Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2023[PDF:670KB]

Translation

August 8, 2022

Consolidated Financial Results

for the First Quarter of the Fiscal Year Ending March 31, 2023

Company name:	Yamato Holdings Co., Ltd.
Listing:	Tokyo Stock Exchange
Stock code:	9064
URL:	https://www.yamato-hd.co.jp/
Representative:	Yutaka Nagao, President
Contact:	Toshizo Kurisu, Executive Officer and Vice President, Responsible for Finance
	Tel: [phone] (from overseas)

Scheduled date of the submission of quarterly securities report:	August 10, 2022
Scheduled date of the commencement of dividend payment:	-
Preparation of supplementary materials on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes

(Amounts less than 1 million yen are discarded)

1. Consolidated financial results for the first quarter of fiscal year 2023 (cumulative: from April 1, 2022 to June 30, 2022)

(1)	Consolidated operating results
															(Percentages represent year-on-year changes)
				Operating revenue	Operating profit		Ordinary profit		Profit attributable to
						owners of parent
For the three months ended	Millions of yen		%	Millions of yen	%		Millions of yen	%	Millions of yen		%
	June 30, 2022			424,159			1.0		2,416	(81.0)			2,493	(84.7)		320		(97.3)
	June 30, 2021			419,841			7.1		12,734	27.9			16,249	54.3		11,705		239.0
(Note) Comprehensive income:	For the three months ended June 30, 2022:		1,056 million yen ((93.9)%)
				For the three months ended June 30, 2021:		17,439 million yen (276.8%)
				Basic earnings per share	Diluted earnings
					per share
For the three months ended					Yen					Yen
	June 30, 2022							0.88					-
	June 30, 2021							31.55					-
(2)	Consolidated financial position
				Total assets			Net assets		Equity-to-asset ratio
As of				Millions of yen			Millions of yen				%
	June 30, 2022				1,120,326					580,489				51.2
	March 31, 2022				1,086,854					598,233				54.3
(Reference) Equity:	As of June 30, 2022:	573,119 million yen	As of March 31, 2022:	590,542 million yen
2.	Dividends
												Annual dividends
				First quarter		Second quarter		Third quarter	Fiscal year-end	Total
					Yen				Yen				Yen		Yen			Yen
Fiscal 2022				-			23.00					-		23.00			46.00
Fiscal 2023				-
Fiscal 2023 (Forecast)								23.00				-		23.00			46.00

(Note) Revisions to the forecasts most recently announced: None

3. Consolidated earnings forecasts for fiscal year 2023 (from April 1, 2022 to March 31, 2023)

							(Percentages represent year-on-year changes)
								Profit attributable to	Basic
	Operating revenue		Operating profit	Ordinary profit	earnings
		owners of parent
									per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen		%	Yen
Half year	874,000		1.0	23,000	(27.4)	23,000	(37.7)	14,000		(4.3)	38.61
Full year	1,820,000		1.5	91,000	17.9	91,000	7.9	57,000		1.9	157.26

(Note) Revisions to the forecasts most recently announced: Yes

• Notes

1. Changes in significant subsidiaries during the three months under review (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Application of specific accounting for preparing the quarterly consolidated financial statements: Yes

(Note) For details, please see "2. Consolidated Financial Statements and Significant Notes Thereto, (3) Notes to consolidated financial statements (Application of specific accounting for preparing the quarterly consolidated financial statements)" of the attached materials to the quarterly financial results report on page 12.

1. Changes in accounting policies, changes in accounting estimates, and restatement a. Changes due to revision to accounting standards, etc.: None

b. Changes other than a:	None
c. Changes in accounting estimates:	None
d. Restatement:	None

1. Number of issued shares (common shares)
   a. Number of issued shares as of the end of the period (including treasury shares)

As of June 30, 2022:	379,824,892 shares
As of March 31, 2022:	388,575,592 shares

1. Number of treasury shares as of the end of the period

As of June 30, 2022:	17,551,422 shares
As of March 31, 2022:	22,084,421 shares

1. Average number of shares during the period (cumulative from the beginning of the fiscal year)

For the three months ended June 30, 2022:	362,964,294 shares
For the three months ended June 30, 2021:	371,024,970 shares

*Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit firm.

