yusen logistics snapshot business snapshot mission 1 ... · a total logistics provider operating...

Annual Report 2012 7Home > Snapshot > 1. Integration Progress

An ability to make proposals for the logistics needs of any type of business model Yusen Logistics can make optimal logistics strategy proposals for any type of business or business model. We

accurately identify the special nature and issues surrounding the logistics services needed by different companies

based on our extensive expertise and experience amassed over more than 50 years in business and a market-centric

approach rooted in 3D Management.

An ability to respond flexibly Air freight forwarding is a field where we have long been strong. The organic integration of ocean freight forwarding

and logistics businesses through the business integration has rounded out our capabilities. We are now able to provide

total logistics solutions to customers' increasingly sophisticated, varied and global needs. We can respond flexibly to

customer needs no matter what the region or the nature of the logistics service required.

A global network based on five regions We have a global network built around five regions: Japan, Americas, Europe, East Asia, and South Asia & Oceania.

Within this network, we have logistics locations and local subsidiaries in 37 countries and regions around the world (as

of March 31, 2012). With this group network, we can meet customers' needs in any region. And with the operational

knowhow we have amassed in Japan for delivering high-quality logistics services, we are able to provide consistent

and detailed services close to customers anywhere in the world.

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Amid ongoing globalization, customer logistics needs are diversifying and becoming increasingly complex and

sophisticated. There is a need for a one-stop service to respond to these needs. We aim to bolster our ability to

provide such a service without over-concentrating on a particular region or business. As a result, we have developed a

business portfolio that is well balanced in terms of regions and businesses.

A total logistics provider operating globally with world-class scale and quality.

Yusen Logistics Co., Ltd. was established in October 2010 from the integration of Yusen Air & Sea Service Co., Ltd.

(YAS) and NYK Logistics (Japan) Co., Ltd. in Japan. This followed discussions regarding the restructuring and

integration of YAS, which is centered on the air freight forwarding business, and the logistics business of Nippon

Yusen Kabushiki Kaisha (NYK), which is centered on land transport, warehousing, distribution, and ocean freight

forwarding.

Since 2011, overseas businesses have been progressively integrated. In April 2012, Chinese and Malaysian entities

were made consolidated subsidiaries, largely completing the integration of overseas businesses.

Yusen Logistics has now launched a medium-term business plan under the banner "GO FORWARD, Yusen Logistics"

for the period until March 31, 2014. Under this plan, we will strive to provide a broad range of logistics services

globally. Our overarching aim is to become a total logistics provider operating globally with world-class scale and

quality.

Maximize enterprise value by contributing to the development of the global economy and earning the confidence of

customers through the provision of sophisticated, high-quality logistics services.

Business Snapshot Mission Vision Values Business Portfolio Three Strengths of Yusen Logistics

1. Integration Progress

2. Medium-Term Business Plan3. Medium-Term Business Plan

Progress: Promoting Fusion of Operations for Maximizing Synergies

4. Yusen Logistics’ FinancialHighlights

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1 Integration Progress

Yusen Logistics Snapshot

Business Snapshot

Integration

Strengths Air freight forwarding

Air freight forwardingOcean freight forwarding

Contract logistics

Ocean freight forwarding

Contract logistics

NYK Logistics Yusen Logistics (Formerly Yusen Air & Sea Service)

Mission

Vision

Yusen Logistics Co., Ltd.8

Home > Snapshot > 1. Integration Progress














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forwarding.






quality.























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forwarding.






quality.









Business Portfolio

Values

InnovationIntensity

Integrity

EnvironmentalManagement

HR-orientedManagement

Quality /Gemba* Focused

CustomerCentric

* Gemba is a Japanese word meaning operational frontline.

Year ended Mar. 2011

(Upon integration)

48%

8%9% Japan

Americas EuropeEast AsiaSouth Asia & Oceania

* Includes consolidation adjustment

* Due to rounding, the total does not equal 100%.

22%

25%19%

13%

14%27%

16%


(Actual)

Net Sales by Geographical Segment

72%Air freight forwarding Ocean freight forwarding Logistics

* Due to rounding, the total does not equal 100%.

