Integrated Report 2023“

16-10, Ginza 2-chome, Chuo-ku, Tokyo
104-8125 Japan
Telephone: 81-3-3541-4141

One
YAMATO”
2023

Medium-Term Management Plan
Based on “YAMATO NEXT100”

Printed in Japan
Published in November 2023

Part 1VALUE CREATION BY THE YAMATO GROUPVALUE CREATION BY THE YAMATO GROUP

CONTENTSThe Yamato Group’s Important Role as a Part of Social Infrastructure
Since its founding in 1919 as Yamato Transport Co., Ltd., theYamato Group has created a large number of services that were
unprecedented at the time, starting with TA-Q-BIN. By doing so,
the Group has established itself as a corporate group thatserves as a crucial part of social infrastructure. Recently, there
have been major changes in the business environment surrounding Yamato and changes to consumption behavior and logistics
structures have accelerated. Accordingly, the active participation of corporations in resolving social and environmental issues
is becoming increasingly important to the achievement of a sustainable society.

Under such circumstances, the Yamato Group aims to realize
sustainable business growth by expanding the value we provide
to the “End to End” of our customers’ supply chains. We willachieve this by promoting business structure reform centeredon the structural reform of network operations and expanding
the corporate business domain based on the One YAMATO
management structure, which centralizes the management
resources of all Group companies.
Through these efforts, we will contribute to the creation of anenriched society, a goal laid out in our Management Philosophy,
and improve medium- to long-term corporate value.

Group Summary*

Operatingrevenues¥1,800.6 billion

Operation facilities forcorporate clients*1

Approx.

400

Overseasdevelopment

24 countries and regions
Domestic parcel
delivery market share*2

No. 1(47.5%)* The fiscal year ended March 31, 2023, or as of March 2023

Operatingprofit¥ 60.0 billion

TA-Q-BIN sales offices

3,331

Annual parcel delivery
amount(TA-Q-BIN, TA-Q-BIN Compact, EAZY, andNekopos)billionparcels

VALUE CREATION BY THE YAMATO GROUP

Network coverage of
TA-Q-BIN in Japan

Approx.

02

Approx.

56 million*1 Warehouses, pickup and delivery facilities for corporate clients, and other locations*2 Source: “Survey and Calculation Method for Parcel Delivery Amount” (provisional translation) compiled by Japan’s Ministry of Land,
Infrastructure, Transport and Tourism

Forward-Looking Statements 

Editorial Policy 

Guidelines Referenced This integrated report contains forward-looking
statements concerning Yamato Holdings’ futureplans, strategies, and performance. Thesestatements represent assumptions and beliefs
based on information available at the time thisreport was created. Furthermore, forward-looking statements are subject to a number of risks
and uncertainties that include, but are not limited to, economic conditions, customer
demand, foreign currency exchange rates, tax
laws, and other regulations. Yamato Holdings
therefore cautions readers that actual results
may differ materially from these predictions.

Having built up long-standing relationships oftrust with all of its many and varied stakeholders,the Yamato Group discloses not only informationof a legal nature but also information considerednecessary for those stakeholders. The YamatoGroup adopted the policy that such information
shall be conveyed promptly and accurately aswell as fairly and equitably. Conveying information, including that of a non-financial nature, onsuch aspects as management strategies, business overviews, and environmental, social, andgovernance (ESG) activities, this integrated
report is intended to deepen the reader’s comprehensive understanding of the Yamato Group.
Please visit our website for more detailed
information.

• Guidance for Integrated
Corporate Disclosure andCompany-Investor Dialogue forCollaborative Value Creation
2.0,
Ministry of Economy, Trade and Industry• Integrated Reporting Framework, International
Financial Reporting Standards Foundation(IFRS Foundation)

CORPORATE GOVERNANCE
44	Outside Director Roundtablea Part of Social Infrastructure / Editorial

50

Policy58 	Directors / Audit & Supervisory

Group Corporate Philosophy

Corporate Governance
Board Members / Management
System04	History of Expanding the Value We

Provide (100 Years of Progress)
06 	Expanding Value Provision to the“End to End”

60,000

Number of Kuroneko
Members

44

01	The Yamato Group’s Important Role as

Sales drivers

Approx. 210,000

2.33

01

100 %

Number of
employees

Approx.

Part 1

08

Value Creation Process

10

Performance Highlights

62

FINANCIAL SECTION
62	Ten-Year Summary and BusinessHighlights
64 	Consolidated Financial

12Statements

DESTINATION OF ONE YAMATO
12

Message from the President

16	Message from the Chief Financial Officer

96

COMPANY INFORMATION

18	Structural Reform of Network Operations

96

Global Network

22

Expansion of Corporate Business Domain

97

Corporate Data / Stock Information

26

Human Resource Strategy

32

Digital Strategy

34

Environmental Strategy

38

Sustainable Management
38 Strengthening of Sustainable

Management
40 Sustainable Medium-Term Plans

2023
42 Measures That Support Sustainable

GrowthYAMATO HOLDINGS CO., LTD.
Integrated Report 2023

01

Part 1VALUE CREATION BY THE YAMATO GROUPVALUE CREATION BY THE YAMATO GROUP

Part 1

Group Corporate Philosophy
The Yamato Group’s foundation lies in its Core Values, which serve as the spirit of the Group’s founding and have remained unchanged
since their establishment in 1931. Supported by our Group Corporate Philosophy, created based on our unchanging Core Values, we
aim to become a corporate group that can make sustainable contributions to the realization of an enriched society.

MissionManagement Philosophy

The mission and purpose the

Yamato helps enrich our society by enhancing

Yamato Group should fulfill in society

our social infrastructure, creating moreManagement Philosophy

convenient services for evolving lifestyles andindustries, and developing innovative logistics
and distribution systems.

VisionCore Values

Our vision for the Yamato Group

1. We all represent the Company.

in the futureThis value represents the spirit of “inclusive management,” whereby employees makedecisions based on their own judgments and engage with our customers and business
partners with an awareness that they represent the Company.

Transformation Plan “YAMATO NEXT100”
Environmental Vision

2. We connect our customers’ hearts with every delivery.
This value defines deliveries as not simply the transportation of goods, but rather achance for us to connect with our customers' hearts and offer them joy.

3. We conduct ourselves both professionally and ethically.

Social Vision

Medium-Term Management Plan “One YAMATO 2023”
Expansion of value provided to the “End to End” of supply chains

This value reflects the importance of ensuring that all our employees adhere to laws andregulations as members of society while conducting themselves in an ethical manner.

ValuesValues that are key to realizing theIncorporating the Founding Spirit within Our Core Values

Company founderYasuomi Ogura

Our Core Values, which were established by our founder Yasuomi Ogura in 1931 shortly after
our founding, have always been considered something that should remain unchanged throughout our over 100-year history. When it came to corporate management, Yasuomi Ogura
believed that no matter how logically a businessperson ran a company, the efforts of eachindividual employee are the most important aspect of preventing that company’s organizationfrom becoming a mere formality and of having that company be accepted by society.
Personnel involved in our transport businesses work on their own individual routes on adaily basis, which means it can take a certain amount of time before the direction of upper
management is communicated to them. Yasuomi Ogura believed that the independence ofeach employee who places importance on the Core Values could compensate for this timelag. He therefore took steps to spread awareness of the Core Values across the Company.

For more details, please refer to our corporate website.
Corporate Philosophy, including Corporate Stance and Employee
Code of Conduct

https://www.yamato-hd.co.jp/english/company/
philosophy.html

02

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Various Policies and Declarations

Yamato Group’s Mission
Corporate Stance

Employee Code of
Conduct

Yamato Group values and policies for demonstrating approaches
Yamato Group
Human Rights
PolicyBasic Policy on
Diversity

Yamato Group
Human Resources
Management
PolicyYamato Group
Environmental
PolicyYamato Group
Responsible
Procurement
Policyetc.

Core Values

https://www.yamato-hd.co.jp/english/csr/esg/
policy.html
YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

03

VALUE CREATION BY THE YAMATO GROUPVALUE CREATION BY THE YAMATO GROUP

Part 1

History of Expanding the Value We Provide

The Yamato Group has developed into what it is today by accepting the changes each era brought and proposing products and services required by customers. We commenced a route-based, regular delivery service (Japan’s first regular route transport service).
Following this, we launched the TA-Q-BIN service to meet the delivery needs of countless customers and expanded the value we provide to meet the needs of varied customers, from individuals to corporate clients. In 2019, we celebrated our 100th anniversary. Basedon the sudden and significant changes in the business environment, we embarked on structural reform to realize sustainable growthand improvement of medium- to long-term corporate value.

Founding of
YamatoTransport
Co., Ltd.

Direction ofstrategies

Delivery company

Business
environment(100 Years of Progress)

1919

Around 1919

Around 1960

Transformation of freighttransportation (from ox- andhorse-drawn carriages andwagons to trucks)

Functions (including products and services)

Around 2000

Rapid economic growth tostable growth
improvement in standard ofliving and purchasing power

Around 2020
Emergence and spread of
COVID-19

Changes to lifestyles andexpansion of needs fromhome delivery to individual
delivery

Changes in consumption
behavior and logistics
structures

Around 1929

Around 1976

Around 2000

Around 2013

Launch of regular route transport service

Launch of TA-Q-BIN service

Promotion of Group management

Creation of solutions in corporate logistics

Response to demand for small-lot delivery

 rovision of products andP
services that meet
consumer needs

Further advancementof Delivery Business reation of highCvalue-added
business modelIndependent growthof non-delivery
businesses xpansion of TA-Q-BIN
E
network

1929

Launch of regular route, combined-load transport
service between Tokyo and Yokohama

200000200000Conclusion of agent contract with
C.A.T. (Civil Air Transport), a
Taiwanese airline, and launch of air
freight handling

100000100000

Launch of marine
freight handlingshipping
operations

1958

Launch of artwork
packing and shipping

1960

50000
50000

1986

Launch of TA-Q-BIN
service

Launch of Collect service (Currently
TA-Q-BIN Collect)

1983

Establishment of TA-Q-BIN
service points (currently
distributors)

Launch of Kuroneko
Members, membersonly service for individual clients

2002

Launch of TA-Q-BIN EmailNotification service

1989

Launch of Golf TA-Q-BIN
service2007

Launch of TA-Q-BIN
Time Zone Delivery
service

Launch of Cool TA-Q-BIN
service

1984

1976

Reinforcement ofbusiness
infrastructure byinnovating networks

1998

1988

Launch of Ski TA-Q-BIN
serviceLaunch of International
TA-Q-BIN service

150000150000

1951

1952

1976

2005

Launch of Airport
TA-Q-BIN service

Launch of TA-Q-BIN
Collect, comprehensive
payment settlement
service for mail-orderdealers

1987

Launch of TA-Q-BIN service
at convenience stores

1960

2015

Launch of TA-Q-BIN Compact
serviceLaunch of Nekopos service

The fiscal year ended March 31, 20202012

Launch of Yamato Business
Members, members-only service forcorporate clients

Completion of network for regulardeliveries across the Tokyo metropolitan area and surrounding areas

2000

Establishment of Yamato System Development Co., Ltd. andcommencement of business in information and communication domain

Establishment of PUDO Stations(open-type parcel lockers)

From April 2021

Launch of third-party logistics (3PL)
business

2012

Launch of Total Logistics Support
service for medical equipment
manufacturers“One YAMATO 2023”

2007

Launch of Kuroneko Yamato Recall Support service

001970

1980

1990

2000

2010

2020

Expansion of domestic TA-Q-BIN network
Ratio of area covered across Japan

1976

1,630.1billion

¥

2016

Changes in Operating Revenues

1935

100th Anniversary of theCompany’s Founding

Medium-Term Management Plan

1973

Launch of international mixed air-freight handling

1920

Part 1

3.4%

1989

99.5%

2013

1997

Completion of domestic TA-Q-BIN network

Launch of operations at
Haneda Chronogate

Launch of the One YAMATO management structure,
which centralizes the management resources of theGroup with the aim of providing value to the “Endto End” of the businesses of our corporate clients, including clients based overseas, inboth the upstream and downstream
domains

Networks

Expansion of overseas network

1980

Establishment of Yamato
Transport U.S.A. Inc.

1982

1983

Establishment of Yamato Transport (S) Pte. Ltd.

Establishment of Yamato
Transport (Hong Kong) Ltd.
(Currently Yamato Logistics(Hong Kong) Ltd)

04

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

1986

Establishment of Yamato
Transport (Nederland) B.V.
(currently Yamato
Transport Europe B.V.)

2020

2003

Establishment of Yamato (Shanghai) Logistics Co., Ltd.
(the predecessor of Yamato International Logistics Co., Ltd.)

27 overseas subsidiaries
25 countries and regions of operation(including representative offices and branch offices)2016 onclusion of agreement for business collaboration andCcapital alliance with major Malaysian delivery company GD
Express Carrier BHD. (currently GDEX Berhad)Acquisition of stock in OTL Group, of Malaysia

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

05

VALUE CREATION BY THE YAMATO GROUPVALUE CREATION BY THE YAMATO GROUP

Part 1

Expanding Value Provision to the “End to End”

From April 2020

From April 2021

Transformation Plan “YAMATO NEXT100”

Medium-Term Management

Part 1

Recently, there have been major changes in the business environment surrounding Yamato, and changes to consumption behavior andlogistics structures have accelerated. Accordingly, the active participation of corporations in resolving social and environmental issues
is becoming increasingly important to the achievement of a sustainable society. Under such circumstances, the Yamato Group aims torealize sustainable business growth by expanding the value we provide to the “End to the End” of our customers’ supply chains. We
will achieve this through promotion of business structure reform centered on the structural reform of network operations and expansion of the corporate business domain based on the One YAMATO management structure, which centralizes the management
resources of all Group companies.

Plan “One YAMATO 2023”

Business Structure Reforms
Group Management Structure Reform

Point

We are embarking on Group management structure reformand business structure reforms to sustainably meet the
expectations and needs of customers and society, based
and worsening social issues.
Business Environment /Social Issues

Issues with theManagement Structure iversification of customer
D
expectations and needs

 ecentralization of manageD
ment resources of operatingcompanies for each function(partial optimization)D eclining workforceC limate change and resource
scarcity

Review of Business PortfolioL imits of conventional business model that utilizes
TA-Q-BIN ependency on experienceDand intuition in individual
decision-making
 orporate culture focusedC
on self-reliance(Fiscal Year Ended March 31, 2011, to Fiscal Year Ended March 31, 2020)(¥ billion)

(%)

2,000

10.0

1,500

7.5

1,000

5.0

500

2.5

0

0

Operating revenues (left scale)Operating profit margin (right scale)

06

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

 ransfer of shares issued by Yamato Lease Co., Ltd.
T
and Yamato Home Convenience Co., Ltd.
(wholly-owned subsidiary → equity-method affiliates) ithdrawal from development of TA-Q-BIN in EastW
Asia and Southeast Asia

Review

Changes in Operating Revenues and Operating Profit Margin

2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3

Creation of One YAMATO Management Structure
 entralization and redeployment of management
C
resources by integrating Yamato Transport with eightGroup companies

on the accelerating changes to the business environment

 eclining population andDrural depopulation

P18–21

 einforcement of existing networks as well as creatRing and expanding designated networks

Identification of Issues

 apid progress of EC (e-comR
merce) adoption in various
industries

Structural Reform of Network Operations( Fiscal Year Ended March 31, 2022, toFiscal Year Ended March 31, 2023)

Medium-Term Management Plan
“One YAMATO 2023”—Results and Issues
Results

Issues Creation of One YAMATO management structure,
which centralizes Group resources
Progress in creation of EC logistics network as a starting point
Completion of overall design and launch of phased
implementation to reinforce existing TA-Q-BIN network
Expansion of domains in which we provide value, suchas domestic EC procurement and returns domain,cross-border EC for Japan, logistics in three temperature ranges for food distributors, and Lead Logistics
Partner projects (LLP contacts)

Strengthening of response to logistics needs in growthdomains as well as enhancement of network quality andefficiency

Expansion of Corporate Business Domain

P22–25

Vision xpansion of value provision by combining domesticEand international facilities and transportation anddelivery networks, third-party logistics, and international forwarding
Point
Expanding value provision to the “End to End” of domestic and global customer supply chains

Promotion of Fundamental Strategies
that Support Structural Reforms
Human
Resource
Strategy
P26–31

DigitalStrategy

Environmental
Strategy

P32–33

P34–37

Expanding value provision to the “End to End”
of customer supply
chainsAchievement of sustainablebusiness growth Structural reform for integration of sales and operations
 ontinuous reinforcement of management foundation
Cthat supports business structure reforms

	
Optimization of pricing based on changes to the external environment

Reinforcement of Foundation for Improving Sustainable Corporate Value

Strengthening of sustainable management × Strengthening of corporate governanceP38–43		
P44–61YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

07

Part 1VALUE CREATION BY THE YAMATO GROUPVALUE CREATION BY THE YAMATO GROUP

Part 1

Value Creation Process

Business Environment / Social Issues

Our Vision• Diversification of customer expectations and needs • Rapid progress of EC adoption in various industries• Declining population and rural depopulation • Declining working population• Climate change and resource scarcity• Management Philosophy:
Contribute to the creation of an enriched society

Rising costs due to changes in the external environment• Environmental Vision: Connect. Deliver the future via green
logistics• Now: Impact on infrastructure following uncertain international circumstances• Social Vision: Through co-creation and fair businessactivities, help create a society that “leaves no one behind”

Sustainablecorporate value
improvement• Future: Labor shortage (2024 problem and 2030 problem)

Management Resources / Strengths (As of March 31, 2023)

CustomerFoundation

CorporateclientsY amato Business Members :Approx. 1.60 million

ConsumersK uroneko Members :Approx. 56 million

×
Human
Resources

Employees

Approx. 210,000

Sales
drivers

Approx. 60,000

Value Creation Strategies

Logistics
Network

Transportationand delivery
network

Data

March 31, 2027)

Medium- to long-term viewpoint targets
Greenhouse gas (GHG) emissions*2:

Environmental

Structural Reform of Network Operations

Virtually zero by 2050
48% reduction by 2030*

3*2 In-house emissions of consolidated companies
in Japan and Swan Co., Ltd. (Scope 1 & Scope 2)*3 Compared to fiscal year ended March 31, 2021

T
 A-Q-BIN network

Promotion of fundamental strategies that support structural reforms

Designated networks (EC logistics, refrigerated and frozen, and corporate)

Medium- to long-term viewpoint*1
Human
Resource
Strategy

Human productivity*4:
DigitalStrategy+15% compared with the fiscal

Environmental
Strategy

year ended March 31, 2023

Enhancementof non-financial
value(fiscal year ending March 31, 2027)
Improvement of engagement:
Level that exceeds record-high ales drivers / sales representatives / guest
S
operators / call center operators / Kuroneko
Members / Yamato Business Members , etc.

figures in employee awarenessApprox. 2.33 billion parcels a year

Credit rating (R&I): AA–

March 31, 2027)
ROE: Over 13% (fiscal year ending

Sales offices (TA-Q-BIN ): 3,331

×Soundness

Financial

Expansion of Corporate Business Domain

 orporate operation facilities:C
Approx. 400

The Yamato Digital Platform (YDP)

Financial
Foundation

Enhancementof financial
value

Enhancement of profitability and growth potential through business structurereform to integrate sales and operations

×
Information

Consolidated operating profit

margin: Over 7% (fiscal year ending

International transport (forwarding andcross-border land transportation in Asia)

Physical anddigital customer
contact points

Medium- to long-term viewpoint*1

Expanding value provision to the “End to End” of supply chains×
Base network

OutputSocialReinforcement of foundation to improve sustainable corporate value
Strengtheningof sustainable
management

Energy &ClimateAtmosphere

Resource
Conservation &Waste

Resilience ofCompanies &SocietyLabor

Human Rights &Diversity

Safety &Security

Data Utilization& Security

Supply Chain
Management

Community

surveys*5 (fiscal year ending March
31, 2027*4 (Consolidated operating revenues – consolidated
subcontracting expenses) ÷ consolidated
personnel expenses*5 For consolidated companies in Japan and
Swan Co., Ltd.

Medium- to long-term viewpoint targets

Strengthening of corporate governance

Serious traffic accidents*6: zero

Serious occupational diseases*7: zero
*6 Fatal accidents for which the Company is responsible*7 Incident involving a fatality*1 Expectation for beginning of fiscal year ending March 31, 2024

08

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

09Part 1VALUE CREATION BY THE YAMATO GROUPVALUE CREATION BY THE YAMATO GROUP

Performance Highlights(Year Ended March 31, 2023)

Financial Information

Non-Financial Information

Operating revenues amounted to ¥1,800,668 million, up 0.4% year on year, owing to an increase in the number of parcels handled by theCompany in response to the continued growth of the EC domain, and Yamato’s focus on the optimization of logistics for customers. As aresult of rising fuel prices, hourly wages, electricity rates, and other expenses, and an increase in costs associated with the promotion of
our medium-term management plan “One YAMATO 2023,” such as structural reform of network operations, operating profit came to¥60,085 million, down 22.2% year on year. Due to a decline in total income taxes, following the approval to liquidate overseas consolidated subsidiaries, profit attributable to owners of parent stood at ¥45,898 million, a decline of 18.0%, and ROE was 7.6%, decreasing 2.0
percentage points

We are working to promote sustainable management to improve medium- to long-term corporate value and realize a sustainable society. During the fiscal year ended March 31, 2023, (the second year of these plans), we have been engaging in reducing GHG emissions
through the introduction of EVs and solar power generation equipment, reinforcing the recruitment and development of specialized
personnel, and creating a working environment that respects the diversity of human resources and enables employees to play anactive role, based on Sustainable Medium-Term Plans 2023, which sets out targets and specific actions for material issues in 2023. We
will continue promoting various measures leading to sustainable growth that supports business structure reform.

Operating Revenues

Operating Profit / Operating Profit Margin(¥ billion)(¥ billion)

1,800.6

2,000

(%)

GHG Emissions*3 /GHG Emission Intensity

Percentage of Electricity Generated via Renewable
Energy Sources in Electricity Consumption*3*4

Number of Employees /Human Productivity*5(Thousand tCO2e)(%)(People)(tCO2e/operating revenues of ¥100 million)

860

950

6

120

100

5

100

60.0
3.3%

80
60

1,000

80

900

43.9

4
850

30

40

2

20

1

60

20
15

40

800

2019/32020/32021/32022/302023/3

2019/32020/32021/32022/3(Millions of parcels)(%)(¥ billion)

1,000

10

500

5

0.4%

0

2020/32021/32022/32023/3

Parcel delivery amount (left scale)Parcel unit price growth rate (YoY) (right scale)

60

12

40

0

2019/32020/32021/32022/3

610.3

400

(100)

(49.4)
2019/32020/3

Cash flows from operating activities
Free cash flows

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

2021/32022/32023/3

Cash flows from investing activities

0
2019/32020/32021/32022/32023/350

2022/32023/30(People)(%)

70%
68%
67%
66%
61%

2019/32020/32021/32022/32023/3

98.1%
100

700

80

(Units)

2021/3

Total shareholders’ equity (left scale)
Shareholders’ equity ratio (right scale)2022/32023/3

0

5.7%

500

60

400

40

300

0

10

600

369

200

2019/32020/32021/32022/302023/3

8
6
4
2

100

Percentage of annual paid vacation days taken

Number of Serious Traffic Accidents*8/ Number of Serious Occupational
Diseases*9

2019/32020/32021/32022/32023/30

Number of women in management (left scale)
Percentage of women in management (right scale)*1 Definition: TA-Q-BIN, TA-Q-BIN Compact, and EAZY
*2 Free cash flows = Cash flows from operating activities + Cash flows from investing activities*3 Scope: consolidated companies in Japan and Swan Co., Ltd.
*4 Electricity generated via renewable energy sources (MWh) ÷ Total power generated (MWh)*5 (Consolidated operating revenues – consolidated subcontracting expenses) ÷ consolidated personnel
expenses10*6 A
 wareness surveys regarding working styles administered on an annual basis (scope: full-time andpart-time employees of Yamato Group companies in Japan)
×100
*7 N
 umber of employee resignations in respective fiscal year (of their own accord)

6202020/32021/3(%)

855

2019/32020/3(%)

4

0

2019/3

Number of Women in Management /Percentage of Women in Management*3

RewardingDesire to continue employment
Sense of growth
Sense of contribution to the Company

(%)
60

200

(50)

1.1

Percentage of Annual Paid Vacation
Days Taken*7

Employee-friendly

ROE (right scale)

55.1%

0

0

20

0

2023/3

40.5

50

0

4

150
100

210,197

Number of employees (left scale)
Human productivity (right scale)

60
20

600

89.9

2023/3

70

8

7.6%

(¥ billion)

200

2022/380

Total Shareholders’ Equity / Shareholders’ Equity Ratio(¥ billion)

2021/3

45.8

Profit attributable to owners of parent (left scale)Operating and Investing Cash Flows /Free Cash Flows*2

2020/30(5)

1.2

Employee Awareness Surveys*650
2019/3

2019/3

GHG emissions (left scale)
GHG emission intensity (right scale)

(%)

15

1,500

190,000

Operating profit margin (right scale)Profit Attributable to Owners of Parent / ROE

20

0

0

2023/3

Parcel Delivery Amount*1 /Parcel Unit Price Growth Rate (YoY)
1,926

1.3

5

Operating profit (left scale)

2,000

1.4

210,000

170,000

10

500

0

22%

25

3

1.32

230,000

40
35

1,500

10

Part 1

0/0
2019/32020/32021/32022/32023/3

Number of serious traffic accidents	Number of registered employees as of respective fiscal year-end + Number of
employee resignations in the respective fiscal year(including those due to retirement, etc.)(Scope: Full-time employees of consolidated companies in Japan and Swan Co., Ltd.)*8 Fatal traffic accidents (for which the employee is responsible)*9 Incidents involving a fatality

Number of serious occupational diseases

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

11

Part 2

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2Message fromthe President
Reinforcement of the TA-Q-BIN Network
As we have visualized the management resources of thelarge-lot clients Accordingly, we are focusing on reviewing

entire Group, issues that need to be addressed havethe purpose of facilities, particularly in urban areas with abecome clear. One of these issues is the structural reform ofhigh density of them, while consolidating and enlarging their

network operations. We are engaging in an enhancement ofsize in line with changes to the flow and volume of pack-the quality and efficiency of the entire network to respondages. While there is currently a total of approximately 3,300

to various changes in the market environment, such as thesales offices, I think eventually having approximately 1,800

expansion of online consumption and the development ofwould be appropriate.

small-lot, high-frequency logistics between companies.

Furthermore, we are advancing revisions to the pickup

As part of these reforms, we first responded to theand delivery operations available at each facility, in conjunc-

sudden expansion of EC demand during the COVID-19 pan-tion with the consolidation and enlargement of their size.

demic by creating an EC logistics network in collaboration

We aim to standardize the workload for each driver bywith partner companies. Over the next four years, we will

designing pickup and delivery operations through data utili-

focus on reinforcing the existing TA-Q-BIN network. Now,

zation, not just entrusting the response to the fluctuating

three years away from celebrating the 50th anniversary ofworkload to the judgment and ingenuity of frontline staff.

TA-Q-BIN’s launch, the time has come to revise the way

It is important to optimize facility allocation and opera-bases that make up the network are organized, in response

tions in line with regional and customer needs rather thanto changing customer needs.

aimlessly reducing the number of facilities. Naturally, it isSpecifically, we will consolidate and enlarge the size of

Yutaka Nagao
Representative Director,
President and Executive Officer

Business Reform Over the Next Four Years—Expanding Value Provision to the “End to End” of Supply Chains

Structural Reforms Amid a Sense of Impending Crisis

social infrastructure. To maintain a national network inlaunched as a service for individual customers and we allo-

which all employees can respond to customers in allcated sales offices in smaller areas to collect small-lot deliv-

regions, we will enhance the safety, quality, and ease oferies from a wide variety of customers. As a result, our sales

operation for employees and partners even more thanoffices increased to approximately 4,000 at their peak. Now,

before. At the same time, we will increase the productivity

however, there has been a change in the type of packagesof the entire network, optimize processes for transportation

being shipped with 90% of deliveries being made for corpo-

between facilities and sorting operations at each sales

rate clients, and approximately half of those deliveries foroffice, and further enhance the performance of employees.

Establishment and Expansion of Dedicated Networks
In addition to reinforcing the existing TA-Q-BIN network, webehavior due to the recent COVID-19 pandemic, there has

are promoting the creation of dedicated networks. While

been a significant advancement of the shift to EC for food

one of these is an EC logistics network, we also estab-

distribution. Under such circumstances, we will maintainlished, in June 2023, a low temperature transportation andand enhance quality while expanding transportation anddelivery center and began operation of a network dedi-delivery capacity to further meet demand by aggregatingcated to temperature-controlled operations. To date, therefrigerated and frozen delivery under a new, dedicated net-

Yamato Group has contributed to the culture of consumers

work in urban areas, where demand is particularly concen-

ordering fresh produce directly from other regions and thetrated. Refrigerated transportation and delivery is a growthdevelopment of related businesses by building a transporta-

domain that is not limited to food. Demand is expected totion and delivery network that handles three temperature

increase for pharmaceuticals and we plan to expand thisranges (room temperature, refrigerated, and frozen).

dedicated network as necessary.

In 2019, I was appointed the President of the Yamato Groupas “effective utilization of management resources.” No

during a time of impending crisis. An awareness of twomatter how many excellent management resources you

major issues formed the background of this. The first issue

gather, you cannot achieve the performance you are capa-

being that our management structure did not provide ser-ble of if they are not optimally allocated. Accordingly, undervices drawn from a customer standpoint in the face of

YAMATO NEXT100, our grand design for management overchanges to society and customers. Up to 2019, the Yamato

the medium to long term announced in 2020, and Medium-

Group was organized by function—such as a company that

Term Management Plan “One YAMATO 2023,” launched inprovided TA-Q-BIN services, a company that provided logis-

April 2021, we have been engaging in Group managementtics services for corporate clients, and a company thatstructure reform. In other words, how to change the form ofdeveloped IT systems—and was partially optimized. The

management to fully utilize management resources. By inte-

The Yamato Group aims to achieve sustainable businessfurther value to customers. Since launching One YAMATO

second issue I was aware of was that many of the managers

grating nine existing operating companies into one entity,

growth through expanding value provision to the “End to2023, we have created several examples of solutions, such

responsible for the management of each operating com-

Yamato Transport, creating “One YAMATO structure”, andEnd” of supply chains. The Group management structure

as initiatives to optimize the entire supply chain of our cor-pany did not see this existing management structure as acentralizing and reallocating Group management resources,reform that we have promoted to date and the structural

porate clients, which are steadily yielding results.

I believe we have been able to shift to a structure thatreform of network operations we are currently advancing

directly addresses customer needs.

are to help us evolve into a business that can provide

problem and strongly felt that there was no sense of crisis.
I believe that “corporate management” can be rephrased

12

essential we do not damage the national network as asmall, multi-store sales offices. TA-Q-BIN was originally

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Meanwhile, against a backdrop of changing consumption

Expanding Value Provision to the “End to End” of Supply Chains

Additionally, we are striving to expand the value provided
in the cross-border EC domain. To date, the conventional

YAMATO HOLDINGS CO., LTD.
統合レポート 2023

13

Part 2

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2Message from the President

method for individual clients to obtain products purchased

realized this under the existing partially optimized structurefrom overseas was via logistics by international and domes-

and this achievement is one result of the Group manage-

tic operators. In recent years, however, individual clientsment structure reform.

have been able to directly purchase and receive products

Meanwhile, while we are still at the development stage

from overseas sellers. The Yamato Group has been focusing

for fields such as third-party logistics and international for-on this domain for many years and has been proposing thewarding, I believe there is significant room for growth in lightuse of Yamato’s logistics network to overseas sellers. Theof the Yamato Group’s management resources and poten-

number of parcels we handle has expanded to a volume

tial. Over the next four years, we aim to further reinforce thebeyond our initial expectations. This was achieved throughnetworks, operations, and corporate sales functions, includ-

collaboration between domestic and overseas units of theing collaboration with other companies, to expand the

Yamato Group, who worked together to establish opera-

scale of transactions.

tions and make proposals to customers. We could not have

Visualization of GHG Emissions as a New Differentiating Factor

at each terminal, where definitions of duties remained

culture that enables employees to accomplish their tasks

vague. Furthermore, while we have further clarified the

independently, enhance their performance, and feel theirduties of sales drivers, there is an increasing necessity towork is rewarding. We will achieve this by implementing a

subdivide duties to meet diversifying customer needs, suchcycle of further clarifying the definitions of duties for all

as increasing the shipping ratio for large-lot clients. We are

employees, establishing appropriate evaluation criteria foralso adding new duties based on our management strategy,

measuring performance according to these definitions, andsuch as in the digital and corporate business domains. In

holding meetings between evaluators and each employee

light of such circumstances, we will cultivate a corporate

to give detailed feedback.

