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Financial Results Meeting:FY Ended March 2010
(April 1, 2009 - March 31, 2010)
Financial Results Meeting:FY Ended March 2010
(April 1, 2009 - March 31, 2010)
May 12, 2010May 12, 2010
11
ContentsContents
• KWE Group’s Worldwide Five Regional Management System• Major Topics (FY Ended March 2010)• Non-consolidated Balance Sheet for FY Ended March 2010• Monthly Trends in KWE Consolidated Airfreight Leaving Japan• Actual Volume by Region (Five Regions)• Current Status of Items Handled (1) (Non-consolidated,
Airfreight)• Current Status of Items Handled (2) (Non-consolidated, Ocean
Freight)
Outline of Results (Consolidated & Non-Consolidated) for FY Ended March 2010and the Forecast for FY Ending March 2011
New Medium-Term Management Plan:“Ready for the Next !”FY Ending March 2011 – FY Ending March 2013
• Results for FY Ended March 2010 (1)• Results for FY Ended March 2010 (2)• Major Factors Affecting Results for FY ended March 2010• Worked throughout the Fiscal Year to Achieve the Cost
Reduction• Y on Y Comparison of Net Sales, Operating Cost, Sales &
General Administrative Expenses (Consolidated)• Freight Cost Ratio for Airfreight Exports Revenue• Consolidated Balance Sheet (1)• Consolidated Balance Sheet (2)• Consolidated Cash Flow Statement• Consolidated Net Sales by Category• Consolidated Net Sales and Operating Income by Region• Major Factors Affecting Results by Region• Consolidated Operating Results by Quarter• Projected Results for FY Ending March 2011
(Consolidated, Forecast)- The First year of the New Medium-Term Management Plan
• Net Sales by Category & Region for FY Ending March 2011 (Consolidated, Forecast)
• Goals and background of New Medium-Term Management Plan: “Ready for the Next !”
• Outline of “Ready for the Next !”• New Medium-Term Management Plan: “Ready for the Next !”
Basic Numerical Targets (Consolidated, Three Years)• <Management Strategy 1> Create a Strong Asia (Focused
Investment of Management Resources) • <Management Strategy 2> Sell a Strong Asia (Create a Sales
Structure to Compete with Global Competitors)• <Management Strategy 3> Strengthen Core Competencies
(Human Resources, Quality, IT)• <Management Strategy 4> Ensure Thorough Compliance and
Strengthen a Management System for the Environment• Investment Plan• Net Sales by Category & Region (Consolidated, Forecast)• Dividends
Supplementary Material
22
Results for FY Ended March 2010 (1)Results for FY Ended March 2010 (1)
2009/3 (Results) 2010/3 (Results)
Net Sales¥211.8 billion
Net Sales¥260.3 billion
Y on Y -18.6%
Y on Y -12.7%Ordinary Income
Ordinary Income
Net IncomeNet Income
Operating Income
Operating Income ¥9,025 million
¥3,478 million
¥9,203 million
¥7,451 million
¥4,570 million
¥8,032 million
Y on Y -17.4%
Y on Y +31.4%
33
Results for FY Ended March 2010 (2)Results for FY Ended March 2010 (2)
Non-consolidated
Consolidated
Non-consolidated
Consolidated
Non-consolidated
Consolidated
Non-consolidated
Consolidated
Non-consolidated
Consolidated
Non-consolidated
Consolidated
31.44,570△62.03,478131.23,634△68.71,572
48.44,179△44.72,816
1,292.21,480△96.7106
△2.616,018△19.016,438
△15.376,078△12.189,827△10.036,116△15.740,123
Gross profit
940.53,124△90.5300Net income
△10.24659.1517Volume (Ocean)△14.9869△8.71,021Weight (Airfreight)△9.17,014△6.47,716Shipments (Airfreight & Ocean)
△4.97,596△47.37,991Income before income taxes and minority interests
△12.78,032△38.49,203Ordinary income
△17.47,451△35.09,025Operating income
△18.6211,836△10.9260,330Net sales
Y on Y Y on Y ((%%))Y on Y Y on Y ((%%))
FY ended March 2010 ResultsFY ended March 2010 ResultsFY ended March 2009 ResultsFY ended March 2009 ResultsItemItem
¥91.03FY ended March 2009
¥93.57FY ended March 2010 ¥95.471st half of the FY ended March 2010
5.5%¥1,670.18
¥96.62FY ended March 2009
¥1,822.95BPS7.3%
¥126.97FY ended March 2010
ROE
EPSIndicator
Shipments (thousands) Weight (1,000 tons) Volume (1,000 TEU) Amount (¥million)
(Yen-Dollar Conversion Rate)
44
Major Factors Affecting Results for FY Ended March 2010Major Factors Affecting Results for FY Ended March 20101
2
Slowdown in performance of KWE Japan in the second half・ Particularly in terms of exports to Taiwan and China, shipments of LCD-related
items, electronic components, and semiconductor manufacturing equipment gradually recovered, and there was a clear rebound in airfreight export volume. However, a full-fledged recovery in exports to the U.S. and Europe has not yet materialized.