24%

23% 39%38%

6%Freight Sales by Business


(Upon integration)


(Actual)

Annual Report 2012 9















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forwarding.






quality.









Three Strengths of Yusen Logistics

Yusen Logistics Co., Ltd.10Home > Snapshot > 2. Medium-Term Business Plan

Under 3D Management, we are executing concrete initiatives based on three main strategies: Business Strategy,

Sales Strategy and Area Strategy.

* Click here for information on specific measures taken in the year ended March 2012.

* Click here for initiatives taken during the year ended March 2012.

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"3D Management" means to operate business efficiently in three dimensions, namely, by area, business, and customer

or industry, and manage them from various aspects, to ensure we generate balanced profits.

In the year ended March 31, 2012, our business environment was shaped by the European sovereign debt crisis,

slowing growth in Asia, and economic instability in Japan and the U.S. These and other factors stymied the global

economy. Coupled with the effects of natural disasters, the logistics market stalled, most notably with regard to freight

originating from Japan and Asia. The logistics business in Europe and the U.S. was also hit hard by the prevailing

conditions. Because of these outcomes, as well as the yen's sharp appreciation and other factors we are no longer

forecasting the economic growth we expected when we announced our plan in March 2011. For this reason, we

revised our numerical targets in the medium-term business plan in April 2012, as follows:

From Integration to Fusion and Dramatic Progress Numerical Targets 3D Management Strategy Three Strategies

1. Integration Progress2. Medium-Term Business Plan

3. Medium-Term Business Plan Progress: Promoting Fusion of Operations for Maximizing Synergies



2 Medium-Term Business Plan


From Integration to Fusion and Dramatic Progress

1 INTEGRATION2 FUSION

3 DRAMATIC PROGRESS

YAS*NYK

Logistics

Completion of “Integration”Completed integration following the consolidation of companies in China, Malaysia and elsewhere in April 2012.

“Fusion” of OperationPromote “Fusion” of employee awareness, organization and governance, in order to maximize synergies, share corporate values worldwide within the Yusen Logistics (YLK) Group and aim to achieve its goals.

For “Dramatic Progress”Establish “3D Management” that positions business, sales and area strategies as three basic strategies, and aim to be a total logistics provider operating globally with world-class scale and quality.

Fusion of Employee Awareness

Fusion of Governance

Fusion of Organizations

Business Strategy

Area Strategy

Sales Strategy

Toward World-Class

Total Logistics Provider

* Yusen Air & Sea Service


Home > Snapshot > 2. Medium-Term Business Plan





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Numerical Targets

3D Management Strategy

2,5005,000

7,5009,500

18,500

8,200

309,000

370,000

500,000

430,000

13,000

5,500

12(Actual)

13(Forecast)

14(Initial Targets)

14(Revised Targets)

(Millions of Yen)

Net Sales, Ordinary Income, Net Income (YLK (Consolidated))

Net SalesOrdinary IncomeNet Income

ITOrganization

FinanceCSR

Customer Centric Quality/”Gemba” FocusedInnovationIntensity

Environmental Management

HR-oriented Management

Integrity

Business Strategy

Sales Strategy

Area StrategyCustomer 1

Customer 2

Customer 3

Customer 4

Customer 5

Japanai

sA t

saE

aina

ecO

&ai s

A ht

uoS

epor

uEsa

cir e

mA

AirOcean

Contract Logistics

Land Transport

3D Management

Basic Management Strategy

Value

The Concept of 3D Management







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Three Strategies

Business Strategy

Handling target FY2013: 1 million TEU

Quantitative expansion through service quality and price competitiveness

Ocean Freight Forwarding Business

Purchasing Strategy

Product and Quality Strategy

Sales Strategy

Handling target FY2013: 500 thousand tons

Sales expansion through the development of services leveraging the strength of the global network and further quality improvements

Air Freight Forwarding Business

Toward World-Class Forwarder

Cost Management

Eco-friendly Handling

Cutting-edge Technology

IT

Quality Standards

Strengthen Weakness (SWOT)

Cultivation of Human Resources

Assistance for Launch

Competitive ‘Gemba,’ front line

Aim to be No. 1 Kaizen (Improvement) Company

Expand synergies with forwarding businesses by strengthening

brand power as the “No. 1 Kaizen Company”

