Logistics Business Briefing

February 20, 2023
Nichirei Corporation© Nichirei Corporation. All rights reserved.

Contents
I. Past Growth and Future Outlook
1. Business Model
2. Business Results
3. Competitive Advantage
4. Future Outlook
II. Initiatives to Solve Societal Problems and Improve Capital Efficiency

1. Measures and Vision
2. Changes in the Business Environment Caused by the Truck Driver 2024 Problem
3. Solution to the Truck Driver Shortage
4. Financial and Non-financial Targets
5. ROIC Performance and Targets
6. Capital Investment Strategy
7. Business Model—Europe—
8. Future Initiatives—Europe—
9. Future Initiatives—ASEAN and China—
10. Nichirei Group Material Matters—Climate Change Initiatives—
III. Appendix© Nichirei Corporation. All rights reserved.

I. Past Growth and Future Outlook© Nichirei Corporation. All rights reserved.

1. Business Model—Japan’s leading service is becoming a global standard for advanced temperature-controlled logistics—
As Nichirei Group’s only service business, the Logistics Business will enhance satisfaction for everyone working at

Basic Position the Company, and contribute to consumers by striving to enhance value in all aspects of the customer experience.
(Business Model)

Cumulative-typeservice business➢ Business model premised on accumulation of assets that provide
continuous earnings, as opposed to a flow-type business that
manufactures and sells goods➢ Metered charge-type subscription service (shared warehousing service)⚫ High-quality operations andoptimal solutions⚫ Long-standing business
relationship to maximize
customer lifetime value

Customers(+) Logistics solutions(+) Charge based on usage, without theneed for in-house personnel or facilities

12. Business Results
Net Sales, Operating Profit, and EBITDA(EBITDA : billion yen)

(Net Sales : billion yen)30

FY2005/3–2022/3 CAGR
Net sales: 4％
Operating profit: 6％
EBITDA: 5％

25

20

15

FY2022/3
Operating margin: 6.5％

250

224.5

200

10.9

FY2005/3
Operating margin: 4.5％

FY2019/3–2022/3 CAGR
Operating profit: 9％
EBITDA: 7％

116.7

150

100
10
6.4
14.6

50

5
5.2

0

0
FY2005/3 FY06/3

FY07/3

FY08/3

FY09/3

FY10/3Operating Profit (left axis)

FY11/3

FY12/3

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

Depreciation (including amortization of goodwill, left axis)© Nichirei Corporation. All rights reserved.

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

Net Sales (right axis)

2

3. Competitive Advantage

Logistics infrastructure network(1) Operational
capabilities

Ability to provide a one-stop, universal service
to accommodate a wide range of businesstypes, freight volume, and service level.

Extensive and varied service lineup
Highest storage capacity in Japan(2) Customer base(3) Consulting
capabilities

Ability to utilize various combinations toenhance logistics efficiency, based on
extensive customer base and handling volume.
(High operations rate, joint distribution, etc.)

Ability to provide know-how and consulting
services to reduce switching costs for potential
customers.
(Risk reduction when customers revise
logistics services)

Solid and varied customer base
Combined and coordinated service
Advanced logistics system

Consulting expertise and performance
Highly experienced logistics professionals and partners
Implementation and operational management capabilities34. Future Outlook(Five-year Plan)
Current medium-term business plan period is a preparation stage that will allow for both rapid growth andcapital efficiency during the next plan period.
Regulations for working stylereform take effect (April 2019)

2017

2018

Preparation period
Begin operational
reforms

New and expandedfacilities(Heiwajima DC, Tokachi DC)

Establish base forworking stylereforms

2019

2020

Logistics industry 2024
Problem* (April 2024)

Growth exceeding plan

2021

Benefit period

2022

2023

Preparation period

Implement operational
reforms

Establish and expand
frozen foods platform

Introduce new personnel
structure

Establish trunk linetransport baseSetting of appropriate
chargesOrganizational reform(strengthen network)

New and expanded facilities

Expand facilities (Kobe Rokko(Nagoya Minato DC, Hommoku DC)

DC, Kanto and Kansai areas)

Ensure stable services

Strengthen base for
rapid growth2024* Regulations limiting continuous working hours fortruck drivers, which will take effect in April 2024.

2025 and beyond
Benefit period

・Take advantage of 2024
Problem to capture
demand・Establish dominantposition in temperaturecontrolled logistics
marketAchieve both rapid
growth and capitalefficiency
14

II. Initiatives to Solve Societal Problems
and Improve Capital Efficiency© Nichirei Corporation. All rights reserved.

1. Measures and Vision
Nichirei’s Measures

Market Environment / Societal Issues

Food-related
issues・Greater supply chain risk
・Food security in Japan and overseas
・Labor shortages (primary to tertiary industry
sectors)
・Food loss

・Strengthen trunk line transport function (expand SULS)

Temperaturecontrolled
logistics industry

・Market scale of around ¥2 trillion (estimate);
Greater proportion of frozen foods in recent
years
・Response to the truck driver 2024 Problem;
Shortage of warehouse personnel
・Rising energy prices
・Market entry of logistics real estate businesses
・Response to sustainability issues

・CO2 reductions and conversion to natural refrigerants

Societal demands

Goal

・Provide high value-added, extensible cold chain・Expand and upgrade frozen food logistics platform

・Overseas business expansion (growth in Europe andstrengthening base in Asia)
・Provide a sustainable logistics service (operational
reforms)

Create social value and gain economic value through sustainable growth.
© Nichirei Corporation. All rights reserved.