We are currently developing tools for visualization of GHG

on this standard. We plan to complete development thisemissions. These tools are expected to become a new

fall. For the Yamato Group, who have adopted the target ofstrength aimed at expanding the value provided in corpo-

achieving virtually zero GHG emissions by 2050,* visualizing

rate client supply chains. While to date there has been no

GHG emissions is an opportunity to further contribute to

global formula for calculating GHG emissions in logistics,

the sustainability of society and the environment. As interest

the Yamato Group has signed a basic agreement for collab-

in and standards for global GHG emissions increase, we

oration in the environmental domain with the major

expect that contributing to the optimization of distribution

European home delivery company, DPDgroup. We haveand inventory while reducing these emissions through visu-

been participating in the creation of ISO 14083:2023, analization of GHG emissions in the supply chains of corpo-

international standard related to transportation-based GHG

rate clients will become a major differentiating factor in

From April 2024, a cap on overtime work will be applied tocharter flights following a shift to small-lot, high-frequency

emission calculation and reporting methods, and promoting

expanding the corporate business domain.

automobile driving operations. The entire logistics industry

delivery, loading operations outside of contracts, and longthe development of a tool for visualizing emissions based*Scope 1 and Scope 2

is facing the serious issue of workstyle reforms for drivers

waiting times for cargo in logistics between companies.

and securing transportation capability. We have alreadyAccordingly, we will make proposals for resolving such

implemented workstyle reforms for Yamato Group employ-issues for corporate clients. For example, we can enable

ees and employee working hours have reached an appropri-

more efficient methods of delivery by combining packages

ate level. However, we are now promoting cooperation withfrom numerous clients through a package transportationeach partner company, such as reviewing the purpose ofservice in pallet units, even if the cargo area of a chartertransportation and introducing a standardized contract

flight is empty on the return journey. The Yamato Group has

	Planning and Development of Human Resource Measures in Conjunction
with Our Management Strategy
A major driving force in promoting a series of reforms and

For the Yamato Group, our most important management

measures was the existence of professional humanresource is people. We plan and develop human resource

resources that have joined the Yamato Group over the pastmeasures under the recognition that our HR strategy is so

few years. Now, over 20% of Yamato Transport executive

important, it can be called a management strategy.

officers have outside knowledge and we have ensured weSpecifically, we are promoting the clarification of defini-can set out new challenges and measures by gathering thetions of duties in line with our management strategy andappropriate people from within the Company to work

new business structure. For example, this clarification has

under them.

been implemented in some cases in the sorting operations

Response to the 2024 Problem

system based on the transport distance and time period, tothe knowledge to standardize transportation, as shown byadvance the workstyle reforms in our partner businesses

TA-Q-BIN. We are pursuing sustainable logistics by stan-that support trunk-route transportation.

dardizing transportation in logistics between companies

Furthermore, I feel it is necessary to improve inefficientbusiness practices, which has previously been an issue,and creating more efficient delivery methods that also contribute to even better workstyles for drivers.

such as decreasing efficiency of loading operations forAchievement of Sustainable Growth by Building the Trust of Customers
I believe that the most important factor for the sustainable

reallocation of management resources will be tested in

growth of a company is building up trust with customers.

order to achieve sustainable growth. We aim to be a com-

The growth the Yamato Group has achieved to date is apany that is trusted by all our customers and stakeholders

result of building up trust through provision of our TA-Q-BIN

by fully utilizing Group management resources to pursue

service. However, there have been changes to the businesseven better services that fit the times, rather than being

environment and customer needs. Simply maintaining thecontent with our past experience of success.

same services we have provided to date will not result ingrowth in the future.
I view the year ending March 31, 2024, and the three
years of the next medium-term management plan as fourvital years in which the true value of reforms based on the

14

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

October 2023

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

15

Part 2

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2Message from the Chief Financial Officer
Please share your approach to financial

Q1 strategies and awareness of your role as CFO.
I believe that my role as CFO is to support management strategies from a financial perspective to realize sustainable growth
and the improvement of corporate value in the medium to long

Contributing to Improving
Shareholder Value andCorporate Value by
Supporting Management
Strategies from a
Financial Perspective

term. I am also aware of the need to continuously enhance theoverall market price of the shares as shareholders value andplace importance on earnings per share (EPS) and ROE accordingly. By promoting medium- to long-term strategies centeredon business structure reforms, the Yamato Group aims toachieve ROE of over 13%. As CFO, I engage in implementing
investments that increase the profitability of the business and its
growth potential while engaging in maintaining and strengthen-we are advancing the expansion of the corporate businessbillion, to promote our environmental strategies. Meanwhile, we

domain and structural reform of network operations in an inte-intend to continue utilizing debt in working capital and capitalgrated manner.

investments necessary for business structure transformation andAt the same time, we are optimizing balance sheets, promot-

will strive to manage our balance sheet based on capital effi-

ing the selection and concentration of our businesses, products,

ciency, such as shareholders’ equity ratio, while maintaining ourand services to make full use of management resources, andcredit rating (Rating and Investment Information, Inc.; AA–) withactively examining collaboration with business partners. In addi-

an awareness of optimal capital structure.

tion, we are continuing to reduce our cross-shareholdings and,dividends with an awareness of DOE (ratio of dividends tobillion, we will continue to sell stocks that we deem to lack sig-

shareholders’ equity) based on factors including growth poten-

nificance to the Company, as appropriate. Meanwhile, while

tial, profitability, financial soundness (cash and cash equivalents

condensing our balance sheets, we intend to maintain a certain

and shareholders’ equity ratio), progress in investments, andlevel of shareholders’ equity ratio, which is required as a corpo-

capital efficiency. We aim for a dividend payout ratio of 30% orrate group that serves as a crucial part of social infrastructure.

more and a total return ratio of 50% or more (cumulative for theperiod from the fiscal year ended March 31, 2021, to the fiscal

ing shareholder returns and optimizing balance sheets. I hope
to continuously enhance shareholder value by achieving ROE

EPS/Operating Profit Margin/ROE (Fiscal Year Ended

that fully exceeds shareholder capital costs.

March 31, 2014, to Fiscal Year Ended March 31, 2023)

Q2

 wo years have passed since the launchTof Medium-Term Management Plan
“One YAMATO 2023.” Please explain
the second-year results and businessperformance evaluation.

year ending March 31, 2024). While we have implemented
stable dividends over the long term, we believe that we should
also be aware of dividend yield in the future, and will discuss(Yen)(%)
12

160¥126.6120

When creating the “One YAMATO Structure,” we engaged in for-

3.3%

40

6

(Yen)(%)

3by defining our vision for facilities and personnel. By doing so,
we can gradually generate results.
In the structural reform of network operations, we are lower-0

2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3

EPS (left scale)Operating profit margin (right scale)

Representative Director,
Executive Officer and Vice President

lease explain your approach toward andQ4 Pplansfor investment.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

160

30

120

are optimizing all costs by flexibly allocating the management

value. Regarding the establishment of large-scale facilities, which

resources of both Yamato and our partners in response to fluc-began in the fiscal year ending March 1, 2024, we are moving

tuations in workload. We are also aggregating and standardizing

forward with a balance between properties we rent and proper-

administrative operations in tandem with facility strategies,

ties we own with an emphasis on the speed of expansion. We

making steady progress toward our ideal cost structure.

will reinforce verification and monitoring of the results of invest-

80

58.1%
10

1.9
0

My basic approach is investment that contributes to customer

1.9

2.1

2.0

2.0

2.0

2.9

3.0

36.3%
2.9 2.8%

2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3

40

0Dividend per share (left scale)
Dividend payout ratio (%) (right scale) otal return ratio (%) (right scale)T
DOE (right scale)

inally, what is your message forQ6 Fstakeholders?

ments to ensure that we can make a return on investments

overseas consolidated subsidiaries and the introduction of thewithin as short a time as possible. We will also actively promote

Two years have passed since the launch of “One YAMATO struc-

Japanese Group Relief System helped to secure net income forinvestment based on digital, human resource, and environmen-

ture.” The numerical management systems of each company,

the fiscal year ended March 31, 2023. We will strive to continue

tal strategies that support business structure reforms.

which used to be separate, are gradually being developed andave you considered how to enhance ROE,
Q3 Hwhich
is a KPI, going forward?

corporate activities can be visualized through various indicators.

Q5

 lease explain Yamato’s capital policies
P
going forward.

We intend to carefully select and prioritize business investments(capital investments, strategic investments, and M&As) that will

Increasing operating revenues and operating profit—namely,

contribute to enhancing shareholder value through capital cre-strengthening earning power—are essential for enhancing ROE.

ated from profit growth due to business structure reforms.

To this end, it is important to expand value provision to the“End to End” and to receive corresponding compensation, and

16

TA-Q-BIN 40th
anniversarycommemorative
dividend ¥2

200

20

idation and enlargement of sales offices. At the same time, we

Yamato’s financial strategies.

Toshizo
Kurisu¥46

ROE (right scale)enhancing income by also addressing tax aspects as part of

PROFILE50

0ing the break-even point by reducing fixed costs through consol-

Furthermore, measures including a resolution to liquidate our100th anniversarycommemorative
dividend ¥1040

YAMATO 2023,” I believe that we are steadily implementing
measures to enhance profitability, which is always a challenge,

next medium-term management plan.

Shareholder Return Results (Fiscal Year Ended March 31,
2014, to Fiscal Year Ended March 31, 2023)

Yamato’s performance in fiscal 2022 did not fully meet the targets adopted under the Medium-Term Management Plan “Onecapital policies and shareholder returns as we formulate the

9

7.6%
80

mulating a plan to fully transform our business structure. While

Our basic policy for shareholder returns is to pay out stable

while we sold four assets in fiscal 2022 for approximately ¥2.7

Regarding fundraising, we issued our first green bonds in July
2023, with a five-year maturity and a total amount of ¥20.0

As a result, while reflecting these appropriately in management
strategies and financial strategies, we are aiming for operating
profit margin of 7% or more and ROE of 13% or more in themedium to long term. Additionally, at the same time as weshow our concrete strategies to shareholders in our next
medium-term management plan, we will realize sustainablegrowth and improvement of medium- to long-term corporate
value through the implementation of these strategies anddialogues.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

17

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Part 2

Structural Reform of Network Operations
In response to the progressing growth of EC and changes in customer needs and distribution structure, we will achieve the enhancement of overall network quality and efficiency by creating dedicated networks optimized to meet diverse logistic needs at the sametime as reinforcing the existing TA-Q-BIN network.

Reinforcement of Existing Networks

1

Background

Consolidation and Enlargement of Sales Offices

We are optimizing transportation, operation, administration, and management costs and enhancing safety, quality, and employee-friendlinessat each location by consolidating and enlarging small, multi-store TA-Q-BIN sales offices, with a focus on urban areas.

The existing TA-Q-BIN network was initially launched to provide CtoC services. Despite meeting the diverse BtoB and BtoC needsof small-scale to large-scale corporate clients, it has become a structure difficult to link to revenue growth with an increase inparcel delivery amount following changes in customer needs and distribution structure.

Existing Networks
 ationwide roll out of a hub and spoke distributionNmodel for sorting and transportation terminals andsales offices
 peration on standardized timelines to provide uniO
form (high-quality) services
 lacement of full-time employees (multi-functionalP
sales drivers) at small, multi-store sales officesIncrease in volume of parcels from large-scale corporate clients who ship from specialized warehouses, etc.

Previously: s mall, multi-store sales
officesIncompatibilities with existing network, which mainly
focuses on small-lot parcels and standardizing operations on next-day shipping, have become apparent(Ten thousand units) (People) (Million yen)

250,000

Peak in number of
employees
Approximately 225,000

1,800*

0

Growth domains

2014/32022/32023/32024/32027/3* Prediction for beginning of the fiscal year ending
March 31, 2024

Basic Strategies that Support Structural Reforms

Digital Strategy

 romotion of appropriate human resourcePallocation in conjunction with renewal ofworkstyles and structures

150,000

 or an overview of our human resource strategy,Fplease see page 26.

100,000

50,0000
2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
 arcel delivery amount (ten thousand units)PNumber of employees (people)
Operating profit (million yen)
* Product scope: TA-Q-BIN, TA-Q-BIN Compact, EAZY, and Nekopos(Fiscal Year Ending March 31, 2024, to Fiscal Year Ending March 31, 2027)

Progress in building EC logistics network as a start point

Accomplishment of existing network reinforcement

 ompletion of overall design to gradual launch of initiatives
C
aimed at reinforcing existing networks

 reation and expansion of dedicated networks optimized toCmeet diverse logistic needs
Creation results

2

Environmental Strategy

 aximization of the initiative’s outcomesM
through utilization of a system for optimal
resource allocation in response toworkload or an overview of our digital strategy, please seeFpage 32.

Review of Terminal Functions

 uplication of timelines for dispatch operations andDarrival operations within the same terminal, lowering
operational efficiency

 or an overview of our environmental strategy, pleaseF
see page 34.

Number of terminals

Concurrently with reviewing terminal functions, such as separating dispatch and arrival operations andintegration of large-scale sales offices with terminal in light of changes in volume of parcels and timelines, we will promote maintaining and improving safety, quality, job satisfaction, and employee-friendliness and optimizing transportation and operation costs by revising definitions of duties, standardizing
human resource composition (full time, part time, hourly workers, and temporary staff), and entrusting
part of operations at some terminals to business partners, then reallocating employees.

Previous Operations

 ncouragement to reduce GHG emissions
Eby introducing various environmental
equipment at large-scale sales offices,
including a switch to EVs, solar power
generation equipment, and LEDs.

76
Fiscal year ended
March 31, 2023

Approximately

70 *Fiscal year ending
March 31, 2027

* Predictions for beginning of the fiscal year ending
March 31, 2024; total for specialized dispatch andarrival terminals and integrated terminals

Integrated dispatch and arrivalmodel (conventional)
Dispatch
ArrivalCreation of EC logistics network
Creation and expansion of dedicatednetworks optimized to meet
diverse logistic needs

Creation of network dedicated to temperature-­controlled deliveries (BtoC and BtoB)
Expansion of transportation and delivery network
for corporate clients xpansion of value provided inE
response to needs
 eception of appropriate pricing
R
based on value provided
Optimization of operating costs

Base domain

3,501 3,331 Approx.
2,800*Approx.

1,500

Human Resource Strategy

Measures

3,924

3,000

Future Initiatives(Fiscal Year Ended March 31, 2021, to Fiscal Year Ended March 31, 2023)(Facilities)

Group management structurereforms—begin business structure reform

Overview
Initiatives and Results to Date

Trends in number of sales offices

4,500

Increase in EC parcels with different timelines andoperations
 hanges in the balance between dispatch and arrival
CvolumesIn the Future: consolidated andenlarged sales offices

Parcel Delivery Amount*/Number of Employees/
Operating Profit

200,000

Changes in Customer Needs and Distribution Structure

18

Base domain

Reinforcement of existing networkat the same time as creating a
dedicated network

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Consolidationand enlargement of sales offices
Review of terminal functions

 enewal of workstyles and the operationalR
structure

Increase in job satisfaction
 aintenance and enhancementMof safety, quality, andemployee-friendliness

Future Operations
Improvement in flow of
overall operations throughseparation of dispatch andarrival operations and redesign of operations
 election and implementaStion of optimal methods in
response to characteristics
of each terminal

Integrated dispatch and arrivalmodel (conventional)

Dispatch
ArrivalIntegrated dispatch and arrivaland enlarged sales officecoexistence model

Dispatch
ArrivalEnlarged sales office

Separated dispatch and arrival, and integrated enlarged sales office

Dispatch

ArrivalEnlarged sales office

Began reorganization of terminals in the Fukuoka
area and launched operation of new Sasaguri terminal (new and lease) from November 2022

Basic Strategies that Support
Structural Reforms
Human Resource Strategy
 romotion of optimal human resource allocaPtion and clarification of definitions of duties

Digital Strategy andEnvironmental Strategy
 eduction of GHG emissions by promotingRtransportation efficiency through data analysis

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

19

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Part 2

Structural Reform of Network Operations

3

Reform of Workstyles and Operational Structures (Sales Drivers)

Previously

In the Future

SD (sales driver):Specialized sales and client relations model

Uniform nationwide SD

Major urban areas*1 SD+DD+PD

DD (delivery driver):Specialized delivery model

Creation and Expansion of Dedicated
Networks Growth Domain

We will maintain and enhance quality, employee-friendliness, and job satisfaction, strengthen our response to diversifying customer
needs, and optimize operating costs by enhancing delivery efficiency subdivision and specialization of sales driver duties into sales,delivery, pickup, and other operations in line with regional characteristics based on changes in the balance between pickup anddelivery workloads and the increasing burden of multi-tasking following a rise in shipping ratio for large-scale corporate clients.

 aintenance of structure withM
­approximately 60,000 drivers covering
nationwide nhancement of pickup and deliveryEproductivity through specialization andcreation of systems
Sales

DeliveryPickupSD

Sales

DeliveryPD (pickup driver):Specialized pickup model*1 Placement of drivers (employees) specializing in­temperature-controlled delivery only and EAZY CREW
(business partners) in places with specific demand

Estimated Composition in March 2027*2

Pickup
SD·PD

SD
DD

—

PD

Development

DD

—
—

*2 P
 rediction for the beginning of the fiscal year
ending March 31, 2024

Basic Strategies that Support Structural Reforms rom February 2023: Commencement of trials in someFareas of Tokyo rom January 2024: Further development in majorF
urban areas (Tokyo, Chiba, Kanagawa, Saitama,
Nagoya, and Hanshin (Osaka and Kobe) areas)

Human Resource Strategy
 aximization of initiative outcomes through design of workM
styles and pay conditions based on duties

Digital Strategy
 aximization of initiative outcomes by introducing systems
M
that flexibly rearrange operations in line with daily workload
fluctuations, in conjunction with the consolidation andenlargement of sales offices

Basic Agreement Regarding Collaboration with Japan Post Group Aimed at Promoting
Sustainable Logistics Services
We signed a basic agreement regarding collaboration with Japan Post Group to promote sustainable logistics services. This agreement willcontribute to transportation services that are instrumental in enhancing convenience for customers and business growth through effective
utilization of the management resources of both companies, to resolving social issues, including the “2024 problem” faced by the logistics
industry, and to environmental issues.

Strengths of Both Groups

Details of Cooperation

Yamato Group (Yamato Transport)

Japan Post Group (Japan Post)

From February 2024: Direct mail service area

Nationwide network of pickup
and delivery trucks
Approximately 35,000 2t and4t trucks*

Nationwide network of pickup anddelivery bikes and mini vehicles
Approximately 82,000 bikes
Approximately 30,000 minivehicles nd of Kuroneko DM-Bin on January 31, 2024, and launchEof new service, Kuroneko Yu-Mail (tentative)* Installation of temperature-controlled
equipment in 95% of trucks (approximately 33,000)
average refrigeration
capacity for temperature-control of 2t
trucks is 2,000 liters

Utilization of
network
resources

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

1

Gradual Opening and Development of(¥ billion)

2 elivery of packages accepted from customers by Yamato
D
Transport on the Japan Post delivery network

From October 2023 in Stages: Small, thin parcels
 nd of Nekopos in stages from October 2023 and launchEof new service, Kuroneko Yu-Packet
 elivery of packages accepted from customers by Yamato
D
Transport on the Japan Post delivery network

12,000

(%)

4,000

5

4.16%

13,999.7
6

10,051.5

6,000

Largescale EC
operatorsEC
sorting
centerEC
deliverycenterEnd user(personreceivingparcel)

3

0

2019

2020

2021

2022

0

Size of the BtoC EC market in product sales domain
Rate of shift to EC (right scale)
Source: Ministry of Economy, Trade and Industry, Market
Research on E-commerce

2020

2.89%

2,750.5

1,823.3

R*1 of

3 CAG

023//3 to 2

9.2%%*

R of 5.8

IN CAG

TA-Q-B

4

2

3
2
1

2019

2020

2021

2022

0

	Size of the EC market for food, beverages, and alcohol (left scale)	Rate of shift to EC (right scale)
Source: Ministry of Economy, Trade and Industry,Market Research on E-commerce

3(20 facilities open as of June 2023)

9

6.76%

Trends in Cool TA-Q-BIN Delivery Amounts(¥ billion)

0(%)

Network Dedicated to Temperature-Controlled Deliveries

Growth of the EC market in food logistics

2,000

9.13%

18,000

By responding to the increase in EC parcels,which differ from conventional TA-Q-BIN in termsof timelines, delivery method, pricing, and otherfactors, and by creating flexible capacity throughcoordination with business partners, we are
expanding sales opportunities for EC operators,
reducing lead times between order by EC users
and arrival, and improving customer experiences
through real-time communication and diversedelivery methods.

3,000

EC Delivery Centers in Urban Areas

Growth of the EC Market

EC Logistics Network

1,000

TOPIC

20

Alongside initiatives reinforcing our existing network, we are promoting dedicated networks optimized to meet diverse logistics needs in areas where demand is concentrated. Accordingly, at the same time as expanding the value we provide in response
to customer transportation needs, which existing networks could not sufficiently meet, we will increase the growth capabilities andprofitability of the Yamato Group through reception of appropriate pricing based on this value.

2020/32021/32022/32023/3*1 CAGR: Compound annual growth rate
*2 TA-Q-BIN (including Cool TA-Q-BIN), TA-Q-BIN
Compact, and EAZY

By expanding capacity
through the establishment of two largescale concentrated
facilities in the Tokyo
metropolitan area in
response to increasing
Low Temperature
demand for BtoC andTransportation and Delivery
Center (South Tokyo Area)
BtoB temperature-­(Commenced operation incontrolled deliveries,
June 2023)
we will contribute to
the expansion of sales
opportunities, such as for food manufacturers
and sales business operators, and provide thevalue of reducing overall logistics costs by optimizing the entire supply chain.

Specialized Corporate Transportation and Delivery Network

Based on various risks in customer supply chains, such as changes in consumer trends and industry structures, decreases in workforce, andresponses to the “2024 problem” and environmental issues, we will expand the value we provide through our response to standardization ofoperations to the transportation needs outside the scope of TA-Q-BIN transportation needs by reorganizing group resources and reinforcing
collaboration with business partners.

Service Example: JITBOX Chartered Delivery
 ransportation service, from pickup to delivery, that loads customer packages
Tonto a metal cage on wheels
 lternative service to chartered truck delivery that provides value of timelyA
delivery and high-frequency delivery in the appropriate quantity

JITBOX Chartered Delivery

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

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DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Part 2

Expansion of Corporate Business Domain
We view evolving growth of the EC (e-commerce) market and changes to the supply chain as an opportunity and provide comprehensive value to the “End to End” of our customers’ entire supply chains. To those ends, we will pursue the creation of multiple last mile
networks in response to needs that exist in the growth domains, the strengthening of account management, and the reinforcement
and expansion of third-party logistics (3PL) and international forwarding.

Initiatives in Base Domains

Base domain

Expansion of Value Provided Through Proposals Combining TA-Q-BIN with Other Functions

Overview
VisionAchievement of sustainable business growth by expanding the value we provide to the “End to End” of our customers’ supply
chains(Fiscal Year Ending March 31, 2024, to Fiscal Year Ending March 31, 2027)

Direction of Domain Expansion

Base domain

Capturing of demand in growthmarkets, such as EC, by creatinga specialized network

Local

Reinforcement of contract
logistics and value provision to
BtoB and BtoC as an LLP*1*1 LLP: L ead Logistics Partner (a partner who not only manages and operates
logistics but also participates in and supports the creation of customer
logistics plans and supply chain management strategies)

Fiscal year ended
March 31, 2023

CAGR
approximately
8%*3

Supply Chain Solution

CAGR
approximately
2%*3

Value provision­centered on TA-Q-BIN

Regional branch office

Growth domain

Proposal
activities forresolvingissuesExpansion of Value Provided
Through Proposals Combining
TA-Q-BIN with Other Functions

Provision of Supply Chain Solutions
 xpansion of domestic and internaEtional LLP projects

 rovision of value in each customerP
segment based on business sizeand potential

 einforcement of response to supplyR
chain to the “End to End” and to EC,
including cross-border EC ubdivision of duties and clarificaStion of roles for sales representatives placed in local communities

 dvancement of operational functions
A
to the “End to End” of supply chains
Expansion of store deliveries for
BtoC, DtoC,* and BtoB in food-related
domains (promote the provision of
new value on a specialized refrigerated
and frozen network in the Greater
Tokyo area)

 einforcement of business activities
R
that aim to resolve each customer
issue as one team, based on information noticed by sales drivers

 einforcement of collaboration aimed
R
at expanding from domestic to global
operation (consider M&As)


22

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Promotion of Pricing Optimization
 eflect the impact accompanying
Rchanges in the external business environment surrounding the YamatoGroup and transportation and delivery
partners on prices in a timely andappropriate mannerImplement revisions to individual contracts with corporate clients based on
conditions including business relationship and applicable fares
 ake an effort to review prices on anMannual basis, maintain and reinforce
our transportation and delivery network, and create a business environment that continues to provide
customers with excellent services

New

ISE

System andotherproposals

New

SSE

Share details of client relations

Sharing of problems,requests, andobservations

Connected
systemsNew

ISE (Inside sales executive)

Aims to expand transactions and prevent loss
through inside sales, such as telephone andemail. Coordinates with FSEs and SSEs according
to the details of the project to understand andresolve customer issues

SSE (System sales executive)

Has specialized knowledge in areas such as systems and warehouse operations and supports FSE
and ISE proposals combining TA-Q-BIN with otherfunctions. Designs operations to meet and resolve
customer issues

Head Office

PICK UPFSE (Field sales executive)

Oversees sales activities in responsible area.
Makes proposals for understanding and resolving
customer requests and issues through information
gained by SDs and customer visits

New

Support*3 P rediction for the beginning of the fiscal year ending March 31, 2024
CAGR: Compound Annual Growth Rate

Growth domain

FSE

Non-face-to-facesales activities,
such as email
and telephone

Check details of information
Update activities

Fiscal year ending
March 31, 2027

Growth domain andbase domain (shared)

New

New

Office manager

SD

Measures to Expand Corporate Business Domain in Growth Domains and Base Domains
Base domain

Share information quickly by utilizing contact
points through TA-Q-BIN pickup and delivery andunderstanding customer trends (requests andissues)Point of contact for
pickup and delivery customers*2 Yamato Transport and overseas consolidated subsidiaries

Upstream

Downstream
Existing TA-Q-BIN network
optimized for CtoC andsmall BtoC

Expansion of value we provide through proposals combining
TA-Q-BIN with other functions

Image of Future Growth for Operating Revenues*

Presence in integrated
domains of express shipping,forwarding, and 3PL

SD (Sales driver)

Area customers

2

GlobalTop share of express
shipping (home delivery)

Further expansion of supply chain solution sales

Sales
office xpansion of areas in which we provide value, such as domesE
tic EC procurement and returns domain, cross-border EC for
Japan, logistics in three temperature ranges for food sales
operators, and LLP projects (lead logistics partner contracts)with sales drivers (SDs) who connect with customers on a daily
basis through TA-Q-BIN pickup and delivery, quickly understanding customer issues, and resolving such issues via proposals that combine system, payment, and other functions.
Furthermore, the head office sales department is promoting
the expansion of value we provide through measures including
the advancement of systems to link customer information
obtained by SDs to sales representatives for proposals, thedesign and implementation of training to improve sales representative’s skills, and the revision of products and services.

Overview of Area Customer-Facing Sales Activities

Future Initiatives(Fiscal Year Ended March 31, 2021, to Fiscal Year Ended March 31, 2023)

Corporate­business branch

Initiatives and Results to Date

The Yamato Group is engaging in the expansion of the value we
provide through proposals combining TA-Q-BIN with other functions for small- and medium-sized corporate clients (area customers), aiming to further improve business growth by utilizing
our wide customer base built up through TA-Q-BIN. From April
2023, we placed sales personnel gathered from each businesscompany at regional offices through the transition to One
YAMATO, which subdivides the duties and roles of area customer-facing sales representatives. Each sales office and sales
representative will expand the value we provide by coordinating

Voices of Employees Facing Regional Customers as One TeamFSESD

 e feel that sales efficiency has
Wincreased since we can gain real
information on customers fromSDs and sales office managers
through frequent visits to sales
offices.

 ommunication with sales repreCsentatives, mainly FSEs, has
become easier, enabling us toeasily consult on customer
trends, issues, and other matters.

 e can increase the accuracy ofW
information from SDs who coordinate with systems on a daily
basis and easily link with proposals for customers through directcommunication with SDs.

 e can now communicate withW
customers more actively by learning from FSEs.
 ales representatives can now
S
respond earlier to customer
issues that are linked to thesystem, enabling them to deal
with customers more quickly.

* Direct to Consumer
YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

23

Part 2

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Expansion of Corporate Business Domain
M ESSAG E

Initiatives in Growth Domains Growth domain

Promotion of Solution Sales That Provide Value to the“End to End“ of Our Customers’ Supply Chains

Provision of Supply Chain Solutions
We have positioned our solution business, which aims to deeply understand the businesses of our large-scale corporate customers and resolve management issues, as a
growth domain, and are promoting account management. Initiatives to optimize the logistics and inventory of the entire supply
chain are progressing in response to understanding customer issues arising from changes in consumption behavior and distribution
structures, such as the shift to omni-channel approaches; expansion of logistics for room temperature, refrigerated, and frozen
goods; expansion of cross-border EC; and enhancement of supply chain sustainability.

 onclusion of Logistic Partnership Agreement
C
Aimed at Realizing Sustainable Fashion(December 2022)
A logistic partnership agreement has been concluded between
Adastria Co., Ltd. and Yamato Transport to realize a sustainablesupply chain for Adastria. We are working to visualize and optimize the entire supply chain and reduce GHG emissions tocreate even more effective logistics for management by reviewing logistics and inventory in Adastria’s supply chain, which
extends both domestically and internationally, from procurement of raw materials to manufacture, and omni-channel saleof products.

Future Developments

Product
planning
Design andprototypes

Procurement
Marine /of raw materials
Product
Airand secondary manufacturing
Transportationmaterials

Domestic
logistics
centersOmni-channel
sales, such as
stores and EC

Customers

Visualize and coordinate various information on matters
including inventory, transportation, orders, and sales
Manufacturing Plan

Transportation Plan

Delivery Plan

Initiatives for Sustainable Fashion
 reation of manufacturing and logistics structure in line with demandCSustainable operation reforms and reduction of GHG ­emissions, etc.

 ealization and expansion of sustainable fashion* while collaborating with other fashion companies by leveraging
Rmutual expertise and knowledge* Initiatives that aim for sustainability in the future throughout all processes from manufacture of clothes to wearing and disposing of them, taking into consideration the global environment, including ecosystems, and the people and societies involved

Rebuilding of Supply Chains to Meet Diverse Transportation Needs
COLOWIDE MD CO., LTD and Yamato Transport Co., Ltd. aim to create a sustainable supply chainthat contributes to forming an efficient and recycling-oriented society by utilizing Yamato Transport’s
transportation and delivery network at the same time as visualizing and optimizing the entire supply
chain of the Colowide Group, which operates multiple restaurant chain brands.
First, we are working to rebuild the entire supply chain, from raw material procurement, manufacturing, and logistics to sales, with the aim of expanding the meal service business, which is Colowide’s
focus. We will continue to realize effective and speedy shipping by launching Yamato Transport’s
three-temperature-range logistics facilities (terminal-integrated) from September 2023.

Future Developments
 evelopment into a wide range of business domains (such as procurement, manufacturing,D
delivery to stores, and overseas projects) by leveraging our mutual expertise and knowledge.
Reduction of GHG emissions throughout the entire supply chain

Shipping of food products in themeal service business

Expansion of Value We Provide to Cross-Border EC
Amid the recent expansion of cross-border EC, which involves the online purchase of products from overseas by individuals, we collaborated with Enigmo Inc., a company that manages the specialty marketplace BUYMA, and began providing the cross-border EC
anonymous delivery service BUYMA YAMATO. Going forward, we aim to expand availability of the service to facilitate deliveries
from various countries and regions, including South Korea, and are working to develop and provide overseas shipping services thatenable the even safer, more stable, and easier use of cross-border EC for sellers and purchasers.

Key Points of Service
Protection of personal information by realizing anonymous shipping in cross-border EC
Improvement of the convenience for receiving parcels through linkage with Kuroneko Members
Unification of Shipping Label Issuance, Freight Charge Settlement for sellers on BUYMAPROFILE

Hiroshi
Etani

Senior Managing Executive Officer,
Head of Sales and Global Strategy,
Yamato Transport Co., Ltd.

After working as a logistics manager at PT. ITOCHU Indonesia, general manager at
ITOCHU Logistics Jakarta, general manager at ITOCHU Logistics Shanghai, and managing director at ITOCHU Logistics Singapore, Mr. Etani’s work history includes experience
as global customer director at DHL Global Customer Solutions, sales, marketing, andcustomer service director at TNT Express, deputy general manager of the logistics business at Rakuten Group Inc., CEO and president director of JP Rakuten Logistics, Inc.,
executive officer and assistant CEO at MITSUI-SOKO LOGISTICS Co., Ltd., and president
and representative director of CMA CGM Japan K.K. He joined the Yamato Group in
November 2020 and became managing executive officer and head of the Global SCM
Business Division at Yamato Transport Co., Ltd. on April 1, 2021. He has worked as
senior managing executive officer and head of Corporate Sales and Global Strategy
since February, 2022 and has held his current position since February, 2023.

In 2021, we transitioned to the One YAMATO structure, bringing
together our vast domestic customer base developed throughTA-Q-BIN, logistics functions such as facilities, transportation anddelivery network, third-party logistics, and international forwarding,and various functions such as finance and IT systems. Additionally,
we have assigned account managers and solution designers with adeep understanding of the businesses of our major corporate clients and can accompany them in the management of their businesses. We have created a system that aims for Yamato to becomea Lead Logistics Partner (LLP) that contributes to not only the management and operation of customer logistics but also the logistics
strategies and plans, by fully utilizing management resources under
One YAMATO structure.
We are also developing concrete initiatives together with customers. As an example, in September 2022, we signed an LLP contract with Nihon Michelin Tire Co., Ltd. with the target of creating a
fluid and robust logistics system across Japan. We are engaging ineliminating uneven distribution of inventory and reducing transportation between facilities by consolidating approximately 20
Michelin warehouses into 5 and visualizing and optimizing inventory control at each warehouse. We are minimizing waste due toexpiry through the realization of a first expire first out (FEFO)
system to ship tires that are closer to their expiration date before
others through inventory management that orders tires by theirindividual production year. Now, in a time of sudden changes tothe market environment, we are aiming for total supply chain optimization that is closer to a just-in-time strategy, while ensuring ajust-in-case strategy. Going forward, we will support Michelin in
optimizing its logistics and inventory, starting in the domestic sales
domain and working back up the supply chain to include production domains overseas.
Based on the long-term risk of environmental issues in the supply
chain, we are promoting green logistics, such as the introduction of
20,000 electric vehicles, installation of 810 units of solar power
generation equipment, and operation of refrigerated delivery that
does not utilize dry ice. Ultimately, we aim to achieve the targetsof virtually zero in-house GHG emissions by 2050 and a 48% reduction, compared to fiscal 2020, by 2030. By reducing our emissions,
we contribute to reducing the Scope 3 emissions of our customers(the emissions of other companies in a business’ entire supply
chain of which transport and delivery make up a large percentage).
Furthermore, visualization of the movement of products throughout
the entire supply chain also means visualizing GHG emissions. At
Yamato, we will provide reports that visualize the GHG emissions
resulting from customers using our transportation services.

Optimization of the supply chain also leads to the realization oflogistics with a low environmental burden. As a result, if we optimize our customers’ inventory and production, we contribute to
not only reducing their Scope 3 emissions but also their Scope 1
emissions (direct GHG emissions from the company itself) and
Scope 2 emissions (indirect emissions from utilization of electricity,heat, and steam procured from other companies). Going forward,
we will help reduce the environmental burden of our customers’
supply chains as an LLP.
While we aim to secure a position as an LLP through accountsales, building a foundation to provide value to a wide range ofcustomers is also a key challenge for Yamato. Many of the customers utilizing TA-Q-BIN in Japan are small- to medium-size corporateclients (area customers). To date, business activities for this layer ofcustomers have been led by sales drivers (SDs). However, inconsistencies existed in the level of activities and skills, limiting what we
could offer to customers. As a result, under the leadership of theRegional Branch Manager, we appointed sales representatives who
have expertise with field sales, inside sales, and system sales. We
revised the system to promote sales through close collaboration
between SDs, these representatives, and sales office managers.
SDs communicate the issues and comments from customers when
they visit sites and, based on this information, sales representatives
and sales office managers make proposals that combine not only
TA-Q-BIN but also factors including payment of accounts, systems,
and warehouse operations. This leads to the resolution of customer issues.
For Yamato, we apply value provision to the entire supply chainof our customers and propose “End to End” solutions fromupstream to downstream. At the same time as comprehensively
supporting them in the resolution of management issues they faceby expanding the value we provide to their businesses, we aim togrow together with customers while receiving appropriate compensation. To make this possible, we will continue to promote therecruitment and training of personnel, enhance solutions we provide, and expand our global system. Furthermore, we will
strengthen the necessary functions through alliances with partnercompanies and M&As.
The Yamato Group has been contributing to the creation of anenriched society by innovating delivery services. By creating newdelivery services that meet the changes to society and the environment and diversifying needs in the future, we will support thegrowth potential of our customers and realize a sustainable
society.

Reduction of delivery time

24

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

25

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Part 2

Human Resource Strategy
To realize our vision, the Yamato Group is promoting human resource strategies in tandem with management strategies, based on the
Yamato Group Human Resources Management Policy, which demonstrates our approach to human resource management.