Contract Logistics Business

http://yusen-logistics.onlinereport-gs.com/ir/library/ar2012/management/index.html#q-6







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Sales Strategy

Solution Sales Activities Integrated Sales


Global Operation

Organizational operation connected through a global network

Provision of optimized logistics solutions through a strategic approach based on marketing by industry

Conduct integrated sales matching customer needs by improving sales in individual businesses and capturing synergies from among air freight forwarding, ocean freight forwarding and logistics businesses

Area Strategy

Japan

Priority Measures

• Expand ocean freight forwarding business

• Develop new transportation services and undertake off-shore business

Americas

• Reinforce sales to global corporations

• Aggressively sell import and export forwarding services

Europe

• Reinforce sales to global corporations

• Establish a delivery network within Europe

East Asia

• Expand the logistics business within Asia

• Expand own network

• Expand business in China

South Asia & Oceania

• Focus investments on emerging countries

• Expand logistics business within Asia and volume handled between the Americas and Europe

http://yusen-logistics.onlinereport-gs.com/ir/library/ar2012/operations/index.html

Yusen Logistics Co., Ltd.14Home > Snapshot > 3. Medium-Term Business Plan Progress: Promoting Fusion of Operations for Maximizing Synergies

We announced "GO FORWARD, Yusen Logistics" at the end of March 2011 as our first medium-termbusiness plan for the YLK Group following integration. Our aim is to be a total logistics provider operating globally with world-class scale and quality, with three keywords guiding this transformation: integration, fusion and dramatic progress.

* Click here for overview of Medium-Term Business Plan.

We targeted completion of the integration stage of this transformation by the end of March 2012. This was largely

completed following the consolidation of companies in China, Malaysia and elsewhere. We are now moving from the

integration to the fusion stage, where we will take the following actions to set the stage for much higher growth in the

stage of dramatic progress.

* Click here for more details on 3D Management.

Following organizational and system integration, our employees around the world will proceed with fusing expertise,

knowledge and other less tangible aspects of our operations to enable us to provide a detailed response to customers'

logistics needs. By doing so, we aim to achieve the numerical targets of the medium-term business plan.

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1. Integration Progress2. Medium-Term Business Plan3. Medium-Term Business Plan




3 Medium-Term Business Plan Progress:

Promoting Fusion of Operations for Maximizing Synergies



Fusion of Employee Awareness

• Group value sharing (integrity, innovation and intensity)• Promote a change of mindset to become a total logistics provider operating globally

Air freight forwarding

Fusion of Organizations

• Unify organically, streamline and link the IT systems of integrated companies• Improve organizational management by each regional headquarters

Fusion of Governance

• Establish 3D Management• Rebuild the global compliance system

http://yusen-logistics.onlinereport-gs.com/ir/library/ar2012/snapshot/snapshot02/index.html

http://yusen-logistics.onlinereport-gs.com/ir/library/ar2012/snapshot/snapshot02/index.html#anc-03

Annual Report 2012 15Home > Snapshot > 4. Yusen Logistics’ Financial Highlights

Notes:

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Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Years Ended March 31

Millions of YenThousands of

U.S. Dollars

Results of Operations 2012 2011 2010 2009 2008 2007 2012

Net sales \309,004 \160,788 \123,453 \167,460 \187,518 \182,617 $3,759,625

Cost of sales 257,296 124,514 92,127 128,663 141,736 138,278 3,130,500

Gross profit 51,708 36,274 31,326 38,797 45,782 44,339 629,125

Selling, general and administrative expenses 45,436 31,327 29,016 34,223 35,566 33,901 552,814

Operating income 6,272 4,947 2,310 4,574 10,216 10,438 76,311

Income before income taxes and minority interests 6,673 5,887 3,004 2,859 12,178 11,514 81,192

Net income 2,526 3,621 1,545 1,083 7,271 6,722 30,737


U.S. Dollars

Sales by Geographical Segments 2012 2011 2010 2009 2008 2007 2012

Japan \83,761 \77,635 \61,227 \72,337 \87,355 \82,757 $1,019,113

Americas 70,056 13,471 10,782 16,696 17,758 17,364 852,365

Europe 76,822 15,022 11,888 20,564 21,417 19,236 934,683

East Asia 39,884 31,705 22,315 33,079 35,185 39,080 485,266

South Asia and Oceania 42,440 25,742 19,332 26,958 28,520 26,915 516,367

Inter-segment sales/transfers (3,959) (2,787) (2,091) (2,174) (2,717) (2,735) (48,169)