5

2. Changes in the Business Environment Caused by the Truck Driver 2024 Problem(Changes in the business environment)

Limiting of total working
hours for drivers

Shortening of direct
shippable distance

Shift from consolidated to
disbursed inventory(Issues facing cargo owners)
Dilemma for cargo owners

Issue
Increase in number of
inventory bases
・Increase in management
costs due to more facilities
・Increase in total inventory
amountSolution

Curbing inventory levels
requires more frequent
replenishing of stock,
increasing transport costs.

Less frequent stock
replenishment results inhigher inventory volume,
increasing storage costs.

・ Adjust and optimize balance of stock replenishment frequency and load factor
・ Increase transport efficiency through shared logistics© Nichirei Corporation. All rights reserved.

6

3. Solution to the Truck Driver Shortage
Expand the Next-generation Transport System (SULS)

Establish a Logistics Platform for Frozen Foods

・Reduce workloads by shortening total working hours for truck drivers
・Enhance transport efficiency by using detachable, large-capacity trailers
・Establish an SULS model case in the Tokyo-Nagoya-Osaka region, andexpand to other areas
・Add to the four semi-trailers owned by Nichirei with the purchase of anadditional 45 vehicles during the current business plan period (plan toacquire 15 vehicles per year)

・Categorize cargo owners by business type, and provide a shared platform・Establish a comprehensive contract model over the next fiscal year, andexpand customer base to build and provide a platform
・Focus on utilizing assets of other companies, and be flexible about facilities
used
Frozen foods producers
Company A

Company B

Company C

Collective contract for logistics

SULS Operation Concept (current)(Intra-region)(Intra-region)

SULS operations (Trunk line)

Other
Facilities
Other
Facilities

Nichireifacilities

Coordination of optimal logistics functions

Nichireifacilities

Tokai Switching Center(Nagoya Minato DC)

Kansai Nichirei
area facilities

One-daytransport

Nichireifacilities

One-daytransport

3PL revenue

Nichirei

Kanto
area

Joint storage
Other
Facilities

Nichirei Group
warehouse

Other
Facilities

Logistics company D
warehouse

Logistics company E
warehouse

Storagerevenue

Joint delivery

Delivery destination© Nichirei Corporation. All rights reserved.

Delivery destination

Delivery destination

Transport
revenue7

4. Financial and Non-financial Targets(Billion yen)

Financial Targets

Net Sales
Overseas Sales

FY22/3Results

FY25/3Plan

Compared
with
FY22/3

CAGR

Non-financial Targets

224.5

260.0

35.5

5.0%

* Nichirei Group overall (compared with FY16/3
levels, Japan Scope 1, 2)

45.9

63.8

17.9

11.6%

Natural Refrigerant Implementation Rate

20.5%

24.5%

4.1%

—

14.6

16.2

1.6

3.5%

6.5%

6.2%

-0.3%

—

25.4

30.8

5.3

6.5%

11.3％

11.8%

0.5%

—

* Three-yea cumulative inmedium-term business plan

49.8

64.9

15.1

Simple ROIC*

7.8%

7.0% orhigherOperating Profit
Operating Margin
EBITDAEBITDA Margin
Capital Expenditures

FY25/3
TargetReduction in CO2 emissions* Temperature-controlled Logistics (Global)

Overseas sales ratio

FY22/3Results

-20％

-30％

53％

63％

Breakdown of Capital Expenditures
Total
64.9 billion yen• New refrigerated warehouse(metropolitan area)• Environment-related investments (switch
to natural refrigerants, upgrade to energyefficient facilities)• New refrigerated warehouse (Europe)* Simple ROIC= Operating profit after tax ÷ Main capital employed (Operating fund + Non-current assets)© Nichirei Corporation. All rights reserved.

8

5. ROIC Performance and Targets
FY2022/3 Results◼ Japan: Profit ratio and asset turnover both increased on growth in the TC business and revised
storage charges, with ROIC up 2.6 ppt from FY2013/3 levels◼ Overseas: Profit ratio rose on expansion of port facility business, mainly in the Netherlands,

with ROIC up 0.7 ppt from FY2013/3 levels
FY2028/3 Targets◼ Increase profit ratio and asset turnover in both Japan and overseas, aiming for an overall ROIC of 9%
FY2013/3
Total

Japan

FY2022/3
Overseas

Total

Japan

FY2028/3
Overseas

Total

Simple ROIC*

5.8%

5.9%

4.6%

7.8%

8.5%

5.3%

9%

NOPAT Ratio

3.8%

3.9%

2.6%

4.5%

4.8%

3.1%

Upper 4% level

1.5 times

1.5 times

1.7 times

1.7 times

1.7 times

1.7 times

Around 1.9 times

Capital Employed Turnover* Simple ROIC= Operating profit after tax ÷ Main capital employed (Operating fund + Non-current assets)© Nichirei Corporation. All rights reserved.