Overview

Basic initiative

ACTIVITYPROFILE

Creating Even Higher Added-Value by Maximizing
the Activities and Contributions of Each Employee

 et Human Resources Management Policy that connects the growth ofS
employees to the growth of the Group, and planning and deploymentof human resource initiatives

Enhancement of Labor Productivity

 larify definition of roles linked to management strategy, and set plan forChiring, training and appointment Groupwide based on definition of roles
 stablish cycle of target-setting, evaluation and feedback based on defiE
nition of roles

Build Optimal Talent Portfolio to Create Added Value

KPIs

Growth rate for2015/3
2019/3Growth rate for
2019/32023/3Growth rate for2023/32027/3(prediction)

0%

+9%

+15%

Human resource
productivity** Human resource productivity = (consolidated operating revenues – consolidated
subcontracting expenses) / consolidated personnel expenses

 romote active participation of female employees, support employment
Pof non-Japanese employees reate work environment with no harassment or violations of humanCrightsHuman Resource Strategies: Challenges and Mission

human resource management in promoting Group management

Strengthen Engagement

structure reforms and business structural reforms, as well as the

Recordso far*2023/3

Employee-friendly

72%

66%

Rewarding

68%

61%

Desire to continue employment

75%

70%

Feel their own growth

72%

67%

Feel they are contributing to thecompany

74%

68%

KPIs
Employee Awareness
Surveys

Value creation

Promote health and productivity management

Masayuki Ishii entered the Bridgestone Corporation in 1988. After working at the Head Office, plants, andtechnology centers, he was responsible for human resources and labor management at various offices in the
United States, Spain, and Belgium. Upon returning to Japan, he was responsible for areas at the Head Officeincluding global human resources and human resource development, corporate planning, corporate communication, risk management, and overseas business management. In October 2022, he joined Yamato
Transport Co., Ltd.

resource strategies are to clarify the vision for the organization and ptimal allocation of talent in conjunction with consolidation andOenlargement of facilities, as well as workstyle reform (more detailed
specification of the definition of roles for Sales Drivers, reallocation ofadministrative and operational staff, etc.)

Improve Work Environment and Motivation ofDiverse Range of Employees

Masayuki
Ishii

Managing Executive Officer Responsible for overseeing
Human Resource Management and Development, Yamato
Transport Co., Ltd.

I believe that the challenges for the Yamato Group’s human ire specialized talent for each domain (corporate sales, logistics operaH
tions, digital etc.), and train specialized and core talent by enhancing
education

2027/3(prediction)road map to their realization, and to lead employees to empathizewith and change their behavior. Based on factors including trends
in each indicator of employee awareness surveys, including job sat-

Level higher
than record
so far* Since fiscal year ended March 31, 2017

Formulation of Yamato Group Human Resources Management Policy (April 2023)

Aspiration

Promotion of Human Resource Strategies in Tandem withManagement Strategies Based on Yamato’s Human Resources
Management Policy, Which Has the Key Phrase of “Growth”

OUTPUT/OUTCOME

Set and Promote Human Resource Strategies
that Support Management Strategies

Management Philosophy

M ESSAG E

Help enrich our society

Expand value provision to the “End to End” of supply chains—Realize sustainable business growth

Human Resources Management Policy
Yamato endeavors to create value for the future, and further advance itself to help continuously enrich our society.
Yamato recognizes each employee’s contribution and growth through fair evaluation and feedback, and aims to foster an inclusive work environment where each individual feels actively engaged.
Yamato encourages employees who take ownership with a customer-centric perspective and sincerity, and rewards those who constantly
strive to be at their best with challenging opportunities and personal growth.

isfaction, we must ensure that each employee understands thechanges in the Company and the roles expected of them. We willachieve this by demonstrating our human resource strategies, carried out at the same time as necessary major structural reforms,
and promoting concrete measures.

Since I was first appointed as the Executive Officer
Responsible for Human Resources in 2022, I have becomeaware of frankly communicating and implementing what I feeland believe as
Employee Awareness Surveys
someone who has(%)
80
come from outside
70%of the Yamato
70
Group. I feel that66%
my mission is to60suggest and pro61%
mote human50
resource strategies
40
in tandem with
2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
management stratEmployee-friendly
Rewardingegies and business
Desire to continue employment
strategies basedon issues brought to light through dialogues within the YamatoGroup.

Growth of Both the Company and Employees
Through business growth, the company provides an environment andopportunities for each and every employee with a diverse personality
to flourish while demonstrating their individuality.
Focus on creating new value with customers firstClarify the scope of roles and responsibilities required of employees mpathize with our corporate philosophy and sincerely face our stakeE
holders to create value with customers first eize employee growth as the source of the company’s growth and provide
S
opportunities for employees to flourish and grow

 ecognize roles and achievement responsibilities and act autonomouslyR
to contribute to the company’s growth

Recognize and praise employees who perform well in their expected roles

 onstantly improve the level of value creation through voluntary learning,C
trails, and challenges

 reate a workplace culture that allows employees to feel their work isCworthwhile

26

Employee attitude (ideal human resource)
In order to embody the Group’s corporate philosophy, employees shallact autonomously and independently, with the first priority placed on
customers, in relation to business activities that embody the Group’s
corporate philosophy.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Committed to and able to lead to results

continued growth of both Yamato and employees.
Additionally, we will clarify the roles and responsibilities necessary for the growth of the Company that are the starting point for
creating and operating a human resource management system.
This was the base for our Document for Definitions of Duties. This
document states the specific details of work, scope of responsibility, expertise, skills, and other information. By transforming into asystem that evaluates the degree to which definitions of duties are
put into practice, training assessors to provide feedback that supports employee growth, and appropriately reflecting this evaluationin compensation, we will create a cycle that enables the growth ofboth Yamato and employees. Furthermore, we will enhance
added-value as an organization by supporting the growth of each
employee through investment in people for the purpose of contributing to opportunities for training, developing the working environment, and creating an infrastructure that enables human resource
advancement, such as for non-Japanese employees and female
employees, leading to the generation of even higher-quality results.

Creation of Value by Promoting Human Resource
Strategies That Support Structural Reforms
The main point of human resource strategies is realizing further
growth and improvement of corporate value by supporting management strategies to expand the corporate business domain andcarry out structural reform of network operations.
In expanding the corporate business domain, we are focusing on
recruiting specialized personnel as immediate assets and developing internal specialized and core personnel to strengthen earning
power. At the same time, we are developing a reskilling system forgaining skills in new areas and raising the level of performance.

Human Resources Management Policy for Continued
The attitude of the company (how the organization should be)

employees. This policy has been positioned as a compass for the

In April 2023, we formulated the Yamato Group Human Resource
Management Policy to clarify the type of person Yamato requires andthe Company’s attitude toward human resources. Under the process
for identifying these factors, we held thorough discussions between
the Human Resource department, the entire management team—responsible for executing business—and the Board of Directors,
focusing on how the organization and its employees should change,
with particular emphasis on the key phrase of “growth.” Employee
growth is the driving force for the growth of Yamato and I believe wecan achieve such through the Company’s support for the growth of

In conducting structural reforms of network operations, we willencourage even higher employee performance by advancing thetransition to work styles connected to the reorganization of facilities, such as subdivision of sales driver professional duties, basedon factors including changes to customer needs and diversificationof employee values.
One key challenge going forward is the optimization of humanresource deployment following business structure reforms. By
evolving Yamato Staff Supply Co., Ltd. into a comprehensive personnel service company through collaboration with WORLDHOLDINGS CO., LTD., we will provide diverse job options for Group
employees, even outside of the Group, and a wide range of career
opportunities through reskilling.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

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DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Part 2

Human Resource Strategy Building an Optimal Human Resource Portfolio for Creation of Added-ValueTo create added-value in growth domains, we are promoting the recruitment and training of essential human resources. Furthermore,in conjunction with the structural reform of network operations (including reallocation of human resources responsible for TA-Q-BIN
offices and operation work, and subdivision of sales driver professional duties), we will improve job satisfaction and productivity bydefining roles that meet the needs of customers and employees, and appropriately allocating human resources.

1

Top executive officers

High-Value-Added Solutions
language skills, for approximately 1,000 corporate sales personnel in Japan and overseas.
From the fiscal year ending March 31, 2024, we shifted to asales system that further speeds up proposals for solutions. Thisis achieved by assigning corporate sales personnel who haveenhanced their skills through a systematic training program asregional directors and at regional branch offices, which are close
to customers. Going forward into this new phase, we will planand promote development measures to further enhance theperformance of corporate sales personnel. Additionally, to further expand the value we provide as LLPs to our customers, wewill actively promote the recruitment of human resources who
have diverse knowledge and experience from outside the logistics industry and are familiar with customer supply chains.

(2)
Knowledge

Promotion of acquisition of logistics-related certification(3)
SkillsSupport for improving language skills, etc.

(4)
Action(Process)(5)
Performance(1)
MindsetDevelopment of Core Personnel Who Drive Business Growth

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Drivers

Operations

Talent Pool Two (candidates
for president and high-level
executive officers)

Executive regional directors andExecutive department managers

Human Resource Development
Measures

General managers and Senior managers
Regional branch managers and Head officemanagers

Talent Pool Three (candidates
for executive officers)

Sales office managers and Hub basemanagers(in charge of terminals)
Head office assistant managers

Talent Pool Four (candidates
for managerial personnel)

Officework

Sales
peoplePlanning

Implementation of Selective
Training Program ext Leader ProgramN
Future Leader Program

Encouragement of Autonomous
Career Development
 rovision of training opportunities toP
employees who are willing to growindependently

Operational planning andmanagement

 0-year development plans for regular1
graduate recruits

Data analysis/operational design/system­engineering and operationImplementation of human resource
visualization and assessment

Head Office ppropriate placement based onAcareer goals and qualifications

The Yamato Group has implemented self-assessment questionnaires for regular graduate recruits regarding job satisfaction and their
future career paths. Based on the results of analyzing these questionnaires, we introduced an in-house job-posting system and a selfevaluation system on a trial basis from fiscal year ending March 31, 2024. These are methods to provide opportunities for employees
to re-assess their careers, leading to autonomous growth. Going forward, we will further enhance the working environment thatenables employees to grow autonomously and select their careers.

TOPIC
Mindset of providing value to customers,
colleagues, and society and giving our own
lives value through work

The Yamato Group has created the Definitions of Roles
Document, launching its application in stages from the fiscal
year ending March 31, 2024. In line with these roles, we arerevising our evaluation system. As we are promoting innovatedworkstyles and systems in tandem with the structural reform of
network operations, including the consolidation and enlargement of facilities, we are revising our evaluation system with a

Operational
managers

Talent Pool One (candidates
for presidential succession)Development of an Environment that Realizes Autonomous Growth and Career SelectionCorporate sales seminars for acquiring practical skills* A sales method that utilizes an interview framework that identifies customer circumstances and issues to clarify latent needs

Managerial
personnel

Senior managing executive
officers and Managing
executive officers

Sales offices, Terminals, Regional branch offices,and Regional directors

Mindset training for human resources in corporate sales

Business analysis training

Executive officers

President andVice-President

Skills to support customers’ businesses by
understanding issues faced and to create andprovide solutions for optimizing supply chains

Knowledge related to customers’
industries, businesses, and supply chains

Training to enhance solution sales skills that ­utilize SPIN*

High-level executive
officers

Regularemployees

Designing a Program for Employees to Attend Seminars Tailored to Their Experience and Skills

28

Based on succession plans, we have formed talent pools, with the president positioned at the highest level, and are systematicallypromoting human resource development measures for each talent pool. For example, for executive officer candidates in Talent Pool
Three, we will apply our Next Leader Program, a selective development program, to (1) select candidates for the next generation ofmanagement leaders, (2) monitor candidates and provide training opportunities, and (3) conduct opportunities to achieve stretch
goals and strategic placement to determine their aptitude.

Talent Pool Chart

Development and Recruitment of Corporate Sales Personnel Who Provide

The Yamato Group aims to become a management partner(LLP: Lead Logistics Partner) for corporate clients through theprovision of high-value-added solutions, supporting the innovation of supply chains and business processes, as well as theimplementation of structural reforms. To achieve this goal, we
are focusing on the development and recruitment of corporate
sales personnel.
In the fiscal year ended March 31, 2023, we worked toenhance our knowledge and skills for the purpose of gaining a
deeper understanding of our customers’ industries, businesses,
and entire supply chains, which has allowed us to propose concrete solutions for management issues. Accordingly, we haveprovided training on business analysis, more practical corporate
sales seminars, and training to improve solution sales skills, inaddition to acquiring related qualifications and improving

2

Human Resource Development According to Talent Poolfocus on the definitions of roles, starting from the upper level ofexecutives (managerial personnel), placing importance on linking appropriate evaluation with staff allocation. Instilling a culture within the organization in which employees themselves aim
for career development and personal growth based on evaluation leads to the fostering and securing of personnel who drive
business growth.

Business Partnership with World Holdings Co., Ltd.
In July 2023, the Yamato Group and World Holdings Co., Ltd. (WHD)
formed a business partnership with the aim of effectively utilizing themanagement resources of both companies, retaining revenue opportunities, and securing future competitive capabilities. As part of this,we transferred 51% of issued shares in Yamato.Staff.Supply.Co.,Ltd(YSS), which the Yamato Group has developed as a human resource
business, to World Staffing Co., Ltd. (WSF; a consolidated subsidiaryof World Holdings). In their core business of human resource development, WHD has developed a wide range of human resource businesses, from the manufacturing domain to the service domain. YSS
aims to evolve into a comprehensive human resource service company by utilizing WHD’s human resource management expertise in avariety of industries and occupations to create opportunities formany employees to play an even more active role.

Strengths of YSS and WSF
Consignment
formalContracting/
BPO
Temp staff
placement

Sector

Sector
Logistics

YSS
WSF
YSS
WSF

Administration

Call centers

Service

HR support

Safety education

WSF

WSF

WSF

WSF

YSS

WSF

WSF

WSF

Forklifts

General admin Receive calls

MovingSales admin

Merchandise
management

Make calls

Cash register
In-store
services

Accounting

Leaderoperations

Guide

Warehouse
inspection

Trading admin

Supervisory
work

Cleaning

Sorting

Reception

Picking

Secretary

Drivers

Backroom
work

Strengths of YSS·T rack record in contract
work and temporary
employee placement in
the logistics domain andpossession of knowledge
in the education businessto support safety training
and acquiring qualifications

Strengths of WSF·C overs a wide range of
operations and roles as acomprehensive humanresource service company·P resents rich career plans
to employees

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

29

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Part 2

Human Resource Strategy Enhancement of Employee-Friendliness and Job Satisfaction for
Diverse Employees
To create a foundation for realizing sustainable growth, we are promoting the cultivation of a corporate culture that respects humanrights and diversity and also the development of a working environment where employees can thrive. Additionally, as a result of measures aimed at increasing each employee’s sense of personal growth through their work and their sense of contribution to the growthand development of the Company, we are improving employee-friendliness and job-satisfaction, which will lead to the further
enhancement of engagement.

1

Fostering of a Corporate Culture that Enhances Employee-Friendliness and Job Satisfaction

With the aim of encouraging mutual understanding throughsmooth workplace communication and creating a working environment of mutual respect for diverse approaches and values,
we began implementing workplace discussions between frontline employees and management from the fiscal year ended
March 31, 2018. In the fiscal year ended March 31, 2023, basedon the analysis of responses to employee awareness surveys
showing that the behavior of managers fosters a sense of unity
in the organization and improves job satisfaction, we added theroles and responsibilities of executives to discussion topics for
operational managers who are leaders, such as sales officemanagers, to address the mindset of operational managers.

 ummary of Workplace Discussions in the fiscal year
S
ended March 31, 2023 (Yamato Transport)
PeriodOctober 2022 to March 2023 (held 87 times)

Participants

Sales office managers, logistics center managers, corporate business branch managers, overseas relocation
support center managers, fine arts branch managers,
and international sales branch managers (2,411 people;
regional branch managers participate as facilitators andhead office and regional executive officers participate
as observers)

Scale of events

Regional branch offices

Amid promotion of structural reforms by the Group, understanding management policies and strategies, communicatingthem to employees, and reflecting them in specific actions havebecome an even more important role of operational managers.
Furthermore, the instillation of Human Resources Management
Policy and the performance of duties and application of evaluations and feedback based on the Definitions of Roles Document
have also become vital roles. We will continue to foster a corporate culture that enhances job satisfaction and employeefriendliness by promoting initiatives that encourage operational
managers to demonstrate their role.

Workplace discussions taking place

Development of an Environment Where Diverse Employees Can Play an Active Role

30

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Manuals in numerous languages* Includes Yamato.Staff.Supply.Co.,LtdTOPIC
PICK UP

Respect for Human Rights and Diversity

As one initiative, we have been implementing the Yamato
Original Universal Manners Test for Yamato Group employees. In the fiscal year ended March 31, 2023, the test was
implemented for all executives and operational managers at
Yamato Transport and we will expand this to all regular
employees in the future. Universal manners identify themindset and actions for addressing a diverse range of
people, including older people and people with disabilities.

 ideo training for Yamato Original Universal
V
Manners Test

Promotion of Advancement for Women in the Workplace
The Yamato Group is promoting the development of an environment that enables diverse employees to play an active role.
In the fiscal year ended March 31, 2023, we implemented adevelopment program for women aiming to become sales officemanagers as a measure aimed at the promotion of women in
management. Under this program, we created development
plans for participants and held training not only with these participants but also their supervisors on the theme of eliminating
unconscious bias. The program encourages motivated employees to play an active role in the Company and has actually
resulted in the promotion of participants to sales office managers. At the same time as promoting development programs, wewill continue to develop an environment where women cancontinue working while balancing their work and life events and

The Yamato Group is promoting initiatives
aimed at developing an environment that does
not leave non-Japanese employees behind in
the workplace. As a result of surveying theapproximately 9,500 non-Japanese employees
working within the Yamato Group*, roughly
90% of whom work at Yamato Transport terminals, we identified that insufficient explanations and understanding related to work
content, caused by language, led to inconvenience and difficulties with work. To eliminate
this issue, we have developed manuals innumerous languages that contribute to theunderstanding of work content, and areencouraging their utilization in the workplace.
Going forward, we aim to develop an environment that is employee-friendly and rewarding
for non-Japanese employees through initiatives
including multilingual support at our in-house
consultation contact point.

At the same time as setting out the Yamato Group Human
Rights Policy and Basic Policy on Diversity and developing anenvironment where human rights and diversity are respected,
enabling employees to play an active role in the Company,
we are engaging in the creation of an enriched society, suchas promoting the development of local communities throughco-creation, by addressing various social issues.

ImplementationFace-to-face group discussions
method2

Employment Support for Non-Japanese Employees

will provide regular support, such as introducing female rolemodels, who play a role as leaders, through internal
newsletters.

 evelopment program for women aiming to becomeDsales office managers (sales office manager training)

The Universal Manners Test is for systematically learningand acquiring these skills. We can contribute to achieving asociety that respects human rights and diversity by gaining
the knowledge necessary for improving universal manners,
such as appropriate support for customers, including older
people and people with disabilities, in receiving and sending parcels at home and at TA-Q-BIN sales offices, andthrough promotional activities centered around customer
service representatives.
Note: One characteristic of the Universal Manners test is that people withdisabilities supervise the curriculum and work as instructors. Mirairo
Inc. hosts and conducts the test, which has been certified by theJapan Universal Manners Association.

Please see our corporate website for details on
the various policies.
Yamato Group Human Rights Policy

https://www.yamato-hd.co.jp/english/csr/esg/
pdf/policy02.pdf
Basic Policy on Diversity

https://www.yamato-hd.co.jp/english/csr/esg/
pdf/policy03.pdf

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

31

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Part 2

Digital Strategy
Value Creation Utilizing New Digital Platform and Digital Data

The Yamato Group has positioned digital strategy as one of the fundamental strategies that support business structural reforms.
Therefore, we are reinforcing the digital organizational capabilities, technological capabilities, quality, and governance of the entire Group.
Based on a new digital platform that understands and communicates various information in real time, we are effectively utilizing data inbusiness activities while expanding the value we provide to customers and accelerating the enhancement of operational efficiency.

 Reform of Development and Operational Structures and Reinforcementof Governance1

 reation of structure that promotes the integration of business and digital departments
C
Revision of development and operational structures, entrusted to system subsidiary, through Group reorganization
 evelopment of human resource cultivation and recruitment measures aimed at further reinforcing development and operationalD
structures
Includes revision of human resource system, reinforcement of recruitment, and development of technological capability training process eduction of vendor dependence on development projects
R
Reinforcement of technological regulations through Technology Governance Team einforcing governance of Groupwide digital investments
R
Promotion of maintenance and enhancement of development quality and speed, and optimization of development and operationalcosts by closely examining their validity and order of priority of digital investments at Digital Governance Meetings

Digital Investment
Under the medium-term management plan “One YAMATO 2023,”

Meetings, which regulate Groupwide digital investment. Between

we expect to make digital investments of ¥100 billion in thethe fiscal year ended March 31, 2021 and the fiscal year ended

three years spanning the fiscal year ended March 31, 2022, to the

March 31, 2022, we mostly completed investments in building ayear ending March 31, 2024. During the actual promotion of digi-

new digital platform. From the fiscal year ended March 31, 2023

tal strategy, we carry out the necessary investments after closely

onward, we will prioritize investments that enhance the value we

examining their validity and priority through Digital Governanceprovide to customers and contribute to operational efficiencies.

Trends in Digital Investment AmountResults of Digital Investment
Digital Investment

2022/32023/3

Enhancement of value provided tocustomers¥8.0 billion¥4.7 billion

Improvement of operational efficiency fortransportation and delivery¥6.2 billion¥5.2 billion

Creation and maintenance of digitalplatform¥11.8 billion¥1.5 billion

Others¥1.8 billion¥0.5 billion

Total¥27.8 billion¥11.9 billion(¥ billion)

20.0–
30.0* 30.0*

27.8

30
25

17.9

20

11.9

15
10

6.0

5
0

2020/32021/32022/32023/32024/32027/3* Estimated amount as of the start of the fiscal year ending March 31, 2024

Development and Recruitment of Human Resources
Additionally, we have strengthened systems for bringing nec-

resources with digital skills and strengthening of technologicalessary development and operation in-house by reinforcing thecapabilities through close cooperation between the Digital

hiring of new graduate recruits and mid-career hires and devel-

Department and Business Department to realize sustainable

oping the human resource system and training process.

Under the Yamato Digital Academy (YDA), a digital training program launched in the fiscal year ended March 31, 2022, we spent
the first year engaging in measures such as enhancing fundamental digital literacy and skills. In the fiscal year ended March 31,
2023, the second year, in addition to the above, the DigitalInitiatives Aimed at Development of Human Resources
with Digital Skills (Fiscal year ended March 31, 2023)
VisionContent of Training

Attendance
Results

DigitalDepartment

Recognized as a partner bybusiness department leadership and at the core of project
promotion

Training aimed at strengthening skills necessary in work as
digital-specialized personnel,
such as planning, development, operation, andmaintenanceApproximately
220 employees

Business
Department(Head Office)Collaborate with the digitaldepartment, promote businessstructural reforms, and contribute to enhancing profitability

Training aimed at enhancing IT
literacy and digital skills

Approximately
130 employees

Business
Department(Regional
Branches)

Master digital tools to promote further advancement
and efficiency through devices
unique to the front line

Training aimed at reinforcing
digital utilization skills on thefront line

Approximately
200 employees

TargetDepartment and managers in charge of practical work in theBusiness Department (Regional Branch Offices), which deals withcustomers on the front line, promoted gaining skills and knowledge that can be utilized in actual work, increasing the rate of inhouse system development and operation, and enhancing theefficiency of front-line operations and quality of service.

32

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Total

Enhancement of Last Mile Operation Efficiency
That Utilizes Digital Data

In promoting the structural reform of network operations, we are engaging in measures within the existing TA-Q-BIN network that include appropriate allocation of
Yamato resources in line with workload, consolidation and enlargement of sales
offices, and revision of sales driver (SD) workstyles and structure. Area Management
System, a tool developed to support the design of delivery areas and routes for SDs,
who are responsible for last mile, consolidates information on the parcels for pickup
and delivery (such as area, time, person responsible, classification, and volume) andvisualizing it on a map. As a result we have significantly reduced the time needed todesign areas and routes, which previously required analogue data aggregation andstudy and are promoting the enhancement of delivery operation productivity by SDs
based on data.
Additionally, in conjunction with consolidation and enlargement of sales offices,
we will introduce a mechanism (Last-mile Management System) for flexibly adjusting
the delivery area and route in response to fluctuations in daily workload in thesecond half end of the fiscal year ending March 31, 2024. We will further enhance
operational efficiency by integrating this with measures for innovating SD workstyles
and structure, such as allocation of Delivery Drivers (DD, specialized for delivery) in
key urban areas.

2

Creation and Development of EC Logistics Network

Under our EC logistics network, we are creating and expanding terminals specialized
for dispatching EC parcels (EC sorting centers) and EC delivery centers in collaboration with business partners. In this collaboration, Yamato Transport provides an operation system that links data, such as parcel information and customer requests forchange, in real time,
thereby enhancing
Real-Time Connection of YDP and EC Logistics Network
service quality andoperational effiEC logistics network system
YDP
Delivery support system (administrative operations)ciency throughParcel information
Dashboard/Ring
scanner (center operations)smooth manageStatus information
CDA, a delivery app(delivery operations)ment of business
Real time collaboration
partner operations.

Before Revising Areas
and Routes

After Revision

108

138

109
79

Course A volume of parcels: 138

Course A volume of parcels
excluding area framed in red: 108

Course B volume of parcels: 79

Course B volume of parcels
including area framed in red: 109

Area Management System Image
By confirming the volume of parcels by area basedon various factors, including delivery day and time,
information such as fluctuation in volume anduneven workload for each SD can be quickly
understood, leading to a revision of routes.

3A dvancement ofFulfillment Service

In the operation of the fulfillment service
that acts as an agent for a series of operations, from ordering products to their storage and shipping, order data from anorder management system for EC operators is linked in real time to shipping operations. This improves the efficiency ofshipping operations in warehouses,
reduces dead stock, and shortens leadtimes, thereby contributing to theenhancement of customer experiences.

 nhance efficiency of administrative operations through definition of operationalEstandards and digitalization

The Yamato Group is engaging in the development of humanbusiness growth.

We are supporting the expansion of the value we provide to customers and the enhancement of operational efficiency from a digital
perspective by utilizing the Yamato Digital Platform (YDP), our new digital platform, which understands various data in real time andcollaborates with internal and external systems.

 lexibly respond to changes in workload by visualizing workload and progress ofFwork in real time, etc.

TOPIC

Selection of DX Stocks 2023
Yamato was selected for Digital Transformation Stocks (DX Stocks)* 2023. During this selection, we were recognized for our efforts to promote business structure reforms in responseto the changing times, to promote the transformation of each customer’s entire supply
chain and enhance operational efficiency based on data analysis, and to create an organization and corporate culture. We will continue advancing initiatives for business structure reforms based on a structure for promoting data utilization through collaboration between the Business Department and Digital Department.
* Organized jointly by the Ministry of Economy, Trade and Industry, the Tokyo Stock Exchange, and the Information-technology Promotion Agency, Japan toselect and introduce TSE-listed companies that create in-house systems for enhancing corporate value while promoting DX and displaying outstanding performance in utilizing digital technology

Approximately 550 employees

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

33

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Environmental Strategy
We are promoting environmentally-conscious management, based on our Environmental Vision, to achieve both sustainable businessgrowth and the development of a sustainable society. To realize our long-term target of achieving virtually zero GHG emissions (in-houseemissions) by 2050 and medium-term target of a 48% reduction in GHG emissions by 2030 (compared with the fiscal year ended March
31, 2021), we will promote measures to reduce such emissions, such as the introduction of EVs and solar power generation equipment
in conjunction with facility strategies in the structural reform of network operations based on climate change-related risks and opportunities. At the same time, we will expand the corporate business domain by supporting the creation of supply chains with a low environmental burden and visualizing GHG emissions in relation to customer needs, such as reducing GHG emissions related to logistics.

Overview
ACTIVITYOUTPUT/OUTCOME

Basic initiative

Reduction of GHG Emissions by Promoting Green
Innovation

Environmental Vision

Long-Term Environmental Targets“Connect. Deliver the future via
green logistics”

Introduction of EVs, solar power generation equipment, and LEDs,
and promotion of measures including the reduced use of dry ice,
linked to facilities strategy for structural reform of network operations, together with utilization of electricity generated from renewable energy sources, thereby steadily reducing GHG emissions

GHG emissions
 edium-term target (2031/3):
M–48%*2
Short-term target (2024/3): –10%*2

20,000 EVs
810 units of solar power generation equipment
Zero use of dry ice evelopment of emissions visualization tools based on ISO
D
14083:2023, an international standard for calculating GHG emissions in the logistics domain

Value Creation

 edium-term target (2031/3): 70%
Mof total
Short-term target (2024/3): 40% of
total*3*3 W
 e added 10% to our original targetof 30% to achieve our overall targets
for reducing GHG emissions

Visualization of Customer GHG Emissions HG Emissions/Percentage of Electricity Generated via
G
Renewable Energy Sources(Thousand tCO2e)(%)
1,000

Enhancement of Value Provided to
Customers

Baseline (2)%

(7)%

(10)%

80

70%

(Support for Creation of Supply Chains with Low

921

902

In promoting each measure aimed at reducing GHG
emissions, creating a balance between EV operation andcharging is an issue in the logistics industry. Since EV
operation and solar power generation both occur during
daylight hours, it is vital to create a mechanism for balance
between operation and charging. Additionally, there areconcerns over issues including supply shortages due to asudden increase in demand for electricity generated via
renewable energy sources and insufficient capacity in thenecessary systematic power transmission. As acountermeasure, Yamato Transport is engaging in establishingenergy management responsible for battery detachment,
Demonstration period/Area

860

500

22%

Contribute to reducing GHG emissions by optimizing logistics
and inventory through transformation of each customer’s entire

As one key measure for reducing GHG emissions, the Yamato Group is promoting the introductionof EVs. Our demonstration tests to date have been able to confirm effects including the reductionof GHG emissions, efficiency in pickup and delivery operations, and reducing operational burden.
We have introduced 540 Hino Dutro Z BEV, ultra-low-floor walkthrough, small-sized commercial-use
EVs, mainly in urban areas (as of August 2023). We will continue toengage in introducing EVs with environmental functions and practicality together with car manufacturers.
We are also promoting measures such as installation of solar
power generation equipment at our bases, use of electricity generated via renewable energy sources, switching to LEDs at bases, andSmall-sized commercial-use EV, Hino
utilization of transportation materials that do not use dry ice.

40%

40

(48)%

11%

250

supply chain

20

0%
0

2021/302022/32023/32024/3
Target2031/3
Target2051/3
TargetGHG emissions (left)
Percentage of electricity generated via renewable energy sources (right)(Units)
40,00030,00036,902
31,29220,00010,0000

2019/32020/32021/32022/32023/3

Electric vehicles (EVs)
New long-term compliance vehicles
Hybrid vehicles
Compressed natural gas (CNG) vehicles
Liquefied petroleum gas (LPG) vehicles

0

replacement, and transportation using cartridge batteries.
As a concrete initiative, we are promoting demonstration
projects in Gunma Prefecture, which have been subsidized by
the New Energy and Industrial Technology Development
Organization (NEDO), a national research and development
agency in Japan. These demonstration projects will include
introducing EVs and solar power generation equipment, as
well as a demonstration of power transmission throughbattery transportation. Additionally, to commercialize
cartridge batteries, we are considering standardization with
the Commercial Japan Partnership Technologies Corporation.

Fiscal Year Ending March 31, 2023, to Fiscal Year Ending March 31, 2031 (Scheduled)/Gunma Prefecture
200 EVs by fiscal year ending March 31, 2024 (introduced 50 EVs as of March 2023)

60

750

Environmental Burden)

Green Innovation

Issues and Countermeasures in the Logistics Industry—Initiatives Aimed at Establishing
Energy Management

Percentage of Electricity
Generated via Renewable
Energy Sources*2 C ompared to fiscal year ending
March 31, 2021

 Reduction in GHG Emissions Through Promotion ofTOPIC*1 In-house emissions of consolidated
companies in Japan and Swan Co.,
Ltd. (Scope 1 and Scope 2)<Fiscal Year Ended March 31, 2022, to Fiscal Year Ending March 31, 2031>

 he Number ofT
Environment-Friendly
Vehicles Owned(Consolidated Group
Companies in Japan)

Dutro Z BEV

Achieve virtually zero*1 GHG emissions by 2050

Part 2

Conversion of all vehicles into EVs and reduction of 5,000 tons of CO2 emissions* generated by vehicles by fiscal
year ending March 31, 2027

KPIs

Conversion of all vehicles into EVs with cartridge batteries and reduction of 7,500 tons of CO2 emissions* generated by vehicles by fiscal year ending March 31, 2031
* Within the demonstration project area, compared to the fiscal year ended March 31, 2021
Note: The prerequisite coefficient for CO2 emissions is 0.000447tCO2/kWh (Ministry of Environment, the emission coefficients of individual power companies, etc.; TEPCO baseCO2 emission coefficient for the fiscal year ended March 31, 2021).
Reference: https://ghg-santeikohyo.env.go.jp/files/calc/r04_coefficient_rev4.pdf (Japanese only)
https://ghg-santeikohyo.env.go.jp/files/calc/r04_coefficient_rev4.pdf

Our Vision for an Energy Ecosystem That Coordinates Electric Vehicles (EVs), Photovoltaic (PV) Systems, and Batteries
Cartridge batteries

Plan for Reducing GHG Emissions to Achieve Medium-Term Targets (2030)
Key Measures
Introduction of 20,000 EVs
Introduction of 810 units of solar power­generation equipment
Introduction of LEDs
70% utilization rate for electricity generated via
renewable energy sources

34

Plan for Reducing GHG emissions

1,000

Baseline

(225)

800

Environmental
investment

600

400

200

Increase in transportation efficiency

09212021/3· EV introduction: (100)· Solar power generationequipment introduction:(110)· LED introduction: (15)Balance between
vehicle operationand charging Cartridge batteries

Systemic
powertransmissions

(442)

Local
communities
Response tonaturaldisasters

On-site PV systems(145)

At the same time, we will take measures to enhance transportation efficiency to cope with the increase inemissions due to businessexpansion

Recipients

Battery transportation(72)
Use ofrenewable Eliminationenergy, etc. of dry ice

Off-site PV systems

Areas hit by
natural disasters

Stationary
batteries
Batterytransportation• Expansion of EV introduction• Expansion of supply capacity for electricity generated via renewableenergy sources both on-site and off-site• Balance vehicle operation and charging by separating the chassis
and battery through EVs that utilize cartridge batteries

Shared battery
infrastructure
Transportationindustry479

2031/3
TargetCreation ofregional
infrastructure

Delivery

Stationary
batteries

Environmental investment​(Thousand tCO2e)

Elimination of dry ice

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

On-site PV systems• Duplication of electricity transmission network by transporting batteries and utilizing systemic power transmissions• Creation of regional infrastructure for transporting batteries andresponding to natural disasters• Creation of a shared battery infrastructure for the transportationindustry

Reduce CO2 emissions
Reduce burden on electricity
system
Support local communities andprovide disaster relief
Stabilize transportation industry

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

35

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Part 2

Part 2

Environmental Strategy

Visualization of GHG Emissions—Value Provision to Customers

GovernanceContribution to Reducing GHG Emissions by Transforming Customer Supply Chains
Climate change response has become a key issue at each company and Yamato Group customers have expectations, such as the
reduction of logistics-related GHG emissions. To meet these expectations, the Yamato Group is supporting the reduction of customer
GHG emissions by transforming their entire supply chain, including reviewing the purpose of logistics and inventory holding methods,
and by visualizing GHG emissions.

Examples of Initiatives with Customers
Kubarahonke Co., Ltd. (Food Manufacturer)

Adastria Co., Ltd. (Clothing Seller and Manufacturer)

Yoshinoya Co., Ltd. (Restaurant Chain)

By integrating supply chains that had been individually optimized for each sales channel and product and creating an optimal supply chain from the manufacturing base to the rest of
the country, Kubarahonke and the Yamato Group are conducting environmentally-conscious, sustainable operations andreducing GHG emissions from product delivery.

