Message from the Chief Financial Officer[PDF:93.6KB]

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.
Integrated Report 2021

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.

YAMATO HOLDINGS CO., LTD.

021

Integrated Report 2021