96. Capital Investment Strategy
Approach

Confirmationof demand

・Decision-making after securing cargovolume・Effective locations to attract newcustomers

Portfolio
management

・Investment management according tostorage capacity and facility age
・Investment decisions taking into accountthe combination and reorganization offacilities, and utilization of othercompanies’ assets

Maximizing
benefits ofinvestment

・Quickly stabilize operations for new
warehouses
・To enhance operational efficiency,
maximize earnings across the entire area,
including transport and delivery
・Gain earnings while investing in facilities(Portfolio Management)➢ The proportion of company-owned warehouses built within
the last 10 years, which have a high cost burden, is kept withina fixed limit
Ratio of warehouse capacity by age of facility
20 years or
less: 20%(+) High utilization rate fromstart of operations(–) Increase in costs for new
facilities

More than 20
years: 80%(+) Decrease in depreciation
expense(+) Long-term use of facilities(–) Increase in repair costs

Nichirei(2022, Japan)

Reference.: Statutory useful life
Refrigerated warehouses 21 years,
machinery 12 years© Nichirei Corporation. All rights reserved.

106. Capital Investment Strategy
Capital Expenditures, Net sales, Operating Profit, and Depreciation(Billion yen)(Billion yen)

20

250

15

150
10

5

50

0

-50

-5

-10

-150
-15
On-balance sheet requirement for leasing assets from FY09/3-20

Operating Profit (left axis)

Depreciation (including leased assets, left axis)

Net sales (right axis)© Nichirei Corporation. All rights reserved.

-250

Capital Expenditures (including leased assets, left axis)

11

7. Business Model—Europe—
Growth from dual strength in port operations and distribution
Port Operations Business Model(Upstream)

Cold warehouse/Cross dock

Netherlands

Forwarding officePort of Rotterdam

Inland area

・Port operations anddistribution business centeredin Rotterdam (the Netherlands)

Lithuania

England
Poland・Cross-border, seamlesstemperature-controlled
logistics service combining
refrigerated warehouses atmarine ports with customs
clearance, inland and sea
transport functions

Germany
Belgium

France

Italy

Spain

© Nichirei Corporation. All rights reserved.

Distribution Business Model(Downstream)・ Temperature-controlled
distribution for retail chains inGermany and Poland

・Poland in particular has highpotential as a growth market inEurope. Nichirei is combining
the TC business model andknow-how cultivated in Japan
with a transport network
covering all areas of Poland toprovide temperature-controlled
distribution for retailers

128. Future Initiatives—Europe—
Nichirei provides a comprehensive service utilizing its two business models (strengths).
Marinetransport

Importclearance

Drayage

Storage / Valueadded service

Transport

Transport

PackerStorage / Valueadded service

Exportclearance

Marinetransport

Transport

Finaldestination

Nichirei Logistics Group provides a seamless, comprehensive service.

Storage and Transport Business Net Sales and Ratios
StorageTransport

Net sales (Storage and Transport)

100%

80%

FY28/3
EBITDA margin target(Billion yen)100

45,000¥42.1 billion

90%

Net Sales and EBITDA Margin Targets

40,000¥35.3 billion¥33.8 billion

Net Sales (left axis)

EBITDA Margin

35,000¥33.4 billion

70%

15%

8%

30,00060%

Expand comprehensive
service with storage
facilities as base.

9%

10%

25,00050%

50

20,00040%

5%15,00030%

10,00020%
10%¥8.7 billion

0%

5,000

0

FY20/3

FY21/3

FY22/30

0%
FY2022/3© Nichirei Corporation. All rights reserved.

FY25/3 Target

FY28/3 Target

139. Future Initiatives—ASEAN and China—
Implement the European model in ASEAN, and increase sales volume in the overseas business.
ASEAN Business
Thailand・Expand freight collections with seamlessstorage and transport service utilizing prime
locations・Additional value-added services from facility
expansion
Malaysia
・In June 2022, acquisition of approximately
49% of issued shares in temperaturecontrolled logistics firm Litt Tatt Enterprise
Sdn. Bhd
・Strengthening of transport function in
response to robust consumption
NLCCN

Litt TattStorage function

Transport function

ASEAN Business Sales and Growth Image
China

FY2028/3 Target(Compared with FY22/3 levels)

TaiwanFY2022/3

Myanmar

ASEAN Business

Vietnam
Laos

ThailandCambodia

The Philippines

Total Overseas Sales

Implementationof the European
model

Brunei
Darussalam

Total Overseas Sales

Vietnam・Joint venture established in February 2023 to support full-fledged market entry

China Business

Malaysia

Malaysia

Singapore

Indonesia

・Strengthening service to convenience stores to support growth of major customers
・Exploring expansion to south and southwest China through partnerships or investments in local firms© Nichirei Corporation. All rights reserved.

