DESTINATION OF ONE YAMATO
Message from the President
DESTINATION OF ONE YAMATO
From the fiscal year ending March 31, 2022, we have been promoting the medium-term management plan "One Yamato 2023" based on the One Yamato management structure that focuses on the new Yamato Transport, which centralizes the management resources of nine Group companies. We are engaging in structural reforms with the aim of evolving from an operating structure centered around our TA-Q-BIN service to a company that can provide value covering the entire business process of our customers. In the first year of "One Yamato 2023," the fiscal year ending March 31, 2022, we have been implementing new strategies aimed at medium- to long-term growth, while at the same time responding to increasing demand, particularly in EC, where growth is accelerating. In anticipation of growth in the future, we are flexibly responding to issues and quickly implementing the strategies set out in "One Yamato 2023."
Centralizing Management Resources and Providing End-to-End Value for Customers
Becoming a Company That Can Create
New Delivery Methods and Value beyond Delivery
Up to now, the Yamato Group's business has focused on its TA-Q-BIN service, which is its main point of contact with customers' businesses and their day-today lives. Looking at this in terms of the supply chain for our corporate clients, it means that services were focused on last mile logistics. Over the three years of the medium-term management plan, we will be expanding our provision of value to the upstream domains of the corporate clients who have been using our services to date.
Currently, approximately 90% of the total TA-Q-BIN delivery amount comprises pickup from our corporate clients and, out of these, approximately half by sales drivers. The remaining half are shipments from relatively large corporate clients and are handled by the account sales representative. To expand the scope of our value provision for these clients we
must deepen our knowledge and understanding of our customers' businesses and embed ourselves into their businesses. We aim to reinforce the account management system for One Yamato, which centralizes management resources, and to be chosen by companies as a partner that solves management issues for customers by bringing together our sales representatives, managers, and executive personnel through the utilization of the knowledge of specialized personnel who have been invited from outside the Company.
Furthermore, we will accelerate the provision of logistics solutions that meet the needs of customers and promote initiatives to achieve One Yamato management on a regional basis and become closer to our customers. This will enable us to optimally allocate management resources more effectively.
Prioritizing the Creation of an EC Logistics Network
Yutaka Nagao
Representative Director, President and Executive Officer
In recent years, the rate of online shopping has been increasing at an ever growing pace due to changes to lifestyles and consumption behavior. As the EC (e-commerce) user base expands, the sales methods of our corporate clients and their businesses themselves have been changing. We must promote the creation of a new EC logistics network to realize Yamato's sustainable growth and continue responding to expanding EC needs.
The existing TA-Q-BIN network was created as an optimal framework for meeting the transportation needs of an unspecified number of customers throughout Japan. Meanwhile, responding to EC needs by shipping large volumes from specific locations through the existing network is not an optimal solution from both a functional and cost standpoint.
Accordingly, we are promoting the creation of a new network that meets the demands of major EC opera- tors, particularly in urban areas where cargo is focused. Through these efforts, we will achieve profit growth for Yamato, while supporting the growth of EC, by reducing costs through the simplification of the operation process for EC freight.
This new EC logistics network has been created to handle over 10% of the overall TA-Q-BIN delivery amount during the fiscal year ending March 31, 2022 and approximately 20% in the final year of "One Yamato 2023."
Furthermore, we will change the existing network into one that more effectively meets the needs of consumers and corporate clients.
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Responding to Corporate Clients through Account Management under One Yamato
Responding to corporate clients through One Yamato | From April 2021, we launched our new account |
and providing value in the upstream domains of the | management structure and are working to provide |
wide range of customers who use our TA-Q-BIN ser- | value to our customers. |
vice are vital when strengthening corporate business. | Our sales drivers face small-lot corporate clients | |
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DESTINATION OF ONE YAMATO
Message from the President
on a daily basis. By enhancing our strengths of pickup and delivery and the development of an environment in which sales drivers can focus on pickup and sales activities, we will interact more closely with customers' lifestyles and businesses and provide value that has roots in the needs of regional customers.
Additionally, to provide value to customers
businesses. In the fiscal year ending March 31, 2022, we began operation of this process as a system across the entire organization.
At our overseas businesses, we used to promote the expansion of TA-Q-BIN in Asia as a strategy, but it was difficult in some respects to be self-reliant.