・ Full-term, non-consolidated cost reduction of 3.3 billion yen (versus an original target of 3.0 billion yen)
・ Increased freight costs from 3Q put profits under pressure
East Asia driving profitability・ Thanks to cost reduction and volume recovery, East Asia has far exceeded
original targets.・ The Americas was ahead of targets thanks to the cost reductions, and also
Southeast Asia was solid and in line with targets.・ Subsidiaries in Japan were hit by a drop in domestic demand, and Europe was
badly affected by sluggish markets and insufficient cost reductions.
55
Worked throughout the Fiscal Year to Achieve the Cost ReductionWorked throughout the Fiscal Year to Achieve the Cost Reduction
+
Cost reductions that go beyond liquidity costs to also include reductions in fixed costs
Cost reductions that go beyond liquidity costs to also include reductions in fixed costs
Cost reductions amounting to 3.3 billion yen at KWE JapanResults essentially in line with targets at domestic and overseas subsidiaries
Rationalization measures throughout the company without exceptions・Reduction in the monthly salaries and bonuses of directors and executive directors ・Reduction in the salaries and bonuses of managers ・Reduction in overtime work for union members ・Reduction in staff, reduction in facility costs, and rent ・Reduction in liquid overhead costs
Deployment of personnel to suit the volumes of business / Merger and consolidation of sales offices
⇒ Flexible staff deployment
66
Year on Year Comparison of Net Sales, Operating Cost, Sales & General Administrative Expenses (Consolidated)Year on Year Comparison of Net Sales, Operating Cost, Sales & General Administrative Expenses (Consolidated)
7,451
28,665
175,720
211,836
FY ended March 2010
9,025
31,097
220,207
260,330
FY ended March 2009
3.5%3.5%Operating income
13.5%11.9%SGA expenses
83.0%84.6%Operating cost
100.0%100.0%Net sales
Ratio to net sales Ratio to net sales
211,836220,207
175,720
31,097 28,665
260,330
0
50,000
100,000
150,000
200,000
250,000
300,000
FY ended March 2009 FY ended March 2010
Net Sales
Operating Cost
SGA Expenses
(Millions of yen)
(Millions of yen, %)
77
Freight Cost Ratio for Airfreight Exports RevenueFreight Cost Ratio for Airfreight Exports Revenue
57.9%
65.7%
62.5%59.2%53.7%55.4%
1st Half of FY 1st Half of FY eendndeded March March
20201010
66.3%66.5%East Asia & Oceania East Asia & Oceania
66.4%
71.9%
63.5%59.2%69.0%
FY ended March FY ended March 20092009
62.7%
69.2%
62.2%54.5%62.2%
FY ended March FY ended March 20102010
Southeast Asia & Southeast Asia & Middle East Middle East
Europe & Africa Europe & Africa
Group as a WholeGroup as a Whole
The Americas The Americas KWE/JapanKWE/Japan
*Fuel surcharges (FSC) were the primary factor behind the decline at KWE Japan during the first half of the FY ended March 2010.
88
Consolidated Balance Sheet (1)Consolidated Balance Sheet (1)
Net assets: 6,16568,03861,873Total net assets 7,487116,640109,153Total liabilities and net assets
47,2796,646
40,632
109,153
10,2932,544
31,20744,045
65,107
FY ended March 2009
Liabilities:
Assets:
1,40042,032Current liabilities:
△776,569Long-term liabilities: 1,32348,602Total liabilities:
7,487116,640Total assets:
2,55246,597Fixed assets
△3999,894Investments and other assets: △4732,071Intangible fixed assets 3,42434,631Tangible fixed assets:
4,93670,043Current assets
Changes FY ended March 2010
(Millions of yen)
99
Consolidated Balance Sheet (2)Consolidated Balance Sheet (2)DebtsDebts
InvestmentsInvestments
Main investments (FY ended March 2010)• Logistics facilities (Narita Terminal Phase 3 construction, investment of about 1.3 billion yen,
Guelph warehouse in Canada, investment of about 8,400 million yen)• IT, vehicles, offices
Main scheduled investments (FY ending March 2011) • Logistics facilities (Guelph warehouse in Canada, investment of about 2,400 million yen, etc.)• IT, vehicles, offices
DepreciationDepreciation
17,365FY ended March 2009FY ended March 2009
△2,06115,304Changes Changes FY ended March 2010FY ended March 2010
205
ChangesChanges
4,000
FY ending March 2011 FY ending March 2011 (Forecast) (Forecast)
3,541
FY ended March 2009FY ended March 2009
3,746
FY ended March 2010FY ended March 2010
3,191FY ended March 2009FY ended March 2009
△423,149ChangesChangesFY ended March 2010FY ended March 2010
(Millions of yen)
(Millions of yen)
(Millions of yen)
1010
25,904
28,500
△2,595
△4,137
△1,663
△6,481
9,687
FY ended March2009