Adastria and the Yamato Group aim to reduce GHG emissions
by reviewing the purpose of logistics and inventory holding
methods in supply chains that span both Japan and overseas,from raw materials procurement to product production andomni-channel approaches to sales, creating even more effective logistics in terms of management.

Yoshinoya and the Yamato Group are
reducing GHG emissions and surplus
food and material loss by integrating andoptimizing supply chains for direct sales
and wholesalers.

Nihon Michelin Tire Co., Ltd. (Tire Manufacturer)

Colowide Co., Ltd. (Restaurant Chain)

By consolidating approximately 20 warehouses into 5 and visualizing and optimizing
inventory control at each warehouse, we are working to eliminate uneven distribution of
inventory and reduce transportation between facilities, while utilizing networks for corporate clients and other resources to stabilize lead times for delivery of products andreducing GHG emissions. We are also minimizing waste due to expiry (reducing impact
on the environment) through managing overall tire inventory by production year andshipping tires that are closer to the expiration date before others using a management
system that minimizes waste by tracking the production year of all tires in the inventory.

We are working on building a sustainable supply chain with an even lower
environmental burden, eliminating muri
(unreasonableness), mura (inconsistency), and muda (waste), by visualizing
and optimizing the entire supply chain,
which was previously divided by company and difficult to view as a whole.

The Yamato Group deliberates and seeks to resolve environmental
issues, including climate change, based on its system for environmental management, with the Environment Committee as a decision-making body, and the Board of Directors supervising the statusof execution. The president serves as chairperson of the YamatoGroup Environment Committee and is the supervisor responsible forenvironmental management. Further, important matters, such as
basic policies related to environmental issues, which include climatechange discussions by the Yamato Group Environment Committee,
are debated and decided on at Management Committee meetings,

which operates above the Environment Committee, and Board of
Directors or management meetings. Executive officers in charge ofthe environmental field, regional directors, and presidents of Group
companies are responsible for environmental issues, in addition to
being responsible for the reliable implementation, maintenance, andsupervision of environmental management, including preparing necessary management resources. As a general rule, all managers andheads of frontline organizational structures are also responsible formanaging environmental risks and opportunities, including climatechange, as environmental managers.

Strategy
STEP 1

Assessment of Risk Importance

The Yamato Group will look ahead to the period between the fiscal year ended March 31, 2022, and the fiscal year ending March 31, 2024–which is the period of the
Sustainable Medium-Term Plans 2023 [Environmental], set as the fiscal year for medium-term targets, and 2050, which has been set as the fiscal year for long-term targets,with reference to the targets formulated by the Japanese government for reducing GHG emissions. We will consider transition risks, such as the introduction of policies andregulations by the Japanese government and changes to market needs, and physical risks, such as abnormal weather brought about by climate change, and will respond torisks and opportunities by reflecting them in the Group’s strategies.
We evaluated physical risks, such as the suspension of operations due to the increasing severity and frequency of abnormal weather and expanding repair costs owing
to damage to and loss of facilities and equipment caused by abnormal weather, as short-term risks. Furthermore, we evaluated the transition risk of increasing costs due tothe introduction of a carbon tax as a result of revised policies and laws as a medium- to long-term risk. Meanwhile, regarding opportunities, we also identified significant
potential for future financial benefits, such as falling costs due to energy conversion and increased efficiency, in line with the low-carbon transition, and increasing revenues
supported by customers with a heightened awareness of our proactive, environmental response to climate change mitigation and adaptation. Going forward, we will continue to assess the impact of the risks and opportunities that may arise.

Development of GHG Visualization Tools Based on International Standards
Yamato Transport is advancing the development of GHG emissions visualization
tools based on ISO 14083:2023, an international standard for calculating GHG
emissions made by transportation that was issued on March 20, 2023. This
international standard calculates GHG emissions from not only trucks for transportation but also from various methods such as air and marine transportation,
as well as from terminals. Through such visualization tools, we will make evenmore realistic calculations for GHG emissions from transportation by Yamato
Transport, which correspond to Scope 3* emissions for corporate clients. We
aim to use these visualization tools globally.
* GHG emissions in the supply chain made by companies indirectly

PICK UP

Conventional
Calculation of emissions using
coefficients based on monetaryamount or physical volume

After creation ofvisualization tools
Calculation of emissions byaggregating each process inactual transportation operation
Measures for reducing
emissionsIntroduction of EVs and solar
power generation equipment, etc.

Physical
GHG
volume emissions

Physical
GHG
volume emissions

Cannot visualize
reduction efforts

Can visualize
reduction efforts

Increasing Need for International Standards

Climate change response is an urgent issue for the entire international society. As a result, many companies have adopted a target ofvirtually zero GHG emissions and are advancing various initiatives. Additionally, businesses are now required to respond on not only an
individual company basis but throughout the entire supply chain, such as by making the reporting of GHG emissions related to products a condition of business transactions with suppliers. Each company and country have adopted various standards for calculating
GHG emissions in the logistics industry. However, with the advancing globalization of the supply chain, the need for international standards has increased. When global calculation standards did not yet exist, the Yamato Group signed a basic agreement with the largest
European home delivery company, the DPDGroup, aimed at environmental-based cooperation. We are actively engaging in measures
such as participating in the formulation of ISO14083:2023, an international standard related to methods of calculating and reporting
GHG emissions from transportation, leading to the development of emissions visualization tools based on international standards.

Initiatives Based on the Recommendations of the TCFD
The Yamato Group understands that revealing the risks and opportunities faced by and presented to society and the Company by climate change issues, evaluating the impacts thereof, and formulating countermeasures are essential for the sustainability of the business. We have carried out scenario analyses of Yamato Transport in the fiscal year ended March 31, 2022, based on therecommendations of the Task Force on Climate-related Financial Disclosures (TCFD). While enhancing the sustainability of the Groupby clarifying the business impacts of climate change and engaging in countermeasures focused on issues that have a significant
impact, we will enhance corporate value by holding dialogues with stakeholders.

36

YAMATO HOLDINGS CO., LTD.
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STEP 2

Definition of Scenario Categories

Under scenario analysis conducted in the fiscal year ended March 31, 2022, we predicted
two scenarios for Yamato Transport, based on information*1 from the Intergovernmental
Panel on Climate Change (IPCC) and the International Energy Agency (IEA).
*1 Includes the RCP8.5 global warming scenario created by the IPCC as well as the Net Zero
Emissions by 2050 Scenario, Sustainable Development Scenario, and Stated Policies Scenario
created by the IEA*2 Referencing the 2ºC scenario when no scenario exists for 1.5ºC

STEP 3

Evaluation of Business Impact for Yamato Transport

Evaluation of financial impact
due to introduction of acarbon tax

Calculation of business impact in 2030 and 2050
related to settlement[s] following the full-scale
introduction of a carbon tax
By 2030: ¥13.3 billion
By 2050: ¥25.6 billion
Note: Estimated using carbon tax prices of $130 per
ton (2030) and $250 per ton (2050)

Financial impact assessment
regarding decreasing revenues
and increasing repair costs forfacilities and equipment due
to abnormal weather anddisasters

Trial calculation of business impact of decreased
revenue due to abnormal weather, such as heavy rain
resulting from increasingly severe typhoons and linear
rainbands, and repair costs for damaged facilities andequipment
By 2030: ¥1.9 billion
By 2050: ¥3.8 billion
Note: Calculated by referencing past disasters

We determine the business impact by referencing energy-related indexes, such as the
carbon pricing published in the World Energy Outlook by the IEA. Furthermore, to understand changes in trends, we reference data, including the frequency of flooding, publishedby the Japanese Ministry of Land, Infrastructure, Transport and Tourism; the Ministry of
Education, Culture, Sports, Science and Technology; and the Japan Meteorological Agency
in light of climate change.

1.5ºC
Scenario*2

The incurrence of costs associated with reducing GHG emissions
will become necessary and we must enforce stricter regulations
and higher fuel and electricity costs; however, sustainability is the
key to creating and offering competitive products.

4ºC
Scenario

While we will continue to practice our current style of management, incurring costs to address damages from natural disasters
in each area of operation will become necessary.

STEP 4

Direction of Countermeasures• Implementation of measures to achieve targets for reducing GHG emissions by 2030
(48% reduction compared with the fiscal year ended March 31, 2021)
Introduction of 20,000 low-carbon vehicles (mainly EVs), installation of 810 units ofsolar power generation equipment, etc.
Expected result: Reduction of business impact due to introduction of a carbon tax
by 2030 (¥6.1 billion decrease)• Implementation of measures to achieve targets for climate neutrality by 2050
Introduction of low-carbon vehicles, including EVs with cartridge batteries, further
installation of solar power generation equipment, improvement of usage rate for electricity generated via renewable energy sources, reinforcement of other measures, etc.
Expected result: Elimination of business impact due to introduction of a carbon tax
by 2050• Examination of introducing internal carbon pricing with the aim of proactive capital
expenditures in low-carbon transition• Opening of stores by utilizing hazard maps and periodic reviews of our business continuity planning manual• Examination of disclosing information on efforts to adapt to climate change internallyand to our business partners• Testing for use of renewable energy and EVs with cartridge batteries that enhance
resilience• Reevaluation of business impact going forward while adding extra prerequisites, suchas enhancing predictions for location and scale of occurrences of incidents, and continuous examination of countermeasures

Risk Management

Indicators and Targets

Yamato Holdings has created a dedicated department responsible
for promoting the Groupwide response to climate change.
Additionally, we are promoting said response by deploying an environmental officer (president and representative director) and an
environmental promotion representative to each Group company.

We will implement measures for achieving GHG emissions reduction
targets (see page 34) and create green logistics in collaboration withour business partners to reduce GHG emissions across the entire
value chain (Scope 3). At the same time, we will consider the feasibility of acquiring certification for achieving the 1.5ºC target of the
Science Based Targets* initiative.
* Targets for reducing GHG emissions set by companies for the next five to ten years, inline with the levels required by the Paris Accords

For details on initiatives based on TCFD recommendations, please refer to our corporate website.
https://www.yamato-hd.co.jp/english/csr/environment/tcfd.html

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

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Part 2

Part 2

Strengthening of Sustainable Management
At a time when society as a whole is facing many urgent issues that must be addressed, such as climate change, the declining workforce, human rights, and inequality, it is becoming increasingly important that all corporations also respond to such social issues.
Based on these circumstances, the Yamato Group is promoting sustainable management with the aim of realizing the improvement of
medium- to long-term corporate value and a sustainable society.

Vision for the Environment and Society
Environmental Vision

Material Issues

Refine Choices for Material Issues

STEP1

Based on risks and opportunities in the Yamato Group’s businesses,
we identified important material issues that contribute to realizing asustainable society and improving medium- to long-term corporate
value. Among these issues, we recognize that Energy & Climate,
Labor, Human Rights & Diversity, and Data Utilization & Security havea particularly significant impact on the Group’s sustainability. As
such, we are promoting initiatives in conjunction with business structure reforms.

Hold Stakeholder Dialogues (November 2019)

STEP2

STEP3

Connect. Deliver the future via green logistics
The Yamato Group will further promote its vision of “Connect. Deliver the future via green
logistics.” By leveraging cutting-edge connections between data, people, and resources, wewill increase the efficiency of transportation and provide delivery services that are betterfor the planet, our customers’ lifestyles, and the economy. We will also support a strong,smart society by striving toward virtually zero GHG emissions*1 and by creating businessmodels based on sustainable resource use and consumption.

Material Issues

Themes of Initiatives

Atmosphere

Through co-creation and fair business activities,
help create a society that “leaves no one behind”*2
As a social infrastructure company, the Yamato Group will contribute to improving thequality of life of various people, including employees and customers, by reducing and eliminating various inequalities and obstacles in society. We will do this by delivering goods
and value to everyone through fair and efficient business processes.
By promoting digital innovation and our strengths offline, as well as co-creation with various partners, we will be a leader in solving social challenges and creating a society thatleaves no one behind.

Resilience ofCompanies & Society

Labor

Human Rights &Diversity*2 To leave no one behind: A basic philosophy of the SDGs
Safety & Security

Sustainability Promotion System
The Yamato Group discusses and makes decisions on sustainability matters at the Management Committee meetings and Board of
Directors meetings. To promote sustainable management, the Yamato Group Environment Committee and Yamato Group Social
Promotion Committee, which are chaired by the president and comprise the executives (including senior managing executive officers
and managing executive officers) of Yamato Transport, meet once a year to discuss and make decisions on issues related to sustainability. Further, four subcommittees in the environmental field (energy, climate, and pollution; resources and waste; management andcollaboration; and products and services), and three subcommittees in the social field (human rights and diversity; supply chain management; and local communities) each meet three times a year, considering measures and implementing progress checks.

Data Utilization &Security

Supply Chain
Management

Community

Identifying Material Issues (January 2020)
At the same time as identifying material issues, we formulated thetransformation plan “YAMATO NEXT100” as a grand design for management
reform over the medium to long term.

Risk/Opportunity

Mitigate climate change

Risk

Clean up the skies(prevent air pollution)

Pursue transportation that reduces the effects of
air pollutants emitted by vehicles and cleans up
skies in local communities

Risk

Drastically reduce our environmental burden andpromote the use of technology and creation ofopportunities for minimizing environmental
impact

Risk

Opportunity

Support a society that
combats environmental
changes

Collaborate with diverse partners to increase theresilience of stakeholders and local communities
and create environmental value

Risk

Opportunity

Create a work
environment where
employees can thrive

Implement a high-value-added model labor andpromote “decent work”

Risk

Opportunity

Create a corporate culturethat respects humanrights and diversity

Respect human rights, recognize diversity, andcreate a framework for human rights due
diligence

Risk

Opportunity

Create initiatives to carryout business in a safe andsecure manner

Maintain traffic and labor safety and provide
reliable service

Risk

Create an information
security infrastructure

Create an information security infrastructure andbusinesses that utilize data to resolve social
issues

Risk

Opportunity

Develop a common
understanding withstakeholders

Build a stable business infrastructure throughsound, resilient supply chains

Risk

Opportunity

Create corporate
citizenship activities thatare rooted in local
communities and create aframework for businesscreation

Establish corporate citizenship activities that are
unique to the Yamato Group.
Create a business model that revitalizes local
economies

Promote resource
conservation and reduce
Resource Conservationwaste& WasteSocial Vision

VisionWe invited experts from universities, international institutions, and securities
companies and exchanged opinions on material issues and the expected roleof the Yamato Group in solving environmental and social issues.

Reduce GHG emissions by using electricity
generated via renewable energy sources,enhancing transportation efficiency through theutilization of digital technology, and reducing theuse of dry ice, etc.

Energy & Climate*1 In-house emissions of consolidated companies in Japan and Swan Co., Ltd. (Scope 1 & Scope 2)

Based on international frameworks, such as the GRI Standards, the Sustainability
Accounting Standards Board (SASB), ISO 26000, and the Sustainable
Development Goals (SDGs), as well as ESG research items that investors consider to be of high importance to the Group’s business, we considered therisks and opportunities of the Group’s business and narrowed down candidates for material issues.

Related SDGs

Opportunity

Opportunity

Yamato Holdings Board of Directors
Yamato Holdings Management Committee
Yamato Group Environment Committee

Yamato Group Social Promotion Committee

Yamato Group Environment Subcommittee

Yamato Group Social Subcommittee

Key Initiatives to Strengthen Sustainable Management
2020

2021

2022

2023

Formulation of vision for the environment and society and long-term targets
GeneralFormulation of Sustainable Medium-Term Plans 2023
Creation of Sustainability Promotion System

Yamato Transport

Group Companies

Environment Committee

Environment Committee

Environment

Regional Environment Committee
Regional Branch Office Environment Committee evelopment of Environmental Management
D
System (EMS) ormulation of Yamato GroupF
Environmental Policy

Announcement of mid-term targets for reducing GHG emissions by 2030
Announcement of third-party verification related to performance in reducing GHG emissions
Announcement of support for TCFD recommendations and results of scenario analysis

Formulation of Yamato Group Human Rights Policy
SocialFormulation of Yamato Group Responsible Procurement Policy

 ormulation of Yamato Group HumanF
Resources Management Policy

Formulation of Yamato Group Business Partner Guidelines

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Part 2

DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

Sustainable Medium-Term Plans 2023

Part 2

Details on Sustainable Medium-Term Plans 2023 can be found on our corporate website.
https://www.yamato-hd.co.jp/english/csr/

In order to promote sustainable management, the Yamato Group has set out specific actions to address material issues in Sustainable
Medium-Term Plans 2023. In the fiscal year ended March 31, 2023, the second year of these plans, we announced our mid-term environmental targets for reducing GHG emissions by 2030 and are engaging in measures to reduce GHG emissions such as through the introduction of
EVs and solar power generation equipment. Regarding social aspects, we are developing an environment that respects diverse humanresources and enables employees to play an active role. At the same time, we are engaging in measures to promote addressing social issues
and community development through co-creation.

For ESG-related numerical results, please see “ESG Data.”
https://www.yamato-hd.co.jp/english/csr/esg/performance.html

Medium-Term Environmental Plan 2023
Material Issues

Energy & Climate

Mitigate climate change

Atmosphere

Clean up the skies (prevent air pollution)
Resource Conservation & Waste

Promote resource conservation
and reduce waste
Resilience of Companies & Society

Support a society that combats
environmental changes

Targets for the Fiscal Year Ending March 31, 2024

Progress in the Fiscal Year Ended March 31, 2023

Examples of Initiatives• Introduction of EVs (868 vehicles as of March 2023)• Introduction of solar power generation equipment (11 units as of March 2023)•S witch to a menu of electricity generated via renewable energy sources• L aunch of construction for systems related to optimization of EV operations, standardization of
charging, and flexible inter-base power distribution• Improvement of loading efficiency per vehicle based on data visualization• Implementation of a modal shift•C onsolidation of TA-Q-BIN sales offices• Introduction of LEDs (1,241 locations as of March 2023)

 educe GHG emissions 10% compared with the fiscal year ended
R
March 31, 2021*1

7% decrease educe GHG emission intensity 10% compared with the fiscal year
R
ended March 31, 2021*1,*2

6% decrease chieve 30% usage rate of electricity generated via renewable energyAsources*3

22% usage rate

 educe NOx and PM emissions from vehicles 25% compared with theRfiscal year ended March 31, 2021*4

NOx emissions: 23% decrease/PM emissions: 22% decrease • Holding of discussions and continuation of technical checks on automated mobility with suppliers

Introduce vehicles that emit fewer air pollutants

Introduction of environmentally-friendly vehicles

 se 55% renewable resources and recycled materials for paperUmaterials*5

63%Reduce landfill disposal rate (final disposal rate) to 5% or less*7%

 rovide products utilizing recycled materials and resource savingPmaterials

Switch to recycled materials and resource saving materials inall 19 applicable materials

Advance green logistics in collaboration with our business partners

 romotion of developing an environment for calculating theP
GHG emissions of our transportation partners

 ollaborate with society to improve environmental resilienceC(verify and share information about mitigating climate change) iscussions regarding development and utilization of carD
tridge batteries for EVs

Provide environmentally friendly products and services*7

Launch of development of tools to visualize GHG emissions

6

that contribute to low-carbon transportation and the prevention of air pollution• Introduction of environmentally friendly vehicles (36,902 vehicles, including EVs, as of March 2023)•E xpansion of renewable resources and recycled materials for containers andpackaging material utilization• Improvement of methods for waste treatment and separation• L aunch of development of materials for reuse and common reusable materials• L aunch of data collection to calculate GHG emissions of transportation partners• Implementation of studies aimed at standardization and commercialization of removable andportable cartridge batteries for EVs• L aunch of development for tools to visualize GHG emissions based on the international standard ISO 14083:2023*9

Medium-Term Social Plan 2023
Material Issues

Labor

Create a work environment where
employees can thrive

Human Rights & Diversity

Create a corporate culture that respects
human rights and diversity

Safety & Security

Create initiatives to carry out businessin a safe and secure manner

Data Utilization & Security

Create an information security
infrastructure
Supply Chain Management

Develop a common understanding
with stakeholders

Targets for the Fiscal Year Ending March 31, 2024

11.2% increase educe overtime for employees 20% compared with the fiscal year
R
ended March 31, 2021

7% decreaseAchieve 90% annual paid leave utilization

98.1%

Achieve 100% attendance at human rights training for all employees

100%Ensure percentage rate of employees with disabilities is 2.5%

2.9%


Doublethe number of women in management (executives) compared with the fiscal year ended March 31, 2021, and ensure 10% of
all managers are women1.1 times (369 women)/5.7%

 chieve zero serious traffic accidents (fatal traffic accidents for whichA
the Company is responsible)*3

Zero educe number of traffic accidents (where bodily injury occurs) 50%
R
compared with the fiscal year ended March 31, 2020*3

16% decrease (216 accidents)

Achieve zero serious occupational diseases (work-related deaths)*3

Zero educe frequency of lost workday injuries*8 by 20% compared withR
the fiscal year ended March 31, 2020*3

8.9% increase evelop an infrastructure for creating businesses that utilize data toDresolve social issues

 evelopment of infrastructure for creating businesses thatDutilize data to resolve social issues

Achieve zero serious information security incidentsZero nsure 100% deployment of information security managers at major
E
organizations and 100% implementation of training for information
managers*4

 nsuring 100% deployment of information security managE
ers at major organizations and 100% implementation oftraining for information managers

 omplete development and demonstration of monitoringC
framework*4

Implementation and completion of monitoring tests andverification for key suppliers

Community

Create corporate citizenship activities thatare rooted in local communities and createa framework for business creation

Progress in the Fiscal Year Ended March 31, 2023

Improve operating revenue per employee (compared with the growthrate for the fiscal year ended March 31, 2021)

 omplete development of a framework to measure effectiveness ofC
corporate citizenship activities and business in resolving social issues

Examples of Initiatives• Implementation of workplace discussions for all business managers at Yamato Transport•C ompletion of formulating definitions of duties for occupations and roles•R evision of development system for regular university graduate hires•F ormulation of Yamato Group Human Resources Management Policy•C ompletion of development for multi-lingual tools, such as documents related to recruitment
and health and safety and training manuals• Implementation of training programs for female employees aiming to become sales officemanagers• L aunch of creating manuals for standardizing methods for recruiting and retaining people withdisabilities•P rovision of coaching through ride-along guidance and dashcam videos• Implementation of safety training and skill tests for safety experts• Introduction of vehicle safety equipment (electric parking brakes and wide-angle rear cameras)•C reation of occupational health and safety management system• L aunch of operation for contact points that utilize data
• Information security training for all employees at Yamato Transport (100% attendance rate)• Implementation of on-site and internal audits aimed at continued ISMS certification• Implementation of monitoring tests for key suppliers at 28 companies•D ecision on how to advance monitoring in the fiscal year ending March 31, 2024 (standards forselecting key suppliers, methods for implementing monitoring, and structure for contracts andpromotion)

 xamination of deploying people to promote corporateE
citizenship activities within the Company•E xamination of creating a mechanism to encourage employee participation incorporate citizenship activities
Examination of mechanisms and in-house support structures • C ompletion of creation of support system aimed at creating an in-house environment to create
for creating businesses that resolve social issues, contributing projects on local (social) issues

to business growth*1 In-house emissions of consolidated companies in Japan and Swan Co., Ltd. (Scope 1 & Scope 2) *2 tCO2e/operating revenues of ¥100 million*3 For consolidated companies in Japan and Swan Co., Ltd. *4 For Yamato Transport *5 Paper materials refer to cardboard for shipping, pickup and delivery materials, etc.
*6 Equivalent to reduction by half compared with the past *7 Products and services with environmental value and a low burden on the environment*8 Number of work-related fatalities and injuries per million working hours *9 Standards for calculating and reporting GHG emissions from transportation

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DESTINATION OF ONE YAMATODESTINATION OF ONE YAMATO

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Part 2

Measures That Support Sustainable Growth
Community

Safety Initiatives
Based on its stance of respecting human life and ensuring safety, as laid out in the Group Corporate Philosophy and Corporate Stance,
the Group thoroughly adheres to its philosophy of placing safety first and business second in the workplace, positioning respect forhuman life as a priority at all times. Our partner companies and business partners also share our philosophy of respecting human lifeand ensuring safety and endeavor to ensure safety in all of their business activities.

The Yamato Group conducts business activities deeply rooted in communities by developing a logistics network across Japan.
Co-existence and co-prosperity with members of local communities are vital for sustainable growth and we aim to create social value
and economic value by resolving social issues at the same time as collaborating and co-creating with partners.

TOPICS

Initiatives for Ensuring Safe Transportation
The Safety Department of the Corporate Division at the head
office of Yamato Transport is at the center of promoting initiatives for ensuring even greater safety. We are taking steps toimprove the frontline working environment through efforts
including the creation of a system for training safety experts andthe enhancement of safety training. At the same time, we arepromoting the integration of Groupwide standards and frameworks for safety management. We share key points for safe driving and other information by releasing safety communication
tools for transportation partners.
We are also continuing to work on hardware aspects, such as
introducing vehicle safety equipment connected to preventing
traffic accidents, in addition to software aspects, such asenhancing the skills of drivers. For example, we have been introducing various equipment to Yamato Transport pickup anddelivery vehicles, including electronic parking brakes that aim toprevent accidents involving vehicles moving when unattended,Introduction rate for vehicle safety equipment

wide-angle rear-view cameras that reduce accidents whenreversing by vertically and horizontally widening the driver’s fieldof view, and brakes that reduce collision damage by detecting
obstacles, sounding an alarm to alert drivers, and assisting withbraking operations. These innovations will lead to reducing thenumber of accidents. Furthermore, we have decided to purchase
only new automatic vehicles for pickup and delivery, aiming to
reduce the burden of driving operations and address the recruitment and retention of new drivers, mainly young people.
To develop an environment in which Yamato Group and partner company employees can carry out loading and unloading
operations more safely, in conjunction with the consolidationand enlargement of TA-Q-BIN sales offices in the structuralreform of networks and operations, we are promoting measures
including the installation of arrival berths and introduction of lift
tables for large size vehicles to avoid the use of forklifts atnewly developed large-scale bases.

Wide-angle rear-view cameras

Contributes to safety by showing an even wider view from behind vehicles(130° vertically and 170° horizontally)

Scope: Yamato Transport pickup and delivery vehicles

2020/3 2021/3 2022/3 2023/3
Electronic parking
brakesNumber of units

4,645

6,469

9,887 11,375

Introduction rate

10.9%

15.1%

22.6%

Brakes that reduce
collision damage

Number of units

2,323

5,619

8,924 11,237

Introduction rate

5.4%

13.1%

20.4%

25.3%

Wide-angle­rear-view cameras

Number of units

—

—

—

2,323

Introduction rate

—

—

—

5.2%

Automatic vehicles

25.6%

Number of units

22,582 23,742 27,687 29,370

Introduction rate

52.9%

55.3%

63.3%

Conventional verticalangle 70–100°

66.1%

Conventional horizontal angle 117°

170°
130°

For details related to safety and security, please see ourcorporate website.
https://www.yamato-hd.co.jp/english/csr/society/safety/

Creation of Solid Relationships with Business Partners
The Yamato Group operates its businesses with the support ofnumerous business partners and is promoting supply chain
management, recognizing that co-existence and co-prosperity
with business partners are vital for achieving sustainable growth.
In recent years, in addition to changes to the external environment such as decreases in Japan’s working population andrising energy prices, workstyle reform has become a serious
issue for drivers in the entire logistics industry following theapplication of a cap on overtime work to vehicle operation from
April 2024.
In light of these issues, the Yamato Group clarified its policy topromote fair, equitable, and honest business transactions withpartners through the Yamato Group Responsible Procurement
Policy in 2021 and the Declaration of Partnership Building(Yamato Transport) in March 2023. The Partnership Promotion
Office established at Yamato Transport is taking the lead on providing continuous employee training for proper business transactions, holding regular discussions with partners, and supportingtransportation partners based on the 2024 problem.
Furthermore, we are working to build partnerships by promoting
improvement activities through regular surveys of our partners
and will continue to contribute to realizing a sustainable society
by enhancing added value across the entire supply chain.

1

Provision of Monitoring Services that
Utilize IoT Lightbulbs and Our
Nationwide Network

Recently, the aging population and increasing burden of labor shortages for local governments and welfare-related businesses havebecome issues in monitoring older people who live alone and we
needed to create a new monitoring system. Kuroneko Monitoring
Service: HelloLight Visitation Plan is a monitoring service provided by
Yamato Transport that utilizes our nationwide network with close
relations to local communities and can be used by simply replacing
household lightbulbs with IoT lightbulbs. Following the launch of thisservice, we have promoted its introduction to bodies including local
governments and real-estate businesses not only for use by individual
customers with elderly family members but also to be utilized as gifts
sent in return for furusato nozei (hometown tax donations).

2

Initiatives that Support Shopping
Environments in Collaboration with
Satudora Holdings

In July 2023, Yamato Transport Co., Ltd. formed a basic partnershipagreement with Satudora Holdings Co., Ltd. to realize a sustainable
society in Hokkaido. There have been concerns about the serious
social issues of the falling birth rate and aging and shrinking population in Hokkaido and the fragility of logistics due to factors such as
heavy snow, particularly in some areas. Leveraging both of ourstrengths, we will contribute to providing a fulfilling shopping environment for local residents by working together to pick up parcels from
Satudora stores and deliver products bought at stores to customers’
homes. We will also utilize Yamato Transport’s transportation anddelivery network to deliver products to stores in an even more effective and stable manner and sell Satudora products within Yamato
Transport sales offices and mobile sales vehicles.

3

Kuroneko Monitoring Service: HelloLight Visitation Plan service flow

Mobile sales vehicles

Inside of vehicles

Collaboration with Local Governments to Resolve Furusato Nozei Issues

The number of furusato nozei donors has been increasing annually since its creation in 2008, with the nationwide donation
amount reaching a record ¥965.4 billion. Gifts sent in return to donors have been linked to spreading a region’s appeal and sustainably growing local industries. Meanwhile, challenges have also arisen, such as complication of operations for local governments, increase in outsourcing costs, and the burden of shipping operations for businesses providing these gifts. Yamato
Transport is working to resolve such issues through collaboration with local governments by utilizing the local community connections and diverse management resources we have built up to date.
Working together with Nakatsu, Oita, we are supporting the resolution of operational issues by helping local businesses participate in providing gifts, in addition to support for streamlining operations related to furusato nozei, such as management ofspecial sites, payments, and understanding the shipping capacity of gifts.
We also collaborated with local partner companies in Kamo, Shizuoka, and commenced initiatives to comprehensively support businesses that provide gifts, from gift promotion to shipping and delivery, with the aims of communicating the appeal of
local products and sustainably growing local industries.

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Part 3CORPORATE GOVERNANCECORPORATE GOVERNANCE

Yoichi Kobayashi

Shiro Sugata

Mariko Tokuno

Charles Yin

Noriyuki Kuga

Outside Director

Outside Director(Chairperson of the Board)

Outside Director(Chairperson of the Nomination andCompensation Committee)

Outside Director

Outside Director

Outside Director Roundtable

Improvement ofCorporate Value over the
Medium to Long TermThrough Business
Structure Reforms
The Yamato Group is engaging in business structure reforms to realize sustainable growth and the
medium- to long-term enhancement of corporate
value, alongside the reinforcement of corporate
governance that supports this endeavor. Five
independent outside directors gathered to engage
in lively discussions about the issues surrounding
the current status of corporate governance andthe achievement of the medium- to long-term
enhancement of corporate value.

Effectiveness of the Board of
Directors and Nomination andCompensation Committee
Pertinent Discussions Held by the Board of
Directors That Focus on Important Matters
SugataThe Yamato Group Board of Directors has

been increasing the ratio of outside directors and continuously transforming the governance structure. An
example of this is myself, an outside director, acting aschairperson. In addition to implementing pre-planned
agenda setting for the year and pre-meeting briefings,
we are also advancing our initiatives for improving theeffectiveness of the Board of Directors, such as
relaunching site observations.
In light of these topics, I would like to hear everyone’s opinions about the status of discussions regarding the actual Board of Directors meetings.
Kobayashi

I believe that Yamato’s governance structureis highly advanced even among Japanese companies,
considering actions such as outside directors making

44

YAMATO HOLDINGS CO., LTD.
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up more than half of the Board of Directors and an outside director acting as chairperson of the Board. Having
an outside director as the chairperson enables a selection of appropriate agenda items discussion by the
Board of Directors. This also enables the enhancementof discussions by dividing each item into resolutions,information on matters, and agendas. If the chairperson
deems it necessary to hold further discussions of topics
that arose from the day of Board of Directors meetings,
they will actively facilitate these discussions, such as
requiring the executive side to provide other opportunities for comprehensive explanations and reports.
Furthermore, during site observations in the Kyushu
area, I gained a comprehensive understanding of theideal future operations regarding our facility strategies,
which are a key issue in business structure reforms,
such as the consolidation and enlargement of sales
offices and separation of terminal functions. In addition
to dialogues with various site managers, I received further explanations from the responsible executive officer
who accompanied us from the Head Office, which further deepened my understanding. Based on such initia-

Yin

Part 3In recent years, there has been a need toreinforce corporate governance in response to thesense of uncertainty caused by geopolitical risks andsudden changes in the business environment. So,
Yamato is creating a governance structure in line withthe changing times. Through dialogues with employees
during observations, we are developing practical discussions with the Board of Directors while understanding the implementation status of and issues withmanagement strategies.
The logistics industry has recently been facing international headwinds, such as the COVID-19 pandemic
and rising fuel costs. However, Yamato has been treating these circumstances as an opportunity. I believe
Yamato can enhance its competitiveness by dramatically innovating logistics and its own business model.
As a logistics company that represents Japan, I believe
Yamato can become a company able to win on a
global scale by proactively adopting the management
techniques and sense of speed of global corporations,and I myself will actively engage in these efforts.

tives, I recognize that the Board has been able to focus
on important matters and hold pertinent discussions.

