Yamato : DESTINATION OF ONE YAMATO

Part 2

DESTINATION OF ONE YAMATO

Message from the President

Fully Utilizing the Management Resources of One Yamato Structure to Promote Value Provision from End to End, Covering the Entire Business Process of Our Customers

Achieving Sustainable Corporate Value Improvement

Issues Following Integration of the Group and Our Future Response

DESTINATION OF ONE YAMATO

Part 2

delivery of goods through integration of the strengths of our logistics facilities and transportation and delivery networks, as well as providing consolidated management and optimization of solutions for the inventory of and logistics for brick-and-mortar stores and EC, not just by taking responsibility for TA-Q-BIN in last mile delivery.

Going forward, it is my belief that the Yamato Group should provide solutions that cover customers' entire supply chains in this way. Resolving inventory and operational issues will consequently contribute to improving our customers' management. We have been developing a base that enables proposals that contribute to addressing customer management issues by combining the management resources of the Group. We will continue to engage in maximizing

In January 2020, we announced One Yamato, our policy for integrating Yamato Group companies. Following this announcement, we had a period of preparation, and from April 2021 we integrated nine group companies and launched the One Yamato management struc- ture, in both name and practice.

Sixteen years have passed since the Yamato Group shifted to a pure holding company system in 2005. Since each Group company operated their diverse businesses under various systems, integrating their management structures into One Yamato and reallocating management resources in an optimal manner was not easy. In the first year of the One Yamato management structure, we developed a platform for management as One Yamato while devoting more effort than expected to integration.

Fiscal 2022 marked the second year of the medium-term management plan "One Yamato 2023," and there has been no change in the direction the Group should take in the medium to long term. In light of recent changes to the business environment, I have once again realized that it is time to make a change.

Reflecting on the Yamato Group's history, we launched our chartered truck delivery service in 1919 by purchasing four trucks, at a time when there were only 204 trucks in the entire country. Ten years later, we launched Japan's first regular route combined-load transport service and expanded our network to cover the entire Kanto region as the use of trucks became widespread in society. As we entered an era of post-war economic growth, mass production, and mass consumption and needs increased for transport using

trucks for long-distance travel, Yamato was so focused on short-distance transportation that the response to these changes was delayed and performance suffered. However, following this, we turned to small-lot delivery and launched TA-Q-BIN to meet the delivery needs of countless customers. Quickly understanding and anticipating changes in society and the methods for purchasing and selling items and making proposals to customers has led to today's development. Now, when information can be shared online in real time with the spread of the internet and smartphones, we must make new logistics proposals that take into account further changes to methods for purchasing and selling items.

The goal of transitioning to One Yamato is to evolve into a company capable of providing value to corporate clients, both inside and outside of Japan, across their entire business process. Changes in consumption and lifestyles that accompanied the COVID-19 pandemic and upheaval in the business process and supply chain, from the procurement of raw materials and components and production to sales and after-sales services, have become urgent issues for corporate clients. Accordingly, the Yamato Group is taking these changes as opportunities for growth. Under the One Yamato management structure, which centralizes management resources, we will expand our range of value provision through comprehensive proposals that support the resolution of customer management issues by utilizing extensive relationships with customers and our superior logistics facilities and transportation and delivery networks.

the value we provide.

Deepening of Connections with Each Country and Global Expansion of the Value We Provide

In expanding the value we provide to corporate clients, the scope of our activities is not limited to within Japan. If we follow our custom- ers' supply chains, the field extends overseas. The Group has global networks and has developed local subsidiaries in 25 countries and regions. To date, local subsidiaries have had the power to provide logistics services with uniform quality, but have been limited to providing value to each country individually. Accordingly, we are currently providing integrated solutions, deepening connections between Japan and other countries and examining what kind of customer-oriented value we can provide.

In particular, transportation costs have been increasing significantly as a result of disruptions to global supply chains and steep rises in crude oil prices, and companies are responding by shifting their production bases to other countries recently. When customers move their bases, there is a risk that we may lose business. However, if the Group coordinates globally and utilizes networks in the countries to which customers have relocated, we can once again propose optimal solutions. We are now making full use of the Group's existing management resources to provide value to customers. We will also globally expand the value we provide by collaborating with external partners, including M&As, for functions we do not possess.

