Medium-Term Business Plan （from FY2014 to FY2016） FORWARD, Yusen...Jun 2012 Yusen Logistics Turkey Logistics Services Co., Ltd. Jul 2012 Yusen Logistics (Bangladesh) Ltd. Sep 2013

March 28,2014

Yusen Logistics Co., Ltd.

Medium-Term Business Plan

（from FY2014 to FY2016）

1

INDEX

Ⅱ. Numerical Targets

Ⅲ. Strategies to Achieve Targets

Ⅰ. Review of the PreviousMedium-Term Business Plan

2

I-1. Review of the Numerical Targets

Net sales Ordinary income Net income

FY2012 (results)

400.0

FY2011 (results) FY2013 (forecast)

309.0

7.5

2.52.7

1.1

339.0

4.81.5

（Billions of JPY）

Numerical Targets ： Consolidated net sales ： JPY500.0 billionfor FY2013 Consolidated ordinary income ： JPY 18.5 billion

3

Air Freight

I-1. Review of the Numerical Targets

(unit:TEU)

FY2012 (result)

FY2011(resul

t)

FY2013

450,000

550,000570,000

Ocean Freight

FY2012 (result)

FY2011 (result)

(unit:TON)

(forecast)FY2013

(forecast)

350,000310,000 310,000

Numerical Targets ： Ocean Freight Forwarding ： 1 million TEUfor FY2013 (Group total) Air Freight Forwarding ： 500 thousand tons

4

I-2. Review of the Area Strategy

Emerging Market・Russia・Brazil・Bangladesh・Cambodia・Myanmar

Business Expansion through Aggressive Investments in Emerging MarketBusiness Expansion through Aggressive Investments in Emerging Market

Priority Target Areas

India China SouthEast Asia

VietnamIndonesiaThailand

Growth Strategy for Priority Areas

<New Companies>Jun 2012 Yusen Logistics Turkey Logistics Service s Co., Ltd.Jul 2012 Yusen Logistics (Bangladesh) Ltd.Sep 2013 Yusen Logistics (Cambodia) Co., Ltd.Sep 2013 Yusen Logistics (Myanmar) Co., Ltd.

<New Branches / Offices>Aug 2011 Zhengzhou Office in ChinaJul 2012 Chengdu Branch in ChinaSep 2012 Far East Branch in Nakhodka, RussiaOct 2013 Johannesburg Representative Office in So uth Africa

<Facilities>Feb 2013 Yusen Logistics (India) Ltd. Established Four New Warehouses

(Total approx.70,000 ㎡㎡㎡㎡ in India)Jan 2014 Yusen Logistics RUS LLC expanded the war ehouse

(Total approx.30,000 ㎡㎡㎡㎡ in Russia)Jan 2014 Yusen Logistics (Thailand) Co., Ltd. est ablished 30,000 ㎡㎡㎡㎡ new warehouse

(Total approx.250,000 ㎡㎡㎡㎡ in Thailand)

5

I-3. Review of the Integration

Europe

76 locations

650 thousand ㎡㎡㎡㎡East Asia

85 locations

240 thousand ㎡㎡㎡㎡Japan

73 locations70 thousand ㎡㎡㎡㎡

South Asia/Oceania

171 locations

790 thousand ㎡㎡㎡㎡

Americas

64 locations

260 thousand ㎡㎡㎡㎡

(The above data is as of December 31,2013.)(*) Employees with Consolidated Companies only.

● Number of employees:19,004 (*)

● Number of logistics business locations:469● Total warehouse space:2,010 thousand ㎡㎡㎡㎡

● Number of countries:39

Current Business Scale

6

INDEX




7

Ⅱ-1. Numerical Targets for FY 2014-2016

400.0

FY2013 (forecast)

4.5

1.5

430.0

FY2014

6.5

2.1

460.0

9.0

3.0

500.0

12.0

4.0

JPY1.0 trillion

FY2015 FY2016 (Long-term target)

Net sales Operating income Net income

(Billions of JPY)

Numerical Targets ：for FY2013

Numerical Targets ： Consolidated net sales ： JPY500.0 billionfor FY2016 Consolidated operating income ： JPY 12.0 billion

