Top Message
President
Kenji Watanabe
We would like to take this opportunity to convey our deepest condolences to those who have become victims of the Great East Japan Earthquake, which struck in March of this year. We sincerely hope that the afflicted areas will realize a quick recovery.
My name is Kenji Watanabe and I assumed the office of President and Chief Executive Officer at the Board of Directors Meeting held upon the conclusion of the 105th Ordinary General Meeting of Shareholders.
I am firmly committed to carrying out the duties of my new post to the best of my ability, and I humbly ask you in this regard for the same support and guidance that my predecessor received.
During the fiscal year under review, the Japanese economy continued to experience a moderate turnaround in corporate earnings with the backing of a recovery in overseas economies. However, the overall condition of the Japanese economy continued to hang in the balance, affected by persistent concern about the economic downturn marked by a strong yen-induced slowdown in exports, a flagging employment situation, and the waning effectiveness of economic policy packages implemented domestically and abroad. Moreover, the Great East Japan Earthquake that struck on March 11, 2011 had a devastating effect on the country’s economy, creating significant uncertainty about its future direction.
In the field of logistics, amid the economic environment as described, the demand for international freight transportation, especially exports to Asian countries such as China and other emerging economies, demonstrated solid growth over the course of the year. On the other hand, domestic demand remained in a severe condition due to a decrease in total freight handling volume coupled with the disruption of distribution systems in the Tohoku region because of the earthquake.
In such a business environment, the Nippon Express Group made collective efforts to achieve the four key strategies comprising the two pillars for growth （“Growth as a Global Logistics Company” and “Promotion of Strategic Environmental Management”） and to implement measures to achieve the goals of “Enhancement of Management Infrastructure” and “Promotion of Corporate Social Responsibility （CSR） Management” based on the three year medium-term management plan “Nippon Express Group Corporate Strategy 2012 - Towards New Growth,” which commenced on April 1, 2010.
Specifically, regarding “Growth as a Global Logistics Company,” the Group has embarked on organizational reforms to further develop its overseas-related business in the fast-growing Asian market, while initiating projects such as expanding the solution business, strengthening the function of global business bases, and broadening the overseas transportation network to be able to make swift and positive responses to increasingly sophisticated global business needs.
With regard to the “Promotion of Strategic Environmental Management,” the Group has been actively expanding environmental businesses and supporting the nurturing and dissemination of environmental awareness by offering its environmentally-friendly logistics products, promoting a modal shift of increased efficiency, and implementing resource-saving measures for packing materials in an effort to develop a recycling-based society.
Additionally, to achieve “Enhancement of Management Infrastructure” and “Promotion of Corporate Social Responsibility （CSR） Management,” the Group has implemented a review of means to improving the educational promotion system to enhance its competitiveness in the global market and in highly advanced specialty fields. Further, the Group has been focused on various initiatives geared toward the achievement of sustainable growth, such as the promotion of social contribution activities.
The Great East Japan Earthquake caused substantial damage to some of the Nippon Express Group offices.
Nevertheless, the Group has engaged proactively in collective efforts to respond to customer requirements and resume operations at the stricken offices. In parallel with this, the Group is fulfilling its emergency transporter role, designated by the government as a public institution in the event of natural disaster, to deliver relief supplies using all of its transportation systems.
As a result of all the above, our consolidated business results for the 105th term were as follows:
Consolidated net sales of 1,617.1 billion yen （up 3.0% year-on-year）
Consolidated operating income of 31.6 billion yen （down 15.7% year-on-year）
Consolidated ordinary income of 40.6 billion yen （up 7.8% year-on-year）
Consolidated net income of 8.5 billion yen （down 32.0% year-on-year）
Concerning the future direction of the economy, a moderate recovery is predicted for overseas economies overall, driven by the high rates of economic growth in Asia and in emerging economies. Meanwhile, regarding the domestic economy, overall recovery is expected to be delayed until the second half of the fiscal year due to the effects of the Great East Japan Earthquake, which include the disruption of economic activity in the afflicted areas and slowdowns in production activity and personal consumption as a result of the measures to respond to electricity shortages; harsh conditions are expected to continue for the time being.
In the field of logistics, the aftermath of the earthquake is expected to be felt not only in declining demand for domestic cargo but also as a downward trend in international freight transportation, especially in overseas bound cargo. As overall cargo volume is expected to decline, there are a number of issues that we must address, including securing international competitiveness, reviewing the supply chain, reducing CO2 emissions, and complying with energy-saving measures.
In such a harsh business environment, the Nippon Express Group will continue to make comprehensive efforts to achieve the four basic strategies of “Growth as a Global Logistics Company,” “Promotion of Strategic Environmental Management,” “Enhancement of Management Infrastructure” and “Promotion of Corporate Social Responsibility （CSR） Management,” in order to accomplish the goals of the medium-term management plan, “Nippon Express Group Corporate Strategy 2012 - Towards New Growth.”
For “Growth as a Global Logistics Company,” we intend to increase the proportion of sales from overseas related business to 50 percent by promoting initiatives geared toward further growth such as cultivating new business fields that go beyond existing frameworks, in addition to expanding and developing global businesses in Japan and overseas.
With regard to “Promotion of Strategic Environmental Management,” we will answer the needs of society related to the environment while realizing sustainable growth by actively promoting the development and sales of products and services that reduce the environmental burden.
As for “Enhancement of the Management Infrastructure,” we will improve our management infrastructure, which is the source of our competitiveness, in order to achieve “Growth as a Global Logistics Company” and “Promotion of Strategic Environmental Management,” the pillars of our growth.
Additionally, for “Promotion of Corporate Social Responsibility Management,” we will strengthen corporate governance and improve the management system related to compliance and safety, while enhancing the environment so that each employee will be able to realize his or her full potential, thereby becoming a company that is even more trusted by society.
The Nippon Express Group will make a comprehensive effort to steadily implement these key strategies and ensure that the goals of the management plan are achieved.
Furthermore, the Nippon Express Group is committed to working toward the recovery from the Great East Japan Earthquake by fulfilling its important role as a designated public institution at the time of a natural disaster and, through logistics, contributing to the rejuvenation of the regional community.
Looking forward, we at the Nippon Express Group are committed to meeting the expectations of stakeholders by steadily gaining opportunities for growth and further enhancing our corporate value. We would be grateful for your continued support in this regard.
June 2011
