Progress of Our Medium-Term Business Plan and Our Key Policies

Kamigumi has formulated a Five-Year Medium-Term Business Plan, which has the fiscal year ending in March 2020 as its final year. Below is an update on our progress under the plan and our key policies moving forward.

1. Summary through the Fiscal Year Ended March 2018

(1) Overview

With the fiscal year ended March 2018, the Kamigumi Group concluded the third year of its Medium-Term Business Plan, which has the fiscal year ending in March 2020 as its final year. Due in part to capital investments totaling about ¥54.7 billion over the three years, our core business is making good progress in line with plans and is achieving steady growth.

At the same time, in recent years the logistics industry has become increasingly active in business expansion through M&A, with a succession of large-scale projects taking place. Kamigumi also has investigated many projects, but as a result of close assessments of feasibility, only a few of those projects have progressed to the contract stage. Our planned increase in revenue through M&A remains short of our goals, and at present is underperforming initial plans.

(2) Specific Initiatives through the Fiscal Year Ended March 2018

In the past three years, our grain business has remained particularly robust through active investments related to base cargo. This sector, along with feed raw materials, vegetables and fruits, and other sectors, has supported our core business.

In the container terminal business, we began operations at Kamigumi Tokyo Container Terminal Y1 in Central Breakwater Outer Wharf of the Port of Tokyo, and commenced operations at the PC-13 Container Terminal in the Port of Kobe.

In the imported new vehicle preparation business, an area in which we have been making efforts in recent years, we expanded our sites through M&A and strengthened the business base.

Overseas, we launched our first warehouse in Indonesia and began terminal business in Myanmar. In Malaysia and Mexico, we worked to build high-quality logistics that leverages the track record we have built up in Japan.

2. Management Strategy in the Remaining Period (Fiscal Year Ending March 2019 - Fiscal Year Ending March 2020)

(1) Management Strategy

Domestically, we are seeking to improve our profit margin and strengthen competitiveness through automation and multi-functionality in the third-party logistics business, including the use of the IoT and the establishment of high value-added distribution processing logistics centers. At the same time, we are also advancing initiatives for the creation of new cargo demand, including trial export of domestic agricultural products and food products.

In overseas expansion, as our long-term vision to build a robust business platform, we will work to enhance measures to secure and develop international-minded personnel. We will orient ourselves toward further development in the global age, while building logistics networks between the US and Mexico and in the Middle East and Africa, actively undertaking the reinforcement of asset-type logistics in Indonesia and Myanmar, and investigating the expansion of our market share through M&A as appropriate.

Moreover, we will establish sustainable business models driven by appropriate investments in the fields of the Environment, Social, and Governance, aiming to be a logistics company that creates new value in logistics. Together with this, we will make daily efforts to build a highly transparent organization and to enforce safety, quality, and legal compliance, to fulfill our responsibilities as a logistics provider that supports the foundation for growth in society.

(2) Capital Investment Plans

We forecast investment during the remaining period to total around ¥40 billion.

The primary targets for investment are planned to include terminal businesses in Japan and overseas, feed and grain businesses, vegetables and fruits business, third-party logistics business, and other overseas businesses.

3) Consolidated Financial Performance Targets

Consolidated financial performance targets are unchanged from the initial plan, and we will continue working on M&A for the remaining period.

Consolidated operating revenue: \300.0 billion (\280.0 billion + \20.0 billion growth target through new business and M&A, etc.)

Consolidated ordinary profit: \30.0 billion (\27.0 billion + \3.0 billion growth target through new business and M&A, etc.)

3. Formulation of Capital Strategy and Review of Shareholder Return Policy

In parallel with the improvement in business performance under the Medium-Term Business Plan, we will conduct a review into the distribution of profit and work on the following capital strategy below with the aim of improving corporate capital efficiency and enhancing and strengthening shareholder returns.
(The details of the section below were announced separately in the timely disclosure dated today.)

We will position the strengthening of shareholder returns as a key policy and set a payout ratio target of 30% for the distribution of profit while considering the balance with financial performance and internal reserves.

We will establish a basic policy to continue the acquisition of treasury stock, which it will determine in a flexible manner with the aim of strengthening shareholder returns and improving capital efficiency.

We will maintain the basic policy of cancelling the treasury stock it currently holds, while flexibly reviewing its disposal including use in M&A and incentives for officers and employees.

For inquiries on this matter, contact : Public Relations Dept.
TEL. +81-78-271-5110