Consolidated ordinary income ： JPY 12.0 billion

Ordinary income

4.8 Ordinary income

Operating income

8

Ⅱ-1. Numerical Targets for FY 2014-2016

570,000

650,000

740,000

FY2014 FY2015 FY2016 FY2014 FY2015 FY2016

(unit:TEU)Ocean Freight Air Freight (unit:TON)

FY2013(forecast)

FY2013(forecast)

850,000

310,000330,000

370,000350,000

Numerical Targets ： Ocean Freight Forwarding ： 850 thousand TEU for FY201 6 (Group total) Air Freight Forwarding ： 370 thousand tons

9

FY2013 (forecast)

Ⅱ-2. Medium-Term Business Plan

and Long-Term Targets

Ocean Freight: 8 50,000 TEUAir Freight: 370,000 tonsNet Sales: JPY500.0 bn.Operating Income: JPY12.0 bn.

Reinforcement of

Business Foundation

FY2016 (plan )

Integration

Fusion

Ocean Freight: 570,000 TEUAir Freight: 3 10,000 TonsNet Sales: JPY400.0 bn.Operating Income: JPY4.5 bn.

Global Top 5

No.1 in Asia

Ocean Freight: 2 million TEUAir Freight: 700,000 tonsNet Sales: JPY1.0 tn.Operating Income: JPY35.0 bn.

Long-Term Targets

10

INDEX




11

Sustainable Growth

OperationalS

trategy

Investment

Strategy

Grow

thS

trategy

Reinforcement ofBusiness Foundation

Ⅲ-1．Basic Strategy

12

(*１) Core Products (‘Read-Made’ Products)：

Air & Ocean Core Products (‘Ready-Made’ Products) are defined as ocean and airfreight forwarding services that include shipment tracking and data management, which can be implemented for customers quickly, efficiently and cost effectively as part of YL core competency

(*2) Tailor-made Services：

“Tailor-Made” Services are defined as ‘Total Logistics ‘ Solutions which require Yusen Logistics expertise to integrate multiple services and products to address a customer’s supply chain needs

Ⅲ-1．Basic Strategy

-Expand Total Logistics Services with global custome rs, utilizing expertiseand operations in Asian markets

- Air and Ocean Forwarding Business ：：：：①Increase volume ②Reinforcement of Core Products (*1) Sales(“Ready-Made” Products Sales)

- Logistics Business ：：：：Enhancement of “Gemba-ryoku” - on-site capability - by continuous “Kaizen”- “Tailor-Made “ Services (*2) focused on target indu stry verticals and emerging markets

- Improve profitability through ongoing Re-Engineeri ng Projectand enhance competitiveness through Global Business Process Management

-Investment in people: Development of global hum an resources for CoreProducts Management and Total Logistics Services

-Investment in systems: Standardization of global IT platforms drivenby Business Process Management to support Total Log istics solutions

- Investment in Emerging Markets: Expansion of faci lities and transportation network in Asia

Sustainable GrowthSustainable GrowthSustainable GrowthSustainable Growth

Operatio

nal

Operatio

nal

Operatio

nal

Operatio

nal

Stra

tegy

Stra

tegy

Stra

tegy

Stra

tegy

Investm

ent

Investm

ent

Investm

ent

Investm

ent

Stra

tegy

Stra

tegy

Stra

tegy

Stra

tegy

Growth

Growth

Growth

Growth

Stra

tegy

Stra

tegy

Stra

tegy

Stra

tegy

Reinforcement ofReinforcement ofReinforcement ofReinforcement of

Business FoundationBusiness FoundationBusiness FoundationBusiness Foundation

Operational Strategy

Investment Strategy

Growth Strategy

13

■ Net Sales Portfolio by Business Segment

■ Net Sales Portfolio by Geographical Segment

FY2013(forecast)

Logistics41%

Logistics39%

Others5%

Others4%

Air27%

Ocean27%

Air26%

Ocean31%

Ⅲ-2. Sales Composition by Segment

FY2013(forecast)

FY2016 (plan)

FY2016 (plan)

