Nippon Express Holdings, Inc. · TSE:9147
Nippon Express — Q3 FY2020 Earnings Presentation
51 slides from Nippon Express's earnings presentation, Jan 29, 2021
Slide 1: Financial Results Presentation for Q3, Fiscal Year Ending March 2021
Financial Results Presentation for Q3, Fiscal Year Ending March 2021 January 29, 2021 Nippon Express Co., Ltd. Investor Relations Promotion Group Corporate Planning Division
Slide 2: Contents
Contents IV. Nippon Express Group Business Plan 2023 KPIs I. Financial Results for Q3, FY2020 A. Growth Strategy for Core Businesses P.21 A. Financial Highlights for Q3, FY2020 P.2 (Reference) Air/Marine Freight Forwarding Business Trends P.22 B. Japan and Overseas Results P.3 B. Strategy to Enhance
Slide 3: Financial Highlights for Q3, FY2020
I. Financial Results for Q3, FY2020 A Financial Highlights for Q3, FY2020 1. Overview (Consolidated) (100 million yen) (rounded down to 100 million yen) FY2020 FY2019 Full-Year Difference Difference Forecast Progress Item Cumulative Cumulative Difference YoY YoY (%) (Announced (%) Q3 Results Q3 Resu
Slide 4: Japan and Overseas Results
I. Financial Results for Q3, FY2020 B Japan and Overseas Results (100 million yen) (rounded down to 100 million yen) FY2020 FY2019 Segment Item Difference Difference Cumulative Cumulative YoY YoY (%) Q3 Results Q3 Results Revenues 12,924 13,628 (703) (5.2) Japan Total Segment income 474 444 29 6.6 R
Slide 5: Results by Reportable Segment
I. Financial Results for Q3, FY2020 C Results by Reportable Segment (100 million yen) (rounded down to 100 million yen) Full-Year FY2020 FY2019 Segment Item Difference Difference Forecast Progress Cumulative Cumulative Difference YoY YoY (%) (Announced (%) Q3 Results Q3 Results October 30) Revenues
Slide 6: Breakdown of Revenues and Operating Income: Revenues
I. Financial Results for Q3, FY2020 D Breakdown of Revenues and Operating Income 1. Revenues (100 million yen) Correction of ★Breakdown of revenue prior-period decrease from business revenues activities by segment ⇧7 ★ Revenue Japan: (40) 15,700 decrease from Overseas total: (133) business Sec
Slide 7: Breakdown of Revenues and Operating Income: Operating income
I. Financial Results for Q3, FY2020 D Breakdown of Revenues and Operating Income 2. Operating income ★ Breakdown of operating income increase from business activities by segment Impact of [Presented as Japan domestic Environment (100 million yen) investments foreign and Overseas business] ⇩0 exchang
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 %] January 29) October 30) 500 Revenu
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 January 29) Revenues 17,335 18,097 (762) (
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 October FY2020 October FY2019 FY2019 Results Revised Difference 30 Difference Revised Difference 30 Difference Results
Slide 11: Forecast Breakdown of Revenues
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 by segment Japan: +70 21,000 Impact of Impact of COVID-19 Overseas total: +143 foreign ⇩104 Security Transportation: (22)
Slide 12: Forecast Breakdown of Operating Income
II. Financial Results Forecast for FY2020 D Breakdown of Revenues and Operating Income 2. Operating income (100 million yen) Provision for Correction of retirement benefits Impact from prior-period (insufficient prior- change of the revenues period provisions) period ⇧7 ⇩7 850 applicable to Impact b
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 ⇧9 effect 2,588 ⇩37
Slide 14: Japan Segment
III. Segment Overview, FY2020 A. Japan Segment (100 million yen) Vs. FY2019 Q3 Highlights FY2020 Q3, Item Difference Results FY2019 Difference The impact of COVID-19 continued to diminish in the second quarter, and declines halted across all (%) businesses. 1 Our railway utilization business recover
