KAMIGUMI

Investor Relations

Medium-Term Management Plan

(Plan Target Period: April 1, 2020 to March 31, 2025)

Formulation of Medium-Term Management Plan

The Kamigumi Group (the “Group”) has formulated a five-year Medium-Term Management Plan with the fiscal term ending March 31, 2025 as the final year of the plan that places emphasis on steady corporate growth while adhering to our management policy: “As an enterprise that manages logistics services in a comprehensive manner, we strive to upgrade our value as a global enterprise, by reinforcing our equipment and systems both within and outside Japan and cultivating human resources. Ultimately, we aspire to enhance our corporate value and fulfill our corporate social responsibilities.”

1 Medium-Term Management Plan

(1)Objectives of Medium-Term Management Plan

The Group will pursue initiatives based on the key strategies of the Medium-Term Management Plan, namely strengthening core businesses, strengthening profitability of overseas businesses, and exploration of new businesses. To ensure that we are able to pursue these strategies with strength, we will also work to strengthen hiring and enhance personnel development. In addition, while taking a hard look at what it means to be a logistics company, the Group will strive to operate according to the principles of ESG (Environment, Society, and Governance).

(2)Goals of Business Performance

We have set the business performance goals for the fiscal term ending March 31, 2025 as follows:
Net sales:    ¥280,000 million (     -% from the fiscal term ended March 31, 2020)*
Operating profit:  ¥30,000 million (up 21.6% from the fiscal term ended March 31, 2020)
Recurring profit:  ¥31,000 million (up 17.4% from the fiscal term ended March 31, 2020)

*The accounting treatment for recording net sales changed as a result of the application of “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29), and as it is difficult to make a comparison with the fiscal term ended March 31, 2020, the rate of increase is not stated.

Goals of Consolidated Business Performance for the Fiscal Term Ending March 31, 2025

(3)Investment Plan

During the period of this medium-term management plan, we will actively implement capital investments focusing on logistics-related facilities at the same level as in past years.

(4)Shareholder Returns

We will strive to enhance aggregate return of profit and improve capital efficiency.

  • (i)Implementation of stock dividends with a targeted consolidated payout ratio of 30%
    From the perspective of placing more importance on shareholder returns, we will pay stock dividends with a target consolidated payout ratio of 40% for the 84th to 86th fiscal terms (from the fiscal term ending March 31, 2023 to the fiscal term ending March 31, 2025).
  • (ii)Implementation of continued purchases and cancellations of treasury stocks

2 Key Strategies

(1)Strengthening Core Businesses

    (i)Exploring new cargos
  • The Group will explore the cargos to become new revenue pillars, such as refrigerated and frozen cargo and e-commerce-related cargo inside cities, which are future potential growth markets.
    (ii)Proposing proactive logistics innovations to customers
  • The shortage of labor currently occurring in the logistics industry poses risks of overstocking for the cargo consignors. However, by coming up with proposals for logistics plans that leverage a nationwide network, the Group will dispel customer concerns through offering optimization of lead times, reduction of logistics costs, etc.
    (iii)Proposing logistics strategies with the scope of the transition to new energies
  • Looking to reduce the environmental burden, we will actively consider the establishment of transport and storage technologies for new energy resources such as hydrogen and biomass and initiatives for logistics equipment and facilities that incorporate solar power, wind power, hydrogen fuel cells, etc.

(2)Strengthening Profitability of Overseas Businesses

    We will carefully investigate the logistics demands of each region and proceed with investments in business fields for which the Group has a proven track record in Japan.
  • (i)We will seek further increases in profitability through logistics center operations and efforts to acquire more orders for cargo handling services at container terminals in which the Group is an investment participant.
  • (ii)We will focus on undertaking infrastructure construction projects in developing countries and heavy cargo transportation and installation projects in line with a trend to transfer production bases from China.
  • (iii)In response to increasing needs for temperature-controlled logistics facilities in the ASEAN region, we will investigate the feasibility of business operations that leverage the Group’s knowhow.
  • (iv)As part of the cross-border transportation within the ASEAN Economic Community, there is a burgeoning need for logistics centers and truck transportation. We will conduct feasibility studies to find the appropriate scope of business participation by the Group with the assumption of making capital investment.

(3)Exploration of New Businesses

While promoting the exploration of new customers and cargos in the logistics business, we will flexibly consider new ideas regarding the creation of profitable businesses with enthusiasm in a broad range of fields outside of logistics.

(4)Initiatives to Secure and Develop Human Resources

While pressing forward with the key strategies in Japan and overseas, we will give priority to developing and training personnel with general and broad perspectives. We will implement policies for human resources, including strengthening hiring and improving training systems, with the objective of securing and training personnel with competencies in planning, proposals, and execution suitable for a general logistics company.