Over the past few years, we have discontinued our overseas TA-Q-BIN service and created circum-
DESTINATION OF ONE YAMATO
under a new concept. This is an area that we will examine | working environment that ensures an even higher level of |
by utilizing outside knowledge. | safety, and creating a pleasant space for customers and |
Redefining the functions of bases that are suitable for | employees, will lead to the medium- to long-term improve- |
the future by, for example, considering the introduction of | ment of productivity. |
new facilities and automated equipment, developing a | * As of September 30, 2021 |
Reinforcing Sustainable Management and Changing Risks into Growth Opportunities
through One Yamato, it is vital that account sales representatives make proposals that contribute to solving our customers' issues based on customer feedback obtained by sales drivers. In the fiscal year ended March 31, 2021, society changed rapidly due to the impact of the spread of COVID-19, creating numerous issues for our customers' busi- nesses. Under these circumstances, the Yamato Group was able to rapidly provide solutions based on information from sales drivers, such as support
stances that enable us to make a new start. Based on the One Yamato management structure, the Group companies we have developed in each country are promoting initiatives to provide supply chain solutions to customers both domestically and over- seas, rather than promoting business locally.
We will maximize the value we provide to customers through initiatives including reviewing our organizational structure to further refine account management, continuously developing sales per-
The Yamato Group, which operates together with various stakeholders, including shareholders and investors; a diverse range of customers, from businesses to consumers; and over 220,000 employees, as well as the external partners and business partners we work with on a daily basis, and local communities, is naturally responsible for addressing social issues. Furthermore, ESG and sustainability initiatives are fundamental elements of a logistics company's competitive strategies and are seen as not only risks that can have
a major impact on the business but also as a differentiators and sources of added value for achieving sustainable growth. The Yamato Group formulated Sustainable Medium- Term Plans 2023 to realize its environmental and social visions as set out under "YAMATO NEXT100" and achieve virtually zero greenhouse gas emissions* by 2050. First, we will promote initiatives for each important material issue (materiality) in our business activities to achieve our targets for the next three years.
for our customers who have been focusing their
sonnel, and strengthening our ability to design and
Responding to Climate Change and Energy Management
businesses on physical stores to start up EC
Promoting Data-Driven Management
The data-driven management that the Yamato Group is aiming to develop will enable us to visualize management through the utilization of data and make management decisions in a more objective and scientific manner. If our management resources are insufficient to meet demand and our workload exceeds capacity, our frontline employees will be unable to fully respond, which will lead to a drop in quality. Conversely, if we over-allocate management resources for the workload, Company profits will suffer. To carry out management based on this prin- ciple, we must have a data-driven response for all of our decisions.
To date, we have increased our understanding of
provide solutions that meet customers' needs.
need to collect to achieve this. By analyzing customer demand for each segment based on this data, keeping in close communication with customers who have a particularly high shipping amount, and increasing the accuracy of demand forecasts that reflect recent information, we will allocate management resources effectively, increase the quality of our service, further improve the working styles of our employees and business partners, and enhance profitability.
Rebuilding a Customer-Oriented Network and Utilizing Facility Strategies for Improving Productivity
In recent years, disasters caused by abnormal weather have become more frequent. For the Yamato Group, which has a wide customer base and a logistics network that covers the whole of Japan, climate change is a serious risk that could have a negative impact on our customers' busi- nesses, damage the logistics network, and even affect business continuity.
To reduce our environmental burden, we have been promoting the switch to vehicles that emit fewer greenhouse gases; the introduction of methods for pickup and delivery that do not emit greenhouse gases, such as hand- pushed trolleys and bicycles; and the use of electricity generated via renewable energy sources. To further accelerate initiatives to achieve virtually zero greenhouse gas emissions by 2050, as set out in our long-term targets, we are actively engaging in the introduction of small-sized,commercial-use EVs, the implementation of field tests for the next generation of modes of pickup and delivery that
do not emit greenhouse gases, and the development of vehicles in collaboration with car manufacturers. While there are issues surrounding commercialization, we expect to introduce next-generation vehicles into our last mile pickup and delivery operations in the near future.
Additionally, looking toward the future, we must develop specific plans and initiatives for solving issues regarding the procurement and storage of renewable energy. This is a topic that is strongly connected to the previously mentioned strategies for facilities, and we must reevaluate the purpose of facilities in terms of overall energy management. To achieve this mission, Yamato Transport established the new Green Innovation Development Division in October 2021. This division is focused on promoting environmentally friendly initiatives to achieve our long-term targets and to realize our environmental vision, which will have a positive effect on not only Yamato but also the logistics industry and society as a whole.
the digital field and made progress with the organization of our data by considering how we can realize the management we envisage and what data we
We are promoting initiatives to appropriately reallocate our network of approximately 110 business warehouses, 70 sorting facilities, and 3,500 TA-Q-
Becoming a Company That Further Contributes to the Achievement of an Enriched Society
BIN centers* across Japan based on demand and workload forecasts through data analysis. This is the biggest goal of this initiative for rebuilding a customer -oriented network.