*Proper use of earnings forecasts and other noteworthy events

• Descriptions of the above financial projections and other data are based on information currently available to the Company and certain assumptions that the Company considers to be reasonable. Actual financial results may differ significantly from the projections for various reasons. For points to note when using such assumptions and financial projections, please see "1. Qualitative Information on Settlement of Accounts for the Three Months, (3) Explanation of consolidated earnings forecasts and other forward-looking statements" of the attached materials to the quarterly financial results report on page 7.
• The Company plans to post supplementary materials on quarterly financial results on the Company's website promptly after the announcement of the quarterly financial results.

Attached Materials
Index
1. Qualitative Information on Settlement of Accounts for the Three Months...............................................................	2
(1)	Summary of operating results..........................................................................................................................	2
(2)	Explanation of financial position ......................................................................................................................	7
(3)	Explanation of consolidated earnings forecasts and other forward-looking statements ..................................	7
2. Consolidated Financial Statements and Significant Notes Thereto........................................................................	8
(1)	Consolidated balance sheet ............................................................................................................................	8
(2)	Consolidated statement of income and consolidated statement of comprehensive income..........................	10
	Consolidated statement of income (cumulative)............................................................................................	10
	Consolidated statement of comprehensive income (cumulative) ..................................................................	11
(3)	Notes to consolidated financial statements ...................................................................................................	12
	(Notes to premise of going concern) .............................................................................................................	12
	(Notes on significant changes in the amount of shareholders' equity)...........................................................	12
	(Changes to the scope of consolidation and/or the application of the equity method)...................................	12
	(Application of specific accounting for preparing the quarterly consolidated financial statements) ...............	12
	(Segment information, etc.) ...........................................................................................................................	12
3. Supplementary Information ..................................................................................................................................	13
Operating revenue by segment ............................................................................................................................	13

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1. Qualitative Information on Settlement of Accounts for the Three Months

1. Summary of operating results
   During the first three months ended June 30, 2022, progress was made towards the normalization of economic activity, despite the lingering impact of COVID-19. However, with heightened inflationary pressure around the world, driven by the rise in the price of natural resources and food products due to global instability, coupled with the weakening of the yen due to the widening gap in interest rates between Japan and overseas, there still is not sufficient visibility towards a full-fledged economic recovery.
   Moreover, COVID-19 has led to a change in consumption behavior and lifestyles and accelerated the expansion of e-commerce in all industries, driven by the spread of working from home, as well as medical treatment and education taking place online.
   Under these circumstances, the Yamato Group focused on providing comprehensive value to address the needs of customers and society, in order to achieve sustainable corporate value enhancement through "Helping to enrich our society" which is part of our Management Philosophy, under the Group management structure in which we brought together the management resources of each Group company, and based on the Medium- term management plan "One YAMATO 2023" with the fiscal year ending March 2024 as the final year, towards innovating the supply chain to address changes in people's lifestyles and the distribution structure.
   Our consolidated financial results for the three months ended June 30, 2022 are as follows.

				(Millions of yen)
Item	For the three months	For the three months	Change	Growth (%)
ended June 30, 2021	ended June 30, 2022
Operating revenue	419,841	424,159	4,317	1.0
Operating profit	12,734	2,416	(10,317)	(81.0)
Ordinary profit	16,249	2,493	(13,755)	(84.7)
Profit attributable to	11,705	320	(11,385)	(97.3)
owners of parent

For the three months ended June 30, 2022, operating revenue was 424,159 million yen, up 4,317 million yen from the previous year. This was largely attributable to the increase in parcel delivery volume as a result of capturing demand from the e-commerce domain where growth is accelerating, as well as our focus on optimizing logistics for customers.

Operating expenses was 421,742 million yen, up 14,635 million yen from the previous year.

This was due to the increase in costs associated with the promotion of our Medium-term management plan "One YAMATO 2023", such as the fact that we are still in the process of optimizing transportation and delivery operations between the EC logistics network, which we are building to address the growing EC demand, and in our existing network, in addition to higher fuel prices.

As a result, for the three months ended June 30, 2022, operating profit was 2,416 million yen, down 10,317 million yen from the previous fiscal year.