△85925,045Cash and cash equivalents at end of year
△2,59625,904Cash and cash equivalents at beginning of year
2,646△3,834Cash flows from investing activities
1,736△859Net increase (net decrease) in cash and cash equivalents
4,848710Effect of exchange rate changes on cash and cash equivalents
△2,332△3,995Cash flows from financing activities
△3,4276,259Cash flows from operating activities
ChangesFY ended March 2010
Consolidated Cash Flow StatementConsolidated Cash Flow Statement
(Millions of yen)
1111
48.6%19.6%
13.2%
18.6%
44.2%20.3%
14.3%
21.2%
Consolidated Net Sales by CategoryConsolidated Net Sales by Category
△11.6%30,346△1.8%34,321Other
FY ended March 2010 (Results) FY ended March 2009 (Results)Category
260,330
51,08848,395
126,524Net sales
△10.9%
2.3%△12.2%△16.9%
Y on Y
211,836
42,98444,80593,700
Net sales
△18.6%Total
△15.9%Ocean
△7.4%Logistics
△25.9%Forwarding
Y on Y
Forwarding
Logistics
Ocean
Other
Frei
ght
tran
spor
tatio
nNet Sales by CategoryNet Sales by Category
FY Ended March 2009 FY Ended March 2010(Millions of yen, %)
1212
26.1%
12.8%
9.0%43.9%
8.2% The Americas
Japan
Europe & Africa
East Asia & Oceania
Southeast Asia &Middle East
Consolidated Net Sales andOperating Income by RegionConsolidated Net Sales andOperating Income by Region
3,43556,6493,67371,190East Asia & Oceania
△58△5,482△24△6,720Corporate-wide and unallocated1,06617,8861,17819,786Southeast Asia & Middle East
FY ended March 2010 (Results) FY ended March 2009 (Results) Region
260,330
24,31837,504
114,251Net sales
9,025
4692,5371,191
Operating income
211,836
19,58427,90395,295
Net sales
7,451Total
△18Europe & Africa 1,397The Americas 1,628Japan
Operating income
26.7%
7.4%
42.8%
9.1%
14.0%
Net Sales by Region Net Sales by Region
FY Ended March 2009 FY Ended March 2010(Millions of yen, %)
1313
Major Factors Affecting Results by RegionMajor Factors Affecting Results by RegionJapanJapan・ Airfreight exports decreased 0.7% year on year. (To America decreased 17.9%, to Europe decreased 13.1%, to Asia increased 7.5% year on year).・ Full-year negative impact of fuel surcharges amounted to 200 million yen (previous term: 580 million yen).・ Airfreight import shipments decreased 10.0% year on year. ・ Domestic subsidiaries were struggling partly because of delayed customers’ projects.The AmericasThe Americas・Cost reductions are progressed smoothly and volumes gradually recovered. Good performance in ocean freight exports in Canada.
The Asia to North America (Trans-Pacific Development Project) was in a slump (Asia to North America decreased 15%, North America to Asia decreased 31% year on year).Europe & AfricaEurope & Africa・Shipments to research organizations in the Middle East boosted exports (air and ocean freight) since the beginning of the second half; however, a decline in imports from Japan through the year and insufficient cost reductions resulted in sluggishness.
■■ East Asia & OceaniaEast Asia & Oceania・As a result of a gradual recovery in volume and cost reductions, performance was essentially in line with targets, which were revised upward in 2Q; furthermore, this region is driving theGroup performance.Southeast Asia & Middle EastSoutheast Asia & Middle East・ Performance was essentially on-target thanks to volume recovery from the second halfparticularly in semiconductor-related items, and cost reductions.
1414
Consolidated Operating Results by QuarterConsolidated Operating Results by Quarter
0
1,000
2,000
3,000
4,000
5,000
1Q 2Q 3Q 4Q
2008/3 2009/3 2010/3
0
20,000
40,000
60,000
80,000
100,000
1Q 2Q 3Q 4Q
2008/3 2009/3 2010/3
79,127 (292,333)70,054 (213,206)73,557 (143,152)69,595FY ended March 200838,696 (260,330)68,408 (221,634)81,024 (153,226)72,202FY ended March 2009 61,102 (211,836)55,993 (150,734)49,273 (94,741)45,468FY ended March 2010
4Q3Q2Q1QNet sales (consolidated)
4,133 (13,893)3,745 (9,760)3,077 (6,015)2,938FY ended March 2008956 (9,025)2,399 (8,069)3,247 (5,670)2,423FY ended March 2009
2,113 (7,451)2,565 (5,338)2,046 (2,773)727FY ended March 2010
4Q3Q2Q1QOperating income (consolidated)
4,484 (14,931)3,871 (10,447)3,472 (6,576)3,104FY ended March 2008548 (9,203)2,704 (8,655)3,610 (5,951)2,341FY ended March 2009
2,356 (8,032)2,749 (5,676)2,111 (2,927)816FY ended March 2010
4Q3Q2Q1QOrdinary income (consolidated)
Consolidated Net Sales by Quarter Consolidated Operating Income by Quarter(Millions of yen) (Millions of yen)
(Millions of yen)
Numbers inside ( ) are cumulative figures from the first quarter.