Transformation into a Partner That Supports the Entire Supply Chain for Our Corporate Clients

Optimization of Networks and Operations for Providing Value from End to End

The Yamato Group is widely known as the TA-Q-BIN service provider while TA-Q-BIN has a strong image owing to its services for individual clients, approximately 90% of the total delivery amount we handle comes from corporate clients. Of those, half of these are shipments from large corporate clients that are handled by our account sales representatives.

We cannot expand the range of value provision for these corporate clients by only providing TA-Q-BIN as we have to date. For example, corporate clients who sell products through

brick-and-mortar stores currently also tend to have e-commerce (EC) websites for sales. In many cases, they are also facing an increase in inventory and logistics costs since they have created separate logistics operations for both brick-and-mortar stores and EC websites.

How do they optimize inventory as a whole? How do they minimize the total logistics costs? These are serious management issues for corporate clients. However, the Yamato Group can contribute to the optimization of logistics costs by balancing the appropriateness of inventory with a shortened lead time for the transportation and

Yamato is engaging in the structural reform of its networks and operations to create an infrastructure for providing value from end to end for our customers' downstream, midstream, and upstream supply chains. Numerous EC operators have set up shipping bases in the vicinity of the Tokyo metropolitan area and three of its neighboring prefectures (Chiba, Kanagawa, and Saitama) where demand for EC has been concentrated in recent years. Thus, it is not efficient to continue meeting EC demand through TA-Q-BIN networks and

Yutaka Nagao

Representative Director, President and Executive Officer

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DESTINATION OF ONE YAMATO

Message from the President

operations that appropriately meet the delivery needs of an unspecified number of customers across Japan. Therefore, in urban areas we

In the fiscal year ending March 31, 2023, we have been building EC logistics networks and other infrastructure while drastically

DESTINATION OF ONE YAMATO

Part 2

Creation of a System for Sustainability That Leads the Entire Logistics Industry

are promoting the creation of a logistics network that specializes EC, from pickup and sorting to transportation and last mile processes. For EC operators, there is a process for procuring products before shipping and measures for returning products after purchase.

We will effectively meet these needs by utilizing new EC logistics networks in addition to last mile delivery. Furthermore, in response to increasing demand for procurement and delivery of products between companies and for refrigerated delivery services, we will promote the creation and utilization of a middle mile network (route pickup and delivery for corporate clients) and the launch of dedicated refrigerated delivery facilities while also enhancing the productivity of the entire network.

Material Issues to Address for Sustainable Growth

The Yamato Group has laid out material issues to improve corporate value over the medium to long term and achieve a sustainable society, and is promoting sustainable management based on Sustainable Medium-Term Plans 2023, which defines the details of specific actions and targets to be achieved by 2023.

reviewing our existing TA-Q-BIN network in line with recent changes to the flow and volume of packages. We will enhance safety and quality, reduce processes such as transportation between facilities and sorting work at each facility, and improve productivity across the entire network by consolidating, increasing the size of, and redeploying TA-Q-BIN sales offices, which have been focused in smaller areas; by redefining the functions of each sorting terminal; and by integrating them with larger sales offices.

Transforming these networks and promoting the creation of systems that are capable of regulating management resources and operations in line with workloads will steadily lead to the next phase of growth.

awareness with practicability for drivers; however, the issue going forward is energy management, including energy procurement. We will increase the amount of electricity generated by green energy, namely solar power, by promoting the installation of solar panels at terminals and sales offices. In addition, we will also aim to thor-

It is natural to engage in sustainability as a single company. At the same time, however, it is the role of major companies in the logistics industry to create a system that enables the entire logistics industry to become sustainable. We are examining the creation of a structure that enables not only Yamato but also our small and medium-sized partner companies and other companies in the same industry to participate in reducing greenhouse gas emissions.

Furthermore, distributors are facing issues, such as securing the transportation capabilities of trucks for long-distance travel and considering alternative means of transport, as a cap on overtime work will be applied to vehicle operation from April 2024, in addition to the decreasing working population and aging drivers.

The Yamato Group has adopted various countermeasures including the commencement of the operation of cargo flights as a new method of long-distance transportation from 2024. However, this is merely a new method of transportation. It is essential to increase the value provided by our services. We will expand the scope of value we provide through comprehensive proposals that support the resolution of customers' management issues, as well as provide individual services, such as transportation and storage. We

must also increase the turnover rate of assets to enhance profitability and secure long-distance transportation capacity. For example, we can increase the operational hours for vehicles by reducing the transport distance for drivers and combining short- and medium-distance transportation. Since it is difficult for each distributor to prepare their own facility, the logistics industry as a whole is considering the development of facilities that can be used openly and the creation of a system that allows operations including the transfer of packages and replacement of vehicles.

