Value Creation by the New Yamato Group[PDF:2.09MB]

VALUE CREATION BY THE NEW YAMATO GROUP

The Yamato Group's Important Role as a Part of Social Infrastructure

Since its founding in 1919, the Yamato Group has created a large number of services that were unprecedented in their time, starting with TA-Q-BIN. By doing so, the Group has established itself as a corporate group that serves

VALUE CREATION BY THE NEW YAMATO GROUP

Commenced Use of New Symbol and Advanced Logo

From April 2021, we commenced the use of our new Kuroneko symbol and advanced logo, which symbolize our commitment to providing new value.

as a crucial part of social infrastructure. Recently, there have been major changes in the business environment surrounding Yamato and the spread of COVID-19 has accelerated changes to people's lifestyles and the structure of the logistics industry. Accordingly, the active participation of corporations in resolving social and environmental issues is becoming increasingly important to the achievement of a sustainable society.

Under these circumstances, in April 2021 the Yamato Group launched a new Group management structure that focuses on Yamato Transport, which centralizes the diverse management resources of each Group company. Additionally, the Yamato Group is working to provide comprehensive value that meets the needs of customers and society to transform the supply chain in response to changes to people's lifestyles and the distribution structure based on the medium-term management plan "One Yamato 2023," which is set to conclude at the end of the fiscal year ending March 31, 2024. Through these efforts, we will contribute to the creation of an enriched society, a goal laid out in our Management Philosophy, and realize sustainable growth and the improvement of corporate value.

New Kuroneko Symbol (Corporate Symbol) Without changing the thought behind this symbol of Yamato's friendly and reliable services, the design has been refined into a more future-oriented design that expresses Yamato's intention to further evolve the services it has continuously improved day after day while integrating its activities with community, urban, and regional environments in a more harmonious manner.

Advanced Logo

This is a new advanced logo that expresses and symbolizes the Group's vision and proactive, innovative approach to addressing the challenges facing today's society and businesses. The Yamato Group will combine the expertise and networks it has cultivated to date with new ideas, technolo- gies, and partnerships to create new services and businesses.

Contents

	16		DESTINATION OF ONE YAMATO
		16		Message from the President
01 VALUE CREATION BY THE NEW YAMATO GROUP
20		Message from the Chief Financial Officer
01	The Yamato Group's Important Role as	22		Medium-Term Management Plan
		"One Yamato 2023"
	a Part of Social Infrastructure/Editorial Policy
02	Renewal of the Group's Management Structure	24		Creation of the "EC Ecosystem"

48 CORPORATE GOVERNANCE

48 Governance Roundtable between the Board of Directors and Outside Directors

54 Corporate Governance

62 Directors / Audit & Supervisory Board Members / Management System

100 COMPANY INFORMATION

1. Global Network
2. Corporate Data / Stock Information

04 Creation of New Innovations

1. Strengthening of Sustainable Management

1. Group Corporate Philosophy

28 Transformation into a Partner That Supports

the Entire Supply Chain	66	FINANCIAL SECTION
32 Promotion of Digital Strategies for the Shift
to Data-Driven Management

10 Value Creation Process

1. Overview of the New Yamato Group

1. Performance Highlights

34 Strengthening of Sustainable Management 36 Sustainable Medium-Term Plans 2023

38 Environmental Strategies for Realizing a Sustainable Society

42 Human Resource Management That Supports the Shift to an "Innovating Delivery Business"

45 Measures for Safety and Peace of Mind

That Support Sustainable Growth

1. Ten-YearSummary and Business Highlights

1. Consolidated Balance Sheet

1. Consolidated Statement of Income
2. Consolidated Statement of Comprehensive Income
3. Consolidated Statement of Changes in Equity
4. Consolidated Statement of Cash Flows
5. Notes to Consolidated Financial Statements

1. Independent Auditor's Report

Forward-Looking Statements

This integrated report contains forward-looking statements concerning Yamato Holdings' future plans, strategies, and performance. These statements represent assumptions and beliefs based on information available at the time this report was created. Furthermore, forward-looking statements are subject to a number of risks and uncertainties that include, but are not limited to, economic conditions, customer demand, foreign currency exchange rates, tax laws, and other regulations. Yamato Holdings therefore cautions readers that actual results may differ materially from these predictions.

Editorial Policy

Having built up long-standing relationships of trust with all of its many and varied stakeholders, the Yamato Group discloses not only information of a legal nature but also information considered necessary for those stakeholders. The Yamato Group adopted the policy that such information shall be conveyed promptly and accurately as well as fairly and equitably. Conveying information, including that of a non-financial nature, on such aspects as management strategies, business overviews, and ESG activities, this integrated report is intended to deepen the reader's comprehensive understanding of the Yamato Group. Please visit our website for more detailed information.