Japan19%

East Asia19%

South Asia & Oceania18%

Americas21%

Europe23%

Japan18%

East Asia20%

South Asia & Oceania20%

Americas20%

Europe22%

14

Ⅲ-3. Strategic Framework

ITHR

3.AreaStrategy

2.SalesStrategy

Finance

３３３３D ManagementD ManagementD ManagementD Management

Basic ManagementBasic ManagementBasic ManagementBasic Management

StrategyStrategyStrategyStrategy

Organization

Compliance

1.BusinessStrategy

15

● Increase collaboration betweenOcean and Solutions sales

● Professional developmenthuman resources

● Enhancement of operational

efficiency and standardizationbased on streamlined BusinessProcess Management / IT infrastructure

● Diversification of products● Development of core service

products● Expansion of the Origin

Cargo Management service

Ⅲ-4. Business Strategy

● Improvement in procurement

through strategic partnership with Core Carriers

OBJECTIVE:Volume Target FY2016

850 K TEUMeet growth targets through Business Process Re-engineering and product development that drives scalability and delivers competitiveOcean Freight Forwarding services.

①①①① Ocean Freight Forwarding Business

Sales

Business Process

Re-EngineeringPlanning

Product Purchasing

● Sales development focused on core products● Targeting of Global customers importing and

exporting from Asia

Goal: An Industry Leading Global Ocean Freight Forwarding provider

16


OBJECTIVE: Volume Target FY2016

370 K tonsMeet growth targets through Business Process Re-engineering and product development that drives scalability and delivers competitive Air Freight Forwarding services.

② Air Freight Forwarding Business

Sales

Planning

Product Purchasing

● Development of core serviceproducts

● Product development focusedon customers’ needs inspecific industry verticals

● Sales development focused on core products● Targeting of Global customers importing and

exporting from Asia

● Improvement in procurement

through strategic partnership with Core Carriers

● Professional development of human resources

● Enhancement of operational

efficiency and standardizationbased on streamlined BusinessProcess Management / IT infrastructure

Business Process

Re-Engineering

Goal: An Industry Leading Global Air Freight Forwarding provider

17


Cultivation of Global Human

Resources

Delivering high quality services which are selected and continue to be selected by customer

Aim to be No.1 Kaizen Company

Competitive 'Gemba'

• Standard quality creation• Thorough cost management• Run the PDCA cycle• Establish Win-Win relationship

Project Management

QualityControl

Cost Management

Logistics Technology

& IT

③③③③ Contract Logistics Business

・To satisfy both of product lineup enhancement and profitability

・To become a core component in the Yusen group growth strategyas a total logistics service provider

Solution Proposal

18Yusen Logistics Business Infrastructure

Global Logistics Sales

（Tailor-Made Service・Solution Design）

Core Service Products Sales

Competitive ‘Gemba‘ ・・・・ Sustainable ‘Kaizen ‘

Air Freight ForwardingContract Logistics

Ocean Freight Forwarding

Global Customer

Goal : An Industry Leading Global Logistics Service Provider with“Enhanced Core Service Products” & “Sophisticated LogisticsSolution Design”

Region/Area Knowledge

IndustryVerticals

Knowledge

3PL SolutionKnowledge

LogisticsTechnology

InformationTechnology

Ⅲ-５. Sales Strategy

19

物流最適化

ソリューション

Retail

Healthcare

ASEAN Areas

BRICs

Mexico

TurkeyAutomotive

Aerospace

Technology

IndianSubcontinent

Industry ●●●●●●●●●●●●●●●●●●●●Selected Industry Verticals & Strategic Emerging Market AreaSelected Industry Verticals & Strategic Emerging Market Area

Global Logistics Sales Approach

Industry VerticalsIndustry VerticalsEmerging

Market AreaEmerging

Market AreaProjectCargo

Logistics OptimizationSolution Service

Food

Ⅲ-５. Sales Strategy

EmergingEmergingEmergingEmerging

Market Area

Market Area

Market Area

Market Area

Industry

Industry

Industry

Industry

Verticals

Verticals

Verticals

Verticals

20

Ⅲ-６. Area Strategy

73 locations,70 thousand ㎡

① Japan Region

(forecast) （plan）（plan）（plan）

(Billions of Yen)

Net sales Operating income

Net sales JPY89.0 bn.