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CORPORATE GOVERNANCECORPORATE GOVERNANCE

Part 3

Part 3

Outside Director Roundtable

Improvement of Corporate Value over the Medium toLong Term Through Business Structure Reforms

Numerical-Based Discussions that are
Reasonable and Objective

Kobayashi

We have a vision and strategies, but what

about quantitative targets? I have also repeatedly
stated how vital it is to know the results and progress

SugataInstitutional investors in small meetings,

which have been held continuously since the fiscal
year ended March 31, 2022, have also shown a highLively Discussions Focused on Outside Directors
Conducted by the Nomination andCompensation Committee

Looking at one individual project, the outside direc-

fiscal year ending March 31, 2027. With various environmental changes expected to occur in the future,what kind of issues do you think are of particularof quantitative targets. I believe that we are improvingon these points.

map for its medium-to long-term strategies up to the

SugataNext, regarding the effectiveness of theNomination and Compensation Committee, I would

importance to the Company to realize an improvementof medium- to long-term corporate value?

level of interest in improving the efficiency of the Board

tors exchanged various opinions with the executive

like to ask you about the status of activities, concreteof Directors. Please share some examples of where theside when deciding to introduce freighters in 2022. In

details of discussions, and content and issues you

Kobayashi

remarks and advice of the outside directors have beenlight of issues in the logistics industry, such as the 2024

would like to discuss in depth in the future.

agement structure, we have been actively promoting

reflected in the activities of the executive side, improv-

problem, and aimed at the creation of a sustainable

Since President Nagao took over the man-structural reforms for the entire Group. Despite needSince June 2022, all outside directors partici-

ing time to do so, current initiatives and policies are

remodeled three airplanes from overseas. This was apate in the Nomination and Compensation Committee

moving in the right direction and the implementation

major investment project and faced the risks of theand it comprises one inside director and five outside

has been highly praised.

exchange rate and fuel procurement. We have provided

directors. I, an outside director, was appointed as chair-of the Board of Directors is whether it can contributea lot of advice to the executive side on agenda items

person. The committee is held once a month and I

increasing operating profit margin in the short term.

to the improvement of corporate value and whether it

based on awareness of the significant impact on per-believe that the outside directors actively stating their

Accordingly, the first step is to determine how muchcan monitor the legitimacy of execution. Since theformance and in view of the personal experience pos-opinions based on the combined expertise from their

we can reduce costs and how much we can reduce

executive side is often required to provide more con-sessed as outside directors. I believe that suchvarious backgrounds really enhances the Nomination

business losses and other losses. I believe thatcrete and quantitative explanations regarding thediscussions have led to the execution of this project

and Compensation Committee. To describe one spe-

Yamato’s measures for improving profitability are theimprovement of corporate value, we have ensured thatwith appropriate consideration of the risks involved.

cific discussion, succession plans for the next genera-

further reinforcement of its strongest asset, TA-Q-BIN,

tion of management team members are not simply

and its differentiation from other companies. We must

about who will be the successor, but also about thealso minimize and withdraw from our weak points as

strategies has changed according to the suggestions oflayers below, connecting it to the discovery and devel-much as possible. This is exactly what we intend to dooutside directors, including myself. Since I was

opment of management personnel that play a core role

through the structural reforms that are currently being

appointed as a director, I have felt that Yamato hasin the Company. It is necessary for the Nomination andimplemented. One pillar of these reforms is Yamato’s

as a result of the more precise strategies presented bygood labor management but lacks human resource

Compensation Committee to understand humanfacility strategies. We have been vastly reducing fixed

the executive side in response to the basic message ofstrategies linked to management strategies. By encour-

resource strategies and hold discussions that include

costs and enhancing profitability by optimizing thethe outside directors, which is that it should be shown

aging the discussion of this issue at every opportunity, I

the connection to these strategies.

number of facilities necessary for providing services

through figures. Accordingly, rather than only improving

feel that we have made appropriate changes.

ing the quality or speed of discussions andand robust logistics network, we purchased anddecision-making.
Kuga

To put it into other words, the effectivenesswe have numerical-based discussions. In this sense, I
believe that our discussions are reasonable andobjective.
TokunoI think that we have improved effectivenessthe effectiveness of the Board of Directors, I believe

TokunoThe purpose of Yamato’s human resource

TokunoThe key to measures for improving profitability isthrough consolidation and enlargement of sales offices
Kuga

Currently, there are major changes occurringand establishment of terminals with different functions.
Meanwhile, as a medium- to long-term growth strat-

that the performance of the executive side of thewithin the Yamato Group. Following these changes, I

Board has also improved.

believe the vital role the Nomination andegy, we must establish a new revenue base in line with

Compensation Committee should play is holding dis-

Yamato’s specialty, TA-Q-BIN. I believe that one way tocussions related to the human resource system anddo this is to enter into global business, such as various

compensation system, drafting succession plans, andcountries in Asia, rather than just the Japanese market,

conducting follow-up evaluations.

where the problems of the falling birth rate and aging
population are worsening. We could do this throughmeasures that include M&As with foreign businesses.

Issues in Achieving Medium- to LongTerm Corporate Value Improvement
Enhancement of Profitability by Thoroughly
Implementing Structural Reforms andPromoting Growth Strategies
SugataAt the accounts meetings held in the fiscal

year ended March 31, 2023, Yamato disclosed the road46

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Kuga

To develop globally and expand corporate

business domains, Yamato needs to create added
value and differentiate itself since it is in the positionof a follower. Thinking in terms of time, we should keep
in mind cooperation and collaboration outside thecompany and must also further refine our strengths,
including TA-Q-BIN. I hope the executive side holds discussions and considers numerous aspects from theseperspectives.
YAMATO HOLDINGS CO., LTD.
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47

CORPORATE GOVERNANCECORPORATE GOVERNANCE

Part 3

Part 3

Outside Director Roundtable

Improvement of Corporate Value over the Medium toLong Term Through Business Structure Reforms

TA-Q-BIN started as a CtoC service, but today
corporate clients make up 90% of the overall delivery
amount handled. I am aware that increasing the profitability of these services for corporate clients is an urgent
issue. It has been identified that Japanese companies
are over a decade behind those in Europe and theAmericas within the corporate-oriented marketingdomain. During such a global era, to provide solutions
to corporate clients we need to utilize global-standard
marketing strategies and business intelligence andcreate an organization that corresponds to this scope.
Key issues regarding corporate clients in the YamatoGroup are the implementation of up-selling and crossselling and realization of even higher value-added proposals. For example, we must rapidly scale out our
high-value-added solutions, such as Lead Logistics
Partners (LLPs), at the same time as strategically andactively engaging in new developments. Furthermore,
it is vital that we set KPIs that promote these initiatives.
Yamato’s current management team members recognized the importance of this, and we are seeingchanges within the organization. However, in terms oftime, we should be advancing both organic growth andstrategic approaches and M&As.
Yin

TokunoFor Yamato to grow, it is important to firststrengthen the management foundation, then take onchallenges in new areas. Balancing these two endeavors leads to the long-term development of theCompany. We are currently engaging in structuralreforms to strengthen Yamato’s management founda-tion, in which human resources are highly significant.
Now, Yamato is clarifying the definitions of duties,
such as aiming to subdivide the operations of sales
drivers, creating a framework for so-called “job classes”.
We will deploy employees to the appropriate placesin the company in line with the development of an
employee evaluation system based on these definitions. I believe that the key to increasing the effectiveness of facility strategies is connecting these initiatives
with the promotion of such strategies while advancing
both the hardware aspects of consolidating and enlarging facilities and software aspects of optimal personnel
allocation.
Since it is difficult to develop new growth areas with
only internal human resources, it is important thatexternal personnel with expertise enter the Company
as leaders and promote this development while fostering internal employees. Furthermore, since this nurturing requires a fixed amount of time, acquiring external
personnel is necessary to increase speed. Whileacquiring external personnel with expertise is liable togenerate friction with internal employees, we shouldcarefully share the direction of the Company with all
employees and proceed with conviction and understanding. Meanwhile, Yamato should also re-skill internal employees who have the potential to strengthenbase domains. Naturally, it is important that Yamato is
a company where each employee continues to beaware of its mentality of “we all represent theCompany.” Employees who don’t understand the
direction the Company is heading are likely to leave.

I believe that doing everything we can to fully commu-

TA-Q-BIN sales offices around the country to 1,800,

nicate Yamato’s direction is a prerequisite of promoting

and their subsequent enlargement. Yamato is also

human resource strategies going forward.

advancing initiatives to utilize both the existing TA-Q-

BIN network and dedicated networks that are dediKuga

Focusing on capital efficiency, the Tokyo

cated to the needs of target areas. This includes the

Stock Exchange recently notified listed companies ofcreation of three new major networks—an EC logistics

requests for support in realizing management that is

network that fully launched in the fiscal year ended

aware of capital costs and stock prices. While theMarch 31, 2022, a refrigerated and “Temperature-

Corporate Governance Code introduces the concept

controlled only” network, and a Transportation &of capital costs, Yamato has also set targets for ROE.

­delivery network designated for corporate clients.

However, I believe it is important to further deepen dis-

Additionally, there have been major reforms moving

cussions about what specifically to implement in orderforward, including, the consignment of posting services

to maximize corporate value, such as optimization of

Kuroneko DM-Bin and Nekopos to Japan Post at thecapital structure that includes the purpose of growth

beginning of the fiscal year ending March 31, 2024.

investments and shareholder returns, in addition to

I think that appropriate monitoring indicators willmeasures for enhancing the profitability and growth

be necessary in the future to measure the results of theof the business based on capital costs.

significant reforms that we have been steadily implementing. Furthermore, the final evaluation is a medium-

SugataSince the fiscal year ended March 31, 2021,

to long-term increase in stock price, based on

we have been promoting Yamato’s grand design forenhancement of profitability and improvement of cor-management over the medium- to long-term, “YAMATO

porate value. I will continue to fulfill my role as an out-

NEXT100,” and the medium-term management planside director and chairperson of the Board to further“One YAMATO 2023.” While these plans have been

support appropriate discussions and decision-making

described as a full model redesign for the Yamato

to realize these targets.

Group, for a while after their launch I did not feel asense of change. However, these changes havebecome visible between the fiscal year ended March
31, 2023 and the fiscal year ending March 31, 2024.
An example of this is the consolidation of 3,500

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CORPORATE GOVERNANCECORPORATE GOVERNANCE

Part 3

Part 3

Corporate Governance
Basic Position on Corporate GovernanceCorporate Governance Framework

General Meeting of Shareholders

Based on its corporate philosophy, the Yamato Group carries out business activities in accordance with the law and social norms and actively
promotes compliance management. Striving to maximize corporate value by effectively utilizing the management resources of the Group is oneof the top priorities of management, and we have implemented measures and bolstered management systems as part of our corporate governance initiative.

Elect

Elect

Audit & Supervisory Board

Efforts to Improve Corporate Governance

The Company is a Company with an Audit & Supervisory Board.
In addition to important management decision-making and thesupervision of business execution by the Board of Directors, Audit &Supervisory Board members and the Audit & Supervisory Board,which are independent from the Board of Directors, shall audit thestatus of the execution of duties by directors. Also, to supplement
the supervisory functions of the Board of Directors, the Company
established the Nomination and Compensation Committee comprising a majority of independent outside directors. At the same time,
the Company has separated the supervision and execution of management and adopted an executive officer system to ensure evenmore prompt decision-making related to business execution.
SystemCompany with an Audit & Supervisory Board

Number of directors

8Outside directors

5

Number of Audit & Supervisory
Board members

5

Outside auditors

Year

2015–

Voluntary advisory committees
Executive officer system in place
Independent auditor

Yes
Deloitte Touche Tohmatsu LLC

Established Corporate Governance Guidelines

Make Decisions / Supervise

Executive Conference

Accounting
audit

ReportExecute Business

Audit Department

2016–

Implemented evaluation of effectiveness of the Board of Directors

2017–

Appointed an independent female outside director

2018–

Abolished the advisor position

2019–

Transitioned to a structure in which independent outside directors
comprised one-half of all directors
Decided to revise officer compensation system and introduce a
performance-linked, share-based compensation system

2020–

Appointed outside members as the majority of members on the
Audit & Supervisory Board
Appointed independent outside members as the majority ofmembers on the Board of Directors

1 yearYes(Nomination and Compensation Committee)

Transition to a structure in which outside directors comprised atleast one-third of all directors

2022–

Appointed an independent outside director as the Chairperson of
the Board of Directors

2023–

Abolished special advisors

Composition of the Board of Directors, Audit & Supervisory Board, and Nomination and Compensation Committee
Outside officers

Inside officers

Board of Directors(Chairperson: Independent outside director)

Propose / ReportManagement Committee
Execute Business

Internal
Audit

CSR Department

Propose / Report

Group Companies

Management Structure

Name

Nomination andCompensation Committee

Board of Directors

Audit

ReportReportImplemented director training

3

Term of directors

Initiative

Independent Auditor

Coordinate

Corporate Governance System (As of July 1, 2023)

Elect

Expertise and Experience
Position

Yutaka Nagao

Representative Director, Executive
Officer and President

Toshizo Kurisu

Representative Director, Executive
Officer and Vice President

Yasuharu Kosuge

Representative Director, Executive
Officer and Vice President

Mariko Tokuno

Director

Yoichi Kobayashi

Director

Shiro Sugata

Director

Noriyuki Kuga

Director

Charles Yin

Director

Tsutomu Sasaki

Full-time Audit & Supervisory Board
MemberYoshito Shoji

Full-time Audit & Supervisory Board
MemberTakashi Yamashita

Audit & Supervisory Board Member

Ryuji Matsuda

Audit & Supervisory Board Member

OutsideNomination and
Personnel/
Legal affairs/
Corporate
Marketing/
Finance/
IT/Digital/
Compensation
Labor
Risk
management
Sales
Accounting
Technology
Committee
management
management
memberGlobal(Chairperson)

Yoshihide Shimoyama Audit & Supervisory Board Member
Note: Shiro Sugata took on the role of the Chairperson of the Board on June 23, 2022.

Audit & Supervisory Board
Skills Expected of Directors and Audit & Supervisory Board Members and Reasons for Their Selection
Male

Ratio of independent outside
directors in the Board of Directors

63%

50

Nomination and Compensation Committee

FemaleYAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Skills(Chairperson: Independent outside director)

Ratio of female directors

13%

Ratio of independent outside
directors the Nomination andCompensation Committee

83%

Ratio of outside Audit &Supervisory Board members

60%

Reason for Selection

Corporate management

To demonstrate appropriate decision-making and supervisory functions in the formulation and execution of Yamato’s medium- to long-term management plan to sustainably improve corporate value, extensive experience and expertise in corporate management has been selected as a necessary skill.

Marketing/Sales

To provide value that utilizes the Group’s management resources to meet the changing needs of customers and society, extensive experience andexpertise in marketing and sales has been selected as a necessary skill.

Personnel/Labor management

To become a company that respects human rights and diversity and enables employees to work with peace of mind, at the same time as ensuring that the Group’s employees, its greatest asset, are motivated and play an active role, extensive experience and expertise in human resources
and labor management has been selected as a necessary skill.

Finance/Accounting

To promote investment linked to growth potential and enhancement of capital efficiency by creating a strong financial foundation, extensive experience and expertise in finance and accounting has been selected as a necessary skill.

Legal affairs/Risk management

To become a company that is fair and trusted through safe and secure business activities in line with legal and social standards based on theGroup Corporate Philosophy, extensive legal experience and expertise and risk management capabilities have been selected as a necessary skill.

IT/Digital/Technology

To achieve the optimal allocation of management resources based on data analysis and efficient business management that fully utilizes digitaltechnology, extensive experience and expertise in IT and digital technologies has been selected as a necessary skill.

GlobalTo contribute to the innovation of customer supply chains and business processes through global business development, extensive global experience and expertise has been selected as a necessary skill.

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Part 3CORPORATE GOVERNANCECORPORATE GOVERNANCE

Part 3

Corporate Governance
Board of Directors

Concurrent Posts and Main Activities of Outside Directors and Outside Audit & Supervisory Board Members

Roles and duties

Evaluation of Effectiveness

The Board of Directors discusses basic policies, makes decisions, andmonitors business execution to encourage the improvement of
Yamato’s medium- to long-term corporate value.
1. T he Board of Directors shall make important decisions concerning
the Company’s business and supervise the execution of duties byexecutive directors and executive officers.
2. The Board of Directors shall recognize the medium-term management plan as one of the commitments made to shareholders andsupervise the effectiveness of strategies, such as the Company’sbusiness portfolio and the optimal allocation of management
resources, to achieve the goals of this plan. Moreover, the Board of
Directors shall sufficiently analyze the initiatives aimed at realizing
the goals of the medium-term management plan as well as theextent to which the plan’s objectives are being achieved. In addition to providing explanations to shareholders, such analyses shallbe reflected in future management plans.
3. T he Board of Directors shall encourage executive officers to demonstrate a healthy entrepreneurial spirit and to not excessively
avoid or curb risk, while at the same time establishing a framework that enables it to ensure accountability.
4. T he scope of responsibility of each executive officer shall bedecided on by the Board of Directors. Executive officers shall execute business in accordance with internal regulations.
Management
The Board of Directors takes the following into consideration whenmanaging meetings to achieve constructive discussions and exchangeof opinions, including meetings with independent outside directors.
1. T o allow Board of Directors meeting attendees the opportunity to
prepare for meetings in advance, the Board of Directors secretariat
shall send agenda items and related materials to directors well inadvance of the meeting date and provide explanations in advanceas needed.
2. T he annual schedule of Board of Directors meetings as well as
anticipated agenda items shall be decided in advance, and thisinformation shall be provided to directors and Audit & Supervisory
Board members.
3. T he number of issues to be deliberated as well as the frequencyof meetings shall be appropriately set, and the time of meetings
shall be decided so as to allow sufficient time for deliberations.
4. A
 s needed, meetings comprising Board of Directors meeting
attendees shall be held for the purpose of exchanging ideas,
thereby encouraging lively debate.

MarikoTokunoResults of Analysis and Evaluation
The composition, management conditions, and deliberation
conditions of the Board of Directors were largely appropriate asa system where the Board of Directors serves as the oversightfunction, and where a culture of attendees actively speaking up
and engaging in unrestricted discussions at the Board of
Directors meetings had taken hold

Yoichi
Kobayashi

 llow time for deliberation as a result of revising agenda items,
A
viewing meeting materials in advance, and pre-meeting briefings for the Board of Directors becoming established, andexamine points raised in those briefings before attending Boardof Directors meetings, enabling directors to make risk-based
management decisions through more in-depth discussions

Shiro
OutsideDirectorsIn addition to monthly reports from the president on the statusof business execution at Board of Directors meetings, the executive officers of operating companies regularly present issues
and medium- to long-term themes in their areas of jurisdiction
and discuss them with the Board of Directors, thereby deepening directors’ knowledge of business operations

SugataNoriyukiKuga

 he Board of Directors has continued to display an effectiveT
ness that contributes to securing sound management andachieving prompt, accurate decision-making and business execution, which are the Company’s basic policies for corporate
governance oing forward, the Company must further strengthen corporateGgovernance to improve the soundness of the entire YamatoGroup’s management while continuously working to maintainand improve the effectiveness of the Board of Directors for the
implementation of sustainable business growth strategies

CharlesYin

TakashiYamashita

The Audit & Supervisory Board and its members hold roles and responsibilities that include auditing the execution of professional duties carriedout by directors, selection and dismissal of independent auditors, and execution of authority related to auditor compensation. They makeappropriate judgments from an independent, objective perspective based on their fiduciary duty to shareholders.
Roles and duties

 utside Director ofO
Mitsubishi Materials
Corporation
Outside Director of
Shiseido Company,
LimitedMariko Tokuno comments and advises as needed on all aspects of business management, based on ample experience and extensive knowledge as a businessperson.
Accordingly, she plays an important role, drawing on her insight to provide oversightand advice from a managerial standpoint and customer and employee standpoints,
particularly regarding matters of business execution, business strategy, and HR strategy, to contribute to ensuring the transparency and appropriateness of decision-making. Furthermore, as chairperson of the Nomination and Compensation Committee,
she guides its management and has fully demonstrated supervisory functions in thedecision process for the selection of candidates for officers and the evaluation of theircompensation from an objective and neutral standpoint.

Board of Directors:
18 of 18 meetings
Nomination andCompensation
Committee: 12 of
12 meetings—

Yoichi Kobayashi comments and advises as needed on all aspects of business management, based on ample experience and extensive knowledge as a businessperson.
Accordingly, he plays an important role, drawing on his insight to provide oversightand advice from a managerial standpoint, particularly regarding matters of businessexecution, business strategy, and investment strategy, to contribute to ensuring thetransparency and appropriateness of decision-making. Furthermore, as a member of
the Nomination and Compensation Committee, he has fully demonstrated supervisory
functions in the decision process for the selection of candidates for officers and theevaluation of their compensation from an objective and neutral standpoint.

Board of Directors:
18 of 18 meetings
Nomination andCompensation
Committee: 12 of
12 meetings

 utside Director ofO
Yokogawa Electric
Corporation

Shiro Sugata comments and advises as needed on all aspects of business management, based on ample experience and extensive knowledge as a businessperson.
Additionally, he was appointed the chairperson of the Board of Directors in June 2022
and is contributing to enhancing the effectiveness of the Board of Directors by appropriately fulfilling his professional duties and responsibilities. Accordingly, he plays animportant role, drawing on his insight to provide oversight and advice from a managerial standpoint, particularly regarding matters of business execution, business strategy,
productivity enhancement, and cost structure reform, to contribute to ensuring thetransparency and appropriateness of decision-making. Furthermore, as a member of
the Nomination and Compensation Committee, he has fully demonstrated supervisory
functions in the decision process for the selection of candidates for officers and theevaluation of their compensation from an objective and neutral standpoint.

Board of Directors:
18 of 18 meetings
Nomination andCompensation
Committee: 12 of
12 meetings—

Noriyuki Kuga comments and advises as needed on all aspects of business management, based on ample experience and extensive knowledge as a businessperson.
Accordingly, he plays an important role, drawing on his insight to provide oversightand advice from a managerial standpoint, particularly regarding matters of businessexecution, financial strategy, and corporate governance, to contribute to ensuring thetransparency and appropriateness of decision-making. Furthermore, he was appointed
as a member of the Nomination and Compensation Committee on June 23, 2022. He
attended all 9 meetings since his appointment and fully demonstrated supervisory
functions in the decision process for the selection of candidates for officers and theevaluation of their compensation from an objective and neutral standpoint.

OutsideAudit &
Supervisory
Board
Members

Ryuji
Matsuda2. The full-time Audit & Supervisory Board

bers shall exercise their authority proactively

members shall attend Board of Directors

larly hold information exchange meetings forto sufficiently fulfill their role and responsibil-

meetings and other important meetings

the purpose of sharing information with out-

ities, including operational audits, account-related to the execution of business, express

side directors, thereby ensuring more robust

ing audits, and other functions, and theyreasonable opinions, hold effective Audit &gathering of information and encouraging

shall appropriately state their opinions at

Supervisory Board meetings, and ensure thatteamwork.

Board of Directors meetings as well as toinformation is shared and that members

members of senior management.

work together in a coordinated manner.

Yoshihide
Shimoyama

Board of Directors:
18 of 18 meetings
Nomination andCompensation
Committee: 9 of 9
meetings** Number attended
during tenure xecutive Chairman ofE
Worldwide City Group(Hong Kong)Chairman of China-JapanCEO Forum
Chairman of China-Japan
Asia CEO ForumCharles Yin was appointed as a director on June 23, 2022, and has attended all 14
Board of Director meetings since this appointment. He comments and advises asneeded on all aspects of business management, based on ample experience andextensive knowledge as a businessperson. Accordingly, he plays an important role,drawing on his insight to provide oversight and advice from a managerial standpoint,
particularly regarding matters of business execution and global business strategy, tocontribute to ensuring the transparency and appropriateness of decision-making.
Furthermore, he was appointed as a member of the Nomination and Compensation
Committee on June 23, 2022, and has attended all 9 meetings held in the fiscal year
under review. He has fully demonstrated supervisory functions in the decision process
for the selection of candidates for officers and the evaluation of their compensationfrom an objective and neutral standpoint.

 epresentative ofR
Takashi Yamashita CPA
OfficeOutside Director of Shin
Nippon Biomedical
Laboratories, Ltd.

Takashi Yamashita comments as needed in Board meetings, based on ample experience and professional knowledge of finance and accounting. He also attends Audit &Supervisory Board meetings and exchanges opinions at regular meetings with the representative director and president, confirming the status of the execution of duties carried out by directors, based mainly on ample experience and extensive knowledge asa certified public accountant.

Board of Directors:
14 of 14 meetings
Audit & Supervisory
Board: 18 of 18
meetings

 ttorney-at-Law ofA
Matsuda Law Office

Ryuji Matsuda comments in Board meetings as needed, based on ample experienceand professional knowledge of finance and accounting and as a lawyer. He also
attends Audit & Supervisory Board meetings and exchanges opinions at regular meetings with the representative director and president, confirming the status of the execution of duties by directors, based mainly on ample experience and extensive
knowledge as a lawyer.

Board of Directors:
18 of 18 meetings
Audit & Supervisory
Board: 18 of 18
meetings

 utside Audit &O
Supervisory Board
Member of NIPPONHUME CORPORATION

Yoshihide Shimoyama comments as needed, based on ample experience in management and auditing. He also attends Audit & Supervisory Board meetings andexchanges opinions at regular meetings with the representative director and president,
confirming the status of the execution of duties by directors, based mainly on ample
experience and extensive knowledge as a manager and an outside Audit &Supervisory Board member.

Board of Directors:
18 of 18 meetings
Audit & Supervisory
Board: 18 of 18
meetings

3. The Audit & Supervisory Board shall regu-

1. T he Audit & Supervisory Board and its mem-

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Attendance atmeetings during the
fiscal year ended
March 31, 2023

Concurrent posts

 more well governed structure since outside directors make up
Amore than half of the directors and Audit & Supervisory Board
members and an outside director was appointed as chair of theBoard in June 2022

Audit & Supervisory Board

52

Overview of reasons for appointment and expected roles

Name

To verify the effectiveness of the Board of Directors, the Company
surveys all directors and Audit & Supervisory Board members on anannual basis regarding the composition and operational status of theBoard of Directors. The Company carries out an evaluation on the
Board’s effectiveness in terms of such matters as the condition of
the Board’s operation and the state of deliberation held at Board
meetings. In addition to the survey, the chair has begun performinginterviews to further enhance the usefulness of the evaluation.

Board of Directors:
14 of 14 meetings
Nomination andCompensation
Committee: 9 of 9
meetings** Number attended
during tenure

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

53

Part 3CORPORATE GOVERNANCECORPORATE GOVERNANCE

Part 3

Corporate GovernanceNomination and Compensation Committee
The Nomination and Compensation Committee comprises five independent outside directors and one inside director, with an independent outside director acting as chairperson. As an advisory body to the Board of Directors, the committee shall deliberate particularly on the details ofimportant matters pertaining to nomination and compensation, and present the results of these discussions to the Board of Directors in aneffort to enhance management transparency.
Roles and duties
1. T he committee shall deliberate on matters related to the appointment or dismissal of directors, Audit & Supervisory Board members, and executive officers on the basis of business performanceand multifaceted observations and evaluations, verify the validityof such decisions, and present the results to the Board of
Directors.
2. T he committee shall deliberate policies for determining compensation, such as for directors and executive officers, and the details
of individual compensation, verify the validity of such decisions,and present the results to the Board of Directors.
3. The committee shall propose several candidates to the Board of
Directors, including candidates recommended by the serving representative to the Board of Directors, as successors to the representative director to the Board of Directors, following deliberation by
the committee based on multifaceted observations and evaluations of candidates’ track records, human nature, and other factors.

Key Discussion Items for the Nomination and Compensation
Committee in the Fiscal Year Ended March 31, 2023
Related to Nomination
 eappointment of candidates for directors
R
Criteria for assessing the independence of people selected
to be outside directors
Definition of personnel requirements and nomination process of candidates for president
Related to Compensation
 stablishment of missions for inside director compensationEDecision on performance-linked compensation
Decision on compensation and other remuneration for
individual directors

Remuneration of Directors and Audit & Supervisory Board Members (Fiscal Year Ended March 31, 2023)

Directors and Audit & Supervisory
Board members

Total amount of
remuneration(Millions of yen)

Director(Of which, Outside Directors)
Audit & Supervisory Board Members(Of which, Outside Audit &Supervisory Board Members)
Total(Of which, Outside Officers)

449
(76)
81

Total amount of remuneration by type (Millions of yen)
Medium- to
Of the left,
Short-termlong-term
non-monetary
Basic remuneration performance-based
performance-based
remuneration, etc.
remuneration
stock compensation*

Number ofrecipient Directors
and Audit &Supervisory Board
Members

299
(76)
81

108
(—)
—

41
(—)
—

41
(—)
—

12
(6)
6

(33)

(33)

(—)

(—)

(—)

(3)

530
(109)

380
(109)

108
(—)

41
(—)

41
(—)

18
(9)

* The amount of expenses recorded for share delivery points during the period.

Policy for determining compensation of directors and Audit & Supervisory Board members
1. B asic policy
The Company’s compensation for directors is determined based on the following factors.
A competitive level of compensation
 rovide rewards according to roles andP
responsibilities, as well as performance,and set compensation at an adequatelevel to secure talented human resources

A compensation system emphasizing theimprovement of corporate and shareholder valueL ink compensation to business performance so as to motivate directors toachieve performance goals
Establish a compensation composition
that promotes the sharing of common
interests with shareholders by linking it
to corporate value over the medium tolong term

2. Compensation structure
The Company’s compensation for directors consists of basic compensation (fixed compensation), which takes compensation levels
at other companies and other such factors into consideration;short-term performance-linked compensation (variable

54

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

A fair and equitable compensation system nsure that the process for determiningE
compensation is objective and highly
transparent

compensation); and medium- to long-term performance-linked,
share-based compensation (variable compensation). In addition,compensation for Audit & Supervisory Board members and outside directors consists exclusively of basic compensation due tothe nature of their functional roles.

3. Timing of delivery and conditions
The Company pays its basic compensation (fixed compensation)and short-term performance-linked compensation (variable compensation) as monetary sums on a monthly basis, encompassing
twelve equal installments annually. Medium- to long-term performance-linked, share-based compensation (variable compensation)is granted once a year in June in the form of points. Points accumulated up to retirement are paid out, with one point equaling
one share, at the time of retirement in accordance with regulations for director share benefits.
4. Decisions on compensation and other remuneration for
individual directors
Based on the policy for decisions resolved by the Board of
Directors, the Nomination and Compensation Committee, which
is chaired by one of the independent outside directors who constitute a majority of its membership, conducts further deliberations regarding amounts of compensation and other remuneration
for individual directors, along with details regarding the calculationof such amounts to assess each of the directors, while taking factors such as Companywide business results into consideration.
Based on the findings, the Board of Directors decides on theamount of basic compensation (fixed compensation), short-term
performance-linked compensation (variable compensation), andmedium- to long-term performance-linked, share-based compensation for each individual.
5. Other
A certain percentage of the monetary compensation shall beallocated to the purchase of shares of the Company through the
Officers and Executives’ Shareholding Association. Furthermore, torealize a highly objective and transparent process, the Nomination
and Compensation Committee met 12 times in fiscal 2022 andconducted further discussions on the details of compensationand other remuneration for individual directors, based on the decision-making policies for such compensation as activities for thecommittee in the decision process for the fiscal 2022 individualcompensation for directors. The Board of Directors determines theamount of compensation based on the results of these discussions.

performance and also to achieve greater transparency andobjectivity.
The Company has calculated the annual amount of performancelinked compensation based on these results and then converted
that result to a monthly amount, which is applied to the period
extending from July 2022 through June 2023.
 ormula for Calculating Short-Term Performance-Linked
F
Compensation
Variablecompensation

Performance indicatori)	Group consolidated
operating revenues
Shortii)	Group consolidated
term peroperating profit
formancebench- iii)	Group consolidated
profitmarksiv)	Evaluation of mission(individual)

Increase inratio ofvariablecompensation

Mediumto longterm
performancebenchmarks

Performanceindicator

Detailsi) ROE—ii) TSR

Relative TSR
Comparison
with Total
Return TOPIX
TSR

Indicator
rate oneach
director

30%
30%
30%

Actual(Billionsof yen)Target(Billionsof yen)Achievementrate

1,793.6

1,815.0

98.8%

77.2

95.0

81.3%

56.0

53.0

105.6%—

10%

Indicator
rate oneach
director

40%

30%

ActualTargetAchievement
rate

9.6%

10%

96.0%

77.1%
(Dividend
includesTOPIX
102.0%)

100%

75.6%

(2.0)%

(3)%

66.7%

Single year
targets for
GHG
emissionsiii)	ESG
indicators

Note: -3%
comparedwith the fiscal

20%year ended
March 31, olicy for Determining Performance-Linked CompensationP(Variable Compensation)
The standard amount for short-term performance-linked compensation (variable compensation) is set in terms of the ratio of basic compensation (fixed compensation) in accordance with rank and title.
Following this, the amount paid out to individuals is determinedwithin a range of 0% to 150% in line with the achievement rate for
Yamato’s performance benchmarks and the evaluation of individual
missions. Furthermore, the performance benchmarks comprise Group
consolidated operating revenues, Group consolidated operating
profit, and Group consolidated profit attributable to owners of parent.
The standard amount for medium- to long-term performance-linked,
share-based compensation (variable compensation) is set in terms of
the ratio of basic compensation (fixed compensation) in accordancewith rank and title. Following this, the amount paid out to individuals
is determined within a range of 0% to 150% in line with the achievement rate for Yamato’s performance benchmarks and the evaluationof individual missions. Furthermore, the performance benchmarks
comprise ROE, total shareholder return, and ESG indicators. The
amount of medium- to long-term performance-linked, share-based
compensation (variable compensation) is paid out as points, whereby
one share equals one point for each fiscal year, dividing the standard
amount by the average of the closing prices of the Company’s sharesat the Tokyo Stock Exchange in the month preceding the fiscal year inwhich the medium-term management plan starts.
The Company uses the above as a benchmark for performancelinked compensation to better link compensation to corporate

2021iv)	Mediumto longterm
targets forinnovation
activities

Evaluationof mission(individual)—10%

 ompensation ratio for directorsC(excluding outside directors)(%)

2022/3

65

35

Increase in ratio of variable compensation
2023/360

29

11

Basic compensation
70%(variable compensation)
Performance-linked compensation
Short-term performance-linked compensation (variable compensation)
Medium- to long-term performance-linked, share-based compensation(variable compensation)

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

55

CORPORATE GOVERNANCECORPORATE GOVERNANCE

Part 3

Part 3

Corporate GovernanceSupport Framework for Directors and Audit & Supervisory Board Members

Policy on Cross-Shareholdings

The Company shall establish a support framework enabling the constant provision of information that allows directors and Audit & Supervisory
Board members to effectively fulfill their roles and duties.

1. T he Company shall establish a support framework that enables it
to provide necessary and adequate information at the necessary
time to allow directors to effectively fulfill their roles and duties.
2. B
 y participating in key business strategy meetings for the overall
Group and by observing key Group business sites, including thoseoverseas, participants are able to confirm business strategies andtheir promotion and provide opportunities for proactive involvement in business activities.
3. A
 s a system to help Audit & Supervisory Board members smoothly
perform their duties, employees in the internal audit department
shall be appointed to assist Audit & Supervisory Board members
and ensure a support system.
4. A
 udit & Supervisory Board members shall exercise their authority
to perform investigations in accordance with the Companies Act.

In addition, if a director or employee discovers a fact that could
potentially inflict marked damage on the Company, they shallimmediately report this fact to an Audit & Supervisory Board
member, even if there is no request to do so from an Audit &Supervisory Board member.
5. If a director or Audit & Supervisory Board member believes it tobe necessary, they shall obtain advice from an outside expert at
the Company’s expense.
6. The internal audit department shall regularly hold meetings withthe full-time Audit & Supervisory Board members and provide
audit reports in a planned manner to the Board of Directors andthe Audit & Supervisory Board, thereby enhancing the provision of
information to, as well as bolstering coordination with, outside
directors and outside Audit & Supervisory Board members.

Improvement of Corporate Value Through Dialogues with Shareholders and Investors

The Company has a policy of owning stocks that are deemed meaningful based on comprehensive consideration from a medium- tolong-term perspective of the relationship with the Group’s businesses, the profitability, and the potential for creating new business
opportunities, among other factors. A decision shall be made every
year at the Board of Directors meeting concerning whether to continue holding the stocks based on careful consideration of various
factors, including previous business transactions with the Company
and the market price of the shares, after verifying the benefits andCompliance
Strengthening internal control for the Group overall
The Yamato Group has established an internal control system inorder to promote a sound corporate culture in the Group as a whole
and to enable employees to perform their duties effectively and efficiently without any misbehavior or mistakes. Having stipulated its
basic policy on the internal control system in accordance with theCompanies Act, each Group company is working on strengthening
internal control.