Guidelines Referenced

• Ministry of Economy, Trade and Industry, Guidance for Integrated Corporate Disclosure and Company- Investor Dialogue for Collaborative Value Creation
• International Integrated Reporting Council (IIRC), International Integrated Reporting Framework

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VALUE CREATION BY THE NEW YAMATO GROUP

Renewal of the Group's Management Structure

A Group Management Structure

That Focuses on Yamato Transport,

Which Centralizes Diverse

Management Resources(From April 2021)

Why Change?

The primary reason for commencing these reforms is that the Yamato Group's strategies, management systems, and organizational and corporate culture centered on TA-Q-BIN do not fully address customer and social needs regarding the rapidly changing business environment and steadily worsening social issues.

Business Environment / Social Issues

• Diversification of customer expectations and needs

• Rapid progress of EC (e-commerce) adoption in various industries
• Declining population and decaying regional infrastructure

• Declining working population

• Climate change and resource scarcity

• Further acceleration of the shift toward EC in all industries due to the COVID-19 pandemic

Lifestyles: Further growth of EC and shift to omni-channel approaches, including non-face-to-face interactions

Logistics structure: Total optimization of inventory and

supply routes

VALUE CREATION BY THE NEW YAMATO GROUP

From April 2021, we began promoting our medium-term management plan "One Yamato 2023," which covers the period from the fiscal year ending March 31, 2022 to the fiscal year ending March 31, 2024, based on our new Group management structure that focuses on the new Yamato Transport, which centralizes the diverse management resources of each Group company. We will proactively face the needs of customers and society and make the lives of individual customers more convenient while supporting the overall management of corporate clients, thereby becoming the "best partner of both individual and corporate customers." Accordingly, we are working to implement the main initiatives set out in this plan.

What Is the Purpose of the Change?

We aim to proactively meet the needs of customers and society and make the lives of individual customers more convenient while supporting the overall management of corporate clients, thereby becoming the "best partner of both individual and corporate customers."

Yamato will offer innovative

Retail Business Division	solutions to customers by	Transport Function Division
Corporate Business Division	combining its various	Digital Function Division
management resources
Global SCM Business	throughout the Yamato Group.	Platform Function Division
Division
EC (E-Commerce) Business		Professional Service Function Division
Division

New Organizational System Beginning from April 2021

Issues with the Management Structure

Strategy

Management

structure centered

on TA-Q-BIN

Management	Organizational
systems	and corporate
	culture

Strategy

Currently, TA-Q-BIN alone unable to accommodate rising demand from the EC market and corporate logistics

Management	Organizational
Systems	and Corporate
Weak management	Culture
structure for quick	The Yamato
decision-making	Group's sound
due to depen-	culture of "inclusive
dence on individual	management" no
skills based on	longer practiced
intuition and
experience

Yamato Transport Co., Ltd.

Yamato Holdings Co., Ltd.

President

Corporate Division

Yamato Holdings Co., Ltd.

Yamato System

Delivery

Retail Business Unit

Corporate Business Unit

Development Co., Ltd.

Business Division

Business Division

BIZ-Logistics

Retail

Corporate

Global SCM

EC

Financial

Yamato Autoworks Co.,

e-Business

Transport Function Division

Ltd.

Home Convenience

Digital Function Division

etc.

Autoworks

Platform Function Division

Other Services

Professional Service Function Division

Note: On January 17, 2022, the Company carried out the partial transfer of shares held by Yamato Home Convenience Co., Ltd. As a result, Yamato Home Convenience Co., Ltd. has changed from a consolidated subsidiary to an equity-method affiliate.

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Creation of New Innovations

The Shift from "Delivery" to "Innovating Delivery"

Innovations We Have Taken On To Date

Since its founding as a truck delivery company in 1919, the Yamato Group has been creating services that society needs that do not yet exist. This concept, to always continue to provide even better services for customers and society, originated from our core values. We have valued this concept since our founding, and it has led TA-Q-BIN to success and supported our growth to the present day. Going forward, the Yamato Group will contribute to the creation of a sustainable, enriched society through its mission as a social infrastructure company by creating new delivery methods that support the next generation through new innovations.

Aiming for the Creation of

New Innovations

1919Founding of Yamato Transport Co., Ltd.

