Briefing Material for Results of the Fiscal Year Ending March 2015 NIPPON EXPRESS CO., LTD. IR Group, Corporate Planning Division January 0, 2015 A. of of FY2014 2. Progress of Business Plan. Changes due to the External Environment A. Change factors ( Cumulative Total) B. Assumptions for external factors (Full year) P. 1 P. 2- P. 8 P. P.10 Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015
A. of of FY2014 1) (Consolidated) (rounded down to 100 million yen) for of FY2014 (a) for of FY201 (b) Difference YoY (c) = (a) - (b) Difference YoY (%) (d) = (c) / (b) 100 Forecast for full year (announced on October 1) (e) Progress (%) (a) / (e) 100 Difference (compared to forecast) (e) - (a) Revenues 14,177 12,805 1,72 10.7 18,700 75.8 4,522 Operating Income Ordinary Income Net Income 47 28 48 16. 450 77.2 102 417 74 42 11.4 50 78.7 112 24 18 60.1 00 81.2 56 Revenues 4,85 4,447 58 12.1 Operating Income Ordinary Income 145 12 21 17.2 167 150 16 11.0 Net Income 2) Business Indices 8 108 (25) (2.6) Cumulative Total ( Cumulative Total of FY201) Cumulative Total ( Cumulative Total of FY201) Operating Income Margin 2.4% (2.%) ROE 6.4% (4.7%) Ordinary Income Margin 2.% (2.%) ROA 2.% (1.%) Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 1
1) Combined Business Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 5,548 5,6 184.4 7,48 74.6 1,88 Segment Income 11 7 16 16.7 17 6. 65 Revenues 1,82 1,80 61.4 Operating Income Margin ( of FY201) Segment Income 4 45 8.7 2.6 (2.5) Railway transportation transactions decreased due to reduced freight train service caused by natural disasters including typhoons and snowstorms. Truck transportation transactions remained solid thanks mainly to business from major accounts. Warehousing saw a surge in food-related business, while logistics services related to mail order business remained robust. 2) Security Transportation Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 415 410 5 1.4 556 74.8 140 Segment Income 6 () (6.6) 12 50.5 6 Revenues 1 17 2 1.8 Operating Income Margin ( of FY201) Segment Income 2 4 (2) (5.0) 1.6 (.5) New routine transportation services that started in 1 is making favorable progress. Profit decreased due to a rise in employment costs resulting from execution of operations only by the Company s regular workforce, along with expenses caused for vehicle modifications. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 2
) Heavy Haulage & Construction Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 57 276 80 2.2 412 86.8 54 Segment Income 17 14 2 20.0 21 82.6 Revenues 111 5 16 16.8 Operating Income Margin ( of FY201) Segment Income 6 4 1 4.5 5.5 (4.4) In Japan, wind power plant-related transactions and heavy-electric-related transactions remained solid. Business remained buoyant thanks partially to the commencement of new large-scale plant constructions overseas. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015
4) Air Freight Forwarding Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 1,422 1,54 67 5.0 1,862 76.4 4 Segment Income 46 45 1. 60 77.1 1 Revenues 50 47 2 6. Operating Income Margin ( of FY201) Segment Income 21 20 0 0. 4.2 (4.4) Income increased thanks to a surge in spot cargo for the US, while unit buying rate from air freight companies also increased. Cargo imports and domestic cargoes transactions remained strong 5) Marine & Harbor Transportation Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 85 1,002 (106) (10.7) 1,200 74.6 04 Segment Income 46 (6) (14.) 45 87.5 5 Revenues 28 2 (1) (.4) Operating Income Margin ( of FY201) Segment Income 10 12 (2) (1.1).4 (.) Equipment transportation-related exports continued to underpin revenue. Income decreased due to year-on-year decline in cargo imports and coastal shipping service transactions. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 4
6) The Americas Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 572 511 60 11. 74 77.1 170 Segment Income 27 20 7 4.2 0 8. Revenues 18 176 21 12. Operating Income Margin ( of FY201) Segment Income 10 8 1 14.0 5.1 (5.0) Automobile-related truck transportation and warehousing and delivery transactions in the US remained robust. Automobile-related marine import forwarding as well as air export forwarding transactions were solid in Mexico. 7) Europe Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 5 517 82 15. 84 71. 24 Segment Income 18 5 12 206.8 10 16.0 (7) Revenues 20 175 27 15.8 Operating Income Margin ( of FY201) Segment Income 7 2 5 270.5. (1.2) Automobile-related air export forwarding transactions increased in Germany, UK and Spain. Truck transportation and the other intra-region business remained stagnant. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 5