Basic policy
To continuously improve medium- to long-term corporate value through dialogues with shareholders and investors, we are striving to enhance IR
and SR activities by creating a structure focused on the Executive Officer Responsible for IR. When promoting IR and SR activities, we ensure sufficient opportunities for dialogue with executive officers, including the president, and independent outside directors to fully understand the
management strategies and businesses of our shareholders and investors. Additionally, the opinions and requests received from shareholders
and investors through dialogues and other means are fed back to the Board of Directors as necessary to share awareness of issues within the
Company from an objective perspective.
Implementation of Engagement Activities (Fiscal Year Ended March 31, 2023)
Details of Activities
Settlement of accounts meetings
Small meetings
Briefings to explain structural reform of network operations

Responders

4

President and responsible Executive Officer

2

Independent outside directors

1

Responsible Executive Officer

1

Briefings related to sustainability (environment)

Responsible Executive Officer

1

Visits to overseas investors (Europe, Americas, and Asia)

President and Executive Officer Responsible for IR

4

Individual dialogues (One on one)President, Executive Officer Responsible for IR, and representative of IR department*345* Responds based on shareholder and investor requests and purpose of interviews

Key Themes and Points of Interest in Dialogues
 rogress of Group management structure reforms and businessPstructure reforms
 pecific details and creation effects of structural reform ofS
network operations
Strategies for expanding corporate business domain urrent status and future outlook for business environmentCand competitive environment
 ricing policy based on 2024 problem and rising costs,Psuch as fuel isks and opportunities following climate change andRconnection between reducing GHG emissions and improving
corporate value
 urpose of human resource strategies in conjunction withP
structural reforms and human resource managementEffectiveness of the Board of Directors
Measures for capital policies and shareholder returns

56

Number of Times

President and responsible Executive Officer

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Enhancement of Details Disclosed Based on Dialogues(Examples) inancial Results Meeting Materials
F(Fiscal year ended March 2023)
 he timelines of progress with structural reforms and conT
nection to each measure (page 4)
 isclosure of cost trends in each domain of operation
D(page 27)

risks associated with holding the stocks from a quantitative andqualitative perspective. The Company works to reduce the numberof stocks it owns that are deemed to be of little significance.
In exercising the voting rights of shares held, the decision to support or oppose agenda items at the shareholders’ meeting shall bemade on a case-by-case basis according to Yamato policy, with consideration given to the issuing company’s enhancement of corporate
value, the issuing company’s compliance framework, and the possibility of a negative impact on the Group’s business, among other factors.

We have also established a system to carry out evaluations in linewith our internal control report system pursuant to the Financial
Instruments and Exchange Act and immediately put improvements
in place should there be any shortcomings. Furthermore, we prepareinternal control reports on financial reporting and receive an audit of
the internal system by independent auditors.
Internal control over the financial reporting of the Yamato Groupas of March 31, 2023, was considered valid, and an internal control
report was submitted to the Kanto Local Finance Bureau.

Enhancing the whistle-blower system
The Yamato Group has established a whistle-blower system topromptly discover and appropriately respond to law and/ or internal
regulation violations. In addition to compliance-related issues, suchas overall corruption (including bribery) and human rights violations(including bullying and harassment), the whistle-blower system
accepts reports on any action that violates internal regulations andthe Group’s Management Philosophy. We have established a suggestions box as a contact point with the president, a compliance hotline as the secretariat for the Compliance and Risk Committee, anda corporate fraud point of contact manned by external lawyers,which all take correspondence via email, telephone, and letter. In
addition, from February 2019 we established individual points ofcontact at each Group company as a familiar place for consultation.
To spread awareness among employees, we display posters introducing these points of contact with the president’s photograph onthem at each office. Additionally, the Group’s whistle-blowing regulations protect the privacy of whistle-blowers and ensure that they do
not suffer any unfair treatment as a result of making a report.
Accordingly, we are developing an environment that ensures employees who wish to remain anonymous can also utilize this service.
When a report is made on an issue, the whistle-blower system
works to promptly confirm the facts, enact the necessary response
and corrections, and promote measures to prevent a reoccurrence.
Specifically, we promote concrete, response procedures, processing
methods, and risk-assessment criteria that are shared on aGroupwide basis. This enables us to prevent the overlooking ofmajor risks by adopting a consistent management flow andresponse to all reports received. Furthermore, by clarifying the persons responsible for decision-making at the time reports arereceived and unifying relevant standards, we are improving our levelof risk awareness.
We prevent the reoccurrence of issues by formulating rules forholding verification meetings internally to ensure that we carry out
an appropriate investigation and response. Additionally, we implement the standardized management of whistle-blowing informationand the details of responses on a Groupwide basis, thereby allowing
us to ascertain Groupwide trends and share examples of actual
cases in a cross-organizational manner. Such information and details
are reported regularly to the Board of Directors, helping to facilitate
improvements across the Group.
2023/3 Results
Number of whistle-blower cases

751 (117 more than 2022/3)

Note: The Compliance and Risk Committee meets each quarter at Yamato
Holdings and every month at Group companies, including Yamato
Transport.

 isclosure of human resource strategies and KPIs in conD
junction with structural reforms (page 12)
 rganize basic policies for climate change and connectionO
to value creation (page 13)	https://www.yamato-hd.co.jp/english/investors/library/briefing/2023.html

Briefings for each theme
Structural reform of network operations
Sustainability (environment)	https://www.yamato-hd.co.jp/english/investors/library/business_briefing/

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

57

CORPORATE GOVERNANCECORPORATE GOVERNANCE

Part 3

Part 3

Directors
As of June 23, 2023

Management Team

Noriyuki Kuga

Yasuharu Kosuge

Mariko Tokuno

Inside directors

Toshizo Kurisu

Yoichi Kobayashi

Toshizo Kurisu

Mariko Tokuno

Yoichi Kobayashi

Representative Director,
President and Executive Officer

Representative Director,
Executive Officer and Vice President

Outside Director

Outside Director

Apr. 2006

Apr. 2009
Apr. 2010
Apr. 2013
Apr. 2015

Joined the Company
Regional Branch Manager of
Yamaguchi Regional Branch of
the Company
Regional Branch Manager of
Saitama Regional Branch of
Yamato Transport Co., Ltd.
General Manager of TSS Sales
Promotion Office
Executive Officer and Presidentof Kanto Regional Office
Managing Executive Officer
Executive Officer of theCompany

Apr. 2015

Jun. 2017
Apr. 2019

Apr. 2021

Representative Director,
President and Executive Officer
of Yamato Transport Co., Ltd.
Director and Executive Officer of
the Company
Representative Director,
President and Executive Officerof the Company (current)
Representative Director,
President and Executive Officer
of Yamato Transport Co., Ltd.
(current)

Apr. 1983
Jul. 1999
Jun. 2002
Apr. 2006
Apr. 2012

Apr. 2017

Apr. 2019

Yasuharu Kosuge

Joined the Company
General Manager of Accounting
Division of the Company
General Manager of Finance
Division of the Company
Executive Officer of theCompany
Representative Director,
Executive Officer and Presidentof Yamato Financial Co., Ltd.
Representative Director andSenior Managing Executive
Officer of Yamato Transport Co.,
Ltd.
Representative Director,
Executive Officer and Presidentof Yamato Transport Co., Ltd.

Mar. 2020

Managing Executive Officer of
the Company
Apr. 2021 Senior Managing Executive
Officer of Yamato Transport Co.,
Ltd.
Feb. 2022 Executive Officer and Vice
President of the Company
Feb. 2022 Responsible for Finance, Public
Relations and Digital of theCompany
Feb. 2022 Representative Director, Executive
Officer and Vice President of
Yamato Transport Co., Ltd.
(current)
Jun. 2022 Representative Director, Executive
Officer and Vice President of theCompany (current)

Feb. 2002
Apr. 2004
May 2006
Apr. 2011

Joined the Company
Project Manager of Work System Project of theCompany
Regional Branch Manager of Okayama Regional
Branch of the Company
Regional Branch Manager of Yokohama Regional
Branch of the Company
Regional Branch Manager of Kita Tokyo Regional
Branch of Yamato Transport Co., Ltd.
General Manager of Corporate Sales Division of
Yamato Transport Co., Ltd.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Jan. 1994
Apr. 2002

Joined Louis Vuitton Japan KK
Senior Director for Sales
Administration
Mar. 2004 Vice President of Tiffany & Co.
Japan Inc.
Aug. 2010 Representative Director andPresident of Christian Dior Japan
KK

Apr. 2019
Apr. 2019
Apr. 2021
Feb. 2022

Executive Officer of Yamato Transport Co., Ltd.
Managing Executive Officer of Yamato Transport
Co., Ltd.
Managing Executive Officer of the Company
Representative Director, Executive Officer andPresident of Yamato Logistics Co., Ltd.
Senior Managing Executive Officer of Yamato
Transport Co., Ltd.
Senior Managing Executive Officer of theCompany

Feb. 2022
Feb. 2022
Jun. 2022
Jun. 2022

Responsible for Management Strategy and Human
Resources of the Company
Representative Director, Senior Managing
Executive Officer of Yamato Transport Co., Ltd.
Representative Director, Executive Officer and Vice
President of the Company (current)
Representative Director, Executive Officer and Vice
President of Yamato Transport Co., Ltd. (current)

Jun. 2017

Representative Director,
President and CEO of Ferragamo
Japan KK
Director of the Company(current)

Apr. 1973
Jun. 2004
Apr. 2006
Jun. 2006
Apr. 2008

Joined ITOCHU Corporation
Executive Officer
Managing Executive Officer
Representative Executive
Managing Director
Representative Senior Managing
Director

Noriyuki Kuga

Outside Director

Outside Director

Apr. 1972
Jan. 1993

Apr. 2004

Apr. 2014
Apr. 2016

Sep. 2013

Shiro Sugata

Jun. 2000

Representative Director,
Executive Officer and Vice President

Apr. 1985
Jun. 1997

Charles Yi

Outside Directors

Yutaka Nagao

Apr. 1988
Apr. 2004

58

Shiro Sugata

Yutaka Nagao

Joined USHIO INC.
President of BLV LICHT- UND
VAKUUMTECHNIK GmbH
Director and Corporate SeniorVice President of USHIO INC.
Director and Corporate
Executive Vice President

Jun. 2004

Mar. 2005
Oct. 2014
Jun. 2016
Jul. 2017
Jun. 2019

Representative Director andCorporate Executive Vice
President
President and CEO
Director and Corporate Advisor
Corporate Advisor
Special Corporate Advisor
Director of the Company(current)

Apr. 1979
Apr. 2002
Oct. 2004
Oct. 2006

Joined Tokyo Electron Ltd.
Vice President and General
ManagerPresident and Representative
Director, Tokyo Electron BP Ltd.
Executive Vice President ofTOKYO ELECTRON DEVICE
LIMITED

Apr. 2011
Apr. 2015
Apr. 2016
Jun. 2018

Jun. 2007
Jun. 2011
Jun. 2016
Jun. 2020

Representative Director andExecutive Vice President
Senior Advisor
Vice Chairman
Director of the Company(current)

Corporate Director andExecutive Vice President
Senior Executive Vice President
and Representative Director
Chairman of the Board
Director of the Company(current)

Charles Yin
Outside Director

Feb. 1990
Mar. 1992
Sep. 1996

Joined L3, Inc. (New York)
Vice President
Joined Fuji Xerox Asia Pacific Pte.
Ltd. (Singapore)Aug. 2007 CEO of Worldwide City Group(Hong Kong)

Jul. 2018
Jun. 2022

Executive Chairman (current)
Director of the Company(current)

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

59

CORPORATE GOVERNANCECORPORATE GOVERNANCE

Part 3

Part 3

Management System

Audit & Supervisory Board Members

As of October 1, 2023

As of June 23, 2023

Yamato Holdings Co., Ltd. / Yamato Transport Co., Ltd.

Management Team

Serves at both Yamato Holdings Co., Ltd. and Yamato Transport Co., Ltd.
Yamato Holdings Co., Ltd.

Yamato Transport Co., Ltd.

Executive Officer and President

Executive Officer

Yutaka Nagao

Takeshi Arakawa		 (Responsible for Global Business Strategy)
Kazuki Watanabe		(Responsible for Corporate Strategy)

Nobuyuki Ozawa		 (Responsible for Sales Promotion)
Executive Officer and Vice President

Koji Inamori		(Responsible for Account Sales)

Toshizo Kurisu

Suguru Nakanishi		Yasuharu Kosuge

Tetsuya Egashira		 (Responsible for Global Strategy)(Responsible for EC Account Sales)

Kong Jen Siang		(Responsible for Asia Region Cross Border
Senior Managing Executive Officer

Tomoki Otani

Transportation)

(Responsible for ESG and Compliance)

Yasuyuki Miyake		 (Responsible for Business Development)(Head of Sustainability, Legal and Risk

Yasutoshi Shibasaki		(Responsible for Transport and Delivery

Management, Safety and Internal Audit)

Yoshihide Shimoyama

Ryuji Matsuda

Takashi Yamashita

Yoshito Shoji

Tsutomu Sasaki

Control)

Shinji Makiura		(Responsible for Corporate Finance)

Tatsuya Suzuki		(Responsible for Air Freight Operation Design)

Hiroshi Etani		(Head of Sales and Global Strategy)

Michiaki Okamoto

(Responsible for Transport and Delivery
Process Engineering)

Akihiro Kazuma		 Head of Transport and Delivery Operation

Yoshihiro Hatano		(Responsible for Transport and Delivery
Operation System)

Takashi Yamashita

Tsutomu Sasaki

Managing Executive Officer

Outside Audit & Supervisory Board Member

Full-time Audit & Supervisory Board Member

Atsushi Kashimoto		Oct. 1983
Mar. 1987
May 2003

Joined Asahi Accounting
Company
Registered as a Certified Public
Accountant
Representative Partner of Asahi& Co. (currently: KPMG AZSA
LLC)Aug. 2014 Established Takashi Yamashita
CPA Office, Representative(current)
Jan. 2015 Registered as a Certified Tax
Accountant
Jun. 2017 Outside Audit & Supervisory
Board Member of the Company(current)

Apr. 1987
Apr. 2005
Jul. 2006

Apr. 2007

Apr. 2009

Ryuji Matsuda

Apr. 2011

Outside Audit & Supervisory Board Member

Apr. 2017

Joined the Company
General Manager of TA-Q-BIN
Sales Division III
General Manager of ProductDevelopment Division of Yamato
Transport Co., Ltd.
General Manager of
Manufacturer Solution Sales
Division
General Manager of Global
Sales Division
General Manager of Sales
Strategy Division
Executive Officer of theCompany

Processing Promotion)

Sep. 2018

Apr. 2019
Mar. 2020

Apr. 2021
Apr. 2021

Jun. 2007
Jun. 2008

Registered as Attorney-at-Law
and Certified Public Accountant
Audit & Supervisory Board
Member, SQUARE ENIX CO., LTD.
Audit & Supervisory Board
Member, Seika Corporation

May 2012
Apr. 2014
Jun. 2020

Auditor of the Japan Federationof Bar Associations
Auditor of ASAHI GROUP ARTSFOUNDATION (current)
Outside Audit & Supervisory
Board Member of the Company(current)

Representative Director,
Executive
Officer and President of Yamato
Logistics Co., Ltd.
Managing Executive Officer of
the Company
Representative Director andSenior Managing Executive
Officer of Yamato Transport Co.,Ltd.
Senior Managing Executive
Officer of the Company
Senior Managing Executive
Officer of Yamato Transport Co.,Ltd.
Full-time Audit & Supervisory
Board Member of the Company(current)(Responsible for Investor Relations)

Seiichi Awa		
(Responsible for South Kanto region)
Tamaki Abe		(Responsible for Tokyo region and Transportand Delivery Network Management)

Setsuko Nishida		 (Responsible for overseeing Digital)
Toshiyuki Nishide		(Responsible for Kansai region)

Takanao Sugiura		 (Responsible for Business Development
		and CLOE)
Hiroshi Matsuda		 (Responsible for overseeing Transportation)

Takeharu Ootomo		(Responsible for Business Reform Project)

Takaaki Adachi		(Responsible for Innovation Promotion)
Yuko Taguchi		(Responsible for CX Design)
Yasushi Fukuda		(Responsible for Green Innovation
Development)

Yasuhiko Tamura		 (Responsible for Finance Projects)
Katsutoshi Masaoka(Responsible for Finance)

Yosuke Kudo		
(Responsible for Administrative Operation)
Yoshihisa Hosotani(Responsible for Corporate Communications)

Yoshiko Akiyama(Responsible for Sustainability Promotion)

Yoshito Shoji

Kazuhiro Shiozawa(Responsible for Legal and Risk Management)

Full-time Audit & Supervisory Board Member

Hiroyuki Mizushima 	(Responsible for North and South America

Jun. 2022
Apr. 1986

Norihiko Nakabayashi	(Responsible for Transport and Delivery Data

Masayuki Ishii		(Responsible for overseeing Human Resource		Management and Development)

region)Apr. 1980
Nov. 2007

Yoshihide Shimoyama

Apr. 2019
Mar. 2020

Outside Audit & Supervisory Board Member

Apr. 1976

Apr. 2006

60

Joined Nihon Cement Co., Ltd.
(currently: Taiheiyo Cement
Corporation)
General Manager of Technology
Planning Department, Central
Research Laboratory

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

Mar. 2008

Apr. 2015
Jun. 2020

President and Representative
Director of Taiheiyo Consultant
Co., Ltd.
AdvisorOutside Audit & Supervisory
Board Member of the Company(current)

Joined the Company
General Manager of Finance
Division, Yamato Transport Co.,Ltd.
Managing Executive Officer
Director and Managing
Executive Officer, Yamato
Management Services Co.

Apr. 2021

Apr. 2022
Jun. 2023

General Manager, Professional
Service Function Division,
Yamato Transport Co., Ltd.
General Manager of ProjectGroup, Finance Division
Full–time Audit & Supervisory
Board Member of the Company(current)

Masahiro Matsui		 (Responsible for Hokkaido region)
Shuji Yamauchi		(Responsible for Tohoku region)
Kouei Fujisaki		(Responsible for Northern Kanto region)
Takashi Ikeda		
(Responsible for Hokushinetsu region)
Atsushi Terasawa		

(Responsible for Chubu region)

Masato Kosaka		(Responsible for Chugoku and Shikoku region)
Osamu Yamanaka		

(Responsible for Kyushu region)

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

61

Part 4FINANCIAL SECTIONFINANCIAL SECTION

Part 4

Ten-Year Summary and Business Highlights
Millions of Yen
2014/3

2015/3

2016/32017/3

2018/32020/3

2019/32021/32023/32022/3Thousands of
U.S. Dollars
2023/3(¥ billion)

RESULTS OF OPERATIONS:
Operating revenues

1,374,610

1,396,708

1,416,413

1,466,852

1,538,813

1,625,315

1,630,146

1,695,867

1,793,618

1,800,668$13,485,121

Operating costs

1,274,470

1,290,714

1,306,200

1,385,492

1,452,485

1,513,988

1,526,102

1,538,524

1,654,085

1,687,241

12,635,674

Selling, general andadministrative expenses

37,04337,046

41,672

46,47450,642

52,981

59,342

65,22062,33353,341

399,473

Operating profit

63,096

68,947

68,54034,88535,68558,34544,701

92,121

77,19960,085449,974

Profit before income taxes

65,882

69,157

68,07833,037

33,12352,25844,58191,75981,04056,815425,489

Income taxes

31,00331,55428,414

14,672

14,43526,30821,67834,82523,968

11,39385,327

Profit attributable to ownersof parent

34,77637,53339,42418,053

18,231

25,682

22,32456,70055,95645,898343,731

Yen    82.22    90.41    96.45    45.37    46.24    65.14   56.78

151.55151.03126.64$       0.95Diluted earnings

80.18

88.26

95.64

—

—

—

—

—

—

—

—

Cash dividends

24.00

25.00

28.00

27.00

27.00

28.00

41.00

46.00

46.00

46.00

0.34

1,316.12

1,368.66

1,349.56

1,367.51

1,395.74

1,435.15

1,441.20

1,553.45

1,611.34

1,684.87

12.62

2,224

2,772

2,247

2,332.5

2,668.5

2,859

1,697

3,035

2,293

2,269

—

Millions of Yen

Thousands of
U.S. Dollars

Net assets per share
Stock price (closing), end of year

FINANCIAL POSITION:
Working capital
Total shareholders’ equity   179,999   209,171   235,884   214,661   164,599   139,834

134,072

139,010

128,037

139,888$ 1,047,618

551,379

565,521537,821539,179

550,307565,841555,173576,367

590,542

610,380

4,571,115

1,032,134

1,082,531

1,089,436

1,114,672

1,114,870

1,123,659

1,100,739

1,089,991

1,086,854

1,107,587

8,294,669

Capital expenditures

79,53052,022

53,94548,99354,482

79,83855,03355,431

78,572

55,691

417,068

Depreciation and amortization

42,26546,05846,73946,114

46,42351,34655,08348,861

35,52441,557311,225

Net cash provided byoperating activities

80,075

92,62049,71573,32451,728118,093

74,433

123,92152,01689,953

673,660

Total assets

1,793.6

2022/3Retail Business Unit

4.9

4.8

2.4

2.3

3.6

2.7

5.4

4.3

3.3

Net margin (%)

2.5

2.7

2.8

1.2

1.2

1.6

1.4

3.3

3.1

2.5

Return on assets (ROA) (%)

3.5

3.5

3.6

1.6

1.6

2.3

2.0

5.2

5.1

4.2

Return on equity (ROE) (%)

6.4

6.7

7.1

3.4

3.3

4.6

4.0

10.0

9.6

7.6

Current ratio (%)

151.8

158.6

167.8

157.7

141.7

134.1

132.8

135.7

136.3

140.6

Shareholders’ equity ratio (%)

53.4

52.2

49.4

48.4

49.4

50.4

50.4

52.9

54.3

55.1

Asset turnover (Times)

1.4

1.3

1.3

1.3

1.4

1.5

1.5

1.5

1.6

1.6

Interest coverage ratio (Times)

154.7

174.9

126.6

83.1

135.0

215.5

108.4

125.8

100.3

68.5

Price earnings ratio (PER) (Times)

27.0

30.7

23.3

51.4

57.7

43.9

29.9

20.0

15.2

17.9

Price book-value ratio (PBR) (Times)

1.7

2.0

1.7

1.7

1.9

2.0

1.2

2.0

1.4

1.3

(27.9)

Other

1,800.6

2023/3

YoY +7.0

Analysis of Operating Profit(¥ billion)
2022/3

77.1+7.0

Revenue(15.3)

Subcontracting expenses+6.1

Personnel expenses

KEY RATIOS:
4.6

+33.8

Corporate Business Unit

Vehicle expenses

Operating profit margin (%)+1.1

U.S. Dollars

PER SHARE OF COMMON STOCK:
Basic earnings

Analysis of Operating Revenues

Other

(1.6)
+6.4
(19.7)

Eliminations

60.0

2023/3

YoY (17.1)

YoY Growth Rates of Parcel Delivery Amount and Unit Price（%）

15

NON-FINANCIAL DATA:
Number of employees

193,146

197,056

196,582

201,784

213,096

224,945

223,191

216,873

210,197

Full-time

87,27988,247

89,112

90,737

93,534

97,587

98,74496,82994,47392,727Part-time

105,867

108,809

107,470

111,047

119,562

127,538

126,201

126,362

122,400

117,470

Parcel delivery amount

1,665

1,622

1,698

1,800

1,758

1,668

1,627

1,803

1,890

1,926

(Millions of parcels)

574

595

586

574

615

702

726

704

700

703

Unit price (Yen)

—

—

32

67

78

135

172

293

384

413

Kuroneko DM-Bin handling volume

—

—

171

171

181

191

201

195

190

189

2,084

1,901

1,536

1,542

1,464

1,211

987

826

824

800

61

61

57

55

56

60

65

67

67

67

(Millions of units)
Unit price (Yen)

Foreign currency translation: U.S. dollar amounts have been translated, for convenience only, at the rate of ¥133.53 to U.S.$1.
Note: TA-Q-BIN includes TA-Q-BIN, TA-Q-BIN Compact, and EAZY.
On March 31, 2015, we ceased accepting items for Kuroneko Mail Service and from April 1 launched Kuroneko DM-Bin.

62

225,125

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

10
5
0
(5)
(10)

2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Parcel Delivery Amount Growth Rate
Parcel Unit Price Growth Rate

Delivery Amount:
YoY +1.9%
Unit Price:
YoY +0.4%

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

63

FINANCIAL SECTIONFINANCIAL SECTION

Part 4

Part 4

Consolidated Balance Sheet
March 31, 2023

Thousands of
U.S. Dollars(Note 1)Millions of Yen

ASSETS

2023

2022

2023

CURRENT ASSETS:
Cash and cash equivalents (Notes 2.e and 16)

Millions of Yen

LIABILITIES AND EQUITY¥ 185,374¥ 182,645$ 1,388,254

Short-term bank loans (Notes 10 and 16)
Current portion of long-term debt (Notes 10 and 16)

Trade216,251

218,923

1,619,494

Installment (Note 6)

50,50948,055378,262

Allowance for doubtful accounts(1,474)(1,457)(11,039)

Inventories (Note 7)

2,580

2,216

19,324

Prepaid expenses and other current assets

31,40730,463

235,204

484,647

480,8453,629,499

Machinery and equipment
Leased assets (Note 15)
Construction in progress
Others
Total
Accumulated depreciation
Net property, plant and equipment

179,811381,219
196,141

179,651
376,844
197,105

1,346,601
2,854,930
1,468,888

133,69347,257
12,379135,149
39,6533,165

1,001,222
353,90992,706

5,124

2,471

38,370955,624

934,038

7,156,626(512,607)(504,159)(3,838,891)

443,017429,879

3,317,735

Other assets (Notes 2.k and 11)
Total investments and other assets
TOTAL

32,236

13,173
2,126
38,15022,31864,29233,942

17,882
1,872
38,58820,51954,198241,415

98,653
15,921
285,703
167,137
481,478¥

10,000¥15,000$74,890

5,415

4,850

40,554Trade160,766

165,346

1,203,971

Other

10,46318,44078,357

Income taxes payable

16,912

14,396

126,651

Accrued expenses

80,84981,905605,475

Deferred profit on installment sales (Notes 6 and 16)

4,798

4,714

35,929Other current liabilities (Notes 12 and 17)

55,55648,156

416,054344,759

352,8072,581,881

Long-term debt (Notes 10 and 22)

32,85926,038246,078

Liability for employees' retirement benefits (Notes 2.k and 11)

98,295

94,142

736,127

482

1,914

3,613

Other long-term liabilities (Note 12)

14,762

13,720110,551

Total long-term liabilities

146,398

135,814

1,096,369

127,235

127,235

952,856

LONG-TERM LIABILITIES:Deferred tax liabilities (Note 14)

COMMITMENTS LIABILITIES (Note 15)
EQUITY (Notes 13 and 22):
Common stock—authorized, 1,787,541,000 shares in 2023 and 2022;
issued, 379,824,892 shares in 2023 and 388,575,592 shares in 2022

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 8 and 16)
Investments in and advances to unconsolidated subsidiaries and affiliates,
net of valuation allowance of ¥482 million ($3,607 thousand) in 2023 and ¥439 million
in 2022 (Note 16)
Long-term loans
SoftwareLease deposits
Deferred tax assets (Note 14)

2023

Notes and accounts payable:

Total current liabilities
PROPERTY, PLANT AND EQUIPMENT—At cost:
Land
Buildings and structures
Vehicles

2022

2023

CURRENT LIABILITIES:

Notes and accounts receivable, and contract assets (Notes 16 and 17):

Total current assets

Thousands of
U.S. Dollars(Note 1)

Capital surplus

36,83936,813

275,886

Retained earnings

473,892

464,495

3,548,955

Treasury stock—at cost, 17,552,067 shares in 2023 and 22,084,421 shares in 2022

(39,836)(49,552)(298,327)

Unrealized gain on available-for-sale securities

9,280

11,49969,500Foreign currency translation adjustments

1,782

(513)

13,343Remeasurements of defined employees’ retirement benefit plans (Notes 2.k and 11)

1,189

566

8,902

610,381590,543

4,571,115

Accumulated other comprehensive income:

Total

7,628

9,130

57,128Non-controlling interests

6,049

7,691

45,304

179,923

176,131

1,347,435

Total equity

616,430

598,234

4,616,419¥1,107,587¥1,086,855$ 8,294,669¥1,107,587¥1,086,855$8,294,669

TOTAL

See notes to consolidated financial statements.

164

YAMATO HOLDINGS CO., LTD.
IntegratedStatements
Report 2023with Independent Auditor’s Report
Financial

YAMATO HOLDINGS CO., LTD.

Integrated
Report2023
Financial Statements with Independent
Auditor’s
Report652

Part 4FINANCIAL SECTIONFINANCIAL SECTION

Part 4

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Year Ended March 31, 2023

Year Ended March 31, 2023

Thousands of
U.S. Dollars(Note 1)Millions of Yen

OPERATING REVENUES (Note 17)

2023

2022

2023

¥1,800,668¥1,793,618$13,485,121

Thousands of
U.S. Dollars(Note 1)Millions of Yen
2023

2022

¥45,422¥57,072$340,162

Unrealized loss on available-for-sale securities(2,223)(5,415)(16,644)

Foreign currency translation adjustments

2,292

794

17,168Remeasurements of defined employees' retirement benefit plans

677(5,283)

5,070

Share of other comprehensive income of entities accounted for using equity method

(54)

108

(407)

PROFIT

2023

OTHER COMPREHENSIVE INCOME (Note 18):

OPERATING COSTS AND EXPENSES:
Operating costs
Selling, general and administrative expenses
Total operating costs and expenses
Operating profit

1,687,242

1,654,085

12,635,674

53,341

62,333

399,473

1,740,583

1,716,418

13,035,147

60,085

77,200449,974

Total other comprehensive income (loss)
OTHER INCOME (EXPENSES):COMPREHENSIVE INCOME

Interest and dividend income

1,915

1,562

14,341

Interest expense

(905)

(786)

(6,777)

Loss on sales and disposal of property, plant and equipment—net

(404)

(361)

(3,027)

Owners of parent
Non-controlling interests

Loss on impairment of long-lived assets (Note 9)(1,995)(2,420)(14,938)

Gain on sales of investment securities—net (Note 8)

1,966

14,431

14,723

Loss on sales of shares of subsidiaries and affiliates—net

692(9,796)

5,187¥46,114¥47,276$345,349¥46,597¥47,210$348,968

(483)

66

(3,619)TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:

See notes to consolidated financial statements.

(2,222)

Loss on valuation of investment securities (Note 8)(Loss) gain on investments in investment partnerships
Share of loss of entities accounted for using equity method

(2)

(49)

(17)

(257)

4,510

(1,927)(4,159)(243)(31,144)

(27)

(57)

(204)

Provision of allowance for doubtful accounts in unconsolidated subsidiaries and affiliates
Gain on liquidation of subsidiaries

1,210

Gain on transition of retirement benefit plan (Note 11)

1,420

Loss on revision of retirement benefit plan (Note 11)(14,999)

Dismantlement expenses(754)

Other—net

1,353

1,844

10,130

Other (expenses) income—net(3,269)3,840(24,485)

PROFIT BEFORE INCOME TAXES

56,816

81,040425,489

Current

23,01829,293

172,376

Deferred(11,624)(5,325)(87,049)

11,39423,96885,32745,422

57,072

340,162

(476)

1,116

(5,645)

INCOME TAXES (Note 14):

Total income taxes
PROFIT(LOSS) PROFIT ATTRIBUTABLE TO NON-CONTROLLING INTERESTSPROFIT ATTRIBUTABLE TO OWNERS OF PARENT¥

45,898¥55,956(3,569)$343,731
U.S. Dollars(Note 1)

Yen
2023

2022

¥126.64¥151.03

$0.95

46.00

46.00

0.34

2023

PER SHARE OF COMMON STOCK (Notes 2.q and 19):
Basic earnings
Cash dividends applicable to the year
See notes to consolidated financial statements.

366

YAMATO HOLDINGS CO., LTD.
IntegratedStatements
Report 2023with Independent Auditor’s Report
Financial

YAMATO HOLDINGS CO., LTD.

Integrated
Report2023
Financial Statements with Independent
Auditor’s
Report674

FINANCIAL SECTIONFINANCIAL SECTION

Part 4

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Year Ended March 31, 2023

Year Ended March 31, 2023

Thousands

BALANCE,APRIL 1, 2021

371,025

Thousands of
U.S. Dollars(Note 1)Millions of Yen
Accumulated Other Comprehensive Income

Outstanding
Number of
Shares ofCommon StockPart 4

Unrealized
Gain onAvailablefor-Sale
Securities

CommonStockCapitalSurplusRetained
Earnings

TreasuryStock¥127,235¥36,813¥431,572¥(39,549)

Cumulative effects ofchanges in accounting
policies¥15,884

Foreign
Currency
Translation
Adjustments¥(1,317)

Total¥ 5,730¥576,368¥ 7,919¥584,287(3,343)(229)(3,572)573,025

7,690

580,715(3,343)RESTATED BALANCE

127,235

36,813428,229(39,549)

15,884(1,317)

Millions of Yen

Remeasurementsof Defined
Employees’
Retirement
Benefit Plans

5,730

2022

2023
Non-controlling
Interests

2023

OPERATING ACTIVITIES:

Total
EquityProfit before income taxes¥ 56,816¥ 81,040$ 425,489

Income taxes—paid(21,160)(46,738)(158,468)

Depreciation and amortization

41,62635,570311,737

404

361

3,027

Adjustments for:

Loss on sales and disposal of property, plant and equipment—net

Profit attributable toowners of parent

55,95655,95655,956

Loss on impairment of long-lived assets

1,995

2,420

14,938Cash dividends,¥53 per share(19,690)(19,690)(19,690)

Gain on sales of investment securities—net(1,966)(14,431)(14,723)

Purchase of treasury
stock(4,534)(10,003)(10,003)(10,003)

Disposal of treasurystock

366,491

127,235

36,813

464,495(49,552)(4,385)804(5,164)(8,745)

1(8,744)

11,499(513)

566

590,543

7,691

598,234

Profit attributable toowners of parent

45,89845,89845,898Cash dividends,¥46 per share(16,784)(16,784)(16,784)(10,001)(10,001)

Purchase of treasury
stock(4,218)(10,001)

Disposal of treasury
stock
Retirement oftreasury stock(19,717)

Change in equity
related to transaction
with non-controllingshareholders

19,717

26¥127,235¥36,839¥473,892¥(39,836)

26(2,219)

2,295

623

699

(1,642)(943)¥ 9,280¥ 1,782¥ 1,189¥610,381¥ 6,049¥616,430

49

17

243

31,144

Decrease (increase) in notes and accounts receivable

1,234(13,434)

9,244(Increase) decrease in inventories

(357)

144

(2,672)(5,259)11,537(39,387)
34,703

Changes in assets and liabilities, net of effects from previously consolidated
subsidiaries:(Decrease) increase in notes and accounts payable
Increase in liability for employees' retirement benefits

4,634

21,823

7,826(28,789)

58,611

Total adjustments

33,138(29,023)

248,171

Net cash provided by operating activities

89,95452,017

673,660

Other—net

Accumulated Other Comprehensive Income

CommonStockCapitalSurplusRetained
Earnings

Treasury
Stock

Unrealized
Gain onAvailablefor-Sale
Securities$952,856$275,693$3,478,579$(371,089)$ 86,114

Foreign
Currency
Translation
Adjustments$(3,844)

Remeasurementsof Defined
Employees’
Retirement
Benefit Plans$4,238

1,391

348

10,419(35,435)(40,779)(265,374)

Proceeds from sales of investment securities

2,787

18,63820,874Purchases of investment securities(1,752)(5,690)(13,120)

Decrease in investments in and advances to unconsolidated subsidiaries and affiliates

3,068

1,423

22,974Purchases of property, plant and equipment

Payment for sales of shares of subsidiaries resulting in change in scope of consolidation(Note 21)

Thousands of U.S. Dollars (Note 1)

BALANCE,MARCH 31, 2022

2

INVESTING ACTIVITIES:

26

362,273

2,222
4,159

Proceeds from sale of property, plant and equipment

Net change in theyear
BALANCE,MARCH 31, 2023

Loss on valuation of investment securities
Share of loss of entities accounted for using equity method

Net change in theyear
BALANCE,MARCH 31, 2022

Loss on sales of shares of subsidiaries and affiliates—net

Non-controlling
Interests

Total$4,422,547$ 57,597

Total
Equity$4,480,144(7,313)

Collection of loans

1,210

1,259

9,061

Payment of loans(1,375)(1,466)(10,302)

Other(19,314)(25,363)(144,640)(49,420)(58,943)(370,108)(10,690)(10,663)(80,052)

Net cash used in investing activities
FINANCING ACTIVITIES:Profit attributable toowners of parent

343,731

343,731

343,731

Cash dividends,$0.34 per share(125,693)(125,693)(125,693)

Repayments of long-term debt

(74,903)(74,903)

Dividends paid

(17,151)(19,741)(128,446)

Purchase of treasury stock—net(10,025)(10,057)(75,079)

Purchase of treasury
stock(74,903)

Disposal of treasury
stock

2

Retirement oftreasury stock(1)

Change in equity
related to transaction
with non-controllingshareholders(147,662)

194$952,856

See notes to consolidated financial statements.