1410. Nichirei Group Material Matters—Climate Change Initiatives—
Natural Refrigerant Implementation Rate (Temperature-controlled logistics, including overseas)
FY2022/3 Result

FY2025/3 Target

FY2031/3 Target

53%

63%

75%

Japan

Refrigerators steadily replaced when equipment is
upgraded, or in new or rebuilt refrigerated warehouses.

Overseas

Continue systematic upgrades in compliance with local
regulations.

50% Reduction in CO2 Emissions (Nichirei Group overall, compared with FY16/3 levels, Japan Scope 1 & 2)
FY22/3 Result

FY25/3 Target

FY31/3 Target

-20%

-30%

-50%

Nichirei Group(MWh)

Electricity Usage (Japan)(MWh)320,000

3,500

315,000

3,000

310,000

2,500

305,000

2,000

300,000

1,500

295,000
290,000
285,000

Down 7.6% in FY22/3(compared with FY16/3)

Solar Power Generation

Main Measures
・Install solar panels
・Respond to the 2024 Problem and enhance efficiency
through operational reforms

1,000
500
0

Nagoya Minato DC
Solar panels scheduled for installation in March 2023

15

III. Appendix© Nichirei Corporation. All rights reserved.

Contents
Overview of the Logistics BusinessCompany Profile and Evolution of the Logistics BusinessBusiness Results
Organization Chart
Business Domain Overview and Customers
Business Structure and Main Business Operations
Value-Added Services
Japan Business
Position(Explanation of businesses most asked about by investors)

Business Content—Regional Storage Business, Transportation Business, Transfer Center Business,and Engineering Services—
Overseas BusinessBusiness Overview
European Business—Overview, Business Model—
China and ASEAN Business Overview
General Information
Glossary
Information on Nichirei Logistics Group© Nichirei Corporation. All rights reserved.

Overview of the Logistics Business© Nichirei Corporation. All rights reserved.

Company Profile and Evolution of the Logistics Business
Nichirei Logistics Group Inc.

(As of March 2022, consolidated)

Total asset ¥194.5 billion
Net sales¥224.5 billion

Employees

4,609

Overseas sales ¥45.9 billion Operating profit ¥14.6 billion

Main Transitions for the Logistics Business
Nichirei Logistics Group Inc.
established through company split-up

Entry into the European refrigerated warehousemarket with acquisition of refrigerated warehousecompany in the Netherlands(currently consolidated subsidiary Eurofrigo B.V.)
Establishment of Teikoku Marine
Products Control Company

Company re-established as
Nippon Reizo Inc.

Company name changed to
Nichirei Corporation

1942

1945

1985

1943

1988

Entry in the third-party
logistics (3PL) business

1998

1977

1993

Transport business subsidiaryestablished(currently Logistics Network, Inc.)

2005

Full-fledged start for theTransfer Center (TC) businessStart of ice-making, cold storage, andfreezing businesses

2004
Temperature-controlled logistics
business in Japan split into one
logistics network company and sevenregional storage companies(Nichirei Logistics Group-related businesses)© Nichirei Corporation. All rights reserved.

Appendix 1

Business Results
Net sales

Operating Profit and EBITDA(Billion yen)
250

(Billion yen)
17

Regional Storage

Logistics Network

Overseas

Other/Intersegment

200

178.3

187.0
184.9

168.4
150

156.4
33.9 32.0
31.3
149.5
26.3
139.4
142.3
18.9
139.0

195.1

35.3

201.0

38.3

212.3
206.5

37.6

36.5

224.5
15

45.9

18.8

9

22.4 16.5 16.4

100

72.2 75.3 76.9

92.2
83.3 88.4

91.4

100.9
90.5 93.7
88.5
90.8

Regional Storage

Logistics Network

Overseas

Other/Intersegment

Operating Profit (left axis)

EBITDA (right axis)

102.8 102.9

23.6
14.6

21.5 21.7
20.0

13

11

(Billion yen)
26

25.4

20.7

13.1

19.2
17.3
16.3
8.2
1.7

15.7 15.8

0.7

7

1.9

7.3

7.4

0.7

0.9

2.0
2.6

10.6

16.5

10.0
8.6

7.9

11.3 11.4

18.0 17.9

0.7

8.9

8.7

1.1

1.0

1.4

1.0

1.2

11.8

2.1

1.4

1.2
5.5

1.1

16

5.1
3.6

2.9

3.9

21

4.1

3.4
3.8

3.7

11

3.2

2.9

5

50

6.5

3

65.5 64.5 69.4 71.4
57.4 62.2 63.7
53.3
46.2 45.2 43.7 45.9 47.1 47.4

5.0

5.3

-0.4

-0.1

4.3

4.1

-0.3

-0.5

4.6

4.4

4.5

-0.6

-0.4

0.0

6.7

5.4

6.4

6.7

7.0

7.9
6

1

0
-1

© Nichirei Corporation. All rights reserved.