1515
6.17,441△9.17,014Shipments (Airfreight, Ocean)Shipments (Airfreight, Ocean)
10.9235,000△18.6211,836Net salesNet sales
24.510,000△12.78,032Ordinary incomeOrdinary income
――△10.036,116Gross profitGross profit
34.210,000△17.47,451Operating incomeOperating income
FY ending March 2011 (Forecasts)FY ended March 2010 (Results)Item
Y on Y (%)Y on Y (%)
26.95,80031.44,570Net incomeNet income
31.610,000△4.97,596Income before income taxes Income before income taxes and minority interestsand minority interests
10.7514△10.2465Volume (Ocean)Volume (Ocean)
11.0965△14.9869Weight (Weight (AirfreightAirfreight))
Projected Results for FY Ending March 2011 (Consolidated, Forecast)- The First year of the New Medium-Term Management PlanProjected Results for FY Ending March 2011 (Consolidated, Forecast)- The First year of the New Medium-Term Management Plan
Shipments (thousands) Weight (1,000 tons) Volume (1,000 TEU) Amount (Millions of yen)
1616
20.2%
19.9%
13.7%
46.2%
Net Sales by Category & Region for FY Ending March 2011 (Consolidated, Forecast)Net Sales by Category & Region for FY Ending March 2011 (Consolidated, Forecast)
Net Sales by Category Net Sales by Category
13.7%32,100Other
FY ending March 2011 (Forecast) Category
235,000
46,70047,600
108,600Net sales
100.0%Total
19.9%Ocean20.2%Logistics 46.2%Forwarding
Composition
8.5%
26.6%
8.7%
12.4%
43.8%
10,000-
1,3003,800
3001,5003,100
Operating income
235,000△6,00021,00064,00020,50030,000
105,500
Net sales
FY ending March 2011 (Forecast)
East Asia & Oceania
Corporate-wide and unallocated
Southeast Asia & MiddleEast
Region
Total
Europe & Africa
The Americas
Japan
Net Sales by Region Net Sales by Region
The Americas
Japan
Europe & Africa
East Asia & Oceania
Southeast Asia &Middle East
Forwarding
Logistics
Ocean
Other
FY ending March 2011 (Forecast) (Millions of yen, %) FY ending March 2011 (Forecast) (Millions of yen)
Frei
ght
tran
spor
tatio
n
New Medium-Term Management Plan:“Ready for the Next !”
FY Ending March 2011 – FY Ending March 2013
New Medium-Term Management Plan:“Ready for the Next !”
FY Ending March 2011 – FY Ending March 2013
1717
1818
Goals and background of New Medium-Term Management Plan: “Ready for the Next !”Goals and background of New Medium-Term Management Plan: “Ready for the Next !”
FY ending March 2011 – FY ending March 2013 ●Designed to build a strong corporate structure that will enable
us to compete on an even footing with global competitors
The business environment has suddenly changed as a result of the worldwide recession 2008
→ We decided to review the KWE Grand Design for the 21st Century and the Phase III Medium-Term Management Plan (both extending to the year ending March 2012), and started to formulate a new medium-term management plan in the fall of 2009.
→ The result of this effort is “Ready for the Next !”. FY ending March 2011 – FY ending March 2013
1919
Outline of “Ready for the Next !”Outline of “Ready for the Next !”
Targets by March 2013Consolidated net sales: 300 billion yen ( +40% from FY ended March 2010)Consolidated operating income: 15 billion yen (+100% from FY ended March 2010)Consolidated ordinary income: 15 billion yen ( +90% from FY ended March 2010)Consolidated operating margin: 5.0% (1.5% improvement over FY ended March 2010 )
Targets by March 2013Targets by March 2013Consolidated net sales: 300 billion yen ( +40% from FY ended March 2010)Consolidated operating income: 15 billion yen (+100% from FY ended March 2010)Consolidated ordinary income: 15 billion yen ( +90% from FY ended March 2010)Consolidated operating margin: 5.0% (1.5% improvement over FY ended March 2010 )
Construct a balanced management structureImprove competitiveness in the global marketConstruct a balanced management structureImprove competitiveness in the global market
1. Create a Strong Asia (focused investment of management resources)2. Sell a Strong Asia (create a sales structure that allows for competition
with global competitors)3. Strengthen core competencies (human resources, quality, IT)4. Ensure thorough compliance and strengthen a management system
for the environment
1. Create a Strong Asia (focused investment of management resources)2. Sell a Strong Asia (create a sales structure that allows for competition
with global competitors)3. Strengthen core competencies (human resources, quality, IT)4. Ensure thorough compliance and strengthen a management system
for the environment
VisionVision
Management Strategy
Management Strategy
Increase corporate and shareholder values by establishing partnerships with customersProvide reliable services and customer satisfaction all over the world as a Global Logistics Partner
Increase corporate and shareholder values by establishing partnerships with customersProvide reliable services and customer satisfaction all over the world as a Global Logistics Partner
Basic Philosophy
Basic Philosophy
2020
New Medium-Term Management Plan: “Ready for the Next !”Basic Numerical Targets (Consolidated, Three Years)New Medium-Term Management Plan: “Ready for the Next !”Basic Numerical Targets (Consolidated, Three Years)
¥8,000 million
¥7,400 million ¥8,800 million¥7,000 million
¥5,800 million¥4,500 million