$275,886

2

147,663

194

Net change in theyear
BALANCE,MARCH 31, 2023

2

$3,548,955$(298,327)

194(16,614)

17,187

4,664

5,237

(12,293)(7,056)$ 69,500$13,343$8,902$4,571,115$ 45,304$4,616,419

Repayments of short-term debt—net(14,000)

Proceeds from sales of shares of subsidiaries not resulting in change in scope of
consolidation

19

Purchase of shares of subsidiaries not resulting in change in scope of consolidation(Note 5)

(778)

Other
Net cash used in financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

140(5,824)7

5

56(38,618)(54,456)(289,205)

706

701

5,286

2,622

(60,681)

19,633

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

180,604

241,285

1,352,534

CASH AND CASH EQUIVALENTS, END OF YEAR (Note 2.e)¥183,226¥180,604$1,372,167

Newly recorded assets related to lease transactions¥ 11,386¥$

Newly recorded liabilities related to lease transactions

11,797

NON-CASH INVESTING AND FINANCING ACTIVITIES:—

85,267
88,344*The amounts of newly recorded assets and liabilities related to lease transactions for the fiscal year ended March 31, 2022, are omitted due to immateriality.
See notes to consolidated financial statements.

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Notes to Consolidated Financial Statements
Year Ended March 31, 2023

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Act and its related accounting regulations, and in accordance withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to
the consolidated financial statements issued domestically in order to present them in a form which is more familiar toreaders outside Japan. In addition, certain reclassifications and rearrangements have been made in the 2022 consolidated
financial statements to conform them to the classifications and presentations used in 2023.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Yamato
Holdings Co., Ltd. (the “Company”) is incorporated and operates. The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of¥133.53 to $1, the approximate rate of exchange at March 31, 2023. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

an investment in an equity instrument, where a foreign subsidiary elects to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument.
c. Unification of Accounting Policies Applied to Foreign Affiliated Companies for the Equity Method—ASBJ
Statement No. 16, “Accounting Standard for Equity Method of Accounting for Investments,” requires adjustments to bemade to conform the affiliate’s accounting policies for similar transactions and events under similar circumstances to thoseof the parent company when the affiliate’s financial statements are used in applying the equity method, unless it is impracticable to determine such adjustments. In addition, financial statements prepared by foreign affiliated companies in accordance with either International Financial Reporting Standards or generally accepted accounting principles in the UnitedStates of America tentatively may be used in applying the equity method if the following items are adjusted so that profit
is accounted for in accordance with Japanese GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduled amortization of actuarial gain or loss of pensions that has been recorded in equity through other comprehensive
income; (c) expensing capitalized development costs of R&D; (d) cancellation of the fair value model accounting for property, plant and equipment and investment properties and incorporation of the cost model accounting; and (e) recording again or loss through profit or loss on the sale of an investment in an equity instrument for the difference between theacquisition cost and selling price, and recording impairment loss through profit or loss for other-than-temporary declines in

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The consolidated financial statements as of March 31, 2023, include the accounts of the Company andits 29 (30 in 2022) significant subsidiaries (together, the “Group”).
Effective from the fiscal year ended March 31, 2023, Yamato Web Solutions Co., Ltd. has been excluded from thescope of consolidation due to absorption-type mergers in which Yamato System Development Co., Ltd. is the surviving
company.
Under the control and influence concepts, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated, and those companies over which the Group has the ability to exercise significant influence are accounted for by the equity method.
The unconsolidated subsidiaries, whose combined assets, net sales, profit and retained earnings in the aggregate are
not significant to the consolidated financial statements, have not been consolidated with the Company.
There were 24 (22 in 2022) affiliates accounted for by the equity method.
Effective from the fiscal year ended March 31, 2023, Sweetmag Solutions (M) Sdn. Bhd. and one other company havebeen included in the scope of equity method due to GDEX BHD., an affiliate accounted for using equity method, newly
acquiring their shares.
Investments in the unconsolidated subsidiaries and several affiliates not accounted for by equity method are stated atcost, less a valuation allowance representing possible losses on the investments that are deemed to be other than temporary. If the equity method of accounting had been applied to the investments in such companies, the effect on the accompanying consolidated financial statements would not be material.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within the Group is also eliminated.
b. Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements—
Under Accounting Standards Board of Japan (“ASBJ”) Practical Issues Task Force (“PITF”) No. 18, “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements,” theaccounting policies and procedures applied to a parent company and its subsidiaries for similar transactions and events
under similar circumstances should in principle be unified for the preparation of the consolidated financial statements.
However, financial statements prepared by foreign subsidiaries in accordance with either International Financial Reporting

the fair value of an investment in an equity instrument, where a foreign affiliate elects to present in other comprehensive
income subsequent changes in the fair value of an investment in an equity instrument.
d. Revenue Recognition—Principal performance obligations in the principal businesses relating to revenues recognizedfrom contracts with customers in the Group and the normal timing of satisfaction of performance obligation (the normal
timing of recognizing revenues) are as follows:(1) Retail Business Unit
Retail Business Unit mainly provides small-parcel delivery services such as TA-Q-BIN. In this service, the Group provides aservice to collect and deliver cargoes at the customer’s request based on a contract with the customer, and revenue fromthis service is recognized in accordance with satisfaction of performance obligations measured by the progress of delivery,
because other companies are not required to perform the transportation process that has already been performed, even if
delivery to the designated delivery destination cannot be completed.
(2) Corporate Business Unit
In addition to the same transportation services as Retail Business Unit, Corporate Business Unit provides logistics support
services, such as cargo storage and logistics services for inbound and outbound shipments, in order to provide value tothe entire supply chain of its customers. The Group provides logistics support services, which include the collection, storage, packing, and delivery of cargo based on contracts with customers, and recognizes each contractually agreed-uponprocess as a performance obligation, and recognizes revenue for each process under contract in accordance with satisfaction of performance obligations measured by the progress of the work, as the customer receives the economic benefit of
the work as it progresses.
e. Cash Equivalents—Cash equivalents in the consolidated statement of cash flows are short-term investments that arereadily convertible into cash and that are exposed to insignificant risk of changes in value. Cash equivalents in the consolidated statement of cash flows include time deposits, certificates of deposit, and mutual funds investing in bonds that
represent short-term investments, all of which mature or become due within three months of the date of acquisition.
The difference between cash and cash equivalents in the accompanying consolidated balance sheet and cash and cash
equivalents in the accompanying consolidated statement of cash flows was as follows:Standards or generally accepted accounting principles in the United States of America tentatively may be used for the
consolidation process, except for the following items that should be adjusted in the consolidation process so that profit isaccounted for in accordance with Japanese GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduledTime deposits due beyond three months(c) expensing capitalized development costs of R&D; (d) cancellation of the fair value model accounting for property, plant

Cash and cash equivalents presented in the consolidated statement of cash flows

through profit or loss on the sale of an investment in an equity instrument for the difference between the acquisition cost

2022

2023

Cash and cash equivalents presented in the consolidated balance sheet

amortization of actuarial gain or loss of pensions that has been recorded in equity through other comprehensive income;and equipment and investment properties and incorporation of the cost model accounting; and (e) recording a gain or loss

Thousands of
U.S. Dollars

Millions of Yen¥185,374¥182,645

2023$1,388,254(2,148)(2,041)(16,087)¥183,226¥180,604$1,372,167

f. Inventories—Inventories are stated at the lower of cost determined by the first-in, first-out method or net selling value.

and selling price, and recording impairment loss through profit or loss for other-than-temporary declines in the fair value of

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Notes to Consolidated Financial Statements
g. Investment Securities—Investment securities are classified and accounted for, depending on management’s intent, as

The asset retirement obligation is recognized as the sum of the discounted cash flows required for future asset retire-follows: (1) trading securities, which are held for the purpose of earning capital gains in near term, are reported at fairment and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonablevalue, and the related unrealized gains and losses are included in earnings; (2) held-to-maturity debt securities, for which

estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation is incurred, thethere is a positive intent and ability to hold to maturity, are reported at amortized cost; and (3) available-for-sale securities,

liability should be recognized when a reasonable estimate of the asset retirement obligation can be made. Upon initialwhich are not classified as either of the aforementioned securities, are reported at fair value, with unrealized gains andrecognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying

losses, net of applicable taxes, reported in a separate component of equity. The Group had no trading securities at Marchamount of the related fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to31, 2023 and 2022.

expense through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its present

Equity securities with no market price and investments in capital are stated at cost determined by the moving-averagevalue each period. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash
flows are reflected as reconciliation to the carrying amount of the liability and the capitalized amount of the related asset

method.
Investments in the limited partnership for investment partnerships and similar partnerships, which are deemed to be

retirement cost.

securities pursuant to Article 2, Paragraph 2 of the Financial Instruments and Exchange Act are stated at net amount ofequity interest in the partnership based on the most recent financial statements available according to the reporting datem. Leases—For a lessee, all finance lease transactions are capitalized to recognize lease assets and lease obligations instipulated in the partnership agreement.

the balance sheet.

For other-than-temporary declines in fair value, investment securities are reduced to net realizable value by a charge to

For a lessor, all finance leases that deem to transfer ownership of the leased property to the lessee are recognized aslease receivables, and all finance leases that deem not to transfer ownership of the leased property to the lessee areincome.

recognized as investments in leases.
h. Property, Plant and Equipment—Property, plant and equipment are stated at cost. Depreciation of property, plant andequipment excluding leased assets is computed by the straight-line method. Depreciation of leased assets is computed byn. Income Taxes—The provision for income taxes is computed based on the pretax income included in the consolidated

the straight-line method over the lease period with no residual value carried.

statement of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the

The range of useful lives is principally as follows:

expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying currently enacted income tax rates to the temporary differences.

7–60 years

The Company and certain domestic consolidated subsidiaries will transition from the non-consolidated taxation system

Vehicles

2– 7 years

to the Japanese Group Relief System because they submitted the application for the Japanese Group Relief System during

Machinery and equipment

2–20 years

fiscal year ended March 31, 2023 and the approval was granted at April 1, 2023. In addition, the Company has adopted the

Buildings and structures

ASBJ PITF No. 42, “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System” with
Maintenance and repairs, including minor renewals and improvements, are charged to income as incurred.

respect to the accounting treatment and disclosure related to tax effect accounting for national and local corporate income
taxes from the end of the fiscal year ended March 31, 2023.

i. Long-Lived Assets—The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognizedo. Foreign Currency Transactions—All short and long-term monetary receivables and payables denominated in foreign

if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected tocurrencies are translated into Japanese yen at the exchange rates at the balance sheet date.

result from the continued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of thep. Foreign Currency Financial Statements—The balance sheet accounts of the consolidated foreign subsidiaries are

discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition.

translated into Japanese yen at the current exchange rate as of the balance sheet date except for equity, which is translated at the historical rate. Differences arising from such translation are shown as “Foreign currency translation adjust-

j. Other Assets—Amortization of intangible assets is computed by the straight-line method.
Depreciation of leased assets is computed by the straight-line method over the lease period with no residual valuements” under accumulated other comprehensive income in a separate component of equity.
Revenue and expense accounts of the consolidated foreign subsidiaries are translated into Japanese yen at the current

carried.

exchange rates as of the balance sheet date.

k. Retirement and Pension Plans—The Company and consolidated subsidiaries mainly have contributory trusted pension

q. Per Share Information—Basic earnings per share is computed by dividing profit attributable to common shareholders

plans and unfunded retirement benefit plans. In addition, defined contribution retirement plans were introduced along withby the weighted-average number of common shares outstanding for the period, retroactively adjusted for stock splits.

these defined benefit retirement plans.
In calculating the retirement benefit obligations, the straight-line basis is used in determining the amount of the
expected retirement benefit obligations attributed to service performed up to the end of the current fiscal year.
Past service costs are recognized in profit or loss in full in the fiscal year in which it arises. Actuarial gains and losses
are amortized on a straight-line basis over a period within the average remaining service period of the eligible employees(mainly five years) on and after the fiscal year following the fiscal year in which it arises.
Actuarial gains and losses are recognized within equity on the consolidated balance sheet after adjusting for tax

Diluted earnings per share reflects the potential dilution that could occur if securities were exercised or converted into
common stock. Diluted earnings per share of common stock assumes full conversion of the outstanding convertible notes
and bonds at the beginning of the year (or at the time of issuance) with an applicable adjustment for related interest
expense, net of tax, and full exercise of outstanding warrants.
For the years ended March 31, 2023 and 2022, diluted earnings per share is not disclosed because the Company had
no dilutive securities.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicableeffects, and funded status is recognized as a liability or asset.

to the respective fiscal years, including dividends to be paid after the end of the year.

l. Asset Retirement Obligations—An asset retirement obligation is recorded for a legal obligation imposed either by law

r. Accounting Changes and Error Corrections—Under ASBJ Statement No. 24, “Accounting Standard for Accounting

or contract that results from the acquisition, construction, development, and normal operation of a tangible fixed asset andPolicy Disclosures, Accounting Changes and Error Corrections,” and ASBJ Guidance No. 24, “Guidance on Accounting

is associated with the retirement of such tangible fixed asset.

Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections,” accounting treatments are
required as follows:

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Notes to Consolidated Financial Statements(1) Changes in Accounting Policies—When a new accounting policy is applied following revision of an accounting stan-

4. ADDITIONAL INFORMATION

dard, the new policy is applied retrospectively unless the revised accounting standard includes specific transitional provisions, in which case the entity shall comply with the specific transitional provisions. (2) Changes in Presentation—When
the presentation of financial statements is changed, prior-period financial statements are reclassified in accordance with
the new presentation. (3) Changes in Accounting Estimates—A change in an accounting estimate is accounted for in the
period of the change if the change affects that period only, and is accounted for prospectively if the change affects boththe period of the change and future periods. (4) Corrections of Prior-Period Errors—When an error in prior-period financial
statements is discovered, those statements are restated.

performance-based share remuneration plan “Board Benefit Trust (BBT)” for the directors (except for outside directors) and
executive officers who do not concurrently serve as directors of the Company (“Officers”). This plan purports to further
enhance the connection between Officers’ remuneration and performance and share value of the Company, and raise theirmotivation to make contributions to increase the Company’s long-term performance and corporate value by sharing not
only the benefits of a rise in share prices but also the risk of a decline in share prices with shareholders.
The Plan is a performance-based share remuneration plan in which the trust acquires the Company’s shares using
money contributed by the Company as the source of funds, and Officers are provided with the Company’s shares andcash equivalent to the market value of the Company’s shares (“Shares of the Company”) through the trust in accordancewith “Regulation for Benefit of Shares to Officers” established by the Company. As a general rule, Officers shall be entitled to receive Shares of the Company at the time of retirement.
The Company applies the same accounting method as stipulated in the ASBJ PITF No.30, “Practical Solution on
Transactions of Delivering the Company’s Own Stock to Employee etc. through Trusts.”
The book value (excluding incidental costs) of the Company’s shares held by the trust bank is accounted for as treasury
stock in the equity section of the Company’s consolidated balance sheet. The book value and number of treasury stock
held by the trust bank at March 31, 2023 and 2022, were both ¥1,376 million ($10,308 thousand) and 483,700 shares,
respectively.

subsidiaries, YAMATO ASIA PTE. LTD. and YAMATO INVESTMENT (HONG KONG) LIMITED.
Reasons for dissolution and liquidation
Company judged that reorganizing the current management structure based on previous overseas governance by abolishing intermediate holding companies was necessary. The purpose of liquidation is to reconstruct an appropriate governanceframework that aligns with business scale, characteristics, country and region-specific factors, and the growth stage ofoverseas business.
Name, business and ownership of subsidiaries
Name:

YAMATO ASIA PTE. LTD.

Business:

Management of regional business in Southeast Asia, business development and market research

Ownership:

100% owned by the Company

Name:

YAMATO INVESTMENT (HONG KONG) LIMITED

Business:

Management of regional business in East Asia, business development and market research

Ownership:

100% owned by the Company

Schedule of dissolution and liquidation
Board of Directors Resolution (the Company):

February 17, 2023

Extraordinary Meeting of Shareholders (companies involved): August 2023 (planned)
Conclusion of liquidation:

3. SIGNIFICANT ACCOUNTING ESTIMATE

October 2023 (planned)

Financial situation of the subsidiaries
YAMATO ASIA PTE. LTD.

Impairment of Long-Lived Assets
Amount recorded in the consolidated financial statements for the current fiscal year based on accounting estimates that
may have a material impact on the consolidated financial statements for the following fiscal year are as follows:
Thousands of
U.S. Dollars

Millions of Yen
2023

Intangible assets

At the meeting held on February 17, 2023, the Board of Directors of the Company resolved to liquidate its consolidated

The Company decided to liquidate YAMATO ASIA PTE. LTD. and YAMATO INVESTMENT (HONG KONG) LIMITED. The

s. Performance-Based Share Remuneration Plan “Board Benefit Trust (BBT)”—The Company has introduced aProperty, plant and equipment

Dissolution and Liquidation of Subsidiaries

2022

2023

Net assets:¥3,676 million ($27,527 thousand)Total assets:¥3,768 million ($28,216 thousand)Total liabilities: ¥92 million ($689 thousand)
YAMATO INVESTMENT (HONG KONG) LIMITED¥443,017¥429,879$3,317,735

Net assets:¥6,172 million ($46,223 thousand)

43,75945,646

327,712

Total assets:¥6,176 million ($46,252 thousand)In cases where there are indications that an asset may be impaired, an impairment test is performed based on the
future cash flows generated by the asset. The cash-generating unit, which is used to determine whether it is necessary for
an asset to recognize impairment loss, is the smallest unit in an asset group generating cash inflows generally independent of cash inflows from other assets or asset groups. The criteria of the asset groups are the management accountingclassification and the unit used for investment decision making. In Yamato Transport Co., Ltd., the four businesses of
Retail, Corporate, Global SCM, and EC were grouped as the smallest cash flow generating units, and assets associatedwith the Transportation division and the Head Office division were classified as common assets. Because the Retail
Business Unit holds most of the above property, plant and equipment and intangible assets, the undiscounted future cash

Total liabilities: ¥4 million ($29 thousand)Effect on profit or loss due to the dissolution and liquidation
The effect caused by expenses arising from the dissolution and liquidation of the subsidiaries on profit or loss isimmaterial.
Significant effect on operating activities due to the dissolution and liquidation
The effect caused by the dissolution and liquidation of the subsidiaries on operating activities is immaterial.

flows used in determining recognition of impairment losses on those assets of the business are based on future management plans that include significant assumptions, such as the unit price and the transaction volume of TA-Q-BIN. Theseassumptions may have a material impact on the consolidated financial statements for the following fiscal year and thereafter if it becomes necessary for them to be reconsidered due to uncertain economic conditions and the operating conditions of the Group.

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Notes to Consolidated Financial Statements
5. BUSINESS COMBINATIONS

1. Outline of Business Combination
Name and business of the company involved in the business combination

Transactions under Common Control
a. Absorption-type Merger among Consolidated Subsidiaries
At the meeting held on January 20, 2022, the Board of Directors of the Company resolved to conclude contracts involving
the absorption-type merger between Yamato System Development Co., Ltd. and Yamato Web Solutions Co., Ltd., which
are consolidated subsidiaries of the Company, and they implemented the absorption-type merger on April 1, 2022.
1. Outline of Business Combination(1) Absorption-type merger in which Yamato System Development Co., Ltd. is the surviving company
Name and business of the companies involved in the business combination
Surviving company

Name:

Yamato System Development Co., Ltd. (“YSD”)

Business:

Research, development, information provision and consulting services for computer-based systems
Operation and management of information processing services and computer systems and related
services

Dissolving company

Name:

Yamato Web Solutions Co., Ltd. (“YWS”)

Business:

Worker dispatch services
Fee-based employment placement services
Research, development, information provision and consulting services for computer-based systems

Date of the business combination

April 1, 2022 (effective date)
Legal form of the business combination

Name:

Yamato Dialogue & Media Co., Ltd.

Business:

Various businesses related to direct marketing

Date of the business combination

September 26, 2022 (effective date)
Legal form of the business combination

Acquisition of shares from non-controlling shareholders
Name of the company after the business combination

The name did not change.
Outline and purpose of business combination

The purpose of the business combination is to enhance growth potential of the business by increasing the efficiency ofthe managing process through making Yamato Dialogue & Media Co., Ltd. a wholly-owned subsidiary.

2. Outline of Accounting Treatment
The transaction was accounted for as a transaction with non-controlling shareholder of transactions under common control
in accordance with ASBJ Statement No. 21, “Accounting Standard for Business Combinations,” and ASBJ Guidance No. 10,“Guidance on Accounting Standards for Business Combinations and Business Divestitures.”3. Matters related to Additional Acquisition of Shares of Subsidiary
Acquisition cost and the breakdown are as follows:
Acquisition consideration:

Cash and cash equivalents¥613 million ($4,587 thousand)Total acquisition cost:¥613 million ($4,587 thousand)Absorption-type merger with YWS as the dissolving company and YSD as the surviving company
Name of the company after the business combination

The name did not change.

(2) Outline and purpose of business combination
The purpose of the business combination is to improve growth potential of the business by further utilizing businessresources and optimizing the professional personnel in the IT department through the absorption-type merger with YSD
and YWS. YSD is responsible for the IT functions of the Yamato Group, and YWS provides design, construction, operationof website, and staffing services.
2. Outline of Accounting Treatment
The transaction was accounted under common control in accordance with ASBJ Statement No. 21, “Accounting Standard
for Business Combinations,” and ASBJ Guidance No. 10, “Guidance on Accounting Standards for Business Combinations
and Business Divestitures.”

4. Change in Equity related to Transaction with Non-controlling Shareholders
Main reason for the change in capital surplus

Additional acquisition of shares of subsidiary
Increase in capital surplus by transaction with non-controlling shareholders¥23 million ($170 thousand)

6. INSTALLMENT RECEIVABLES
Sales recorded on the installment basis were 0.2% of operating revenues in both 2023 and 2022.
Annual maturities of installment receivables at March 31, 2023, and related amortization of deferred profit on installment sales are as follows:
Millions of Yen
Year Ending March 31

b. Additional Acquisition of Shares of Subsidiary
On September 26, 2022, the Company made Yamato Dialogue & Media Co., Ltd., which is a consolidated subsidiary of theCompany, a wholly-owned subsidiary through additional acquisition of shares of Yamato Dialogue & Media Co., Ltd. heldby DHL eCommerce Japan K.K.

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Deferred Profit on
Installment Sales

Receivables

2024¥22,182¥2,020$166,121$15,1252025

10,876

1,150

81,451

8,616

2026

6,685

598

50,066

4,479

2027

3,838

324

28,742

2,424

2028

2,147

191

16,0801,427

2029 and thereafter

4,781

515

35,802

3,858¥50,509¥4,798$378,262$35,929

Total

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Receivables

Thousands of U.S. Dollars

Deferred Profit on
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Notes to Consolidated Financial Statements
7.

INVENTORIES

Thousands of U.S. Dollars
March 31, 2023

Inventories at March 31, 2023 and 2022, consisted of the following:

Proceeds

Realized Gains

Realized Losses$14,757$34$14,757$34

Available-for-sale:
Thousands of
U.S. Dollars

Millions of Yen

Merchandise

2023

2022

2023

¥ 169

¥ 187

$ 1,265

Work in process

322

167

2,412

Raw materials and supplies

2,089

1,862

15,647

Total¥2,580¥2,216$19,324

Equity securities$20,870

Other
Total

4
$20,874

Loss on valuation of available-for-sale securities for the years ended March 31, 2023 and 2022, were ¥2 million ($17thousand) and ¥49 million, respectively.

9. LONG-LIVED ASSETS
8. INVESTMENT SECURITIESThe Group reviewed its long-lived assets for impairment as of the years ended March 31, 2023 and 2022. Upon review,
due to no future use, continuous operating losses of those units or significant declines in market prices, the Group recog-

Investment securities as of March 31, 2023 and 2022, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen
2023

2022

¥21,001¥21,562$157,274

Non-marketable equity securities

3,759

3,813

28,154

Other

7,476

8,567

55,987¥32,236¥33,942$241,415

2023

Total

Payment Business Unit of Yamato Credit Finance Co., Ltd. and 4 other asset groups for the year ended March 31, 2023,
and ¥2,420 million as other expense for the asset groups of the head office and the Tokyo Regional Branch of Yamato

Non-current:
Marketable equity securities

nized an impairment loss of ¥1,995 million ($14,938 thousand) as other expense for the asset groups of Credit Card

Information regarding each category of the securities classified as available-for-sale at March 31, 2023 and 2022, is as follows:
Millions of Yen

Home Convenience Co., Ltd. and 6 other asset groups for the year ended March 31, 2022. The carrying amounts of therelevant asset groups were written down to their recoverable amounts. In the case where the net selling prices were used
as recoverable amounts, idle assets were evaluated at zero, and the relevant asset groups other than idle assets were
evaluated mainly based on Real Estate Appraisal Standards, assessed value of fixed assets, and posted land prices. In thecase where the recoverable amounts were measured at their value in use, the discount rates used for computation ofpresent value of future cash flows for the years ended March 31, 2023 and 2022, were mainly 5.29% and 5.23%,
respectively.

2023
Cost

Unrealized Gains

Unrealized Losses¥10,448¥254

Fair Value

10. BANK LOANS AND LONG-TERM DEBT

Securities classified as:
Available-for-sale: Equity securities¥10,807¥21,001

interest rates applicable to the bank loans as of March 31, 2023 and 2022, were approximately 0.047% and 0.055%,

Millions of Yen

respectively.

2022
Cost

Short-term bank loans at March 31, 2023 and 2022, consisted of notes to banks and bank overdrafts. The weighted-average

Unrealized Gains

Unrealized Losses¥11,572¥653

Long-term debt at March 31, 2023 and 2022, consisted of the following:

Fair Value

Securities classified as:
Available-for-sale: Equity securities¥10,643

Lease obligations

Thousands of U.S. Dollars
2023
Cost

Unrealized Gains

Unrealized Losses

Total

Fair ValueLess current portion

Securities classified as:
Available-for-sale: Equity securities$80,933$78,242$1,901$157,274

Information for available-for-sale securities, which were sold during the years ended March 31, 2023 and 2022, is as follows:
Millions of Yen
March 31, 2023

Proceeds

Realized Gains

Realized Losses

Available-for-sale:
Equity securities¥2,787¥1,970

¥4

Other
Total

¥2,787¥1,970¥4

Millions of Yen
March 31, 2022

Proceeds

Realized Gains

Realized Losses¥18,638¥14,431¥—¥18,638¥14,431¥—

Available-for-sale:
Equity securities

Thousands of
U.S. Dollars

Millions of Yen¥21,562

Total

2023

2022

¥38,274¥30,888$286,632

38,27430,888286,632(5,415)(4,850)(40,554)¥32,859¥26,038$246,078

Millions of Yen

Thousands of
U.S. Dollars

2023

Annual maturities of long-term debt at March 31, 2023, are as follows:Year Ending March 312024¥ 5,415$ 40,554

2025

4,983

37,316

2026

3,731

27,937

2027

2,885

21,608

2028

2,083

15,6012029 and thereafter

19,177

143,616

Total¥38,274$286,632

Other
Total

78
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Report 2023with Independent Auditor’s Report
Financial

YAMATO HOLDINGS CO., LTD.

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Report2023
Financial Statements with Independent
Auditor’s
Report79
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Part 4

Part 4

Notes to Consolidated Financial Statements
11. RETIREMENT AND PENSION PLANS

The amount of the liability and asset for employees’ retirement benefits that are offset individually by the Company
and subsidiaries are combined.

The Group has defined benefit retirement plans and defined contribution retirement plans for employees.
The defined benefit retirement plans provide, under most circumstances, that employees terminating their employment are entitled to retirement benefits determined based on the rate of pay at the time of termination, years of service,

The components of net periodic benefit costs for the years ended March 31, 2023 and 2022, were as follows:

and certain other factors. Such retirement benefits are made in the form of a lump-sum severance payment from theThousands of
U.S. Dollars

Millions of Yen

Company or from the consolidated subsidiaries and annuity payments from a trustee. Employees are entitled to larger

2023

2022

¥14,233¥14,3172023

payments if the termination is involuntary, by retirement at the mandatory retirement age, by death, or by voluntary retire-

Service cost

ment at certain specific ages exceeding the standard retirement age.

Interest cost

151

169

1,128

Expected return on plan assets

(574)

(855)

(4,295)

Recognized actuarial loss (gain)

493

(488)

3,689

(1) Defined Benefit Retirement Plans
The changes in defined benefit obligation for the years ended March 31, 2023 and 2022, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2022

2023

Balance at beginning of year

Past service cost2023

¥151,477¥183,859$1,134,407

14,999Gain on transition to defined contribution pension plans(1,420)

OthersNet periodic benefit costs$106,592

52

(76)

391

¥14,355¥26,646$107,505

Service cost

14,233

14,317

106,592

Interest cost

151

169

1,128

Amounts recognized in other comprehensive income (before income tax effect adjustments) in respect of defined benefit

Actuarial loss arising during the year

169

1,849

1,266

retirement plans for the years ended March 31, 2023 and 2022, were as follows:(10,721)(9,901)(80,289)

Retirement benefits paid
Past service cost arising during the year

14,999Decrease due to transition to defined contribution pension plans(52,271)

Decrease due to change in scope of consolidation(1,544)

Balance at end of year

¥155,309¥151,477

2023

¥981

¥(7,510)$7,349

Total

¥981

¥(7,510)$1,163,104$7,349Amounts recognized in accumulated other comprehensive income (before income tax effect adjustments) in respect ofThousands of
U.S. Dollars

Millions of Yen

Balance at beginning of year

2022

Actuarial gain (loss)

2023

The changes in plan assets for the years ended March 31, 2023 and 2022, were as follows:

2022

2023

Thousands of
U.S. Dollars

Millions of Yen

defined benefit retirement plans as of March 31, 2023 and 2022, were as follows:

2023

Thousands of
U.S. Dollars

Millions of Yen¥57,351¥112,181$429,500

Expected return on plan assets

574

855

4,295

Unrecognized actuarial gain

¥1,387¥406$10,390

Actuarial gain arising during the year

657

1,334

4,926

Total

¥1,387¥406$10,390

Contributions from the employer
Retirement benefits paid

2

3,827

14

(1,550)(2,034)(11,608)

Decrease due to transition to defined contribution pension plans(57,158)

Decrease due to change in scope of consolidation(1,654)

Balance at end of year

¥57,034

2022

2023

Plan assets as of March 31, 2023 and 2022, consisted of the following:
2022

2023

¥ 57,351$427,127

Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined benefit obliga-

2023

General accounts

58%

57%

Debt investments

22

22

Others

20

21

Total

100%

100%

tion and plan assets as of March 31, 2023 and 2022, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2022

2023

Defined benefit obligation of funded plan
Plan assets

2023¥ 11,802¥ 12,935(57,034)(57,351)(427,127)(45,232)(44,416)(338,742)

88,385

Defined benefit obligation of unfunded plan

143,507

138,542

1,074,719

Net liability arising from defined benefit obligation¥ 98,275¥ 94,126$ 735,977
Thousands of
U.S. Dollars

Millions of Yen
2022

2023

Liability for employees' retirement benefits
Asset for employees' retirement benefits
Net liability arising from defined benefit obligation

80
17

$

YAMATO HOLDINGS CO., LTD.
IntegratedStatements
Report 2023with Independent Auditor’s Report
Financial

2023¥98,295¥94,142$736,127

(20)

(16)

(150)

¥98,275¥94,126$735,977

Assumptions used for the years ended March 31, 2023 and 2022, were set forth as follows:
2022

2023

Discount rate

0.1%

0.1%

Expected rate of return on plan assets

1.0%

1.0%

The expected rate of return on plan assets is determined on the basis of the distribution of plan assets, past performance of respective assets that make up investments of plan assets, and market trends.

(2) Defined Contribution Retirement Plans
The amounts contributed to the defined contribution retirement plans of the Group for the years ended March 31, 2023
and 2022, were ¥10,796 million ($80,849 thousand) and ¥6,886 million, respectively.

YAMATO HOLDINGS CO., LTD.

Integrated
Report2023
Financial Statements with Independent
Auditor’s
Report81
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Part 4

Notes to Consolidated Financial Statements
12. ASSET RETIREMENT OBLIGATIONS

14. INCOME TAXESThe changes in asset retirement obligations for the years ended March 31, 2023 and 2022, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

Balance at beginning of year

The Company and its domestic subsidiaries are subject to Japanese national and local income taxes, which, in the aggre-

2023

2022

2023

¥9,928¥9,646$74,347

Additional provisions associated with the acquisition of property, plant andequipment

23

456

168

Reconciliation associated with passage of time

104

105

779

Reconciliation associated with changes in accounting estimates
Reduction associated with settlement of asset retirement obligations
OthersBalance at end of year

(7)

(138)

(51)

(449)

(138)

(3,362)

10

(3)

77

¥9,609¥9,928$71,958

Changes in accounting estimates were recorded as it became evident that the estimate of the discounted cash flows
required for future asset retirement at the beginning of the year would change. A reconciliation has been prepared for thechange, which resulted in a decrease of the asset retirement obligation for the years ended March 31, 2023 and 2022, by¥7 million ($51 thousand) and ¥138 million, respectively.