-0.3

0.1

-0.1

-0.1

-0.3

-0.4

-0.9
1

Appendix 2

Organization Chart
As of January 2023

Nichirei Logistics Group Inc. (Holding company)

Regional storage business

Logistics network business(3PL, Transportation, TC, DC, and Processing)

Subsidiaries: 39 companies
Affiliates: 11 companies

Overseas business
Europe business

Nichirei Logistics Hokkaido, Inc.

Logistics Network, Inc.

Nichirei Holding Holland B.V.

Nichirei Logistics Tohoku, Inc.

NK Trans, Inc.

* Business and holding company that manages
Europe business

Nichirei Logistics Kanto, Inc.
*Planned consolidation with Logistics
Network, Inc. in April 2023.

Kyokurei Corporation

Nichirei Logistics Tokai, Inc.

Hiwa Rotterdam Port Cold Stores B.V.
China business
日冷物流投資（上海）有限公司

Eurofrigo B.V.

(Business and holding company thatmanages China business)

Thermotraffic Holland B.V.

上海鮮冷儲運有限公司, 上海鮮栄運物流有限公司
江蘇鮮華物流有限公司, 南京鮮華物流有限公司

Thermotraffic GmbH

Nichirei Logistics Kansai, Inc.

Thailand business (Affiliate)

Nichirei Logistics Chushikoku, Inc.

SCG Nichirei Logistics Co., Ltd.

Nichirei Logistics Kyushu, Inc.

Malaysia business (Affiliates)
NLCold Chain Network(M)SDN BHD

Engineering business
Nichirei Logistics Engineering, Inc.

Thermotraffic UK Ltd.
Kevin Hancock Ltd.

NL Litt Tatt Group Sdn. Bhd.
Litt Tatt Enterprise Sdn. Bhd.
Litt Tatt Distribution Sdn. Bhd.

© Nichirei Corporation. All rights reserved.

Frigo Logistics Sp. z o.o.
Armir Logistyka Sp. z o.o.
Armir Dystrybucja Sp. z o.o.

Transports Godfroy S.A.S
Entrepots Godfroy S.A.S
Norish(N.I.) Limited
Norish Limited

Appendix 3

Business Domain Overview and Customers
川

上

川

下

Convenience
storesConsumers

Supermarkets
Distribution centers
for retail stores andrestaurants

Distribution
prep centers

Domestic foodproducers

Restaurants

Stock forwholesalers
Stock forproducers

Main Customers
Overseas foodproducers

More than 90% of sales in Japanare outside Nichirei Group
Processed food makers, trading companies, food
wholesales, restaurants, retailers (generalmerchandise stores, food supermarkets)

Overseas business© Nichirei Corporation. All rights reserved.

Appendix 4

Business Structure and Main Business Operations
Regional Storage Business * Please refer to appendix 8 and 16 for details.

By Facility Type・ Storage of livestock, marine, and agricultural products, frozen foods, and other items in storage-type refrigerated warehouses (DCs) throughout Japan・ Also handles delivery within the regionDC
80 locations
nationwide

Logistics Network Business
Storage BusinessTransportation Business * Please refer to appendix 9 for details.

・Regional storage business in certain areas

・ Transportation and delivery throughout Japan

Third-Party Logistics (3PL) Business・ Planning of effective logistics strategies on behalf of client companies anddeveloping proposals for establishing logistics systems, which are thencomprehensively implemented under contract
・ Nichirei Logistics Group goes a step further, adopting the position of alead logistics provider (LLP) functioning as the client 詳細
company’s
後ページ
distribution management division※

In April 2023, Logistics Network, Inc. will merge with the regional storage
business company Nichirei Logistics Kanto, Inc., with the aim of providing
an integrated storage and transport service in the Kanto region. In termsof business structure, this merger will also incorporate the storage
function in the Kanto area into the logistics network businessTransfer Center (TC) Business* Please refer to appendix10 and 16 for details)

・Dedicated centers for retail chains (40 locations nationwide), thesecenters operate and provide store deliveries as a 24/7/365 service

Overseas Business * Please refer to appendix 12–15 for details .
・ Temperature-controlled logistics services in Europe, China, and ASEAN

TC
40 locations
nationwide

DC, TC,and XD*Please refer toappendix 16 fordetails.

Engineering Services (Other Business) * Please refer to appendix 11 for details.
・ Design, construction, maintenance and repair of temperature-controlled facilities for Nichirei Logistics Group and external clients© Nichirei Corporation. All rights reserved.

Appendix 5

Value-Added Services
The Logistics Business incorporates the accumulated expertise of Nichirei Group into the distribution
process to provide high value-added services.
Food Production Management

Distribution Processing

Food Analysis Technology

Processing center (dressed meat)

Freezing facility

Analysis lab (Japan)

Repackaging

Thawing facility

Analysis lab (The Netherlands)© Nichirei Corporation. All rights reserved.

Appendix 6

Japan Business© Nichirei Corporation. All rights reserved.