Operating income JPY1.9 bn.

FY2016

Total investment amount JPY2.0 bn.

Priority Measures

(Area Strategy)

・Reinforcement of forwarding business of off-shore t rades・Expansion of import business and project cargo hand ling・Expansion of Total Logistics Service

・Increase of import and export handling volume by ex pandingcustomer base

・Service development of import, off-shore business a nd Ocean LCL・Sales reorganization and development of human resour ces focused

on growing industry verticals・Further expansion of business locations

21



Priority Measures

(Area Strategy)

FY2016

②②②② Americas Region

(Billions of Yen)






・Expansion of businesses with global customers

・・・・Expand intra-region, trans-Atlantic, and further de velop trans-Pacificforwarding business

・・・・Expand and deepen relationships with customers who have a globalreach (sourcing or operations) e.g. retailers

・・・・Expand logistics business in each domestic market, Grow revenueof domestic transportation in the United States

・・・・Develop supply chain solution products・・・・Improve operational efficiency・・・・Specific focus to business development in/with Mexi co

22


③③③③ Europe Region

Priority Measures

(Area Strategy)

FY2016


(Billions of Yen)






・・・・Expand forwarding business through approach to glob al customers・・・・Re-engineer contract logistics and transport busine ss in the region

・・・・Facilitate and enhance transportation network withi n the region・・・・Optimize gateway function of forwarding business・・・・Promote sales activities in priority industries (au tomobile, healthcare,

retail and high technology)・・・・Expand businesses in Turkey and Black Sea area・・・・Explore markets in Eastern Russia and North Africa

23


④④④④ East Asia Region

Priority Measures

(Area Strategy)

FY2016


(Billions of Yen)






・・・・Expand forwarding business through “Selection and F ocus”strategies

・・・・Reform Contract Logistics and Transport business

・・・・Expand businesses to Europe and to the Americas・・・・Promote LCL products sales・・・・Induce various logistics business models in China a s consuming

market・・・・Reinforce inland logistics capabilities in China (A utomobile industry,

Yangtze River transportation)

24


⑤⑤⑤⑤ South Asia and Oceania Region

Priority Measures

(Area Strategy)

FY2016


(Billions of Yen)



・・・・Expand business scale through aggressiveinvestments in growing/newly emerging countries

・・・・Facilitate and enhance multi-modal transportation n etworkwithin the region

・・・・Promote sales activities in priority industries (au tomobile, aircraft,project cargo, retail and healthcare)

・・・・Induce various logistics business models in the reg ionas consuming market




25

①①①① Industry Leading Operational Effectiveness

■ Optimization of operational process by Visualization, Standardizationand Equalization

② Industry Leading Operational Quality

■ Providing high-quality service and accurate informatio n to customers

Ⅲ-７. Operational Excellence through Global BPM

26

Ⅲ-8. Basic Management Strategy

■ Promotion of global HR■ Focus on the securing, development, and strategic assi gnment

of human resources responsible for global logistics ■ Strengthening of the 3D Management through collaborati on

between GHQ and RHQ

■ Enhancement and dissemination of a global complianc e system

■ Reinforcement of financial standing by improving the efficiencyof financial flows within the group

① HR Strategy / Organization Strategy

② Strategy to enhance compliance

③ Financial Strategy

27

Ⅲ-8. Basic Management Strategy

■ Promotion of innovation on IT infrastructure and global optimizationwith standardization of technology across common plat forms

■ Enhancement of corporate value by improving stakeholde r communicationand continuing to offer steady dividends

④ IT Strategy

⑤ Contribution to Stakeholders

28

Inquiries about this Document

The Company business projections and strategies in this document are based on information available

at present and contain uncertainties. Actual results and other data may differ from the projections due

to various factors occurring in the future.

Yusen Logistics Co., Ltd.Investor Relations DepartmentTEL: 03-6703-8298FAX: 03-3578-3552E-mail:[email protected]

Medium-Term Business Plan （from FY2014 to FY2016） FORWARD, Yusen...Jun 2012 Yusen Logistics Turkey Logistics Services Co., Ltd. Jul 2012 Yusen Logistics (Bangladesh) Ltd. Sep 2013

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