Rather than viewing sustainability initiatives as a cost, we are taking steps to address them with an awareness that these responses and investments enable us to create new systems that will lead to growth opportunities.

In terms of the environment, we are engaging in the creation of green logistics to meet our long-term target for 2050 of climate neutrality and our interim target of reducing greenhouse gases by

oughly implement electric vehicles and solar power generation by collaborating with car manufacturers to develop and standardize detachable cartridge batteries, intensively introducing and using

Important Factors to Consider When Improving Corporate Value

48% by 2030 (compared with the fiscal year ended March 31, 2021). We are currently promoting the introduction of ultra-low-floor walk- through light-duty electric vehicles, which balance environmental

electric vehicles within specific areas, and engaging in energy management linked to equipment at facilities.

The most important factor when maintaining and improving corporate value is protecting and continuing to strengthen the trust we have built up with customers and society. One of the Yamato Group's core values is that we conduct ourselves both professionally and ethically. For me, professionalism and ethics are vital when strengthening this trust. While the most important goal for a company is generating profit, this does not mean that it should do anything for profit. I believe that in addition to possessing the correct ideals and acting ethically toward customers, conducting business while placing value on acting ethically toward coworkers engaging in daily their operations, business partners, and local communities also leads to trust.

This year we passed the midway point of the current medium- term management plan, which runs until March 31, 2024. Through One Yamato, we are steadily increasing the scope of value we

provide to customers. We aim to further improve corporate value in the future by continuing to always respond to changes with a sense of speed and building up trust with each stakeholder, such as cus- tomers, business partners, local communities, and all of our share- holders, with the Group's Management Philosophy, including our Core Values, as the cornerstone.

November 2022

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DESTINATION OF ONE YAMATO

DESTINATION OF ONE YAMATO

Part 2

Message from the Chief Financial Officer

Toshizo

Kurisu

P R O F I L E

Representative Director, Executive Officer and Vice President

Responsible for Finance, Public Relations and Digital

We aim to improve corporate value over the medium to long term under the One Yamato management structure, which centralizes the management resources of the Yamato Group. While enhancing profitability through the optimal allocation of management resources and the implementation of growth strategies, we will reinforce financial strategies that contribute to reducing capital costs as well as enhance the efficiency of assets and capital and sustainable management for the sustainable development of society and businesses.

Promoting Structural Reforms Based on "One Yamato 2023"

The fiscal year ended March 31, 2022, the first year of the medium- term management plan "One Yamato 2023," which is scheduled to finish in fiscal 2023, we steadily promoted structural reform initiatives under the One Yamato management structure, which focuses on Yamato Transport and centralizes the management resources of nine Group companies. As a result, we have seen an increase in operating revenue as a result of focusing on increasing our delivery amount as part of our response to accelerated growth in the EC domain and optimizing customer logistics. There was a decrease in operating profit due to an increase in the cost price of fuel and an increase in costs following the promotion of structural transforma- tion. Ordinary profit also decreased, despite the positive effect of gains on investments in investment partnerships. Profit attributable to owners of parent remained at the same level as the previous fiscal year due to gains from sale of strategic holdings of shares, the cost of revision of retirement benefit plan, and a loss on sale of shares following the business transfer of associated companies, which reduced taxable income for fiscal 2021.

During the second year of One Yamato 2023, the fiscal year ending March 31, 2023, in addition to global inflation trends, such as the rising cost of resources and steep food prices due to instability of the international situation, there has been continued depreciation of the yen caused by the increasing gap between domestic and international exchange rates, making a full-scale economic recovery remains difficult to foresee. At the same time, there has been an increase in procurement costs, such as fuel, electricity, and labor. Under such circumstances, the Yamato Group has been making amendments to the Group's Manage­ment Structure where neces- sary, based on results and issues from the first year of the plan, and accelerating initiatives for providing value for corporate clients from "End to End" and structural reform of networks and operations as a foundation for future growth. We aim to enable the stable creation of profit by reforming cost structures in line with workload through optimization of the EC logistics network, which is currently being built, and the existing TA-Q-BIN network.