Position
Major Temperature-controlled Logistics Companies Net Sales

Top 20 Companies in Terms of Cold Storage Capacity in Japan (Estimate)
Ranking(Billion yen)

224.5

Yokohama Reito

939

5.5%

3

Maruha-Nichiro Holdings

662

3.9%

4

Toyo Suisan Group

606

3.6%

5

Chilled & Frozen Logistics Holdings

520

3.1%

6

Nissui Logistics Corporation

440

2.6%

7

Matsuoka

362

2.1%

8

Runtec Corporation

322

1.9%

125.1

9

K.R.S.Corporation

289

1.7%

(5.2% YoY)

10

Konoike Transport

247

1.5%

11

Futaba Corporation

244

1.4%

12

Igarashi Reizo

224

1.3%

110.9

13

Hohsui Corporation

215

1.3%

(0.5% YoY)

14

Hyoshoku

175

1.0%

110.4

15

Nippon Logistic Center

172

1.0%

16

Daiichi Storehouse & Refrigeration

158

0.9%

17

Fujibayashi Group

155

0.9%

18

Nippon Daily Net

135

0.8%

19

Housenreizou

125

0.7%

20

Muroo

123

0.7%

212.3

176.0

K.R.S.Corporation(2.8% YoY)

171.2

118.9

Chilled & Frozen
Logistics Holdings

Yokohama Reito

28.3(-0.7% YoY)

28.5

FY2022/3

FY2021/3

Note: Selected logistics companies whose principal business is temperature-controlled logistics.
Source: Compelled by Nichirei based on business results from company financial documents (latest version May 12, 2022).
© Nichirei Corporation. All rights reserved.

Nichirei Logistics Group

2

share

9.1%

(5.8% YoY)

1

Capacity(1,000 tonnes)

1,550

Nichirei Logistics Group

Hamakyorex

Name

Source: Compiled by Nichirei based on Japan Association of Refrigerated Warehouses
documents published November 2021 (excluding non-members’ data).

Appendix 7

Business Content—Regional Storage Business—

Explanation of businesses most asked about by investors

・Conduct warehouse operations and provide value-added services (distribution processing) while
maintaining appropriate temperature ranges.
・Handle items in diverse categories, from food material such as animal products, to finished products suchas frozen foods.
Regional storage business
Storage business

Storage

Warehousing

Inspections
and sorting

Quick thawing,
repackaging, etc.

Domestic Cargo
Frozen foods, ice cream,
and other items
produced in Japan.
© Nichirei Corporation. All rights reserved.

Area delivery withineach region

急速解凍、リパック
Distributionなど
Processing

Retail stores

Dispatch

Sorting and dispatch
preparation

Overseas Cargo
Marine products,
livestock products, etc.

Customers
clearance

Distribution center (DC)Processing plants

Appendix 8

Business Content—Transportation Business—

Explanation of businesses most asked about by investors

The Logistics Business, based on the safety and quality standards of Nichirei Logistics Group, partners
with Loginet Cooperative, a voluntary association of partner subcontract companies operatingaround 7,000 vehicles every day (around 1,000 vehicles per day overseas).
Nationwide network
長距離輸送から近距離の
encompassing the entire
小口配送までlogistics process, from long全国を網羅する
haul transport to regional small
ネットワークを構築
lot deliveries.

Initiative to Establish a New Trunk Line Transport System

SULS Features
・Detachable cargo trailers used for transport between
Nichirei Logistics Group locations
・Loading and unloading handled by Nichirei Logistics
Group warehouse employees rather than drivers
・Loaded trailers readied in advance at relay points.
Upon arrival, drivers can immediately switch to thewaiting trailer and head to their next destination© Nichirei Corporation. All rights reserved.

Appendix 9

Business Content—Transfer Center Business—

Explanation of businesses most asked about by investors

・TCs sort stock without holding inventory, and are able to handle freight in three temperature ranges (frozen,
chilled, ambient)・Consolidated delivery through the TC optimizes delivery routes
・Lowers distribution costs, enhances efficiency of the receiving process at destination, and reduces CO2 emissions
BeforeAfterContent of TC Operations(1) Products received from the vendor(2) Items sorted by destination (retailstore)(3) Shipments prepped for delivery tostores at designated time andfrequency* For some shipments, Nichirei Logistics
Group also provides delivery to stores.

Assuming a combined total of 20 vendors (producers) and 50 retail stores (delivery destinations),

Freight is loaded and unloaded 1,000 times.

Freight is loaded and unloaded 70 times.
© Nichirei Corporation. All rights reserved.

Appendix 10

Business Content—Engineering Services—

Explanation of businesses most asked about by investors

・Optimization of facilities for temperature-controlled logistics, from planning and design to maintenance and diagnostics
・Along with temperature-controlled warehouses, wide-ranging customer base including food producers, ice maker, andother companies that require a temperature-controlled environment
Business Area
One-stop service from front-end to back-end development of buildings and facilities.
Development(front end)

Outside customers

48%

FY2022/3
Net Sales Ratio
Nichirei Group

52%

Numerous licensed professionals on staff

Development(back end)

© Nichirei Corporation. All rights reserved.

First Class Architect, First Class Construction WorkManagement Engineer, First Class Plumbing WorkManagement Engineer, First Class Electrical WorkManagement Engineer, First Class Refrigeration
Machinery Manager

Appendix 11

Overseas Business© Nichirei Corporation. All rights reserved.