8) East Asia Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 7 648 84 1.1 1,00 7.1 26 Segment Income 14 5 51.0 14 10.6 (0) Revenues 252 228 2 10.5 Operating Income Margin ( of FY201) Segment Income 7 2 4 164.5.0 (1.) Automobile-related truck transportation and warehousing and delivery transactions remained robust in China. In China, automobile, electronics and electric appliances-related air and marine forwarding transactions also increased significantly. ) South Asia & Oceania Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 454 76 77 20.7 580 78. 125 Segment Income 10 0 7.4 15 66. 5 Revenues 162 12 2 22.4 Operating Income Margin ( of FY201) Segment Income 4 (0) (12.) 2. (.2) Apparel- and automobile-related warehousing and delivery transactions increased significantly in Malaysia and Indonesia. Profit decreased due to increases in business costs such as Forwarding costs and Vehicle chartering and subcontracting costs, along with initial expenses associated with business expansion. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 6
10) Goods Sales Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues,212 2,4 218 7. 4,225 76.0 1,012 Segment Income 46 4 12 5. 54 84. 8 Revenues 1,128 1,00 8.5 Operating Income Margin ( of FY201) Segment Income 18 1 4 6.6 1.6 (1.2) Logistics support business transactions including export package handling remained robust. 11) Other Comparison with FY201 (announced on October 1) FY2014 FY201 Difference Difference (%) Forecast Progress (%) Difference Revenues 8 07 675 21. 1,4 70.5 410 Segment Income 18 8 1.7 2 77.0 5 Revenues 445 106 1.6 Operating Income Margin ( of FY201) Segment Income 11 7 24.1 2.5 (.0) Nittsu NEC Logistics, Ltd. has been converted to a consolidated subsidiary from the current quarter (). Contributing greatly to an increase in revenues along with Nittsu Panasonic Logistics Co., Ltd. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 7
2. Progress of Business Plan Nippon Express Group Corporate Strategy 2015 - Innovation and Moving Forward - Progress of basic strategy Basic Strategy Item Progress Strengthening Management Practices for Our Domestic Businesses % of operating income margin for Domestic combined business in FY2015 [Organizational change as of January 1] Nagoya Air Service Branch within Air Cargo Business Division Nagoya International Transport Branch within Marine Transport Business Division for of FY2014 2.1% ( for of FY201 1.8%) ( for of FY2014 2.6%) Transferred to the control of the Regional General Manager, Chubu Region Further Expanding Our Global Logistics Business 40% of sales from overseas-related business in FY2015 for of FY2014.5% ( for of FY201 2.2%) Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 8
. Changes due to the External Environment A. Change factors ( Cumulative Total) Change factors Impact on consolidated results ( Cumulative Total) Reference Impact of change in unit fuel price Fuel cost: * + 0.4 billion (cost increase) (0.) billion (cost decrease) Average of FY2014 ( of FY201) Light oil: 117.47/l ( 114.08) Gasoline: 150.47/l ( 146.80) Heavy oil: 71.8/l ( 70.1) Impact of foreign exchange (weak yen) Revenues: Operating income: + 1.47 billion + 0.24 billion * Revenues +.7billion Operating income + 0.0 billion Average exchange rate for of FY2014 (*) ( of FY201) USD: 102.5 ( 6.71) EUR: 1.54 ( 127.5) HKD: 1.28 ( 12.47) RMB: 16.72 ( 15.70) (*) The average exchange rates for of FY2014 and FY201 above are the reference rates. For the preparation of financial reports, average quarterly rates are applied to the quarterly results of businesses on a local currency basis. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015
. Changes due to the External Environment B. Assumptions for external factors (Full year) Change factors Impact on consolidated results (Full year) Assumptions Impact of change in unit fuel price Fuel cost: (0.6) billion (cost decrease) * Amount of cumulative total deducted from forecast for full year (1.18) billion (cost decrease) Average FY2014 (Yearly average in FY201) Light oil: 111.17/l ( 114.2) Gasoline: 14.24/l ( 147.21) Heavy oil: 6.6/l ( 71.24) Impact of foreign exchange Revenues: + 15.0 billion Operating Income: + 0.24 billion * Amount of cumulative total deducted from forecast for full year Revenues + 1.82 billion Operating income + 4 million FY2014 (Yearly average in FY201 (*)) USD: 102.50 ( 7.65) EUR: 141.00 ( 12.68) HKD: 1.20 ( 12.5) RMB: 16.80 ( 15.1) (*) The yearly average exchange rates for FY201 used in the assumptions are the reference rates. For the preparation of financial reports, average quarterly rates are applied to the quarterly results of businesses on a local currency basis. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 10
This document is not aimed to solicit or gain investments in any of our securities that are to be issued. The opinions and forecasts in this document are based on information available at the time of creation of this document. We do not guarantee or commit to the accuracy of this information, and it may be altered without notice. We do not bear any responsibility for any damages caused by information contained in this document. Copyright 2015 NIPPON EXPRESS, All rights reserved. Briefing Material for Results of the Fiscal Year ending March 2015 11