Financial Strategy and Investment Aimed at Creating Future Cash Flows

In the three-year period between the fiscal year ended March 31, 2022 and the fiscal year ending March 31, 2024, we expect to invest a cumulative ¥400 billion, including ¥200 billion in growth investments and ¥200 billion in current investments related to the maintenance of businesses, and to launch initiatives for structural transformation to promote the main initiatives of "One Yamato 2023."

In the first year of "One Yamato 2023," we actively promoted digital investments that contributed to the creation of a digital information infrastructure (Yamato Digital Platform), which maintains and utilizes data, and the enhancement of customer experiences and value provision. Meanwhile, we promoted the utilization of resources from external partners in the creation of an EC logistics network to pursue resilience in responding to the speed of management and fluctuations in demand. Going forward, we will implement investments when necessary, depending on whether or not they will increase corporate value over the medium to long term.

In regard to financial strategy, as a company responsible for social infrastructure, our basic policy is to maintain financial sound- ness, taking into account business continuity in light of increasingly severe disasters, to engage in reducing capital costs through accurate utilization of liabilities, to enhance operating profit margin by promoting structural reforms, and to enhance asset and capital efficiency through optimization of the balance sheet. Under this policy, we will strive to maintain our credit rating (AA-, Rating and Investment Information, Inc.) while keeping in mind an optimal capital structure.

In terms of fundraising, we will do so in a timely and appropriate manner with an awareness of financial soundness and efficiency. In particular, we will examine the utilization of sustainable finance in environment-related investments, such as climate change response.

From the perspective of our business portfolio, in April 2020 we transferred 60% of the issued common shares of Yamato Lease Co., Ltd. to Fuyo General Lease Co., Ltd. to strengthen the competitiveness of the lease service business and achieve joint ventures with partner companies aimed at expanding business domains. We also transferred 51% of the issued common shares of Yamato Home Convenience Co., Ltd. to ART MOVING COMPANY Co., Ltd. in January 2022 to further increase convenience for customers in the moving market.

We will continue to promote initiatives, such as reorganization in anticipation of future business growth and reallocation of management resources to highly profitable businesses, with the aim of improving capital efficiency.

Basic Stance on Capital Policies and Shareholder Returns

In regard to capital policy and shareholder returns, we will consider timely and appropriate measures based on the future growth potential (operating revenues) 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, with a basic policy of stable dividends (with an awareness of the ratio of dividends to shareholders' equity). The key indicators for capital policies will be ROE of 10% or more (fiscal year ending March 31, 2024), a dividend payout ratio of 30% or more, and a total return ratio of 50% or more (cumulative for the period from the fiscal year ended March 31, 2021 to the fiscal year ending March 31, 2024).

In the fiscal year ended March 31, 2022, we paid dividends of ¥46 per share and achieved a payout ratio of 30.5%. In the fiscal year ending March 31, 2023, we plan to pay out an interim dividend

Shareholder Return Results and Forecast*

(Fiscal Year Ended March 31, 2018 to Fiscal Year Ending March 31, 2023)

(Yen)

(%)

50		100th anniversary				200
commemorative dividend ¥10
							160
40							120
							80
30							40
				￥46	￥46	￥46	0
20			￥31
				(Forecast)
10	￥27	￥28
0	2018/3	2019/3	2020/3	2021/3	2022/3	2023/3

Dividend per share (left scale) 

Dividend payout ratio (%) (right scale)  Total return ratio (%) (right scale) * The forecast dividend figure is the figure announced on November 7, 2022.

of ¥23 (implemented) per share and a final year dividend of ¥23 per share, for a full-year dividend totaling ¥46 per share. Furthermore, in the period between February and May 2022, the Company repurchased 8.75 million shares of its own stock (¥20 billion) and canceled all such shares.

Improvement of Corporate Value over the Medium to Long Term

The Yamato Group has positioned ROE as a key indicator for improving shareholder value. We will strive to improve ROE by increasing profitability through optimizing the allocation of management resources and implementing growth strategies while remaining cognizant of an optimal capital structure.

Additionally, we will continue to strengthen corporate governance to achieve sustainable growth and a sustainable society. Based on our vision for sustainable management and material issues, we will also promote Groupwide efforts to achieve the sustainable targets for society and the environment established in Sustainable Medium-Term Plans 2023.