Slide 15: The Americas Segment
III. Segment Overview, FY2020 B. The Americas Segment (100 million yen) Vs. FY2019 Q3 Highlights FY2020 Q3, Item Difference Results FY2019 Difference 1 (%) Revenues were lower in each business due to the impact of COVID-19 lockdowns. In particular, declining volume had a major effect on a significan
Slide 16: Europe Segment
III. Segment Overview, FY2020 C. Europe Segment (100 million yen) Vs. FY2019 FY2020 Q3, Q3 Highlights Item Difference Results FY2019 Difference 1 (%) Continuing from Q2, air export freight forwarding continued to be strong in the third quarter. The impact of COVID-19 resulted in continued sluggishne
Slide 17: East Asia Segment
III. Segment Overview, FY2020 D. East Asia Segment (100 million yen) Vs. FY2019 FY2020 Q3, Q3 Highlights Item Difference Results FY2019 Difference 1 (%) In China, the spread of the infections has been controlled and economic activity has resumed. Volume for air export freight forwarding remained str
Slide 18: South Asia & Oceania Segment
III. Segment Overview, FY2020 E. South Asia & Oceania Segment (100 million yen) Vs. FY2019 FY2020 Q3, Q3 Highlights Item Difference Results FY2019 Difference 1 (%) Continuing from the second quarter, we saw strong demand for chartered transport for emergency COVID-19-related shipments, etc., in Sing
Slide 19: Security Transportation Segment
III. Segment Overview, FY2020 F. Security Transportation Segment (100 million yen) Vs. FY2019 FY2020 Q3, Q3 Highlights Item Difference Results FY2019 Difference 1 (%) As in Q2, the decline in volume due to COVID-19 began recovering from a low point. Despite a certain impact stemming from the decreas
Slide 20: Heavy Haulage & Construction Segment
III. Segment Overview, FY2020 G. Heavy Haulage & Construction Segment (100 million yen) Vs. FY2019 FY2020 Q3, Q3 Highlights Item Difference Results FY2019 Difference 1 (%) Despite the postponement of some projects due to COVID-19, shutdown maintenance performed well, while wind power-related freight
Slide 21: Logistics Support Segment
III. Segment Overview, FY2020 H. Logistics Support Segment (100 million yen) Vs. FY2019 FY2020 Q3, Q3 Highlights Item Difference Results FY2019 Difference 1 (%) As in Q2, petroleum division was affected by a decline in unit sales price and volume. In November, LS revenues recovered and swung positiv
Slide 22: Growth Strategy for Core Businesses
IV. Nippon Express Group Business Plan 2023 KPIs A Growth Strategy for Core Businesses Japan*1 Overseas Item FY2020 FY2019 FY2020 FY2019 Revenues Difference FY2020 Difference FY2020 Q3 cumulative, Q3 cumulative, Q3 cumulative, Q3 cumulative, (%) Forecast (%) Forecast Results*2 Results*2 Results*2 Re
Slide 23: Air/Marine Freight Forwarding Business Trends
(Reference) Air/Marine Freight Forwarding Business Trends *1 Air/Marine Freight Forwarding Business (Vs. 2020 Volume by Weight, Units) (%) Air Forwarding Business *2 20.0 10.8 10.0 -12.0 0.0 -24.6 -16.4 -10.0 -20.0 -30.0 Jan-Mar Apr-Jun Jul-Sep Oct-Dec YoY% -12.0 -24.6 -16.4 10.8 Marine Freight Forw
Slide 24: 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 Group and Company Strengths to the Fullest, ・ Working to reassign 129 employees during the second half (5
Slide 25: Progress in FY2020 Back Office Cost Reductions
IV. Nippon Express Group Business Plan 2023 KPIs C Progress in FY2020 Back Office Cost Reductions (as of December 31, 2020) Cumulative Enhancing FY2020 FY2020 FY2020 [FY2019 Japanese FY2023 FY2019 FY2020 1H FY2020 Q3 Cumulative Cumulative Targets + Domestic Targets Results [YoY] [YoY] (as of Forecas
