased due to higher unit sales prices and transaction volume in the Re
Slide 25: NX Group Business Plan 2023 KPIs of Growth Strategy for Core Businesses
III. Challenges of the Business Plan A NX Group Business Plan 2023 KPIs of Growth Strategy for Core Businesses Japan*1 Overseas Item 2022 2021 2022 2022 ＊2 2021 ＊2 2022 ＊2 Revenues Difference Difference Jan-Jun Jan-Jun Jan-Dec Progress Jan-Jun Jan-Jun Jan-Dec Progress (%) (%) Results Results Targets
Slide 26: Sales by Business: FY2022 (Jan-Jun)
III. Challenges of the Business Plan B Sales by Business: FY2022 (Jan-Jun) Millions of yen,％ (Millions of yen, rounded down) Difference Difference (%) Domestic Business Nippon Express Co., Ltd. • Results Vs. FYE Vs. FYE We saw a recovery in certain cargo in the second quarter; however, to the Result
Slide 27: Strategy to Enhance Domestic Businesses in Japan
III. Deepen Integration of Land, Sea, and Air III. Challenges of the Business Plan ◆ Pursue cross-mode sales • We won 578 contracts out of 1,029 attempts by approaching existing customers (Q2 cumulative total) C Strategy to Enhance Domestic Businesses in Japan • Propose seamless transportation betwe
Slide 28: Impact of Employee System Reform
III. Challenges of the Business Plan D Impact of Employee System Reform (as of June 30, 2022) Reinforce Human Resource System Salary/Wage System Evaluation System workplace capabilities • Employee categories • Equal labor, equal pay • Evaluate roles • CSR, assign health • Competency and grade system
Slide 29: Progress in FY2022 Back Office Cost Reductions
III. Challenges of the Business Plan E Progress in FY2022 Back Office Cost Reductions (as of June 30, 2022) FYE Dec FY 2022 Enhancing FY2019 FY2020 FY2022 FY2022 2021 Results Results FY2022 1H Japanese Domestic FY2023 Target Item Results Results Target Cumulative (Apr-Dec) (Jan-Jun) Cumulative Busin
Slide 30: Pursuing RPA and NX-OCR
III. Challenges of the Business Plan F Pursuing RPA and NX-OCR To create more time for more value-added tasks, such as creative planning and sales activities. Why Adopt RPA? ⇒ Improve productivity and quality, reduce costs, and foster the potential of creating new businesses. FY2023 Target: Create c
Slide 31: ESG Management
III. Challenges of the Business Plan G ESG Management (*Calculation of retention rate for female career employees in or around eighth year of service) CO2 emissions reductions vs. FY2017 Target FYE Dec 2021 FY2022 FY2017 FY2019 FY2020 FY 2023 Apr-Dec Jan-May (New Target) 468,069t 414,884t 401,580t 2
Slide 32: Initiatives for Achieving Our Long-Term Vision
III. Challenges of the Business Plan H Business Plan (FY2022-FY2023) Initiatives for Achieving Our Long-Term Vision FY2022 - FY2023 A logistics company with a strong Numerical Targets Revenues, operating income (margin), net income, overseas revenues, Birth of the NX Group presence in the global mar
Slide 33: Return to Shareholders
IV. Return to Shareholders A Capital Policies • ROE: 10% • Dividend payout ratio 30% or more • Total return ratio: Over 50% (cumulative total FY2019-FY2023) • Equity ratio: Target 35% B Key Indicators (100 million yen) Total dividend Treasury share acquisition Dividend payout ratio Total return rati
Slide 34: 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 35: Appendix 1: Special Factors
Appendix 1: Special Factors (Changes Due to External Environmental and Other Factors) Impact on consolidated results Impact on consolidated results Variable factors (Jan-Jun results) (12-month forecast) Operating income ¥(1.75) billion Operating income ¥(2.94) billion (cost increase) (cost increase)
Slide 36: Appendix 1: Special Factors
Appendix 1: Special Factors (Changes Due to External Environmental and Other Factors) Impact on consolidated results Impact on consolidated results Variable factors (Jan-Jun results) (12-month forecast) Change due to Operating income ¥(0.66) billion Operating income ¥(1.14) billion employee system r
Slide 37: Appendix 1: Special Factors
Appendix 1: Special Factors (Changes Due to External Environmental and Other Factors) Impact on consolidated results Impact on consolidated results Variable factors (Jan-Jun results) (12-month forecast) Operating income Adjustment of prior- period differences in +¥2.51 billion provision for retireme
Slide 38: Appendix 1: Special Factors
Appendix 1: Special Factors (Changes Due to External Environmental and Other Factors) Impact on consolidated results Impact on consolidated results Variable factors (Jan-Jun results) (12-month forecast) Impact of revenue Revenues recognition standard to decrease sales ¥(12.52) billion Logistics Supp