As part of this, we will endeavor to enhance information disclosure based on the recommendations of the Task Force on Climate- related Financial Disclosures (TCFD) while identifying and evaluating the risks, opportunities, and impacts associated with climate change in recognition of its importance in improving the Yamato Group's corporate value over the medium to long term and realizing a sustainable society.

Going forward, we will aim to improve corporate value through not only the financial aspect of enhancing ROE but also the promotion and disclosure of initiatives aimed at the sustainable development of society and the business and through constructive dialogues with all of our shareholders and investors.

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DESTINATION OF ONE YAMATO

Medium-Term Management Plan "One Yamato 2023"

(From the fiscal year ended 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 e-commerce (EC) in all industries brought on by rapid changes to consumption behavior and the logistics structures.

Main Initiatives of "One Yamato 2023"

Optimal allocation of management resources		Promotion of data and innovation strategies		Reinforcement of Group infrastructure
based on data analysis
Creation of the "EC Ecosystem"		Transformation into a business partner that		Reform of management structure and
	supports the entire supply chain		reinforcement of governance
Human resource strategies that support the		Improvement of capital efficiency		Strengthening of sustainable management
"innovating delivery business"

Progress in the First Year of "One Yamato 2023" (Fiscal Year Ended March 31, 2022)

We are steadily promoting structural reform initiatives that have been set out by the medium-term management plan "One Yamato 2023" and are based on changes to the business environment, such as the prolonged impact of the COVID-19 pandemic and the international situation.

DESTINATION OF ONE YAMATO

Part 2

Main Initiative: Transformation into a Business Partner That Supports the Entire Supply Chain

Provision of support for the innovation of supply chains and business processes as a management partner for our customers through the provision of consistent business solutions to the downstream, midstream, and upstream of supply chains

Major Progress and Results			Future Initiatives
			•Further reinforcement of corporate sales and account
			management
•Expansion of business in customers' upstream supply chains		•Provision of value through the integration of sales and
			operations
			•Recruitment and development of specialized personnel
				For more details, please refer to page 20.

Main Initiative: Reform of Management Structure and Reinforcement of Governance

Optimization of the management structure and reinforcement of governance aiming the optimal allocation of management resources and maximization of corporate value under the One Yamato management structure

Major Progress and Results			Future Initiatives
			•Promotion of optimizing management resource allocation on a

	Fiscal year ended March 31,	Fiscal year ended March 31,
	2021	2022
	Performance	Performance
Consolidated operating revenues	¥1,695.8 billion	¥1,793.6 billion
Consolidated operating profit	¥92.1 billion	¥77.1 billion
Consolidated operating profit margin	5.4%	4.3%
Consolidated ordinary profit	¥94.0 billion	¥84.3 billion
Profit attributable to owners of parent	¥56.7 billion	¥55.9 billion
ROE	10.0%	9.6%

Fiscal year ending March 31,

2024

Target

¥2,000.0 billion

¥120.0 billion

6.0%

¥120.0 billion

¥72.0 billion

10.0% or higher

•Launch of the One Yamato management structure, which inte-	regional basis
grates the Yamato Transport with eight Group companies	•Further promotion of integration of operations and systems
	•Optimization of costs by consolidating operations

Main Initiative: Human Resource Strategies That Support the "Innovating Delivery Business"

Creation of a system for clarifying and evaluating the roles of each employee and promotion of development of specialized personnel

Major Progress, Results, and Future Initiatives for Each Main Initiative

Main Initiative: Optimal Allocation of Management Resources Based on Data Analysis	+	Main Initiative: Promotion of Data and Innovation Strategies
Promotion of optimal allocation of management resources by	Renewal of our core systems, development of our digital data, and
enhancing the accuracy of workload forecasts and enhancement of	reinforcement of our digital platform
productivity across the entire network through operational reform	Promotion of open innovation through collaboration with and
and a shift to automation and digitalization	investment in start-up companies

Major Progress and Results			Future Initiatives
			•Completion of defining professional duties for each type of job
•Expansion of system for specialized human resources and redef-		and connection with evaluation and treatment
inition of professional duties		•Creation of a system to encourage sales drivers growth
			•Promotion of the utilization of a talent management system
				For more details, please refer to page 40.