Business Overview
・Business development through M&A, mainly in Europe, starting withthe acquisition of a refrigerated warehouse company in the
Netherlands in 1988 (currently Eurofrigo).
・Currently more than 60 locations in 12 countries, including
distribution centers and sales offices.
Nichirei’s Refrigerated Warehouse Capacity (FY22/3)※数字：冷蔵倉庫設備能力（2021年度実績）

China
Approx. 10(Unit: 1,000 tonnes)

Japan
Approx. 1,500

EuropeApprox. 685
46 locations in nine countries,
9か国46拠点
including the Netherlands,
オランダ、ドイツ、ポーランド、Germany, Poland, France,
フランス、イギリス他
England, etc.

ThailandApprox. 47
Malaysia
Approx. 45

Source (table): Compiled by Nichirei based on International Association of Refrigerated
Warehouses document “ Global Top 25 List ” as of March 2022
© Nichirei Corporation. All rights reserved.

Top Twenty Companies Worldwide
in the Refrigerated Warehouse Industry by Capacity
Ranking

Name

Main Countries
of Business

Capacity(1,000 tonnes)

1Lineage Logistics

United States, etc.

29,4002

Americold Logistics

United States, etc.

15,9903

United States Cold Storage

United States

4,790

4

NewCold Advanced Cold Logistics

United States, etc.

2,440

5

Nichirei Logistics Group, Inc

Japan, etc.

2,260

6

Interstate Warehousing, Inc

United States

1,310

7

Frialsa Frigorificos S.A. De C.V.

Mexico1,230

8VersaCold Logistics Services

Canada1,200

9

VX Cold Chain Logistics

China

1,110

10

Constellation Cold Logistics

Belgium, etc.

990

11

Superfrio Armazens Gerais

Brazil860

12

Serbom Armazen Gerais FrigorificosBrazil770

13

Conestoga Cold Storage

Canada730

14Congebec Logistics, Inc.

Canada690

15

RLS Logistics

United States

670

16

Burris Logistics

United States

670

17

Emergent Cold LatAm

United States

530

18

Friozem Armazens Frigorificos Ltda.

Brazil420

19

Magnavale Ltd.

United Kingdom

410

20

Confederation Freezers -Brampton

Canada390

Appendix 12

European Business Overview
Business development rooted in local markets (Almost all customers are local companies, with 100% local management)
Nichirei Logistics Group Inc.

Nichirei Holding Holland B.V. (regional headquarters)(Capacity unit: 1,000 tonnes)

Storage

Storage• 2 DCs in port areas • Europe fruit• 3 DCs in inlandjuice 25%areas
• Processing
function
Approx. 260 t
available
Approx. 160 t
Livestock and marine
Freight Owners products businesses,
food producers
Distinctive
Characteristics• Storage in port areas
for freight arriving
and leaving Europe• Animal quarantine
stationTransportationand customers clearance

Storage anddistribution processing• Covers all of Europe (approx. 50 • 1 DC in Inland
countries, operating 700
area
vehicles per day)
• Thawing and• Customs clearance at major
freezing service
European ports
Approx. 2 t• Able to handle pharmaceutical
distribution

Storage and transportation

Storage andtransportation• 6 DCs in port
• 2 DCs, 7 XDs in inland areasand inland areas • Actual forwarding• Processing
Approx. 80 t
function
available• 4 DCs in northand central
region• Actual
forwarding

Storage

Approx. 110 t

Approx. 70 t

Fruit juice and drinks Frozen and chilled foods producers,
companies
pharmaceutical companies

Frozen and chilled
foods producers

Frozen and chilled
foods producers

Food retailers

Frozen and chilled
foods producers,
Volume retail centers

Leading company for • Land and sea transport to Europe,storage of fruit juice
Africa, Eastern Europe, and thedrums arriving in
Middle East
Europe• Consigned forwarding business
operator

Microwave thawing,
controlled air thawing,
and quick freezing
provided as valueadded services

Quick freezing andrepackaging
provided as valueadded services• Delivery service to stores• Locations with cross-dock functions tosort and ship goods by general direction• Actual and consigned forwarding
business operator

Actual forwarding
business operator
with approx. 80
company-owned
vehiclesAppendix 13

European Business—Business Model—
Growth from dual strength in port operations and distribution

・ Port operations and distribution
business centered in Rotterdam(the Netherlands)

Cold warehouse/Cross dock

The Netherlands

Forwarding officePort of Rotterdam
Inland area

Name

Capacity(1,000 of
tonnes)Main Countries
of Business

Lithuania

・ Cross-border, seamlesstemperature-controlled logistics
service combining refrigerated
warehouses at marine ports withcustoms clearance, inland and sea
transport functions

England

Poland1

Lineage Logistics

United States, etc.

6,450

2

NewCold Advanced Cold Logistics United States, etc.

1,390

3

Constellation Cold Logistics

Belgium, etc

990

4Americold Logistics

United States, etc.