Slide 39: Export Air Freight Weight Originating from Japan
Appendix 2 Forwarding Results: Export Air Freight Weight Originating from Japan Export Air Freight Weight Originating from Japan Nippon Express Export Weight Nippon Express Share （Unit：t） 30.0% FY Total: 222,247 tons FY Total:214,889 tons Total: 131,704 tons 26.6% 25.4% 25.6% 24.1% 24.3% 28.0% 100,0
Slide 40: Export Freight (Air Freight Forwarding)
Appendix 2 Forwarding Results: Export Freight (Air Freight Forwarding) (Unit：t /chargeable) 2020 2021 2022 Originating Region Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full Year Jan-Mar Apr-Jun Jul-Sep Oct-Dec Total Jan-Mar Apr-Jun Jul-Sep Oct-Dec Total Japan 58,841 45,579 55,874 78,048 238,343 89,719 90,527
Slide 41: Export Freight (Ocean Transportation)
Appendix 2 Forwarding Results: Export Freight (Ocean Transportation) （Unit：TEU） 2020 2021 2022 Originating Region Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full Year Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full Year Jan-Mar Apr-Jun Jul-Sep Oct-Dec Full Year Japan 57,648 52,572 53,813 66,291 230,324 67,261 65,442 66,3
Slide 42: Air Export Freight Forwarding Gross Profit: Japan and Overseas
Appendix 2 Air Forwarding Results: Japan and Overseas Segment Air Export Freight Forwarding Business Gross Profit and Gross Profit Margin by Quarter Japan Segment (100 million yen, %) (rounded down to 100 million yen) 200 60.0% 180 51.9% 50.3% 160 49.6% 2020 Air export freight forwarding gross profi
Slide 43: Air Export Gross Profit by Overseas Segment
Appendix 2 Air Forwarding Results: Air Export Freight Forwarding Business Gross Profit and Gross Profit Margin by Overseas Segment by Quarter The Americas Segment Europe Segment 80 60.0% 80 60.0% 50.7% 50.0% 60 46.7% 46.5% 60 46.5% 40.0% 40.0% 43.8% 42.5% 42.3% 42.1% 34.3% 40 40 25.8% 24.2% 24.0% 23
Slide 44: Consolidated Forwarding Costs by Quarter
Appendix 2 Forwarding Results: (Consolidated) Forwarding Costs by Quarter Consolidated forwarding costs (100 million yen) (rounded down to 100 million yen) 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 Item Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Railway 1
Slide 45: Nippon Express 1H Results and 2H Forecasts: Revenues
Appendix 3: Nippon Express FY2022 1H Results and 2H Forecasts 1H Results 2H Forecasts Change Change A. Revenues Jan-Jun 2022 Jan-Jun 2021 Jul-Dec 2022 Jul-Dec 2021 (Unit: Millions of yen,%) % of % of Forecast % of % of Amount Ratio Amount Ratio Sales Sales Sales Sales Railway utilization business 32
Slide 46: Nippon Express 1H Results and 2H Forecasts: Operating Expenses
Appendix 3: Nippon Express FY2022 1H Results and 2H Forecasts Results Forecast B. Operating expenses Change Jul-Dec 2022 Change (Unit: Millions of yen,%) Jan-Jun 2022 % of Jan-Jun 2021 % of % of Jul-Dec 2021 % of Amount Ratio Forecast Amount Ratio Sales Sales Sales Sales Total personnel expenses 125
Slide 47: Non-Consolidated Profit Factors (Jan-Jun)
Appendix 3: Nippon Express FY2022 Jan-Jun Results Non-Consolidated Profit Factors Increase in (100 million yen) (rounded down to 100 million yen) Revenue increase forwarding *Increase and decrease in the graph is on an income basis +677 costs (495) Increase in vehicle chartering and Decrease in subc
Slide 48: Nippon Express FY2022 Forecasts: Revenues
Appendix 3: Nippon Express FY2022 Jan-Dec Forecasts A. Revenues (Unit: Millions of yen,%) Jan-Dec 2022 Change % of Jan-Dec 2021 % of Forecast Amount Ratio Sales Sales Railway utilization business 67,000 5.0 68,828 5.5 (1,828) (2.7) Automotive Small-lot shipment business 37,500 2.8 41,060 3.3 (3,560)
Slide 49: Nippon Express FY2022 Forecasts: Operating Expenses
Appendix 3: Nippon Express FY2022 Jan-Dec Forecasts B. Operating expenses (Unit: Millions of yen,%) Change Jan-Dec 2022 % of Jan-Dec 2021 % of Forecast Amount Ratio Sales Sales Total personnel expenses 252,000 18.7 260,681 21.0 (8,681) (3.3) Forwarding costs Railway forwarding costs 36,500 2.7 37,53
Slide 50: Non-Consolidated Profit Factors (Jan-Dec Forecast)
Appendix 3: Nippon Express FY2022 Jan-Dec Forecasts Non-Consolidated Profit Factors Increase in (100 million yen) (rounded down to 100 million yen) forwarding Revenue increase costs *Increase and decrease in the graph is on an income basis +1,077 (821) Increase in vehicle chartering and Decrease in
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