“Global Top 10 Solution Partner”
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Kintetsu World Express ANNUAL REPORT 2019 Annual Report 2019 Kintetsu World Express, Inc. Year Ended March 31, 2019 “Global Top 10 Solution Partner” A Global Brand Born in Japan Corporate Philosophy KWE Group Corporate Guidelines Contribute to the development of a global (1) We strive to further increase corporate value by (4) We are committed to comply with external delivering customers quality services that meet their regulations, and compliance monitoring and community through logistics services – needs and earn their confidence. assessment are built into all levels of the business. by creating new values, sustaining the (2) We strive to be an organization that grows and (5) We ensure a safe and healthy work environment environment and collaborating with our expands through logistics business. where people are treated respectfully and fairly. (3) We promote communications with stakeholders clients, shareholders and employees. (6) We contribute in sustainable community and disclose corporate information accurately and development, with attention to global appropriately. environmental issues. Contents 02 To Become a “Global Top 10 Solution 16 Report by Six Segments Partner” 22 ESG Section 35 Management’s Discussion and Analysis 06 Foundation for Creating New Value 40 Financial Highlights 08 Top Message 41 Financial Statements 59 Investor Information Expectations and Forecasts This annual report contains statements about our expectations and forecasts regarding plans, strategies, and business results related to the future of Kintetsu World Express, Inc. (KWE). These statements reflect our expectations based on personal beliefs and assumptions that were determined Guide to Buttons in light of information that was available at the time the report was prepared. There are innumerable risk factors and uncertainties that could affect the future, including economic trends, competition in the logistics industry, market conditions, fuel prices, exchange rates, and tax or other Move Back to Previous Page Move Forward to Next Page regulatory system considerations. Please be well advised that because of these risk factors, actual results may differ from our expectations. Print Search PDF Content Go to Contents Page 02 To Become a “Global Top 10 Foundation for Creating Report by Top Message ESG Section Financial Section Investor Information Solution Partner” New Value Six Segments Long-Term Vision Air Freight Forwarding Sea Freight Forwarding Supply Chain Solutions Long-Term Vision “Global Top 10 Solution Partner” — A Global Brand Born in Japan — Establish our brand by enhancing quality, competitiveness, and solutions with all our strength. Aim to be a preferred partner and grow a strong position in the market despite overwhelming global competition. Be a company where all group members take pride in their work. Numerical Targets Net sales: 1 trillion yen Operating income: 50 billion yen Air freight (Tons): Over 1 million Sea freight (TEUs): Over 1 million Financial soundness: Net interest-bearing debt: Zero 03 To Become a “Global Top 10 Foundation for Creating Report by Top Message ESG Section Financial Section Investor Information Solution Partner” New Value Six Segments Long-Term Vision Air Freight Forwarding Sea Freight Forwarding Supply Chain Solutions Developing Our Strengths Further and Laying Foundations for the Next Half-Century Based on our “Return to Roots” policy, we boosted air freight volume to 600,000 tons, an increase of 31% compared to three years prior. In the coming three years, we will aim for 800,000 tons. After that, we will focus on becoming a “Global Top 10 Solution Partner” with a target of 1 million tons. Amidst growing uncertainty in the business environment, we will draw strength from the knowledge and Air Freight (Export) experiences that we have Over Volume (1,000 tons) 1,000 cultivated thus far, and along with the flexibility 800 of our asset-light business 600 model, we aim to build the 457 foundations for the next ’16/3 ’19/3 ’22/3 ’XX/3 half-century step by step. (Result) (Result) (Plan) (Plan) To Become a “Global Top 10 Solution Partner” Expanding Business Scale by Concentrating on Core Businesses 1 Air Freight Forwarding 04 To Become a “Global Top 10 Foundation for Creating Report by Top Message ESG Section Financial Section Investor Information Solution Partner” New Value Six Segments Long-Term Vision Air Freight Forwarding Sea Freight Forwarding Supply Chain Solutions To Become a “Global Top 10 Solution Partner” Expanding Business Scale by Concentrating on Core Businesses 2 Sea Freight Forwarding 1 Million TEUs Come within Range Over the past three years, we achieved an increase of 54% in sea freight volume, using “700,000 TEUs” as a slogan to