Net sales 309,004 160,788 123,453 167,460 187,518 182,617 3,759,625

Consolidated to non-consolidated ratio (times) 4.00 2.26 2.21 2.57 2.38 2.46


U.S. Dollars

Financial Position 2012 2011 2010 2009 2008 2007 2012

Current assets \93,907 \60,883 \52,690 \47,245 \66,558 \58,300 $1,142,559

Current liabilities 52,580 22,538 21,462 17,193 32,716 29,175 639,740

Equity (Note 2) 57,708 53,164 51,668 49,501 57,725 51,191 702,130

Total equity (Note 3) 79,558 55,360 53,663 51,249 59,614 52,551 967,982

Total assets 151,115 88,363 81,443 75,733 98,366 89,567 1,838,612

Net cash provided by operating activities 2,719 5,675 840 8,213 8,127 9,048 33,078

Free cash ｆｌows (Note 4) (11,182) 6,970 (796) 4,394 5,255 6,139 (136,050)

Yen U.S. Dollars

Per Share Data 2012 2011 2010 2009 2008 2007 2012

Basic net income (Note 5) \59.91 \85.85 \36.63 \25.68 \172.43 \159.46 $0.729

Cash dividends (full year) (Note 5) 20.00 18.00 16.00 18.00 20.00 15.00 0.243

Net assets (Note 5) 1,368.47 1,260.69 1,225.21 1,173.84 1,368.84 1,213.90 16.650

%

Key Ratios 2012 2011 2010 2009 2008 2007

Gross profit to net sales 16.7 22.6 25.4 23.2 24.4 24.3

Operating income to net sales 2.0 3.1 1.9 2.7 5.4 5.7

Cost of sales to net sales 83.3 77.4 74.6 76.8 75.6 75.7

Selling, general and administrative expenses to net sales 14.7 19.5 23.5 20.4 19.0 18.6

Net income to net sales 0.8 2.3 1.3 0.6 3.9 3.7

Return on equity (ROE) 4.6 6.9 3.1 2.0 13.4 14.1

Net income to total assets 2.1 4.3 2.0 1.2 7.7 7.7

Asset turnover (times) 2.6 1.9 1.6 1.9 2.0 2.1

Equity ratio (Note 5) 38.2 60.2 63.4 65.4 58.7 57.2

Other Year-End Data 2012 2011 2010 2009 2008 2007

Number of shares outstanding (Note 5) 42,220,800 42,220,800 42,220,800 42,220,800 42,220,800 42,220,800

1. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of \82.19 to $1, the approximate rate of exchange at March 31, 2012.

2. Equity (\57,708 million in 2012) = total equity - minority interests.

3. From the fiscal year ended March 31, 2007, total equity includes minority interests in accordance with the enforcement of Japan's Corporate Law.

4. Net cash provided by operating activities + net cash used in investing activities

5. These figures do not include any adjustments for the execution of a 2-for-1 stock split in April 2006.

6. The above figures included treasury stock of 50,484 shares in 2007, 50,236 shares in 2008, 50,212 shares in 2009, 50,296 shares in 2010, 50,734 shares in 2011 and 50,862 shares in 2012. On April 1, 2006, the Company executed a 2-for-1 stock split.