¥15,000 million
¥12,000 million¥10,000 million
¥211,800 million
¥300,000 million¥270,000 million
¥235,000 million
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2010/3 (Results) 2011/3 (Plan) 2012/3 (Plan) 2013/3 (Plan)0
5,000
10,000
15,000
20,000
25,000
Net sales(Plan - left)
Net sales(Results - left)
Operating income and ordinary income (right)
Net income (right)
Operating income (Results-right)
Ordinary incomeOrdinary income
Operating incomeOperating income
Ordinary incomeOperating income(Plan)
Ordinary incomeOperating income(Plan)
Net incomeNet income
16.6%
11.4%
6.8%
Annual
737
1,201
8,551
2013/3 (Plan) 4 years change
58.5%
38.2%
21.9%
465Volume (Ocean)
869Weight (Air)
7,014Shipments (Air & Ocean)
2010/3 (Results)
26.3%Operating income
24.4%Net income23.1%Ordinary income
12.3%Net sales
Average annual growth rate over
three yearsAim for 2008/3’s record high
Net sales ¥292,300 millionOperating income ¥13,800 million
Aim for 2008/3’s record highNet sales ¥292,300 millionOperating income ¥13,800 million
Shipments (thousands) Weight (1,000 tons) Volume (1,000 TEU)
(Millions of yen) (Millions of yen)
2121
<Management Strategy 1>
Create a Strong Asia (Focused Investment of Management Resources)<Management Strategy 1>
Create a Strong Asia (Focused Investment of Management Resources)
(1) Secure a position of absolute advantage in bonded logistics business in China・Aggressive investment in bonded areas in China・Establish a new subsidiary in the Shanghai Pudong International Airport Comprehensive Bonded Area・Greater South China Concept: Expand business through integrated operation of subsidiaries in Southern China
(2) Construct a distribution network that covers all of Asia・Strengthen warehouse businesses and logistics functions in Korea, Taiwan, the Philippines, India, and Thailand
(3) Get a head start on competitors to enter into emerging countries (coping with our customers’ “China plus one” strategies)・Begin operating in Bangladesh・Consider entering Cambodia and Myanmar
(4) Improve logistics functions in the American consumer market・Strengthen logistics functions
・Create a structure for expanding Pacific Rim transportation
(5) Make ocean freight forwarding a core business・In addition to the NVOCC business, work on supplementary services such as CFS, warehousing, and buyer’s consolidation, etc.
Improve Asian distribution bases to further strengthen our network. Strengthen logistics and ocean freight forwarding businesses in Asia for
a balanced business portfolio of the Group as a whole.
Improve Asian distribution bases to further strengthen our network. Strengthen logistics and ocean freight forwarding businesses in Asia for
a balanced business portfolio of the Group as a whole.
2222
KWE Hong KongKintetsu Logistics (Shenzhen)GuangzhouShenzhenDongguanZhuhaiZhongshanYantian
Beijing KWEBeijing
KWE XiamenKintetsu Logistics (Xiamen)Xiamen
Shizean
Chengdu
Chongqing
Kunming
Wuhan
Shenyang
Tianjin
JinanQingdao
Nanjing
Hangzhou
Suzhou Kintetsu LogisticsSuzhou Kunshan
Ningbo
Shanghai Kintetsu LogisticsShanghai
Dalian Kintetsu LogisticsDalian
Zhengzhou
Changsha
Huangdao
Changchun
Kintetsu South ChinaKintetsu Far East DevelopmentKintetsu Aerospace Logistics
ウルムチ
Yantai
Wuxi
Fuzhou
Harbin
Nanning
Nanchang
Yangzhou
Wenzhou
Nantong
Hefei
Huhhot
TaiyuanShijazhuang
Lianyungang
<Management Strategy 1>Create a Strong Asia (Focused Investment of Management Resources (1))<Management Strategy 1>Create a Strong Asia (Focused Investment of Management Resources (1))
1) Aggressive investment in bonded areas in China Promote cross-structural action within specialist teams dealing with bonded logistics in China.Aggressive advancement into bonded areas in China
2) Establish a new subsidiary in the Shanghai Pudong International Airport Comprehensive Bonded Area (scheduled to operate in December 2010)We are setting up a new company in the comprehensive bonded area adjacent to Shanghai PudongInternational Airport, and will aggressively sell warehousing services where the demand is expected to increase.
Basic Information of KWE China(As of March 31, 2010)
Shanghai Pudong International Airport Comprehensive Bonded Area (Image)
11 subsidiaries44 cities
109 locations
57 warehouses (Total area 312,531㎡)
1,060 trucks
(1) Secure a position of absolute advantage in bonded logistics business in China
2323
XiamenXiamen
GuangzhouGuangzhou
<Management Strategy 1>Create a Strong Asia (Focused Investment of Management Resources (1))<Management Strategy 1>Create a Strong Asia (Focused Investment of Management Resources (1))
3) Greater South China Concept: Expand business through integrated operation of subsidiaries in Southern China・ Establish a new system principally controlling the four subsidiaries in South China (KWE Hong Kong, KWE Shenzhen, KWE Xiamen, and KWE Guangzhou), and promote sales and operations with a unified Group approach (in order to facilitate more efficient usage of Group resources)→ By covering the entire South China, more flexible supports for customers' locations and requirements arepossible.・ Expand into the new Guangdong bonded area, aiming to establish a bonded network covering the entire Pearl River Delta.