Furthermore, we will reconsider the functions of logistics facilities, as well as their reallocation, with the aim of achieving high profitability. For example, we currently carry out manual procedures, particularly sorting operations, at the current TA-Q-BIN cen- ters. To promote laborsaving measures, we must first redesign operations at sorting facilities, not as an extension of what we have done in the past but
Due to the spread COVID-19 and the progress of digitali- zation, changes to people's lifestyles have accelerated alongside the significant changes to the flow of business, services, and goods. The Yamato Group's Management Philosophy states that it will contribute to the creation of an enriched society. In line with this philosophy, we want to become a Group that contributes even more to achieving an enriched society as a company that works closely with consumers and businesses.
We are proud of the value that logistics services can offer society. To maximize this value, we are working to thoroughly reinforce our logistics domain as a professional
in the field during the three-year period of "One Yamato 2023." We will achieve further growth and the improvement of corporate value in the medium to long term by meeting the needs of our diverse customers, becoming a company that provides extensive end-to-end value for our customers' businesses, deepening our knowledge of consumers and our customers' businesses throughout this process, and creating new delivery methods and value beyond delivery.
February 2022
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YAMATO HOLDINGS CO., LTD. 019 Integrated Report 2021
DESTINATION OF ONE YAMATO
Message from the Chief Financial Officer
We will steadily implement structure reform initiatives based on the medium-term management plan "One Yamato 2023." We aim to improve corporate value over the medium to long term by promoting digital transformation and the reinforcement of Group infrastructure while maximizing the value we provide to customers by focusing on the centralization of management resources in growth domains.
Toshizo Kurisu
Executive Officer and Vice President
Responsible for overseeing Finance, Public Relations and Digital
DESTINATION OF ONE YAMATO
partners, regardless of our policy of self-reliance, in domains | return ratio of 50% or more (cumulative for the period from |
that require management speed or resilience in response to | the fiscal year ended March 31, 2021 to the fiscal year ending |
the fluctuation of demand. | March 31, 2024). |
In regard to financial strategy, as a company responsible | In the fiscal year ended March 31, 2021, we paid divi- |
for social infrastructure, our basic policy is to maintain and | dends of ¥46 per share and achieved a payout ratio of 30.4%. |
improve financial soundness, taking into account business | In the fiscal year ending March 31, 2022, we plan to pay out |
continuity, the impact of COVID-19, which remains uncertain, | an interim dividend of ¥23 per share (already paid), a final |
and increasingly severe disasters. | year dividend of ¥23 per share, and a full-year dividend of |
In terms of fundraising, we will do so in a timely and | ¥46 per share. |
appropriate manner, with an awareness of financial soundness | |
and efficiency. We will strive to maintain our credit rating | Changes to Segment Disclosure of Financial |
(AA-, Rating and Investment Information, Inc.) while keeping in | Results |
mind an optimal capital structure from the perspective of | Following the launch of the new management structure in |
financial stability. | April 2021, we have changed the classification of reportable |
In April 2020, we transferred 60% of the issued common | segments from the first quarter of the fiscal year ending March |
Promotion of Structure Reform Aimed at Sustainable Growth
Amid changes to people's lifestyles and the structure of the logistics industry that have been spurred by the global spread of COVID-19 and the acceleration of the shift to EC (e-com- merce) in all industries, we have met rapidly increasing demand and increased revenues in the fiscal year ended March 31, 2021. This was achieved by proceeding with initiatives based on the transformation plan "YAMATO NEXT100," which we formulated in January 2020 as a grand design for our management over the medium to long term. Furthermore, we achieved an increase in profit by optimally allocating management resources based on data analysis and demand forecasting to improve the efficiency of pickup and delivery and trunk-route transportation, as well as by creating a new delivery network in cooperation with our delivery partners to expand pickup and delivery capacity and optimize costs.
In January 2021, we formulated the medium-term management plan "One Yamato 2023," which is scheduled to finish in the fiscal year ending March 31, 2024. Additionally, we launched a new Group management structure in April 2021 that is centered on the new Yamato Transport, which centralizes the management resources for each Group company.
We formulated the medium-term management plan "One Yamato 2023" with the transformation plan "YAMATO NEXT100" as a foundation and based on the accelerated changes to the business environment spurred by the COVID- 19 pandemic. The plan includes targets for the fiscal year ending March 31, 2024 for consolidated operating revenues of ¥2,000 billion, consolidated operating profit of ¥120 billion, a consolidated operating profit margin of 6.0%, and ROE of over 10%. We will also promote structure reform initiatives with the aim of sustainable growth beyond the end of the fiscal year ending March 31, 2024 and medium- to long-term improvement of corporate value.