motivate ourselves to accomplish this goal sooner than we expected. Our target for the next three years is 900,000 TEUs. By taking up the challenges of expanding into verticals such as retail goods in addition to automo- Sea Freight (Export) Over biles, machinery, and Volume (1,000 TEUs) 1,000 equipment, we will get 900 within arm’s reach of 1 700 million TEUs and ensure 455 our path to becoming a “Global Top 10 Solution ’16/3 ’19/3 ’22/3 ’XX/3 Partner”. (Result) (Result) (Plan) (Plan) 05 To Become a “Global Top 10 Foundation for Creating Report by Top Message ESG Section Financial Section Investor Information Solution Partner” New Value Six Segments Long-Term Vision Air Freight Forwarding Sea Freight Forwarding Supply Chain Solutions To Become a “Global Top 10 Solution Partner” Expanding Business Scale Collaboration Will Be a by Concentrating on Key Driver for Core Businesses Growth Providing supply chain solutions 3 Supply Chain Solutions is the core business of APLL. By coordinating APLL’s and KWE’s future paths to offer a compre- hensive range of logistics services, we will steadily meet our custom- ers’ needs and work diligently to integrate our strengths, fostering collaboration to become a “Global Top 10 Solution Partner”. 06 To Become a “Global Top 10 Foundation for Creating Report by Top Message ESG Section Financial Section Investor Information Solution Partner” New Value Six Segments Foundation for Creating New Value —Outline of 6 Segments— Foundation for Creating New Value —Our Services— Foundation for Creating New Value —Outline of 6 Segments— The Americas United States Canada Mexico Latin American countries Net Sales (’19/3) Japan %UP Net Sales (’19/3) 15.6 (YoY change) Europe, Middle East 14.0 %UP & Africa (YoY change) The United Switzerland Kingdom Ireland Germany Other European France countries Southeast Asia East Asia & Italy Russia Singapore Oceania Malaysia The Netherlands African and Hong Kong Belgium Middle Eastern Thailand countries China India Net Sales (’19/3) South Korea APL Logistics Indonesia Taiwan Vietnam Group Australia 8.5%UP The Philippines Net Sales (’19/3) Net Sales (’19/3) (YoY change) Cambodia Net Sales (’19/3) 1.1%UP 5.6%UP (YoY change) (YoY change) 5.9%UP (YoY change) 07 To Become a “Global Top 10 Foundation for Creating Report by Top Message ESG Section Financial Section Investor Information Solution Partner” New Value Six Segments Foundation for Creating New Value —Outline of 6 Segments— Foundation for Creating New Value —Our Services— Foundation for Creating New Value —Our Services— Main Services Main Services •Air freight forwarding •Contract Logistics •Trucking for pick-up and delivery PO Management/Inventory control management/ •Customs brokerage Cross-dock operation/Assembly works/Call •Customized packaging center functions/Product inspection/VMI (Vendor Managed Inventory), etc. •Installation of precision machinery •Logistics consulting Items to handle •Transportation via truck, trailer, and rail Air Freight •Electronics components & products Logistics •Auto-related Logistics (transportation of •Automotive parts and components finished vehicles, auto parts) •Healthcare products Items to handle Net Sales (’19/3) Net Sales (’19/3) •Chemical products •Industrial products and components •Machinery and its parts •Automotive products •Healthcare products 9.3 %UP •Apparel •Aircraft components 4.8%UP •Chemical products •Retail goods •Consumer (YoY change) •Alcoholic beverages, etc. (YoY change) goods, etc. Main Services Main Services •Sea freight forwarding (FCL,LCL) •Domestic air freight forwarding •Container drayage •Customized packaging, transport, and •Trucking for pick-up and delivery installation of precision machinery •Customs brokerage •Temporary staffing, primarily for logistics •Buyer’s consolidation and trading businesses •PO Management •Transport of art objects and other materials for events and exhibitions Sea Freight Items to handle Other Operations •Hand carry service •Electronics components & products •Automotive parts and components Net Sales (’19/3) •Plant equipment Net Sales (’19/3) •Machinery and its parts •Chemical 6.3%UP products •Equipment for events •General 8.2%UP (YoY change) merchandise and retail goods, etc. (YoY change) 08 To Become a “Global Top 10 Foundation for Creating Report by Top Message ESG Section Financial Section Investor Information Solution Partner” New Value Six Segments Top Message Our Compass for the Next Half-Century 09 To Become a “Global Top 10 Foundation for Creating Report by Top Message ESG Section Financial Section Investor Information Solution Partner” New Value Six Segments Aiming to be a “Global Top 10 Solution Partner” In January 2020, KWE will celebrate its 50th anniversary. By setting new records for handled volumes, net sales, and operating income for the fiscal