Expand into bonded area in Guangdong province to
develop logistics business
Expand into bonded area in Guangdong province to
develop logistics business
ZhuhaiZhuhai OfficeOffice
DongguanDongguanBranchBranch
CLK AirportCLK Airport
ATL ATL LogisticsLogistics
YKK YKK LogisticsLogistics
Shenzhen Shenzhen W/H No 1, 2 W/H No 1, 2 & 3& 3
ShenzhShenzhen A/P en A/P OfficeOffice
YantianYantianOfficeOffice
KWE Hong KongKWE Hong Kong HQHQSunshine LogisticsSunshine Logistics
KWEXMN KWEXMN Guangzhou Guangzhou BranchBranch
◆◆
◆
◆◆
◆
◆
◆ZhongshanZhongshanBranchBranch
KWE KWE Shenzhen Shenzhen HQHQ
Shenzhen and Guangzhou areaShenzhen and
Guangzhou area
2424
Bangladesh Delegate Office(Opened April 2010)
ILC-licensed* warehouse in Taoyuan, Taiwan (* June 2009)
Begin operating in Bangladesh
Begin operating in Bangladesh
Consider entering Cambodia and Myanmar
Consider entering Cambodia and Consider entering Cambodia and MyanmarMyanmar
<Management Strategy 1>Create a Strong Asia (Focused Investment of Management Resources (2)(3))<Management Strategy 1>Create a Strong Asia (Focused Investment of Management Resources (2)(3))
(2) Construct a distribution network that covers all of Asia
Mumbai Warehouse in India
Strengthen warehouse businesses and logistics functions in Korea, Taiwan, the
Philippines, India, and Thailand
Strengthen warehouse businesses and Strengthen warehouse businesses and logistics functions in Korea, Taiwan, the logistics functions in Korea, Taiwan, the
Philippines, India, and ThailandPhilippines, India, and Thailand
(3) Get a head start on competitors to enter into emerging countries (coping with our customers’ “China plus one” strategies)
2525
(4) Improve logistics functions in the American consumer market
(5) Make ocean freight forwarding a core business
<Management Strategy 1>Create a Strong Asia (Focused Investment of Management Resources (4)(5))<Management Strategy 1>Create a Strong Asia (Focused Investment of Management Resources (4)(5))
・Create a structure for expanding Pacific Rim transportation⇒ Strengthen logistics functionsFor example: Opening a new 40,000㎡ warehouse in Guelph, Canada (scheduled for July 2010)
- NVOCC+ α (supplementary services) strategy -Enhance functions and services that complement ocean transportation, such as CFS, warehousing, and buyer's consolidation.
2626
<Management Strategy 2>Sell a Strong Asia (Create a Sales Structure to Compete with Global Competitors)
<Management Strategy 2>Sell a Strong Asia (Create a Sales Structure to Compete with Global Competitors)
(1) Expand freight volume by strengthening logistics functions・ Expand the freight volume between Asia and Japan, Asia and the Americas, and Asia and Europe・ Expand the freight volume within Asia
(2) Strengthen competitiveness by raising productivity・Strengthen buying power
・Standardize operations
(3) Engage in sales in a way that accurately reflects customer needs・Have personnel exchanges based on sales strategies ・Conduct proactive efforts in logistics services between countries other than Japan
(4) Share customer information across the entire Group organization・Construct long-term stable relationships with customers
Create a structure for the Group as a whole to sell a “Strong Asia” in the global market with the goal of expanding our air and ocean freight volume between Asia and Japan, Asia and the Americas, and Asia and Europe, as
well as within Asia.
Create a structure for the Group as a whole to sell a “Strong Asia” in the global market with the goal of expanding our air and ocean freight volume between Asia and Japan, Asia and the Americas, and Asia and Europe, as
well as within Asia.
2727
<Management Strategy 2>Sell a Strong Asia (Create a Sales Structure to Compete with Global Competitors (1) (2))
<Management Strategy 2>Sell a Strong Asia (Create a Sales Structure to Compete with Global Competitors (1) (2))
EuropeEurope
The AmericasThe Americas
Intra-AsiaIntra-Asia AsiaAsia
JapanJapan
(1) Expand freight volume by strengthening logistics functions
・Expand the freight volume within Asia・Expand the freight volume between Asia and Japan, Asia and the Americas, and Asia and Europe
(2) Strengthen competitiveness by raising productivity
・ Strengthen buying power ・ Standardize operations
2828
<Management Strategy 2>Sell a Strong Asia (Create a Sales Structure to Compete with Global Competitors (3) (4))
<Management Strategy 2>Sell a Strong Asia (Create a Sales Structure to Compete with Global Competitors (3) (4))
・Have personnel exchanges based on sales strategiesInteraction currently taking place between sales personnel of each subsidiaries in the directions of Korea to America, Taiwan to China, Europe to China, etc. These efforts will be intensified going forward.
・Conduct proactive efforts in logistics services between countries other than JapanExpand transportations between overseas subsidiaries without passage through Japan.
To this end, internal systems are being built and optimized.
(3) Engage in sales in a way that accurately reflects customer needs
(4) Share customer information across the entire Group organization
・Construct long-term stable relationships with customers
2929
<Management Strategy 3>
Strengthen Core Competencies (Human Resources, Quality, IT)<Management Strategy 3>
Strengthen Core Competencies (Human Resources, Quality, IT)
Position human resources, quality and IT as our core competencies as pursuing overall management strategies. Work continuously to improve them to establish a
competitive edge.