We are promoting the main initiatives of "One Yamato 2023" across the entire Group, including the creation of an "EC ecosystem"; the strengthening of the corporate logistics business; the reinforcement of Group infrastructure, which includes reviewing the location of services and promoting business process re-engineering (BPR); and the promotion of data strategies focused on the shift to data-driven
020 | YAMATO HOLDINGS CO., LTD. |
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management to further increase the Yamato Group's growth potential and profitability in the first year of the plan (the fiscal year ending March 31, 2022). We are also working to improve our business management in line with the new structure.
Financial Strategy and Investment Aimed at Creating Future Cash Flows
Investment decisions are made based on whether or not they will increase corporate value over the medium to long term. In the three-year period between the fiscal years ending March 31, 2022, and the fiscal year ending March 31, 2024, we expect to invest a cumulative ¥400 billion to promote the main initiatives of "One Yamato 2023"
Of this amount, we plan to invest a total of ¥200 billion in growth. This includes ¥100 billion for digital investments to revamp core systems and expand the functions of the new delivery service EAZY, which is geared toward e-commerce companies; ¥50 billion for investments in buildings, such as automating logistics operations and establishing work consolidation centers; and ¥50 billion for developing automated warehouses and equipment for supply chain solutions, such as the distribution of pharmaceuticals.
In addition, as current investments to maintain the busi- ness, we expect to invest ¥60 billion in the extension and structural alteration of logistics facilities, ¥60 billion in the replacement of vehicles and introduction of environmentally friendly vehicles, ¥50 billion in the expansion and replacement of management systems related to existing services and internal personnel safety, and ¥30 billion in the replacement of sorting equipment for parcels and equipment related to service provision.
Through these investments, we aim to increase growth potential and profitability by achieving growth in the EC and Corporate business domains and improving productivity in the areas of transport and delivery services, sorting, and administrative work through the optimal allocation of management resources based on data analysis and the strengthening of Group infrastructure. Furthermore, in response to changes in the business environment and customer needs, we will implement optimal investments in areas such as the examination and implementation of proactive collaboration with external
share of Yamato Lease Co., Ltd. to Fuyo General Lease Co., Ltd. | 31, 2022. We changed from six business segments to two | |||||||||||||||||||||||||||||||||
to strengthen the competitiveness of the lease service business | business segments-the Retail Business Unit, which engages | |||||||||||||||||||||||||||||||||
and achieve joint ventures with partner companies aimed at | in providing high-quality,small-lot transportation services, | |||||||||||||||||||||||||||||||||
expanding business domains. We also transferred 51% of the | including TA-Q-BIN, and providing value that meets the needs | |||||||||||||||||||||||||||||||||
issued common share of Yamato Home Convenience Co., Ltd. | of consumers and regular business clients, and the Corporate | |||||||||||||||||||||||||||||||||
to ART MOVING COMPANY Co., Ltd. in January 2022 to further | Business Unit, which engages in providing value across the | |||||||||||||||||||||||||||||||||
increase convenience for customers in the moving market. | entire corporate logistics supply chain, including the upstream | |||||||||||||||||||||||||||||||||
We will continue to promote initiatives, such as reorgani- | and downstream business domains. Furthermore, this fiscal | |||||||||||||||||||||||||||||||||
zation in anticipation of future business growth and realloca- | period is the first year of the new "One Yamato" management | |||||||||||||||||||||||||||||||||
tion of management resources to highly profitable businesses, | structure and we are engaging in a phased enhancement of | |||||||||||||||||||||||||||||||||
with the aim of improving capital efficiency. | segment information. To ensure that all of our shareholders | |||||||||||||||||||||||||||||||||
and investors understand the Yamato Group's financial situa- | ||||||||||||||||||||||||||||||||||
Basic Stance on Capital Policies and | tion, we will continue striving to disclose information in an | |||||||||||||||||||||||||||||||||
