Action to Implement Management that is Conscious of Cost of Capital and Stock Price

Analysis of Current Situation

• Current cost of equity is approximately 7-8%, based on CAPM and other analyses, reflecting the rising interest rate environment
• Since listing, ROE has consistently exceeded cost of equity
• ROE reached a record high from FY2021/3 to FY2023/3 amid strong earnings growth during COVID-19
• Since FY2024/3, growth investments have expanded, and improvements in capital profitability by business segment are still underway
• Rising interest rates potentially becoming a medium- to long-term trend, upward pressure on the cost of equity is expected to continue

Recognition of the Issues

• Continued improvement in ROE is required while controlling the cost of equity

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  Net income attributable to owners of the parent for FY2022/3 and FY2023/3 includes extraordinary gains from the sale of shares of LOGISTEED, Ltd. (the same hereinafter)

Analysis of Current Situation

• Since listing, PBR has consistently remained above 1x, supported by a high level of ROE compared with other companies in the transportation sector
• Current PER is approximately 15x, roughly in line with the industry average of approximately 13x to 16x (TSE Prime Market and land transportation sector)

Recognition of the Issues

• Sustained achievement of PBR above 1x is required through enhanced disclosure on Total Logistics sophistication and dialogue with the capital markets
• The current PER does not sufficiently reflect growth potential, highlighting the need for improvement efforts

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  The Company conducted a 2-for-1 stock split on November 1, 2020. The PBR and PER figures have been calculated on the assumption that the stock split had been effective from the beginning of FY2018/3

Target Level

• Achievement of ROE of 15% by FY2030 is targeted through improving the profitability across businesses and enhancing shareholder returns

Logic Tree for Improving Corporate Value and Stock Price

ROIC Management: Improving Profitability by Executing Growth Strategies Based on the Business Portfolio

The company-wide hurdle rate is set at 5.5%, based on WACC and other factors. ROIC remains high in the Delivery Business.
ROIC in the Logistics and Global Logistics Businesses temporarily declined due to an increase in goodwill associated with M&A, but profit contributions from acquired businesses have begun to materialize

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  Absorption-type merger with Meito Transportation Co., Ltd. as the surviving company, effective April 1, 2025.
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  ROIC by segment = NOPAT by segment / invested capital by segment. NOPAT by segment is calculated by adjusting operating income by segment for the effective tax rate, while invested capital by segment is calculated as the average working capital plus fixed assets for each segment during the fiscal year. ROIC by segment (excluding goodwill, etc.) is calculated by excluding goodwill amortization expense from NOPAT by segment and goodwill, etc. from invested capital by segment.

Utilization of Financial Leverage

In FY2026/3, ROE ended up at 10.5%, exceeding the initial forecast, through balance sheet management measures such as the use of financial leverage for growth investments

Suppression of cost of shareholders’ equity and improvement of expected growth rate

Implementing various initiatives to enhance governance through dialogue with shareholders and investors

Initiatives to Improve Corporate Value and Share Price
- Action to implement management that is conscious of cost of capital and stock price - (July, 2026) (1.4MB)