Improve Improve brand valuebrand value
StrengthenStrengthenFinancial positionFinancial position
Improve productivityImprove productivity
Strengthen core Strengthen core competencies competencies
(human resources, quality, IT)(human resources, quality, IT)
Enrich and strengthen internal infrastructure supporting global sales
・Select, train and hire executive candidates on a Group-wide basis, and promote diversity
・Implement global hiring for specified purposes
Use numerically-based quality control to increase employee awareness of quality and to increase customer satisfaction
Construct and implement a global personnel system
Improve service quality all over the world
Strengthen global IT functions
3030
<Management Strategy 4>Ensure Thorough Compliance and Strengthen a Management System for the Environment
<Management Strategy 4>Ensure Thorough Compliance and Strengthen a Management System for the Environment
(1) Instill a keen awareness of compliance throughout the Group
・Strengthen Environment Management System
・Prevent environmental pollution in cooperation with clients and business partners
・KWE GroupCompliance Manual
On-going cross-Group training in compliance
・KWE GroupAntimonopoly Compliance Manual
(2) Strengthen a Group management system for the environment
3131
Investment PlanInvestment Plan
Key Investment Projects
・Logistics facilities in Asia and Japan
・M&A in Asia (Ocean and logistics)
Planned investment amount : approx. ¥4.0 billion(Three-year average)
3232
Net Sales by Category & Region (Consolidated, Forecast)Net Sales by Category & Region (Consolidated, Forecast)
52.1% 44.2% 42.9%
18.9%21.2% 19.3%
17.1%20.3% 22.7%
11.9% 14.3% 15.1%
2008/3 (Results) 2010/3 (Results) 2013/3 (Plan)
Fowarding Logistics Ocean Other
Net Sales by Category (Millions of yen, %)
300,000211,836
42.3% 43.9% 36.6%
12.9% 12.8%13.1%
9.2% 9.0%7.5%
27.2% 26.1%34.6%
8.4% 8.2% 8.2%
2008/3 (Results) 2010/3 (Results) 2013/3 (Plan)
Japan The AmericasEurope & Africa East Asia & OceaniaSoutheast Asia & Middle East
300,000211,836Net Sales by Region (Millions of yen, %) Operating Income by Region (Millions of yen, %)
32.0%21.7% 25.5%
19.3%
18.6% 13.5%
34.6%45.7% 44.6%
11.3% 14.2% 13.1%
2.8%
△ 0.2%
3.3%
2008/3 (Results) 2010/3 (Results) 2013/3 (Plan)
292,333
292,333
13,893 7,451 15,000
3333
\10
\11
\12
\12
\1
\13
\14
\7
\17(Plan)
\12(Forecast)
\13(Forecast)
2007/3 2008/3 2009/3 2010/3 (Plan) 2011/3 (Forecast)
Memorial Dividend
Year-end
1st half of FY
DividendsDividendsIn the future, 20% of consolidated
net income will be targeted In the future, 20% of consolidated
net income will be targeted Currently targeting 30% of
non-consolidated net income
¥21/year
¥25/year¥27/year
¥24/year (Plan) ¥25/year (Forecast)
* Memorial Dividend for FY Ended March 2008 was to celebrate the company's 60th year in business.
Supplementary MaterialSupplementary Material
3434
3535
KWE Group’s Worldwide Five Regional Management SystemKWE Group’s Worldwide Five Regional Management System
30 countries overseas, 189 cities, 298 locations (as of March 31, 2010)
KWE Group KWE Group
Europe & Africa Europe & Africa (13 companies)(13 companies)
Japan Japan (9 companies) (9 companies)
Includes KWE Japan and Includes KWE Japan and 3 equity method affiliates3 equity method affiliates
The AmericasThe Americas(6 companies)(6 companies)
Southeast Asia & Southeast Asia & Middle East Middle East
(11 companies)(11 companies)East Asia & Oceania East Asia & Oceania
(19 companies) (19 companies)
Acquired ISO 9001 Acquired ISO 9001 certificationcertification
(17 subsidiaries (17 subsidiaries including Japan)including Japan)
Logistics facilities Logistics facilities 141 locations overseas 141 locations overseas
(659,013 m(659,013 m²²) ) 37 locations in Japan37 locations in Japan
(200,376 m(200,376 m²²))
Acquired ISO 14001 Acquired ISO 14001 certificationcertification(14 locations (14 locations
worldwide including worldwide including the Narita terminal)the Narita terminal)
Acquired TAPA Acquired TAPA certificationcertification(19 locations (19 locations
worldwide including worldwide including the Narita terminal) the Narita terminal)
3636
Major Topics FY Ended March 2010Major Topics FY Ended March 2010
December 2009 KWE (Korea) Opens the SuwonLogistics Center
April 2010 Established Bangladesh Delegate Office
November 2009 Completed Phase 3 Narita Terminal Expansion
June 2009 KWE (Taiwan) acquired International Logistics Center (ILC) License KWE (Shanghai) acquired ISO9001 Certification
November 2009 KWE (South Africa) received the Silver Award at the “Logistics Achievers Awards”
January 2010 KWE (Singapore) Acquired ISO13485: Quality Management System Standard for Medical Devices Certification
February 2010 KWE (Singapore) acquired TAPA Class A
Total floor area : 54,394㎡
Suwon Logistics Center
Overseas service structure
Overseas service structure
Other Other
Japan service structure
Japan service structure
3737
Non-consolidated Balance Sheet for FY Ended March 2010Non-consolidated Balance Sheet for FY Ended March 2010
Net Assets: Net Assets:
Liabilities: Liabilities:
Assets: Assets:
△5019,68219,732Current liabilities Current liabilities △9463,9764,922LongLong--term liabilities term liabilities △99523,65924,654Total liabilities Total liabilities
2,95440,10337,149Total net assets Total net assets 1,95863,76261,804Total liabilities and net assetsTotal liabilities and net assets
1,95863,76261,804Total assets: Total assets:
91138,79337,882Fixed assets Fixed assets
37814,44814,070Investments and other assets: Investments and other assets: △120850970Intangible fixed assets Intangible fixed assets
65423,49522,841Tangible fixed assets: Tangible fixed assets:
1,04624,96823,922Current assets Current assets
ChangesFY ended March FY ended March 20102010
FY ended March FY ended March 20092009
(Millions of yen)
3838
Monthly Trends in KWE Consolidated Airfreight Leaving JapanMonthly Trends in KWE Consolidated Airfreight Leaving Japan
6,685
14,13715,212
14,36613,804
13,309
5,8035,533
12,363
9,855
7,546
14,457
11,395
12,933
11,41112,116
11,353
7,916
10,3929,951
12,222
13,029
10,326
9,139
0
5,000
10,000
15,000
20,000
Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.