Major Progress and Results

•Progression in the creation of a digital infrastructure through the development of our digital data to establish data-driven management and enhancement of methods for data collection that utilize the latest technology

Main Initiative: Reinforcement of Group Infrastructure

Aim to expand value provided to customers and to enhance productivity through the optimization and enhancement of functions for facilities, transportation, and delivery and promotion of business process reengineering

+

Main Initiative: Creation of the "EC Ecosystem"

Establishment of a sustainable EC ecosystem in which EC operators, customers, and delivery persons can enjoy the benefits

Major Progress and Results

•Improvement of efficiency of last mile pickup and delivery services

•Promotion of building EC logistics network

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Future Initiatives

•Advancement of demand forecasts and services and operations that apply digital data

•Implementation of initiatives aimed at enhancing system development capabilities in the medium term

For more details, please refer to page 30.

Future Initiatives

•Creation of a specialized network in line with customer needs and particular characteristics of packages and development of its system of operation

•Enhancement of operational efficiency and optimization of costs by consolidating and enlarging of facilities (sales offices, terminals, and logistics centers)

For more details, please refer to page 20 and 26.

Main Initiative: Improvement of Capital Efficiency

Improvement of shareholder value through timely and appropriate measures based on the future growth potential and profitability of our businesses, financial soundness, investment progress, capital efficiency, and other factors

Major Progress and Results		Future Initiatives
•Improvement of performance at overseas Group companies
•Transfer of shares issued by Yamato Home Convenience Co., Ltd.		•Continued implementation of capital protocol and shareholder
•Purchase of treasury stock and implementation of stable		returns based on basic policies
dividends
				For more details, please refer to page 16.
Main Initiative: Strengthening of Sustainable Management
Promotion of sustainable management based on Sustainable Medium-Term Plans 2023
Major Progress and Results			Future Initiatives
•Promotion of sustainability initiatives		•Promotion of green innovation initiatives in line with risks and
•Formulation of policies related to human rights and the		opportunities resulting from climate change
environment		•Operation and monitoring of each policy and initiative
				For more details, please refer to page 32.
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DESTINATION OF ONE YAMATO

Value Provision for Corporate Clients from End to End

We view evolving growth of the EC (e-commerce) market and changes to the supply chain as an opportunity and providing comprehensive value from end to end to the businesses of our corporate clients in both the upstream and downstream domains. To those ends, we will pursue the creation of multiple last mile networks in response to needs in the growth domains, the strengthening of account management, and the reinforcement and expansion of third-party logistics (3PL) and international forwarding.

Market Environment

Continued Growth of the EC Market and Expansion of EC Demand for Food Products

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Value Provision to Area Customers

Promotion of Value Provision via TA-Q-BIN and Other Services

For area customers, which comprise small-scale customers served by regional sales offices and medium- to large-scale customers served by corporate sales branch offices, we promote value provision via TA-Q-BIN and other services through proposals that utilize detailed solutions and One Yamato management resources as a result of collaboration between corporate sales representatives and sales drivers.

Size of the BtoC EC Market in Product Sales Domain and Rate of Shift to EC

(¥ billion)	8.78%	(%)
18,000			9

12,000								13,286.5	6
6,000										3
0	2013	2014	2015	2016	2017	2018	2019	2020	2021	0

Three-Year Growth Trend of the EC Market for Food, Beverages, and Alcohol

(¥ billion)			3.77%	(%)
3,000			4
2,250	2.89%			3
		¥2,519.9
1,500	¥1,823.3		billion	2
750	billion			1
0	2019	2020	2021	0

Before

Decentralization of management resources to operating companies for each function

• Failure to provide wide-ranging value to customer foundation cultivated through TA-Q-BIN

Sudden increase in volume of EC parcels

• Decrease in time allocated to sales and pickup for sales drivers because of increased same-day deliveries and redeliveries due to customers not being home

Dependence on individual operational capabilities of sales drivers

Variations in results per region

After

Consolidation of decentralized management resources through transition to One Yamato

• Creation of regional structure for customers that fully utilizes management resources

Creation of EC logistics network

• Development of work environment that enables sales drivers to focus on sales and pickup, in addition to delivery, through creation of a dedicated network optimized for EC needs

Deployment of corporate sales representatives and creation of system for sharing information

• Sharing information of customer issues and problems noticed on customer door- steps by sales drivers during pickup and delivery, deployment of corporate sales representatives to each region to make proposals and finalize contracts, and promotion of horizontal expansion and product development by head office