13. EQUITY
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the
Companies Act that affect financial and accounting matters are summarized below:

a. Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria such as (1) having a Board of
Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of thedirectors being prescribed as one year rather than the normal two-year term by its articles of incorporation, the Board of
Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to acertain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Companies Act provides certain limitations on the amounts available fordividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.

gate, resulted in a normal effective statutory tax rate of 30.6% for the years ended March 31, 2023 and 2022.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets
and liabilities at March 31, 2023 and 2022, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2022

2023

2023

Deferred tax assets:
Accrued expenses¥ 11,197¥ 11,871$ 83,856

Legal welfare expense

1,881

1,970

14,086Enterprise tax

1,906

1,958

14,277

526

510

3,938

Tax loss carryforwards

4,257

3,656

31,884

Liability for employees' retirement benefits

30,77729,229230,486

Loss on valuation of land

20,485

20,485

153,408

Loss on impairment of long-lived assets

4,242

3,856

31,771

Loss on valuation of investment securities

920

1,062

Investments in subsidiaries and affiliates

10,628

Unrealized profit

3,944

3,812

394

398

2,947

9,428

8,679

70,604

100,585

87,486753,274(4,257)(3,651)(31,884)

Less valuation allowance for temporary differences(24,585)(23,915)(184,109)

Total valuation allowance(28,842)(27,566)(215,993)¥ 71,743¥ 59,920$ 537,281¥ (2,703)¥ (2,756)$ (20,248)(5,230)(4,880)(39,168)

Deferred tax liabilities¥ (7,933)¥ (7,636)$ (59,416)

Deferred tax assets—net¥ 63,810¥ 52,284$ 477,865

Allowance for doubtful accounts

Loss on valuation of telephone subscription rights
Other
Total tax loss carryforwards and temporary differences
Less valuation allowance for tax loss carryforwards

Deferred tax assets

6,890
79,58929,538Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Other

The expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred tax assets as ofMarch 31, 2023, are as follows:
Millions of Yen

b. Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity accountcharged upon the payment of such dividends until the aggregate amount of legal reserve and additional paid-in capitalequals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal
reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional
paid-in capital, other capital surplus, and retained earnings can be transferred among the accounts within equity undercertain conditions upon resolution of the shareholders.
c. Treasury Stock
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution
to the shareholders, which is determined by a specific formula. The Companies Act also provides that companies canpurchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented asa separate component of equity.

82
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YAMATO HOLDINGS CO., LTD.
IntegratedStatements
Report 2023with Independent Auditor’s Report
Financial

Year Ending March 31

2024

Deferred Tax
Assets Relating
to Tax Loss
Carryforwards

Less Valuation
Allowances for
Tax Loss
Carryforwards

¥

¥

24

Net Deferred Tax
Assets Relating
to Tax Loss
Carryforwards

(24)

2025

50

(50)

2026

36

(36)

2027

3

(3)

¥—

2028
2029 and thereafter

4,144(4,144)Total¥4,257¥(4,257)¥—

YAMATO HOLDINGS CO., LTD.

Integrated
Report2023
Financial Statements with Independent
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Report83
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Part 4

Notes to Consolidated Financial Statements
Short-term bank loans and long-term bank loans are mainly related to a financial business. Bank loans are mainly vari-

Thousands of U.S. Dollars

Year Ending March 31

2024

Deferred Tax
Assets Relating
to Tax Loss
Carryforwards$

Less Valuation
Allowances for
Tax Loss
Carryforwards

180$

Net Deferred Tax
Assets Relating
to Tax Loss
Carryforwards

(180)

2025

378

(378)

2026

269

(269)

2027

19

(19)

$—

31,038(31,038)

Total$31,884$(31,884)

Accounts payable and bank loans exposed to liquidity risks are managed by each company of the Group, such as
through fund settlement, bookkeeping, monitoring of the balances outstanding, and managing cash flows.

(3) Fair Value of Financial Instruments
Since variable factors are incorporated in the calculation of the fair value of financial instruments, the fair value may change
due to the adoption of different assumptions, etc.
Fair value of financial instruments at March 31, 2023 and 2022, were as follows:

2028
2029 and thereafter

able interest rate loans.

$—

Millions of Yen
March 31, 2023

Carrying Amount

Fair Value

Difference

Assets:Reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statement of income for the year ended March 31, 2023, was as follows:
30.6%

Per capita levy of local taxes

4.7

Difference of tax rates for foreign subsidiaries(0.1)

Valuation allowance(17.0)

Share of profit or loss of entities accounted for using equity method

2.2

Other—net(0.3)

Actual effective tax rate

20.1%

Allowance for doubtful accounts¥216,251(261)
215,990

2023

Normal effective statutory tax rate

Trade notes and accounts receivable, and contract assets

Installment sales receivable
Allowance for doubtful accounts
Deferred profit on installment sales¥216,028¥38

50,509(942)(4,798)44,76949,136

Available-for-sale securities

21,001

21,001

Shares of affiliates

4,309

5,805

10,00010,000

4,367
1,496

Liabilities:

Reconciliation between the normal effective statutory tax rates and the actual effective tax rates for the year ended

Short-term loans

March 31, 2022, was omitted since the difference between both rates was less than 5% of the normal effective statutory

Millions of Yen
March 31, 2022

tax rates.

Carrying Amount

Fair Value

Difference

Assets:Trade notes and accounts receivable, and contract assets

15. LEASES

Allowance for doubtful accounts(158)
218,765

The Group leases certain buildings, cargo aircrafts, computer equipment and other assets as the lessee.

Installment sales receivable

Future rental payments under non-cancelable operating leases at March 31, 2023 and 2022, were as follows:
Thousands of
U.S. Dollars

Millions of Yen¥218,923

Allowance for doubtful accounts
Deferred profit on installment sales¥218,777

12(936)(4,714)

2023

2022

Due within one year

42,405

46,956¥ 9,785¥ 7,496$ 73,275

Available-for-sale securities

Due after one year

21,562

21,562

44,46022,608332,961

Shares of affiliates

Total

6,668

10,127¥54,245¥30,104$406,236
15,00015,0002023¥

48,055

4,551
3,459

Liabilities:
Short-term loans

16. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group uses financial instruments, mainly long-term debt including bank loans and bonds, in order to expand its business based on its investment plan to expand its network. Cash surpluses, if any, are invested in low risk financial assets.
Derivatives are not used for speculative purposes but to manage exposure to interest fluctuation risk. Certain consolidated
subsidiaries conduct installment sales operations.
(2) Nature and Extent of Risks Arising from Financial Instruments and the Risk Management for Financial
Instruments
Receivables such as notes and accounts receivable and installment sales receivable are exposed to customer credit risk.
Therefore, the Group minimizes customers’ credit risk by monitoring collections and accrued receivables at due dates.
Investment securities are mainly equity securities of the companies with which the Group has business relationships
or capital alliances. Such securities are exposed to the risk of market price fluctuations.
Most payment terms of payables such as notes and accounts payable are less than one year.

84
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YAMATO HOLDINGS CO., LTD.
IntegratedStatements
Report 2023with Independent Auditor’s Report
FinancialThousands of U.S. Dollars
March 31, 2023

Carrying Amount

Fair Value

Difference

Assets:Trade notes and accounts receivable, and contract assets
Allowance for doubtful accounts$1,619,494(1,954)
1,617,540

Installment sales receivable$1,617,824$

284

378,262

Allowance for doubtful accounts(7,060)

Deferred profit on installment sales(35,929)
335,273

367,974

Available-for-sale securities

157,274

157,274

Shares of affiliates

32,271

43,47674,89074,89032,701
11,205

Liabilities:
Short-term loans

YAMATO HOLDINGS CO., LTD.

Integrated
Report2023
Financial Statements with Independent
Auditor’s
Report85
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FINANCIAL SECTIONFINANCIAL SECTION

Part 4

Part 4

Notes to Consolidated Financial Statements
Cash and cash equivalents are omitted because they are settled in a short period of time and their carrying amounts

Financial instruments recorded on the consolidated balance sheet at fair value

approximate fair value.

Millions of Yen
Fair Value

Trade notes and accounts receivable, and contract assets are presented after deducting allowances for doubtful

March 31, 2023

accounts set up for trade notes and accounts receivable, and contract assets not settled in a short period of time.

Level 1

Level 2

Level 3

Total

Available-for-sale securities:

Installment sales receivable is presented after deducting the relevant allowance for doubtful accounts and deferred

Equity securities

profit on installment sales.

Total assets

Equity securities with no market price and investments in capital are not included in available-for-sale securities or¥21,001¥—¥—¥21,001¥21,001¥—¥—¥21,001

shares of affiliates. The amount of these financial instruments recorded as investment securities on the consolidated balance sheet at March 31, 2023 and 2022, were ¥3,840 million ($28,759 thousand) and ¥3,894 million, respectively, and theamount of these financial instruments recorded as investments in unconsolidated subsidiaries and affiliates on the consolidated balance sheet at March 31, 2023 and 2022, were ¥6,213 million ($46,532 thousand) and ¥7,362 million, respectively.
Investments in partnerships and other similar entities that are recorded on the consolidated balance sheet at net

Millions of Yen
Fair Value
March 31, 2022

Level 2

Level 3

Total

Available-for-sale securities:
Equity securities
Total assets

amount of equity interest are not included. The amount of these investments recorded as investment securities on theLevel 1

¥21,562¥—¥—¥21,562¥21,562¥—¥—¥21,562

Thousands of U.S. Dollars

consolidated balance sheet at March 31, 2023 and 2022, were ¥7,395 million ($55,382 thousand) and ¥8,486 million,

Fair Value

respectively.

March 31, 2023

Trade notes and accounts payable are omitted because most of them are due within one year and their carrying

Level 1

Level 2

Level 3

Total

Available-for-sale securities:

amounts approximate fair value.

Equity securities
Total assets$157,274$—$—$157,274$157,274$—$—$157,274¥—¥216,028(4) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Millions of Yen
March 31, 2023

Due in One Yearor Less

Due after One Yearthrough Five Years

Financial instruments other than those recorded on the consolidated balance sheet at fair value

Due after
Five Years¥185,374

Trade notes and accounts receivable, and contract assets

216,21338

Installment sales receivable

22,182

23,546

4,781

Trade notes and accounts receivable, and contract assets¥423,769¥23,584¥4,781

Installment sales receivable

Total

¥

—

¥

—

March 31, 2022

Due in One Yearor Less

Due after One Yearthrough Five Years¥182,645
218,883

40

Installment sales receivable

22,061

22,7293,265¥423,589¥22,769¥3,265

Total

¥

—

Thousands of U.S. Dollars
March 31, 2023

Due in One Yearor Less

Cash and cash equivalents$1,388,254

Trade notes and accounts receivable, and contract assets

1,619,214

280

166,121

176,339

35,802$3,173,589$176,619$35,802

Installment sales receivable
Total

Due after One Yearthrough Five Years$—

Due after
Five Years$—(5) Matters Concerning the Breakdown of the Fair Value of Financial Instruments by Level and Other Items
The fair value of financial instruments is classified into the following three levels based on the observability and materialityof the inputs used to calculate fair value.
Level 1 fair value: Fair value calculated by the market price of the asset or liability formed in the active market amongobservable inputs
Level 2 fair value: Fair value calculated by observable inputs excluding inputs of Level 1
Level 3 fair value: Fair value calculated by unobservable inputs
When multiple inputs that have a significant influence on the fair value calculation are used, the fair value is classified
into the lowest priority level in the fair value calculation among the levels to which those inputs belong.

YAMATO HOLDINGS CO., LTD.
IntegratedStatements
Report 2023with Independent Auditor’s Report
Financial¥

Level 2—

Level 3

¥216,028

Total

49,136Equity securities

Due after
Five Years

Trade notes and accounts receivable, and contract assets—

Level 149,136

Shares of affiliates:

Cash and cash equivalents¥

Fair Value
March 31, 2023

Millions of Yen

86
23

Millions of Yen

Cash and cash equivalents

5,805

5,805

Total assets¥5,805¥265,164¥—¥270,969

Short-term loans¥—¥ 10,000¥—¥ 10,000

Total liabilities¥—¥ 10,000¥—¥ 10,000¥—¥218,777

Millions of Yen
Fair Value
March 31, 2022

Level 1

Trade notes and accounts receivable, and contract assets¥

Level 2—

Level 3¥218,777

Installment sales receivable

Total

46,956

46,956

Shares of affiliates:
Equity securities

10,127

10,127

Total assets¥10,127¥265,733¥—¥275,860

Short-term loans¥—¥ 15,000¥—¥ 15,000

Total liabilities¥—¥ 15,000¥—¥ 15,000Thousands of U.S. Dollars
Fair Value
March 31, 2023

Level 1

Trade notes and accounts receivable, and contract assets$

Level 2—

Level 3

$1,617,824

Installment sales receivable

Total

$—

$1,617,824

367,974

367,974

Shares of affiliates:
Equity securities
Total assets

43,476$43,476

43,476$1,985,798$—$2,029,274

Short-term loans

$

—

$

74,890$—$74,890Total liabilities

$

—

$

74,890$—$74,890

YAMATO HOLDINGS CO., LTD.

Integrated
Report2023
Financial Statements with Independent
Auditor’s
Report87
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Part 4

Part 4

Notes to Consolidated Financial Statements
Available-for-sale securities and shares of affiliates

Thousands of U.S. Dollars

Marketable equity securities are valued using the market prices. Since marketable equity securities are traded in active2023

markets, their fair value is classified as Level 1 fair value.
Transportation income

Corporate
Business Unit

$ 8,921,327$4,622,346

Other

Total

$ 184,354 $13,728,027

Trade notes and accounts receivable, and contract assets

Logistical support income

25,104

1,943,574

The fair value of these assets is determined using the discounted present value method based on the amount of the

Others193,653

249,814

1,136,458

1,579,925

receivable, the period to maturity and the interest rate that takes into account credit risk for each receivable classified by

Revenues from contracts with customers

9,140,084

6,815,734

1,320,812

17,276,630

certain time periods and is classified as Level 2 fair value.

Other revenues

25,73725,7379,140,084

6,815,734

1,346,549

17,302,367

Total
Installment sales receivable

Internal segment revenues or transfers

The fair value of installment sales receivable is determined using the discounted present value method based on the

Operating revenues by reportable segments(19,200)(356,450)(58,207)(433,857)

6,459,284

1,288,342

16,868,510(838,699)(3,383,389)

Intersegment revenues or transfers(2,421,460)(123,230)

classified by certain time periods and is classified as Level 2 fair value.

Operating revenues from external customers$ 6,699,424$6,336,054

The fair value of short-term loans is determined using the discounted present value method based on the total amount ofprincipal and interest and the interest rate that takes into account the remaining term of the debt and credit risk and isclassified as Level 2 fair value.

(1) Information about Disaggregated Revenues from Contracts with Customers
Millions of Yen
2023

Transportation income

Corporate
Business Unit

Other

¥1,191,265¥617,221

Logistical support income

3,352

259,526

Others25,8581,220,475

Revenues from contracts with customers
Total
Internal segment revenues or transfers

1,220,475

Total¥ 24,617¥1,833,103

33,358

151,751

210,967

910,105

176,368

2,306,948

3,437

3,437

179,805

2,310,385

262,878

Other revenues
910,105(2,563)(47,597)(7,773)(57,933)

Operating revenues by reportable segments

1,217,912

862,508

172,0322,252,452

Intersegment revenues or transfers(323,338)(16,455)(111,991)(451,784)

Operating revenues from external customers¥ 894,574¥846,053¥ 60,041¥1,800,668

Millions of Yen
2022
RetailBusiness Unit

Transportation income

Corporate
Business Unit

¥1,144,359¥598,306

Logistical support income

3,587

249,638

Others28,18433,023

1,176,130

880,967

Revenues from contracts with customers
Other revenues
Total

Other

¥ 50,968

Balance of receivables, contract assets and contract liabilities from contracts with customers
Thousands of
U.S. Dollars

Millions of Yen
2022

2023

2023

Receivables from contracts with customers, beginning of fiscal year

¥188,005¥178,323$1,407,959

Receivables from contracts with customers, end of fiscal year

185,549

188,005

1,389,571

Contract assets, beginning of fiscal year

4,689

4,146

35,115Contract assets, end of fiscal year

4,794

4,689

35,899Contract liabilities, beginning of fiscal year

12,887

11,44496,511

Contract liabilities, end of fiscal year

14,264

12,887

106,820

Contract assets are mainly recognized in TA-Q-BIN transactions and are recognized based on the estimated revenue from

253,225

the progress of deliveries up to the end of the fiscal year. Contract assets are reclassified to receivables from contracts

171,975

233,182

with customers when the consolidated subsidiary’s rights to the consideration become unconditional.

222,943

2,280,040

4,583

4,583

880,967

227,526

2,284,623(42,691)(18,327)(64,734)

Operating revenues by reportable segments

1,172,414

838,276

209,199

2,219,889

Intersegment revenues or transfers(279,017)(26,091)(121,163)(426,271)¥ 893,397¥812,185¥ 88,036¥1,793,618

YAMATO HOLDINGS CO., LTD.
IntegratedStatements
Report 2023with Independent Auditor’s Report
Financial(3) Information about the Relationship between the Satisfaction of Performance Obligations under Contracts
with Customers and Cash Flows from Such Contracts, and the Amount and Timing of Revenue Expected to
be Recognized in Subsequent Periods from Contracts with Customers that Existed at the End of the Current
Fiscal Year

Total

(3,716)

Operating revenues from external customers

Notes: “Other” includes Yamato System Development Co., Ltd. (development of information systems), and Yamato Autoworks Co., Ltd. (collective vehicle management agent business for transportation companies).
Other revenues consist of transactions related to financial instruments included in the scope of ASBJ Statement No. 10, “Accounting Standard for
Financial Instruments,” such as installment sales.

¥1,793,633

1,176,130Internal segment revenues or transfers$ 449,643 $13,485,121(2) Information that Provides a Basis for Understanding Revenue from Contracts with Customers
The same information as in Note 2, “Summary of Significant Accounting Policies” is omitted.
None of the contracts include significant financial elements or variable consideration, and the contractual consideration
for services is generally received within 30–70 days from the time of revenue recognition. The contractual consideration fortransportation services provided to individual customers in the Retail Business Unit is received at the time the parcel is
accepted.

17. REVENUE RECOGNITION

RetailBusiness Unit

1,968,678

9,120,884

amount of the receivable, the period to maturity and the interest rate that takes into account credit risk for each receivable

Short-term loans

8825

RetailBusiness Unit

Contract liabilities mainly relate to advances received from customers who have subscribed to the Kuroneko Member
Discount program for TA-Q-BIN transactions. Contract liabilities are reversed upon the recognition of revenue.
Among the revenues recognized during the fiscal years ended March 31, 2023 and 2022, the amounts included in the
opening balance of contract liabilities were ¥10,427 million ($78,091 thousand) and ¥9,558 million, respectively.
The amounts of revenue recognized in the fiscal years ended March 31, 2023 and 2022, from performance obligations
satisfied in prior periods were immaterial.

YAMATO HOLDINGS CO., LTD.

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Part 4

Part 4

Notes to Consolidated Financial Statements
19. EARNINGS PER SHARETransaction prices allocated to remaining performance obligations

The Group applies the practical expedient in noting transaction prices allocated to the remaining performance obligations
and does not include performance obligations with original expected contractual terms of one year or less and perfor-

Basic earnings per share (“EPS”) for the years ended March 31, 2023 and 2022, was as follows:

mance obligations for which the entity is entitled to receive consideration directly corresponding to the value to the cus-

Millions of Yen

tomer of the portion of the obligation that has been performed by the entity to date. As a result, there were no significant
performance obligations that should have been noted as the transaction price allocated to the remaining performanceYear Ended March 31, 2023

Basic EPS—Profit attributable to common shareholders

obligations.
The performance obligations with original expected contractual terms of one year or less mainly relate to TA-Q-BIN

Thousands ofSharesProfit Attributable to Weighted-average
Owners of Parent
SharesYen

U.S. Dollars
EPS¥45,898

362,446¥126.64¥55,956

370,488¥151.03$0.95

Year Ended March 31, 2022

transactions in the Retail Business Unit.

Basic EPS—Profit attributable to common shareholders

In addition, there were no material amounts of consideration arising from contracts with customers that were notincluded in the transaction price.

20. SEGMENT INFORMATION
18. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended March 31, 2023 and 2022, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2023

2022

2023

Adjustments arising during the year

¥ (304)¥ 10,727$ (2,274)

Reclassification adjustments to profit or loss

(1,970)(19,124)(14,757)

Amount before income tax effect(2,274)(8,397)(17,031)

Unrealized gain on available-for-sale securities:

Income tax effect
Total

51

2,982

387

¥(2,223)¥ (5,415)$(16,644)¥ 2,143¥ 1,437$ 16,051

Foreign currency translation adjustments:
Adjustments arising during the year
Reclassification adjustments to profit or loss

(643)

Amount before income tax effect2,143

Income tax effect
Total

794

16,051149

1,117¥ 2,292¥794$ 17,168¥ 488¥ (1,528)$ 3,660
3,689

Remeasurements of defined employees’ retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit or loss

493

(5,982)

Amount before income tax effect981(7,510)

7,349

Income tax effect

(304)

2,227

(2,279)¥ 677¥ (5,283)$ 5,070

¥

¥

$

Total

(1) Description of Reportable Segments
The Group identifies operating segments as components of entity for which discrete financial information is available andwhose operating results are regularly reviewed by the Board of Directors in order to make decisions about resources to beallocated to the segments and assess their performance.
Under the Company, which is the pure holding company, the Group manages business operations by customer segment and operates through group management structure consisting of the Retail Business Unit, which manages the Retailbusiness that provides delivery services for individual customers and mid-to-small sized corporations, the Corporate
Business Unit, which manages the Corporate business, the Global SCM business, and the EC business, that provide transportation services etc. for large corporations, and Other.
The Group defines the reportable segments as follows:
Retail Business Unit:
Delivery services for individual customers and mid-to-small sized corporations
Corporate Business Unit: Transportation services for large corporations, planning and operation of logistics centers,
customs services, air cargo agency services
Other:Development and operation of IT systems, car maintenance services, sales of fuel, non-life insurance agency services, cargo vehicle transportation services(2) Methods of Measurement for the Amounts of Segment Revenues, Segment Profit, Segment Assets, andOther Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of
Significant Accounting Policies.”

Share of other comprehensive income of entities accounted for using equity
method:Adjustments arising during the year
Reclassification adjustments to profit or loss
Total
Total other comprehensive income (loss)

90
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YAMATO HOLDINGS CO., LTD.
IntegratedStatements
Report 2023with Independent Auditor’s Report
Financial

1

¥

(54)

¥ 692

111
(3)

(55)
¥

108

¥ (9,796)

9
(416)

$

(407)

$ 5,187

YAMATO HOLDINGS CO., LTD.

Integrated
Report2023
Financial Statements with Independent
Auditor’s
Report91
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Part 4

Part 4

Notes to Consolidated Financial Statements(3) Information about Segment Revenues, Segment Profit, Segment Assets, and Other Items
Millions of Yen

2023
RetailBusiness Unit

Segment revenues:
Segment revenues from customers
Intersegment revenues
Total segment revenues
Segment profit
Segment assets
Other:
Depreciation and amortization
Investment in entities accounted forusing equity method
Increase of tangible and intangible
fixed assets

Corporate
Business Unit

Other

Total

Reconciliation

Consolidated

Millions of Yen¥ 894,574¥846,053¥ 60,041¥1,800,668

323,338

16,455111,991

451,784¥(451,784)¥1,217,912¥862,508¥172,032¥2,252,452¥(451,784)¥1,800,668¥

32,298¥ 13,138¥ 13,901¥¥¥

788,000

181,737

142,259

1,111,996(4,409)1,107,587

21,884

14,796

4,097

40,777781

41,558

768

4,309

5,077

4,312

9,389

38,973

9,101

50,3985,293

55,691

59,3372,324—¥1,800,668

748

2022
RetailBusiness Unit

Corporate
Business Unit

Other

Total

Reconciliation¥

Consolidated¥ 893,397¥812,185¥ 88,036¥1,793,618

279,017

26,091

121,163426,271(426,271)¥1,172,414¥838,276¥209,199¥2,219,889¥(426,271)¥1,793,618¥

44,464¥ 17,178¥ 16,559¥¥(1,001)¥

749,718

194,571

156,573

1,100,862(14,007)

1,086,855

17,53813,265

3,812

34,615909

35,524

630

6,668

7,298

5,662

12,96056,587

12,06675,8992,673

78,572

78,201—¥1,793,618

TA-Q-BIN¥1,357,419

Kuroneko DM-Bin¥52,856

Other¥390,393

Total

TA-Q-BIN

Kuroneko DM-Bin¥1,800,668¥1,322,534¥54,323

Other

Total

¥416,761¥1,793,618

Thousands of U.S. Dollars
2023
TA-Q-BIN$10,165,646

Kuroneko DM-Bin$395,836

Other

Total

$2,923,639 $13,485,121(2) Information about Geographical Areas
The disclosure of operating revenues by geographical areas for the years ended March 31, 2023 and 2022, were omitted
since operating revenues to external customers in Japan account for more than 90% of the amount of operating revenues
in the consolidated statements of income.
The disclosure of property, plant and equipment by geographical areas at March 31, 2023 and 2022, were omitted
since property, plant and equipment in Japan account for more than 90% of the amount of property, plant and equipmentin the consolidated balance sheet.

77,200(3) Information about Loss on Impairment of Long-Lived Assets by Reportable Segments
Loss on impairment of long-lived assets by reportable segments for the years ended March 31, 2023 and 2022, were as
follows:
Millions of Yen
2023

7,246

2023
RetailBusiness Unit

$6,699,424

Corporate
Business Unit

$6,336,054

Other$ 449,643

RetailBusiness Unit

Loss on impairment oflong-lived assets

Thousands of U.S. Dollars

Segment revenues:
Segment revenues from customers
Intersegment revenues
Total segment revenues
Segment profit
Segment assets
Other:
Depreciation and amortization
Investment in entities accounted forusing equity method
Increase of tangible and intangible
fixed assets

2022

2023

60,085

Millions of Yen

Segment revenues:
Segment revenues from customers
Intersegment revenues
Total segment revenues
Segment profit
Segment assets
Other:
Depreciation and amortization
Investment in entities accounted forusing equity method
Increase of tangible and intangible
fixed assets[Related Information about Reportable Segments](1) Information about Products and Services
Operating revenues from customers for the years ended March 31, 2023 and 2022, were as follows:

Total$13,485,121

Reconciliation

$

¥281

Consolidated—

123,230

838,699

3,383,389(3,383,389)$9,120,884$6,459,284$1,288,342$16,868,510$(3,383,389)$13,485,121$ 241,881

$

$

$

$

98,391$ 104,103

5,901,297

1,361,024

1,065,370

8,327,691(33,022)5,599

8,294,669

449,974

163,887

110,808

30,685

305,380

5,845

311,225

Other

Eliminations
or Group-Wide

Total

¥966

¥1,995

Consolidated¥—¥1,995

Millions of Yen
2022$13,485,121

2,421,460

444,375¥748

Corporate
Business Unit

RetailBusiness Unit

Loss on impairment oflong-lived assets¥—

Corporate
Business Unit

¥701

Other

Eliminations
or Group-WideTotal¥1,719¥2,420Consolidated¥—¥2,420Thousands of U.S. Dollars

5,754

32,271

291,866

68,157

17,40838,02532,29270,317

377,431

39,637417,068

2023
RetailBusiness Unit

Loss on impairment oflong-lived assets$5,604

Corporate
Business Unit

$2,100Other$7,234

Eliminations
or Group-WideTotal$14,938

Consolidated$—$14,938

Notes: “Other” includes Yamato System Development Co., Ltd. (development of information systems), and Yamato Autoworks Co., Ltd. (collective vehicle
management agent business for transportation companies).
Reconciliations are as follows:(1) Reconciliations of segment profit for the years ended March 31, 2023 and 2022, of ¥748 million ($5,599 thousand) and ¥1,001 million, respectively,
include group-wide expenses that are not allocated to each reportable segment (general administrative expenses of the Company, which is a pureholding company) of ¥7,385 million ($55,308 thousand) and ¥10,384 million, and intersegment eliminations of ¥8,133 million ($60,907 thousand)and ¥9,383 million, respectively.
(2) Reconciliations of segment assets at March 31, 2023 and 2022, of ¥4,409 million ($33,022 thousand) and ¥14,007 million, respectively, include
intersegment eliminations of assets and liabilities of ¥112,277 million ($840,837 thousand) and ¥108,626 million, and group-wide assets which are
not allocated to each reportable segment of ¥107,868 million ($807,815 thousand) and ¥94,619 million, respectively.
(3) Reconciliations of investments in entities accounted for using equity method at March 31, 2023 and 2022, of ¥4,312 million ($32,292 thousand)and ¥5,662 million, respectively, are investments that are not allocated to each reportable segment.
(4) Reconciliations of increases of tangible and intangible fixed assets for the years ended March 31, 2023 and 2022, of ¥5,293 million ($39,637
thousand) and ¥2,673 million, respectively, are the Company’s capital investment.
Segment profit is reconciled with operating profit in the consolidated statement of income.
Segment assets of the Retail Business Unit at March 31, 2023 and 2022, of ¥788,000 million ($5,901,297 thousand) and ¥749,718 million, respectively,
include assets of the Transportation division and the Head Office division of Yamato Transport Co., Ltd. of ¥540,417 million ($4,047,156 thousand) and¥524,780 million, respectively.
Increase of tangible and intangible fixed assets of the Retail Business Unit for the years ended March 31, 2023 and 2022, of ¥38,973 million ($291,866
thousand) and ¥56,587 million, respectively, include the amount of increase of the Transportation division and the Head Office division of Yamato
Transport Co., Ltd. of ¥23,631 million ($176,969 thousand) and ¥36,936 million, respectively.

92
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Report 2023with Independent Auditor’s Report
Financial

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Report93
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FINANCIAL SECTIONFINANCIAL SECTION

Part 4

Part 4

Notes to Consolidated Financial Statements
21. SUPPLEMENTARY INFORMATION TO THE CONSOLIDATED STATEMENTS OF CASH FLOWSIn January 2022, the Company sold 51% of the shares of Yamato Home Convenience Co., Ltd. As a result, Yamato Home
Convenience Co., Ltd. was excluded from the scope of consolidation.
The assets and liabilities of Yamato Home Convenience Co., Ltd. at the time of sales and reconciliation between the
selling price and the payment for sales of shares are as follows:
Millions of Yen
2022

Current assets¥10,655

Long-lived assets

1,266

Current liabilities(5,003)Long-term liabilities(467)

Investment account after sales of shares(3,161)

Loss on sales of shares(2,673)

Other

(617)

c. Appropriations of Retained Earnings(111)

meeting held on May 17, 2023:

Selling price
Incidental cost for sales of shares
Cash and cash equivalents
Net payment for sales of sharesb. Issuance of Bonds
At the meeting held on May 17, 2023, the Board of Directors of the Company resolved matters related to issuance of unsecured bonds with an inter-bonds pari passu clause (Green Bond) as follows:
Total issuance amount: ¥20,000 million ($149,779 thousand)Amount per bond:¥100 million ($749 thousand)Issuance price:¥100 ($0.75) per ¥100 ($0.75) of each bondInterest rate:
Up to the yield on Japanese government bonds with the remaining period equal to maturity of thebond plus 0.5%
Redemption method: Bullet maturity amortization
Maturity:
5 years
Date of issuance:
July 6, 2023
Use of funds:
Investment related to environment

The following appropriation of retained earnings at March 31, 2023, was approved at the Company’s Board of Directors(7,202)¥ (7,313)

22. SUBSEQUENT EVENTS

Year-end cash dividends, ¥23 ($0.17) per share*

Millions of Yen

Thousands of
U.S. Dollars¥8,343$62,483* The total cash dividends approved at the Company’s Board of Directors meeting held on May 17, 2023, include the dividends of ¥11 million($83 thousand) for
the share of the Company held by “Board Benefit Trust (BBT).”a. Purchase and Retirement of Treasury StockAt the meeting held on May 10, 2023, the Board of Directors of the Company resolved matters related to the purchase oftreasury stock in accordance with the provisions of articles of incorporation of the Company pursuant to Article 459,
Paragraph 1, item 1 of the Companies Act, and retirement of treasury stock in accordance with the provisions of Article
178 of the Companies Act.
(1) Reason for purchase and retirement of treasury stock
Improvement of capital efficiency and enhancement of return to shareholders(2) Outline of matters related to purchase of treasury stock
Type of shares to be purchased:
Common stock of the Company
Total number of shares to be purchased: Up to 22 million shares (Ratio against the total number of issued shares(excluding treasury stock): 6.06%)(Note) The Company’s shares held by BBT are not included in the above treasury stock.
Acquisition cost:
Up to ¥ 50,000 million ($374,448 thousand)Purchase period:
From May 17, 2023 to February 29, 2024
Purchase method:
Purchase through the market(3) Outline of retirement of treasury stock
Type of shares to be retired:
Common stock of the Company
Total number of shares to be retired: All of the treasury stock purchased through (2) above
Date of retirement:
March 29, 2024 (planned)

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Financial

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Report2023
Financial Statements with Independent
Auditor’s
Report95
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COMPANY INFORMATION

COMPANY INFORMATIONPart 5

Global Network

Corporate Data / Stock Information

As of March 31, 2023

As of March 31, 2023

25

overseas subsidiaries

24

Company Namecountries and regions of operation (including representative offices and branch offices)

Fiscal Year

Yamato Holdings Co., Ltd.

From April 1 to March 31

Head Office

EuropeCommon Stock

16-10, Ginza 2-chome, Chuo-ku, Tokyo
104-8125 Japan
Telephone: 81-3-3541-4141

Americas

Authorized: 1,787,541,000 shares
Issued: 379,824,892 shares
Stock Exchange Listing

Established

UnitedKingdom

Netherlands

Germany

FranceTokyo Stock Exchange

November 29, 1919

Belgium

Transfer Agent and Registrar

Registered
Czech
Republic

Mizuho Trust & Banking Co., Ltd.

April 9, 1929

CanadaGeneral Meeting of Shareholders

Paid-In Capital

Held in June

127,234,791,077 yen

Hungary

AuditorWebsiteUnited Statesof America

Deloitte Touche Tohmatsu LLC

https://www.yamato-hd.co.jp/english/

Principal Shareholders

Italy
Mexico

Percentage of total shares outstanding(excluding treasury shares)

The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Yamato Employees’ Shareholding Association
Meiji Yasuda Life Insurance Company
Nippon Life Insurance Company
Mizuho Bank, Ltd.
Yamato Trading-Partner Shareholding Association
Toyota Motor Corporation
STATE STREET BANK WEST CLIENT-TREATY 505234
Sompo Japan Insurance Inc.
Total

Americas

EuropePart 516.30%
7.69%
7.65%
4.08%
4.07%
2.82%
2.33%
1.58%
1.45%
1.42%
49.41%

Asia

Stock Price Range / Trading Volume (Tokyo Stock Exchange)(Yen)(Yen)
4,000

30,0003,000
20,000Asia

2,000
10,000

Cross-Border Truck Network
South
Korea

BeijingShanghaiTaiwan

India
Hong
Kong
Vietnam

Hanoi
Philippines

Cambodia

Bangkok

6

7

8
9
2020

10

11

12

1

2

3

4

5

6
7
2021

8

9

10

11

12

1

2

3

4

5

6
7
2022

8

9

10

11

12

1

2
3
2023

10

11

12

1

2

3

4

5

6
7
2021

8

9

10

11

12

1

2

3

4

5

6
7
2022

8

9

10

11

12

1

2
3
2023

0

(Thousands of shares)

60,000Da Nang

40,00030,000Indonesia

Countries and regions with local subsidiaries
Countries and regions with representative offices andbranch offices

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

550,000Kuala
LumpurSingapore96

470,000Shenzhen

Malaysia
Singapore0

Qingdao
ShanghaiThailandDalianTianjin

China

Myanmar

1,000

Cross-Border Trucking

20,00010,000
0

4

5

6

7

8
9
2020

Stock price range (left scale)

Nikkei stock average (right scale)

Trading volume (left scale)

YAMATO HOLDINGS CO., LTD.
Integrated Report 2023

97