Shareholder Returns | appropriate and timely manner. | |||||||||||||||||||||||||||||||||
In regard to capital policy and shareholder returns, we will | ||||||||||||||||||||||||||||||||||
consider timely and appropriate measures based on the | Improvement of Corporate Value over the | |||||||||||||||||||||||||||||||||
future growth potential (operating revenues) and profitability | Medium to Long Term | |||||||||||||||||||||||||||||||||
(operating profit margin) of our businesses, financial sound- | The Yamato Group has positioned ROE as a key indicator for | |||||||||||||||||||||||||||||||||
ness (status of cash creation, cash and cash equivalents, and | improving shareholder value. We will strive to improve ROE by | |||||||||||||||||||||||||||||||||
capital adequacy ratio levels), investment progress, capital | increasing profitability through optimizing the allocation of | |||||||||||||||||||||||||||||||||
efficiency, and other factors, with a basic policy of stable | management resources and implementing growth strategies | |||||||||||||||||||||||||||||||||
dividends (with an awareness of the ratio of dividends to | while remaining cognizant of an optimal capital structure. | |||||||||||||||||||||||||||||||||
shareholders' equity). The key indicators for capital policies | Additionally, we will continue to strengthen corporate | |||||||||||||||||||||||||||||||||
will be an ROE of 10% or more (fiscal year ending March 31, | governance to achieve sustainable growth and a sustainable | |||||||||||||||||||||||||||||||||
2024), a dividend payout ratio of 30% or more, and a total | society. We will also promote Groupwide efforts to achieve | |||||||||||||||||||||||||||||||||
Shareholder Return Results and Forecasts* | the sustainable targets for society and the environment estab- | |||||||||||||||||||||||||||||||||
lished in the Sustainable Medium-Term Plans 2023, based on | ||||||||||||||||||||||||||||||||||
(Fiscal Year Ended March 31, 2017 to Fiscal Year Ending March 31, 2022) | ||||||||||||||||||||||||||||||||||
our sustainability vision and material issues (materiality) as | ||||||||||||||||||||||||||||||||||
(Yen) | (%) | laid out in "YAMATO NEXT100." | ||||||||||||||||||||||||||||||||
As part of this, we will endeavor to enhance information | ||||||||||||||||||||||||||||||||||
50 | 100th anniversary com- | 200 | ||||||||||||||||||||||||||||||||
memorative dividend ¥10 | disclosure based on the recommendations of the Task Force | |||||||||||||||||||||||||||||||||
160 | ||||||||||||||||||||||||||||||||||
40 | 120 | on Climate-related Financial Disclosures (TCFD) while identi- | ||||||||||||||||||||||||||||||||
80 | fying and evaluating the risks, opportunities, and impacts | |||||||||||||||||||||||||||||||||
30 | 40 | |||||||||||||||||||||||||||||||||
46 | associated with climate change in recognition of its impor- | |||||||||||||||||||||||||||||||||
46 | 0 | |||||||||||||||||||||||||||||||||
20 | tance in improving the Yamato Group's corporate value over | |||||||||||||||||||||||||||||||||
27 | 27 | 28 | 31 | (Forecast) | the medium to long term and realizing a sustainable society. | |||||||||||||||||||||||||||||
10 | Going forward, we will aim to improve corporate value | |||||||||||||||||||||||||||||||||
through the promotion and disclosure of initiatives aimed at | ||||||||||||||||||||||||||||||||||
0 | the sustainable development of society and the business and | |||||||||||||||||||||||||||||||||
2017/3 2018/3 2019/3 2020/3 2021/3 | 2022/3 | |||||||||||||||||||||||||||||||||
Dividend per share (left scale) | Dividend payout ratio (%) (right scale) | through constructive dialogues with all of our shareholders | ||||||||||||||||||||||||||||||||
Total return ratio (%) (right scale) | and investors, not just the financial aspect of enhancing ROE. | |||||||||||||||||||||||||||||||||
* The forecast dividend figures are the figures announced on November 12, 2021. | ||||||||||||||||||||||||||||||||||
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DESTINATION OF ONE YAMATO
Medium-Term Management Plan "One Yamato 2023"
(From the fiscal year ending March 31, 2022 to the fiscal year ending March 31, 2024)
Under "One Yamato 2023," the medium-term management plan due to conclude at the end of the fiscal year ending March 31, 2024, we will offer value to individual and corporate customers, as well as society as a whole. We will accomplish this by combining the management resources centralized under One Yamato into an optimal form and supporting the entire supply chain, from suppliers and manufacturers to consumers, based on the accelerated adoption of EC in all industries brought on by rapid changes to lifestyle and the distribution structure.