Slide 26: Pursuing RPA
IV. Nippon Express Group Business Plan 2023 KPIs D 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 Targets ~Planned Use Ca
Slide 27: Restructuring Business Portfolios
IV. Nippon Express Group Business Plan 2023 KPIs E Restructuring Business Portfolios Initiatives to select and focus on core businesses Nippon Express Group High-Profit M&A, Alliances Businesses (inorganic growth strategy) Non-Core Core Businesses Businesses Businesses Transfer, Liquidate Dissolve
Slide 28: Collaborative Efforts in Connection With Leasing Business Spin-off
IV. Nippon Express Group Business Plan 2023 KPIs F Engage in Collaborative Efforts in Connection With the Leasing Business Spin-off Spin off leasing business of Nittsu Shoji Spin-off leasing business Nittsu Leasing and Finance Co., Ltd. Finance and services expertise Diverse customer base, developed
Slide 29: Transition to a Holding Company Structure: Current vs. New Structure
V. Transition to a Holding Company Structure ◆ Current Structure ◆ Holding Company Structure After January 2022 Nippon Express provides functions as both group headquarters Holding company drives group business growth and reform as and stand-alone headquarters (business strategy and operational the
Slide 30: Transition to a Pure Holding Company Structure (January 2022)
V. Transition to a Holding Company Structure Transition to a Pure Holding Company Structure (January 2022) Make Major Changes in Our Group Management Structure to Accelerate Toward Our Long-Term Vision Purpose of Transition to a Holding Company Structure (Ideal Group Management Structure) 1. Reinfor
Slide 31: Return to Shareholders
Ⅵ. 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 32: 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 33: Changes Due to External Environmental and Other Factors (1)
(Appendix 1) Financial Results for Q3, FY2020 A Changes Due to External Environmental and Other Factors Impact on consolidated results Variable factors Reference (Q3, cumulative) Operating Income: +¥2.21 billion Unit price per ℓ [FY2019 Q3/Previous forecast] Impact of change Light oil : ¥81.13 [¥1
Slide 34: Changes Due to External Environmental and Other Factors (2)
(Appendix 1) Financial Results for Q3, FY2020 A Changes Due to External Environmental and Other Factors Impact on consolidated results Variable factors Reference (Q3, cumulative) Changes associated with Japan : ¥(0.49) billion employee system reform Operating income: Security Transportation : ¥(
Slide 35: Changes Due to External Environmental and Other Factors (3)
(Appendix 1) Financial Results for Q3, FY2020 A Changes Due to External Environmental and Other Factors Impact on consolidated results Variable factors Reference (Q3, cumulative) Revenues/Operating Income Japan : ¥(32.37) billion/¥(10.87) billion The Americas : ¥(2.80) billion/¥(1.16) billion Re
Slide 36: Impact of COVID-19 on Sales by Business
(Appendix 1) Financial Results for Q3, FY2020 B Impact of COVID-19 on Sales by Business (Non-Consolidated) 1H Total October 2020 November 2020 December 2020 (100 million yen) (rounded down to 100 million yen) 10 0 (10) (20) (30) (40) (50) (60) Small-lot Marine Harbor Air Warehouse Moving and Securit
Slide 37: Volume in Priority Industries: Domestic
(Appendix 1) Financial Results for Q3, FY2020 C Volume in Priority Industries (YoY Sales) (Unit： % ) Domestic Priority Industries Electric and Electronics Apparel 30.0 20.0 12.8 20.0 12.6 14.5 11.5 10.0 2.6 11.0 4.5 10.0 -7.1 0.0 0.0 -0.7 -7.0 -10.0 -10.0 -20.0 -20.0 Q1 Q2 Oct Nov Dec Q1 Q2 Oct Nov
Slide 38: Volume in Priority Industries: Overseas