910

5

Nichirei Logistics Group, Inc

Japan, etc

630

6

Magnavale Ltd.

United Kingdom

410

7Agri-Norcold A/S

Denmark

350

8Frigoscandia

Sweden, etc.

330

9Frigolanda Logistics GroupThe Netherlands,
etc.

150

France130

Germany
Belgium

FranceDistribution Business Model(Downstream)・ Temperature-controlled
distribution for retail chains inGermany and Poland

Top Ten Companies of Europe in the Refrigerated
Warehouse Industry by Capacity
Ranking

Port Operations Business Model(Upstream)

Italy

Spain

10 Groupe Conhexa

Source: Compiled by Nichirei based on International Association ofRefrigerated Warehouses document “ European Top 10 List ” asof March 2022

© Nichirei Corporation. All rights reserved.

Appendix 14

China and ASEAN Business Overview
・China: Expansion driven by business growth of freight owners
・Thailand and Malaysia: Aim to build a business model modeled on Europe** Integrated service for customs clearance, storage, and cross-border transport.

ASEAN business

China business(Joint Venture)Thailand (Joint Venture)（合弁会社）（合弁会社）

日冷物流投資(上海)有限公司

Malaysia (Joint Venture)

SCG Nichirei Logistics

NLCold Chain Network NL Litt TattStorage and Transportation

Storage and Transportation

Storage and Transportation• 7 DCs (including TC function)• 1 DCs• 7 DCs

and four other companies

Approx. 10 t

Approx. 47 t

Approx. 60 t

(Total capacity approx. 94 t, including ambient
temperature range)
Freight Owners

Convenience stores, restaurants

Foods producers, volume retailer, restaurants

Frozen and chilled foods producers

Distinctive
Characteristics• Specializing in small-lot, frequent store deliveries• Able to handle items in three temperature ranges• Consigned forwarding business operator• Prime location in Laem Chabang, the largest arrival
port in Thailand, with good access to capital city of
Bangkok• Actual forwarding business operator• Malaysia’s largest distribution operator specializingin halal foods, halal-certified for internationaltransport (JAKIM MS2400-1: 2010, MS2400-2: 2010)• Actual and consigned forwarding business operator© Nichirei Corporation. All rights reserved.

Appendix 15

General Information© Nichirei Corporation. All rights reserved.

Glossary
The following is an explanation of terms as used by Nichirei Logistics Group, following general concepts.
Distribution Center (DC)A stock-type distribution center, these facilities hold and store inventory.

Transfer Center (TC)A passage-type logistics center, these facilities do not hold inventory, but sort incoming stock bygeneral direction and ship it onward. Nichirei Logistics Group considers Transfer Centers to be
distribution centers with three temperature ranges, reserved for specific freight owners.

Cross Dock (XD)

These facilities generally do not hold inventory, but sort incoming stock by general direction and ship
it onward. Nichirei Logistics Group considers Cross Docks to be distribution centers in the frozen
temperature range, mainly overseas, handling freight from numerous owners within the same facility.

© Nichirei Corporation. All rights reserved.

Appendix 16

Information on Nichirei Logistics Group
Nichirei Logistics Group releases a Business Report annually in May as external disclosure
with business results and information on the progress of the current business plan.
Documents are available on the company's website (Japanese only).

Company’s website
https://nichirei-logi.co.jp/index.html
Business Reporthttps://nichirei-logi.co.jp/company/report.html© Nichirei Corporation. All rights reserved.

Appendix 17

Forward-looking Statements
Aside from historical facts, Nichirei's present plans, forecasts andstrategies as outlined in this publication consist of forward-looking
statements about future business performance. These forecasts offuture business performance and explanations of future businessactivities may or may not include words such as "believe," "expect,""plan,“ "strategy,“ "estimate," "anticipate" or other similar expressions.
These statements are based on the information available to Nichirei
management at the time of publication. Actual results may differ
significantly from these forecasts for a variety of reasons, and readers
are therefore advised to refrain from making investment decisions based
solely on these forward-looking statements. Nichirei will not necessarily
revise its forward-looking statements in accordance with new
information, future events, and other results. Risks and uncertainties
that could affect Nichirei's actual business results include, but are notlimited to:(1)Changes in the economic conditions and business environment that
may affect the Nichirei Group's business activities.

(4)Risks associated with the practicability of development of new
products and services.
(5)Risks associated with the practicability of growth strategies andimplementation of low-cost systems.
(6)Risks associated with the practicability of achieving benefits
through alliances with outside companies.

(7)Contingency risks.
However, factors that may affect the performance of the Nichirei Groupare not limited to those listed above. Further, risks and uncertainties
include the possibility of future events that may have a serious andunpredictable impact on the Group.
This publication is provided for the sole purpose of enhancing thereader‘s understanding of the Nichirei Group, and should not be taken
as a recommendation regarding investment decisions.

(2)Foreign exchange rate risks, especially as regards the US dollar andthe euro.
(3)Risks associated with the practicability of maintaining quality
controls throughout the process from product development,
procurement of raw materials, production, and sale.

© Nichirei Corporation. All rights reserved.