Main Initiatives of "One Yamato 2023"
1. Optimal allocation of management | 4. Creation of the "EC Ecosystem" | 7. HR Management That Support the Shift to | |||
resources based on data analysis | an "Innovating Delivery Business" | ||||
5. Promotion of data and innovation | |||||
2. Reinforcement of Group infrastructure | 8. Improvement of capital efficiency | ||||
strategies | |||||
3. Transformation into a partner that | 6. Reform of management structure and | 9. Strengthening of sustainable management | |||
supports the entire supply chain | reinforcement of governance |
Main Initiative 1. Optimal Allocation of Management Resources Based on Data Analysis
Through development of the database and the advancement of algorithm development, we are improving the accuracy of the demand and workload forecast for each region and promoting the optimal allocation of Group management resources to respond to the changing and diversifying needs of customers, both individual and corporate. Furthermore, in addition to optimizing and standardizing the transportation process, including trunk-route transportation, we will improve the productivity of the entire network by increasing the time employees spend with customers on the front line and expanding pickup and delivery capabilities. We will accomplish this by appropriately allocating personnel and vehicles at each base, as well as through operation work reform, automation, and digitalization.
Main Initiative 2. Reinforcement of Group Infrastructure
We aim to reinforce the value we offer to customers and improve productivity through the following methods: "reinforce value offered through reallocation of bases and expansion of functionality and improve productivity," "optimize transportation functions, add functions, and expand to an open delivery network," and "promote Business Process Re-engineering (BPR)."
1 Reinforce value offered through reallocation of bases and expansion of functionality and improve productivity
Reallocate facilities owned by various Group companies in | Reinforce functions and improve productivity | ||
Pickup and | the TA-Q-BIN network | Sorting | through automation by digitalizing as well as |
delivery | • Establish bases in optimal locations to improve service level | consolidating operations in certain facilities | |
facilities | |||
bases | • Consolidate transportation between facilities and | ||
• Expand sorting capacity by as much as 50% | |||
other operations |
2 Optimize transportation functions, add functions, and expand to an open delivery network
DESTINATION OF ONE YAMATO
Main Initiative 4. Creation of the "EC Ecosystem"
We are reinforcing initiatives aimed at establishing an EC ecosystem in which EC operators, customers, and delivery persons can enjoy the benefits of the accelerated progress of EC adoption in all industries.
Main Initiative 5. Promotion of Data and Innovation Strategies
In addition to the renewal of our core systems, we are strengthening the development of our digital data and reinforcing our digital platform in order to further advance the use of data. Furthermore, starting with the KURONEKO Innovation Fund, which was established in April 2020, we are promoting the reinforcement of open innovation through activities such as discovering and collaborating with start-up companies and investing in start-ups to create new business.
Main Initiative 6. Reform of Management Structure and Reinforcement of Governance
From April 2021, we launched a new Group management structure that focuses on the new Yamato Transport, which centralizes the diverse management resources of each Group company. We have implemented measures that optimize management systems in order to maximize corporate value by effectively utilizing the management resources of the Group.
Main Initiative 7. HR Management That Support the Shift to an "Innovating Delivery Business"
Under the new management structure, we will renew the HR system in order to clarify the roles and responsibilities of each employee on the front line, thereby improving the evaluation process, and to train specialized personnel in the business and function divisions, who will grow to become top performers and leaders of the Yamato Group.
Main Initiative 8. Improvement of Capital Efficiency
We will improve shareholder value through timely and appropriate measures based on stable dividends (with an awareness of DOE), taking into account the future growth potential (operating profit) and profitability (operating profit margin) of our businesses, financial soundness (status of cash creation, cash and cash equivalents, and capital adequacy ratio levels), investment progress, capital efficiency, and other factors.
Targets | ROE of | Dividend payout ratio of | Total return ratio of *1 | Fiscal year ending March 31, 2024 | |
(Fiscal year | *2 | Cumulative ratio of the fiscal year ended | |||
over 10%*1 | over 30% | over 50%*2 | |||
ending March 31, | March 31, 2021 to the fiscal year ending | ||||
2024) | March 31, 2024 | ||||
Main Initiative 9. Strengthening of Sustainable Management
To promote sustainable management, we aim to establish a medium-term plan and targets through the fiscal year ending March 31,
Reallocate trunk-route, middle mile, and last mile transportation functions of various Group companies in the network and further promote the total optimization of transportation and
Make sophisticated pickup and delivery tools to further strengthen collaboration with partners, such as EAZY CREW, which caters to diverse customer needs related to EC. Expand
2024, with the aim of realizing our two visions set forth for the creation of a sustainable future.