(Appendix 1) Financial Results for Q3, FY2020 C Volume in Priority Industries (YoY Sales) (Unit： % ) Overseas Priority Industries Electric and Electronics Apparel 30.0 15.7 20.4 20.0 20.0 2.7 5.2 -1.1 10.0 10.0 7.5 0.0 15.0 0.0 -10.0 -10.0 -6.2 -2.8 -20.0 -20.0 -30.0 -18.8 -30.0 -40.0 -40.0 Q1 Q2 Ju
Slide 39: Initiatives to Reduce Costs in Japan and Overseas
(Appendix 1) Financial Results for Q3, 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 40: Forecast Breakdown of Revenues vs. Q2 Announcement
(Appendix 2) Financial Results Forecast for FY2020 A Breakdown of Revenues and Operating Income (vs. Q2 Earnings Announcement) 1. Revenues ■ Negative impact of COVID-19 improved to -¥25.0 billion ■ Negative impact of revenue decrease from business activities improved to -¥24.8 billion (100 million y
Slide 41: Forecast Breakdown of Operating Income vs. Q2 Announcement
(Appendix 2) Financial Results Forecast for FY2020 A Breakdown of Revenues and Operating Income (vs. Q2 Earnings Announcement) 2. Operating income (100 million yen) ■ Recovery in business activities in Japan and overseas businesses (Japan: +¥7.4 billion; Overseas: +¥2.1 billion) ■ Negative impact of
Slide 42: Changes Due to External Factors (Forecast) (1)
(Appendix 2) Financial Results Forecast for FY2020 B Changes Due to External Environmental and Other Factors (Forecast) Impact on consolidated results Variable factors Reference (Full-year forecast) +¥3.01 billion Unit price per ℓ [Yearly average in FY2019/ Previous forecast] Impact of change (cost
Slide 43: Changes Due to External Factors (Forecast) (2)
(Appendix 2) Financial Results Forecast for FY2020 B Changes Due to External Environmental and Other Factors (Forecast) Impact on consolidated results Variable factors Reference (Full-year forecast) Correction of excessively Revenues and Operating Income recorded prior-period Japan : +¥0.78 billio
Slide 44: Changes Due to External Factors (Forecast) (3)
(Appendix 2) Financial Results Forecast for FY2020 B 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: Japan : ¥(0.74) billion [Q1] (insufficient prio
Slide 45: Changes Due to External Factors (Forecast) (4)
(Appendix 2) Financial Results Forecast for FY2020 B Changes Due to External Environmental and Other Factors (Forecast) Impact on consolidated Variable factors results Reference (Full-year forecast) Japan Revenues : ¥(36.09) billion Operating income : ¥(10.94) billion The Americas Revenues : ¥(3
Slide 46: 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 30.0% 86,178 86,953 Nippon Express Export Weight Nippon Express Share 80,228 80,000 26.6% 28.0% 63,449 64,978 60,000 54,590 53,249 26.0% 26.6% 26.8% 49,298 47,370 45,094 26.6% 37,19
Slide 47: Export Freight (Air Freight Forwarding)
(Appendix 4) Export Freight (Air Freight Forwarding) (Unit： t /chargeable) 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 90,513 94,814 89,545 99,401 374,273 75,277 67,156 60,847 65,084 2
Slide 48: 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 49: Change in Non-Consolidated Income (Q3 Cumulative for FY2020)
(Appendix 6) Change in Non-Consolidated Income (Q3 Cumulative for FY2020) (100 million yen) (rounded down to 100 million yen) *Increase and decrease in the graph is on an income basis Impact of Other change in Decrease in vehicle expenses unit fuel chartering and price +57 subcontracting costs +11 O
Slide 50: 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 Decrease Other in vehicle chartering and Impact of expenses Operating Operating subcontracting change in unit +75 fuel price
Slide 51: No information contained in this document is intended to solicit purchase or sale of
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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