In 1919, when a total of 204 trucks existed in Japan, Yamato Transport Co., Ltd. was established in the Ginza district of Tokyo with four of those trucks. The founder Yasuomi Ogura anticipated the coming era of speed and embarked on a transportation business in an era where ox- and horse-drawn carriages and wagons were the main method of transporting freight by road.

In 1923, the Company began to accept orders and delivery goods for Mitsukoshi Gofukuten. Mitsukoshi, which had been using private automobiles and covered the majority of delivery costs, made the decision after evaluating Yamato Transport's low shipping expenses, the positive working attitude of its drivers, and its high level of trustworthiness as an organization.

Social Value

Declaration of Structural Reform in "YAMATO NEXT100"

Delivery services help make our lives prosperous.

Developing new delivery services and innovating existing ones change

people's lifestyles, and even society as a whole.

1929Launch of Japan's First

Regular Route

Transport Service

In 1927, Yasuomi Ogura visited London and met with a transportation company that operated a regular transport service route to regional towns and cities. This regular transport service route entailed employees making regular rounds on carriages and picking up packages directly from the doors of households that put out signs. He had the intuition that this system would meet Japan's demand for small-lot delivery and change transportation. Accordingly, he decided to create a similar network of regular transport service routes in Japan. Yamato Transport gave tobacconists, general stores, and other vendors using their service a triangular yellow flag, which features a cherry blossom and a red letter "Y," to display prominently when they had a package to deliver. In this way, they launched a regular transport service route between Tokyo and Yokohama, which was Japan's first regular route transport service, in 1929. The network was expanded to cover the entire Kanto area at the end of 1935.

Creating new methods for transport and delivery that have never existed before

Yamato is a company of innovation. As a social infrastructure provider,

the Yamato Group's mission is to contribute to the creation of a prosperous society

by innovating delivery services. This mission is an integral element of the

Group's corporate philosophy.

With the recent rapid growth of the e-commerce market, delivery volumes have dramatically risen and now exceed the current capacity of the Group's delivery network. At the same time, customer needs have become increasingly diverse and Japan faces serious social issues such as a shrinking population and

a decline in local communities.

Solutions to these social issues have yet to be found, while the delivery services­ of the

		Masao Ogura, who became president of the Company in 1971, noticed that a widely
	The Birth of TA-Q-BIN	held belief in the industry, that small-lot pickup and delivery is labor intensive and
1976	unprofitable, was untrue. Rather than making many deliveries of small packages, it was
thought to be more rational and profitable to make a single large-lot delivery once. He
		asserted that small-lot delivery has a high unit price per kilogram and that income would
		increase if they handled many small-lot deliveries. Additionally, TA-Q-BIN, the concept of
		pickup and next-day delivery with a single phone call, was created on January 20, 1976,
		and a nationwide TA-Q-BIN network was completed in 1997.
		Following this, the Company continued to grow by supporting the businesses of
		corporate clients in addition to creating the concept of tebura bunka leisure (literally
		"empty-handed culture," or the idea of traveling without the need to carry any luggage)
		and a culture of ordering specialty products, to enable TA-Q-BIN to meet the diverse
		needs of customers. In recent years, Yamato has promoted the shift from "home delivery"
		to "individual delivery" amid changes to and the diversification of lifestyles. The Company
		has striven to pursue convenience for customers picking up packages, as well as those
		sending packages, by enabling customers to select how they receive packages, not just
		the time period for their delivery.

future, which will serve as a foundation in the next era, require further innovation. In light of this situation, the Yamato Group will strive to innovate its delivery services and contribute to the realization of a sustainable and prosperous society going forward.

Evolving from a

"Delivery Business" to a

"Delivery Innovation Business"

As a social infrastructure provider and the pioneer of the TA-Q-BIN service,

the Yamato Group's mission is to create a sustainable and prosperous society through

innovative delivery services. By optimizing our delivery methods and working as

a united group, we will transform ourselves into the Yamato of tomorrow.

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VALUE CREATION BY THE NEW YAMATO GROUP

Strengthening of Sustainable Management

Our Aim to Sustainably Develop Society and Business by Realizing Our Two Visions

The Yamato Group's Social

and Environmental Material Issues

(Materiality)

VALUE CREATION BY THE NEW YAMATO GROUP

In January 2020, the Yamato Group formulated its grand design for its management over the medium to long term, the transformation plan "YAMATO NEXT100." As part of this plan, we established "sustain- ability initiatives under the theme 'management embodying the environment and society,'" as one of the infrastructure reforms, set forth our environmental and social visions for a sustainable future, identified important material issues (materiality), and set long-term targets, such as for virtually zero greenhouse gas emissions* by 2050.