For more details, please refer to page 34.
delivery processes
Utilize local networks that can cope with high-frequency, small- to middle-lot deliveries and develop Yamato's original TMS (Transport Management System), thereby expanding transportation functions that cater to the diverse needs of each region
support to partner companies through efforts such as building portal sites for drivers, providing leased vehicles, and enriching safety training and welfare
Planned Figures for "One Yamato 2030"
Performance Targets
2021/3 | 2024/3 | ||
Results | Target | Growth | Growth rate |
Investment Plan ¥400 billion
Growth Investments: ¥200 billion Current Investments: ¥200 billion
3 Promote business process re-engineering (BPR)
Promote operational efficiency across the Company, through the standardization and digitalization of administrative operations, with the Professional Service Function Division taking the lead
• Cut down on administrative work by approximately 40%* |
(create time and contact points with customers for employees on |
Optimize Group sourcing and procurement
- Consolidate sourcing and procurement at the Group level, with a focus on fair and sustainable trading practices, thereby optimizing costs
Consolidated | ¥1,695.8 | +¥304.1 | ||
operating | ¥2,000 billion | +17.9% | ||
revenues | billion | billion | ||
Consolidated | ¥92.1 billion | ¥120 billion +¥27.8 billion | +30.3% | |
operating profit | ||||
Consolidated | ||||
operating profit | 5.4% | 6.0% | +0.6pt | - |
margin | ||||
Consolidated |
Forecast of Future Growth (Fiscal year ending March 31, 2024)
Consolidated operating profit | Composition of Operating | |
¥120 billion | Expenses | |
(+30.3% compared with the fiscal | Other | |
year ended March 31, 2021) | expenses | Personnel expenses |
the front line) |
¥94.0 billion ¥120 billion +¥25.9 billion | +27.6% |
Operating Revenue per
55% in the fiscal year
* Rough estimate of effects of initiative at the end of the fiscal year ending March 31, 2024 (compared with the fiscal year ended March 31, 2021)
Main Initiative 3. Transformation into a Partner That Supports the Entire Supply Chain | ||||
We aim to become a management partner for our corporate clients by providing consistent business solutions to the downstream, | ||||
midstream, and upstream supply chains through strategic account management and by supporting the innovation of supply chains | ||||
022 | and business processes the implementation of structural reforms. | For more details, please refer to page 28. | ||
YAMATO HOLDINGS CO., LTD. | ||||
Integrated Report 2021 |
ordinary profit | ||||
Profit attribut- | ||||
able to owners | ¥56.7 billion | ¥72 billion | +¥15.2 billion | +27.0% |
of parent | ||||
ROE | 10.0% | Over 10% | - | - |
Employee*
+15% compared with the fiscal year ended March 31, 2021
- Converted number of employees based on different working hours
Subcontracting expenses
ended March 31, 2021
50% in the fiscal year ending March 31, 2024
YAMATO HOLDINGS CO., LTD. 023 Integrated Report 2021
DESTINATION OF ONE YAMATO
Creation of the "EC Ecosystem"
The adoption of e-commerce (EC) is accelerating in all industries, to the point where almost everything is available through EC, regardless of the product or service. EC growth through initiatives, such as the expansion of the functions of EAZY, a delivery service for the EC market; support for the creation of a supply chain for EC opera- tors, from receiving orders to shipping and delivery; and the creation of an EC logistics network, will lead to the profit growth of the Yamato Group.
Continued Growth of the EC Market
DESTINATION OF ONE YAMATO
Improvement of Convenience for EC Users
By connecting EC users, EC operators, and delivery service providers in real time using digital information, we will thoroughly enhance the convenience, safety, and efficiency of purchasing, sending, and receiving parcels and help realize sustainable growth in the EC domain.
- Further growth expected domestically as the rate of the shift to EC is comparatively low compared with countries such as the United States and China, despite the continued growth of the EC market
- Further expansion of the EC user base and more established use of EC as a result of changes in lifestyles and consumption behavior due to the COVID-19 pandemic
EAZY-A New Delivery Service for the EC Market
(Launched in June 2020)
Features of
EAZY Delivery Amount
(Thousands of parcels) | 435.00 million |
500,000 | |
parcels | |
375,000 |
Size of the BtoC EC Market in Product Sales Domain and Rate of Shift to EC
(¥ billion) | (%) | ||||
18,000 | 8.08% | 9 | |||
Percentage of Households Using EC
(%)
60Declaration of first state of emergency in April 2020
1. Responding to diversifying needs for non-face-to-face delivery
• Front door • Delivery boxes • Gas meter boxes
• Storeroom • Garages • Bicycle baskets
• Reception / custodian
2. Receiving location can be changed right up until you |
250,000 | 178.83 million | |
parcels | ||
125,000 | ||
12,000 | 12,233.3 | 6 | |||||||
6,000 | 3 | ||||||||
0 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 0 |
50
40
0
51.8%
2019/1 2019/7 2020/1 2020/7 2021/1 2021/7
receive parcels | |
3. | Providing real-time delivery completion notice to |
customers | |
4. | Collaborating with external partners for more efficient |
deliveries |
0 | Forecast for scal year |
Results for scal year |
ended March 31, 2021 | ending March 31, 2022* |
* Forecast for delivery amount is the figure announced on November 12, 2021
Size of the BtoC EC market in product sales domain
EAZY will increase convenience for EC users and enhance value provided to EC operators by utilizing digital informa-
Rate of shift to EC (right scale)
Source: Ministry of Economy, Trade and Industry, Market Research on E-commerce
Source: Ministry of Internal Affairs and Communications, Family Income and Expenditure Survey
tion and expanding the functions of the service. For more details, please refer to page 32.