Initiatives for the entire Yamato Group

In response to COVID-19, the Yamato Group has been working to stably provide logistics services, including TA-Q-BIN, through measures such as non-face-to-face parcel deliveries and thorough measures to prevent infections in our customer services, while paying utmost consideration to hygiene management of our employees. Moreover, based on the Medium-term management plan "One YAMATO 2023", which aims to provide comprehensive value to address the diversifying needs of customers and society, we have continued to implement the following measures:

• Increasing operating revenue through growth in the corporate client domain

In response to growing EC demand and changes in the supply chain of corporate customers, we continued to provide value to cover the entire supply chain, through measures such as making clients' inventory more fluid, by integrating the inventory management system and transportation and delivery network with the consolidated and enlarged facilities, while our front-line employees worked to understand the needs of corporate customers and proposing solutions with headquarters.

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• Increasing productivity across the entire Yamato Group

In order to address the continuously changing and increasingly diverse needs of our customers, we have continued working to improve the accuracy of our demand and workload forecasts through data analysis, while optimizing transportation and delivery operations.

In addition, in order to address the growing EC demand, we continued to build the EC logistics network which has a more simple operation process covering sorting, transportation and last-mile deliveries, while consolidating and reallocating the terminals and TA-Q-BIN centers in our existing network. We also promoted initiatives such as reforming and automating our operations, as well as optimizing and standardizing the delivery process through digitalization, thereby increasing the time our front-line employees can spend facing customers, enhancing our pick-up and delivery capabilities as well as improving our safety and quality levels.

We also worked on standardizing operations to reduce the administrative indirect burden on our front-line employees, and promoted BPR (Business Process Re-engineering) through digitalization.

• Promoting strategies for achieving sustainable enhancement of corporate value

With the aim of sustainably enhancing our corporate value, we are engaging in initiatives under our Medium-term management plan "One YAMATO 2023" that involves promoting data and innovation strategies, reforming the management structure and reinforcing governance, engaging in an HR strategy which supports "Innovating Delivery Business," improving capital efficiency, and strengthening sustainable management.

As for our data strategy, we developed digital data and strengthened digital platforms in order to further enhance our use of data. Also, we continued to improve our demand forecasting, our services and operations using digital data.

Meanwhile, we made progress in our innovation strategy with initiatives to promote open innovation, which entails discovering and collaborating with startups, as well as to invest in such startups with the aim of creating new businesses.

We are also working on strengthening governance, separating management supervision and execution, maintaining and enhancing management transparency, as well as enhancing governance with an emphasis on the speed of our decision-making.

When it comes to an HR strategy which supports "Innovating Delivery Business," we believe our employees numbering roughly 220,000 is our most valuable asset. We have been reinforcing our front-line staff that faces customers by clarifying their job descriptions in more detail, as well as introducing systems and structures that motivate employees that will become leaders of the Group, as well as the employees with skills in specific areas.

As for strengthening our sustainable management, we are promoting management that considers the environment and society through measures such as connecting people, resources and information at a high level, and making our transportation more efficient, in order to achieve both sustainable growth and sustainable social development, under our two visions of "Connect. Deliver the Future via Green Logistics" and "Through Co-Creation and Fair Business Activities, Help Create a Society That Leaves No One Behind". In the three months ended June 30, 2022, we set a mid-term target of "48% reduction in GHG in 2030, compared to FY March 2021", as a milestone for achieving our long-term target of "Climate neutrality (in-house emissions) in 2050". In order to achieve this mid-term target, we will make steady progress in "introducing 20,000 EVs", "introducing 810 solar power generation facilities" and "improving the usage rate of renewable energy-based electricity".

Business strategies of each segment

• Retail Business Unit
• The Retail Business Unit provides high-qualitysmall-lot parcel delivery services such as TA-Q-BIN, and as the starting point of business for the entire Group, has been working to provide value that addresses the needs of our customers by utilizing the distinctive characteristics of TA-Q-BIN in terms of its points of contact with a broad range of customers, with our front-line employees monitoring and capturing changes in our customers in their lifestyles and business environments, and working with headquarters and proposing solutions that utilize the Group's management resources. It has also been working to provide services that make delivery and pick-up more convenient, particularly the "Kuroneko Members" service,
• • 3 -