Additionally, under our sustainable plans Medium-Term Environmental Plan 2023 and Medium-Term Social Plan 2023, formulated in January 2021, we set out specific actions to be taken to address each important material issue (materiality) and targets to be achieved by 2023 in order to realize these visions. Based on these plans, we are promoting initiatives for the sustainable development of society and business.

* In-house emissions (Scope 1 and Scope 2)

Two Visions for Realizing

a Sustainable Society

EnvironmentalEnvironmental

Energy &	Atmosphere
Climate
Environmental	Environmental
Resource	Resilience of
Conservation	Companies &
& Waste	Society

  Environmental Vision

Connect. Deliver the future via green logistics

The Yamato Group will further promote its vision of "Connect. Deliver the future via green logistics." By leveraging cutting-edge connections between data, people, and resources, we will increase the efficiency of transportation and provide delivery services that are better for the planet, our customers' lifestyles, and the economy. We will also support a strong, smart society by striving toward virtually zero greenhouse gas emissions and by creating business models based on sustainable resource use and consumption.

SocialSocialSocial

Labor	Human Rights	Safety
& Diversity	& Security

SocialSocialSocial

Data	Supply Chain
Utilization &	Community
Management
Security

  Social Vision

Through co-creation and fair business activities, help create a society that "leaves no one behind"*

* To leave no one behind: Basic philosophy of the SDGs

As a social infrastructure company, the Yamato Group will contribute to improving the quality of life of various people, including employees and customers, by reducing and eliminating various inequalities and obstacles in society. We will do this by delivering goods and value to everyone through fair and efficient business processes.

By promoting digital innovation and our strengths offline, as well as co-creation with various partners, we will be a leader in solving social challenges and creating a society that leaves no one behind.

Please see Sustainable Medium-Term Plans 2023 on pages 36 and 37 for details on specific actions to be taken to address each important material issue (materiality) and targets to be achieved.

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VALUE CREATION BY THE NEW YAMATO GROUP

Group

Corporate

Philosophy

The Yamato Group's foundation lies in its Core Values, which serve as the spirit of the Group's founding and have remained unchanged since their establishment in 1931. Supported by our Group Corporate Philosophy, which was created based on our unchanging Core Values, we aim to become a corporate group that can make sustainable contributions to the creation of an enriched society.

Core Values

1. We all represent the Company.

This value represents the spirit of "inclusive management," whereby employees make decisions based on their own judgments and engage with our customers and business partners with an awareness that they represent the Company.

2. We connect our customers' hearts with every delivery.

This value defines deliveries as not simply the transportation of goods, but rather a chance for us to connect with our customers' hearts and offer them joy.

3. We conduct ourselves both professionally and ethically.

This value reflects the importance of ensuring that all our employees adhere to laws and regulations as members of society while conducting themselves in an ethical manner.

VALUE CREATION BY THE NEW YAMATO GROUP

Overview of Our Group Corporate Philosophy

	Customers
Shareholders	Local
Communities

	Stakeholders
Partners	Employees

Incorporating the Founding Spirit within Our Core Values

Company founder Yasuomi Ogura

Our Core Values, which were established by our founder Yasuomi Ogura in 1931 shortly after our founding, have always been considered something that should remain unchanged throughout our 100-year history. When it came to corporate management, Yasuomi Ogura believed that no matter how logically a businessperson ran a company, the efforts of each individual employee are the most important aspect of preventing that company's organization from becoming a mere formality and of having that company be accepted by society.

Personnel involved in our transport businesses work on their own individual routes on a daily basis, which means it can take a certain amount of time before the direction of upper management is communicated to them. Yasuomi Ogura believed that the independence of each employee who places importance on the Core Values could compensate for this time lag. He therefore took steps to spread awareness of the Core Values across the Company.

Management

Philosophy

Our Management Philosophy serves as the purpose for operating our businesses and provides the direction toward which we should aim as a company.

Corporate Stance

Our Corporate Stance serves as our promise to society and represents our basic approach that we constantly implement with the aim of realizing our Management Philosophy.

Employee Code

of Conduct

The Employee Code of Conduct lays out the ideal approach and mindset that all members of the Yamato Group should have as they engage in their daily work in accordance with the Management Philosophy and Corporate Stance.

Management Philosophy

Yamato helps enrich our society by enhancing

our social infrastructure, creating more

convenient services for evolving lifestyles and industries, and developing innovative logistics and distribution systems.

Yamato Corporate Philosophy

Core Values

Our Core Values encapsulate our fundamental way of thinking and can be considered as the spirit of our founding. Within our Group Corporate Philosophy, we position these Core Values as the foundation of the Yamato Group.

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