Overview of the EC Ecosystem
Creation of a New "Delivery System" That Connects EC Operators and Consumers
Provision of Added Value for EC Operators
EC operators/sellers
EC Users
We are supporting business growth for EC operators by providing
Large & mid-sized
operators
Promote collaboration with major EC operators Examples of EC sites for introducing EAZY
Trunk-route/terminal functions | Last mile delivery |
• Digitalization of upstream processes, | • Delivery combining digital |
such as Yamato's trunk-route | technologies with the physical |
transportation | network |
• Increased visibility of the transportation | • Various ways of receiving parcels |
process | • Partnership with delivery compa- |
• Use of digital data to achieve various | nies across Japan |
production efficiencies |
Delivery
notification
Real-time communication with customers and enhanced
total solutions in not only last mile processes but also upstream manufacturing processes, such as the delivery of goods to ware- houses, warehouse operations, and sorting.
Renewal of Fulfillment Service Aimed at Improving Convenience for EC Operators
- ZOZOTOWN
- Amazon
- LOHACO
- PayPay Mall*
- Yahoo! Shopping* * In some stores
Mass retailers
Manufacturers
Direct
delivery/
pickup
Order
placement/
intake/
inventory
data
Terminal | Analyze optimal | |
means of | ||
transportation | ||
Automation using robotics Fully digital operation management
Trunk-route
transportation
Optimization and visualization using various types of digital data
Sales drivers Make pickup and delivery tools electric and more lightweight
Delivery
Corporate Individual
Delivery by various carriers
EAZY CREW portal
Operational support tools, enhancement of welfare and other benefits, provision of leased vehicles, etc.
Delivery
Delivery
touchpoints based on customer needs, allowing flexible receipt of parcels
Delivering to desig-
nated locations
Smart locks
Okihai (drop-off delivery at the doorstep, etc.)
Station lockers
From April 2021, Yamato Transport and Yahoo Japan Corporation renewed their fulfillment service, which uses Yamato Group warehouses to carry out a series of operations on behalf of the stores of Yahoo! Shopping and PayPay Mall, from receiving orders for products to their storage and shipping, and have begun to provide nationwide flat rate shipping by size.
Previously, individual estimates had to be provided at the time of contract formation and procedures had to be completed in writing. After the renewal, the service will
be introduced more quickly and be easier to use, thanks to web-based processing and "uniform nationwide shipping rates by size" offered through the cooperation of both companies.
Additionally, because the Yamato Group warehouses enable smooth shipping, the packages will be eligible for "Blue Ribbon Delivery" as defined by Yahoo! Shopping and PayPay Mall, which is expected to improve the probability that the merchants will be selected by users.
Small EC operators
Total
picking
Digital connection | Digital data | Digital connection | |
with EC users | platform | with EC operators | |
Convenience stores
Other retailers
(drug stores, etc.)
Fulfillment Service
The Yamato Group conducts all operations from receiving orders to product storage, picking, packaging, shipping, and delivery.
Benefits for EC Operators | Benefits for EC Users | Benefits for Delivery Service Providers | ||||||
Increased sales opportunities | Real-time communication about deliveries | Ability to forecast business volume (allowing | ||||||
Improved customer satisfaction through various | Shorter lead times between order and arrival | resource optimization) | ||||||
added value | Wide range of options available for receiving parcels | Robust measures in place | ||||||
024 | Digital communication with clients | Efficient deliveries using operational support tools | ||||||
YAMATO HOLDINGS CO., LTD. | ||||||||
Integrated Report 2021 |
Receiving
orders
Yamato Group | ||||||||||||
Data | Total picking | Billing issuing | Single picking | Packaging | Shipping | |||||||
download | ||||||||||||
YAMATO HOLDINGS CO., LTD. 025
Integrated Report 2021
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Yamato Holdings Co. Ltd. published this content on 15 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2022 06:29:09 UTC.