41211100908

Yusen Logistics’ Financial Highlights



Home > Snapshot > 4. Yusen Logistics’ Financial Highlights

Notes:

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Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Years Ended March 31


U.S. Dollars

Results of Operations 2012 2011 2010 2009 2008 2007 2012

Net sales \309,004 \160,788 \123,453 \167,460 \187,518 \182,617 $3,759,625

Cost of sales 257,296 124,514 92,127 128,663 141,736 138,278 3,130,500

Gross profit 51,708 36,274 31,326 38,797 45,782 44,339 629,125

Selling, general and administrative expenses 45,436 31,327 29,016 34,223 35,566 33,901 552,814

Operating income 6,272 4,947 2,310 4,574 10,216 10,438 76,311

Income before income taxes and minority interests 6,673 5,887 3,004 2,859 12,178 11,514 81,192

Net income 2,526 3,621 1,545 1,083 7,271 6,722 30,737


U.S. Dollars

Sales by Geographical Segments 2012 2011 2010 2009 2008 2007 2012

Japan \83,761 \77,635 \61,227 \72,337 \87,355 \82,757 $1,019,113

Americas 70,056 13,471 10,782 16,696 17,758 17,364 852,365

Europe 76,822 15,022 11,888 20,564 21,417 19,236 934,683

East Asia 39,884 31,705 22,315 33,079 35,185 39,080 485,266

South Asia and Oceania 42,440 25,742 19,332 26,958 28,520 26,915 516,367

Inter-segment sales/transfers (3,959) (2,787) (2,091) (2,174) (2,717) (2,735) (48,169)

Net sales 309,004 160,788 123,453 167,460 187,518 182,617 3,759,625

Consolidated to non-consolidated ratio (times) 4.00 2.26 2.21 2.57 2.38 2.46


U.S. Dollars

Financial Position 2012 2011 2010 2009 2008 2007 2012

Current assets \93,907 \60,883 \52,690 \47,245 \66,558 \58,300 $1,142,559

Current liabilities 52,580 22,538 21,462 17,193 32,716 29,175 639,740

Equity (Note 2) 57,708 53,164 51,668 49,501 57,725 51,191 702,130

Total equity (Note 3) 79,558 55,360 53,663 51,249 59,614 52,551 967,982

Total assets 151,115 88,363 81,443 75,733 98,366 89,567 1,838,612

Net cash provided by operating activities 2,719 5,675 840 8,213 8,127 9,048 33,078

Free cash ｆｌows (Note 4) (11,182) 6,970 (796) 4,394 5,255 6,139 (136,050)

Yen U.S. Dollars

Per Share Data 2012 2011 2010 2009 2008 2007 2012

Basic net income (Note 5) \59.91 \85.85 \36.63 \25.68 \172.43 \159.46 $0.729

Cash dividends (full year) (Note 5) 20.00 18.00 16.00 18.00 20.00 15.00 0.243

Net assets (Note 5) 1,368.47 1,260.69 1,225.21 1,173.84 1,368.84 1,213.90 16.650

%

Key Ratios 2012 2011 2010 2009 2008 2007

Gross profit to net sales 16.7 22.6 25.4 23.2 24.4 24.3

Operating income to net sales 2.0 3.1 1.9 2.7 5.4 5.7

Cost of sales to net sales 83.3 77.4 74.6 76.8 75.6 75.7

Selling, general and administrative expenses to net sales 14.7 19.5 23.5 20.4 19.0 18.6

Net income to net sales 0.8 2.3 1.3 0.6 3.9 3.7

Return on equity (ROE) 4.6 6.9 3.1 2.0 13.4 14.1

Net income to total assets 2.1 4.3 2.0 1.2 7.7 7.7

Asset turnover (times) 2.6 1.9 1.6 1.9 2.0 2.1

Equity ratio (Note 5) 38.2 60.2 63.4 65.4 58.7 57.2

Other Year-End Data 2012 2011 2010 2009 2008 2007

Number of shares outstanding (Note 5) 42,220,800 42,220,800 42,220,800 42,220,800 42,220,800 42,220,800

1. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of \82.19 to $1, the approximate rate of exchange at March 31, 2012.

2. Equity (\57,708 million in 2012) = total equity - minority interests.

3. From the fiscal year ended March 31, 2007, total equity includes minority interests in accordance with the enforcement of Japan's Corporate Law.

4. Net cash provided by operating activities + net cash used in investing activities

5. These figures do not include any adjustments for the execution of a 2-for-1 stock split in April 2006.

6. The above figures included treasury stock of 50,484 shares in 2007, 50,236 shares in 2008, 50,212 shares in 2009, 50,296 shares in 2010, 50,734 shares in 2011 and 50,862 shares in 2012. On April 1, 2006, the Company executed a 2-for-1 stock split.





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