195.7
122.9
91.8104.6
170.7
72.3
172.6
205.9
72.167.9
64.6
54.8
176.1
87.2
120.1
99.8
153.3
182.6
178.1
60.7
68.7
70.7
78.4
58.7
April 2008-March 2009 April 2009-March 2010
*KWE’s Industry Share2010/3 14.2%2009/3 13.5%
*KWE’s Volume2010/3 (Y on Y) 99.3%2009/3 (Y on Y) 73.5%
*Industry Volume2010/3 (Y on Y) 98.0%2009/3 (Y on Y) 74.3%
*KWE’s Industry Share2010/3 14.2%2009/3 13.5%
*KWE’s Volume2010/3 (Y on Y) 99.3%2009/3 (Y on Y) 73.5%
*Industry Volume2010/3 (Y on Y) 98.0%2009/3 (Y on Y) 74.3%
Weight (tons)
Source: JAFA statistics documents
Compared to the KWE figure in the same month the previous year (%)Compared to the industry figure in the same month of the previous year (%)
3939
35,048
27,625
140,736
112,345
43,996
44,933
136,069 135,097
57,39577,104
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2009/3 2010/3
Actual Volume by Region (Five Regions)Actual Volume by Region (Five Regions)
432,954 Y onY87.2%
74.4%
78.8%
79.8%
99.4%
102.1%
123,014104,715
446,839
189,491
167,534
397,331 358,204
115,592131,731
501,328
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2009/3 2010/3
Y on Y88.8%
89.1%
85.1%
87.7%
90.2%
88.4%
377,395 1,192,884
1,342,895
(Shipments)(Weight: tons) Airfreight importsAirfreight exports
East Asia& OceaniaEast Asia& Oceania
Europe & AfricaEurope & Africa
The AmericasThe Americas
JapanJapan
Southeast Asia& Middle East
Southeast Asia& Middle East
4040
Current Status of Items Handled (1) (Non-Consolidated: Airfreight)
Current Status of Items Handled (1) (Non-Consolidated: Airfreight)
Electronics-related items
59.3%
Automobile-related products
15.2%
Machinery andconstruction
devices2.0%
Optical devices1.1%
Aircraftcomponents
1.1%
Other0.9%
Medical andchemicalproducts20.4%
Fashion andtextile products
8.5%
Other1.3%
Electronics-related items
63.0%
Automobile-related products
0.7%
Machinery-related products
3.2%
Medical andchemicalproducts22.3%
― Based on net sales of top 100-ranked companies ―Airfreight Composition
― Based on net sales of top 100-ranked companies ―Airfreight Composition
KWE Japan’s Airfreight Import Composition, FY Ended March 2010
KWE Japan’s Airfreight Export Composition, FY Ended March 2010
4141
Current Status of Items Handled (2) (Non-Consolidated: Ocean Freight)
Current Status of Items Handled (2) (Non-Consolidated: Ocean Freight)
Other15.4%
Electronics-related items
30.6%
Facilities andmachnery-
related products19.1%
Automobile-related products
17.2%
Medical andchemicalproducts17.7%
Fashion andtextile products
13.3%Machinery-
related products12.0%
Automobile-related products
10.2%
Generalmerchandise
10.2%
Other11.2%
Electronics-related items
32.7%
Medical andchemicalproducts10.4%
― Based on net sales of top 100-ranked companies ―Ocean Freight Composition
― Based on net sales of top 100-ranked companies ―Ocean Freight Composition
KWE Japan’s Ocean Freight Import Composition, FY Ended March 2010
KWE Japan’s Ocean Freight Export Composition, FY Ended March 2010
KintetsuKintetsu World Express, Inc.World Express, Inc.WebsiteWebsite: http://: http://www.kwe.co.jp/en/index.htmlwww.kwe.co.jp/en/index.html
** The information contained herein does not constitute an offer to solicit investment which can only be made by formal prospectus. The forward-looking statements contained herein are not intended to assure or guarantee future performance. Actual results may vary from that projected herein.
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