Size of the BtoC EC market in product sales domain  Rate of shift to EC (right scale)

Source: Ministry of Economy, Trade and Industry, Market Research on E-commerce

Size of the EC market for food, beverages, and alcohol during this period  Rate of shift to EC (right scale)

Value Provision to EC Accounts

Our Vision for Structural Reform

Full Utilization of Management Resources under One Yamato Logistics Network

Last mile networks (TA-Q-BIN,EAZY, middle mile)

Facilities (sales offices, terminals, logistics centers)

International transport

(forwarding and cross-border land transportation in Asia)

Customer foundation / Human Resources / Information / Finances Downstream

Global

Presence in integrated domains of express shipping, forwarding, and 3PL

Upstream

EAZY-Delivery Service for the EC Market	Provision of Solutions to Optimize Return Operations
In June 2020, we launched EAZY, a delivery service for EC opera-	We are contributing to the enhancement of convenience for users
tors that promotes the enhancement of customer experiences	and the optimization of returning products to operators by providing
and the optimization of operations by utilizing various digital data	our digital return and shipping service, which launched in August
based on the newly created system infrastructure.	2021.

Achieve the Growth of Revenues and Profit by	Top share of express shipping
Capturing growing EC demand
	(home delivery)

Users

Operators

Expanding Value Provision	Existing TA-Q-BIN network opti-		through creation of EC logistics
	network
Aim to increase the ratio of sales in the international forwarding and		mized for CtoC and small BtoC
	Reinforcement of contract logistics
domestic and international third-party logistics domains by moving away		Local	and value provision to BtoB and
			BtoC as an LLP*
from a ratio of sales that focused on TA-Q-BIN and expand sales of

				* LLP: Lead Logistics Partner (a partner who not only manages and operates logistics but also
domestic and international small-lot delivery services, including TA-Q-BIN
participates in and supports the creation of customer logistics plans and supply chain
				management strategies)
Value Provision to Each Customer

Delivery Amount

Features				Completion of	Diverse drop-off
2021/3 178,830	2022/3 464,860	procedures online	methods
		(thousand parcels)	(thousand parcels)
1.	Responding to diversifying needs for non-face-to-face delivery			Pickup by	PUDO Station
• Front door • Delivery box • Gas meter box
			sales drivers
• Storeroom • Garage • Bicycle basket • Reception / custodian
2.	Receiving location can be changed right up until you receive parcels
3.	Providing real-time delivery completion notice to customers			Convenience	TA-Q-BIN
4.	Collaborating with external partners for more efficient deliveries

Reduction of	Fast, low-cost
workload	introduction
	of service

Customers

Sales leaders		Value provision
		Provision of value that leads to increased sales opportunities, including provision of diverse,
		convenient pickup and delivery (returns) chosen by end users, simplification of sorting during

store

sales office

domainBaseGrowth domains

	EC
Account
Global
	National
	Area

Area customers

Major EC companies

Healthcare, automo- biles, fashion, electronic goods, food products, etc.

All industries

	shipping, lengthening of cutoff times, and provision of fulfillment service for EC store
	operators
Account
manager	Provision of value that leads to customer supply chain reform, such as optimization of logis-
	tics and inventory control from end to end of customer supply chains, and business process
	innovation
	Full utilization of domestic and international home delivery, route pickup and delivery, contract
	logistics and forwarding functions

Corporate		Provision of value via TA-Q-BIN and other services by proposing detailed solutions as a result
sales represen-
tatives and		of collaboration between corporate sales representatives and sales drivers
sales drivers

Fulfillment Service for EC Store Operators

Yamato Transport provides value through its fulfillment service for the opening of stores on Yahoo! Shopping and PayPay Mall based on collaboration with Yahoo Japan Corporation. Such value includes stocking products at Yamato Transport's logistics warehouses, providing services on behalf of shop operators from warehousing to shipping, improving convenience through uniform nationwide shipping rates based on size, shortening delivery lead times, and enhancing customer experiences by offering diverse methods for receiving parcels via EAZY.

Operated by Yamato Transport

Warehousing

Stocking

Receiving

Downloading

Billing

Single picking

Packaging

Shipping

orders

data

issuing

20	YAMATO HOLDINGS CO., LTD.	YAMATO HOLDINGS CO., LTD.	21
Integrated Report 2022	Integrated Report 2022