Yamato : Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2023

Translation

February 6, 2023

Consolidated Financial Results

for the Third Quarter of the Fiscal Year Ending March 31, 2023

Company name:	Yamato Holdings Co., Ltd.
Listing:	Tokyo Stock Exchange
Stock code:	9064
URL:	https://www.yamato-hd.co.jp/
Representative:	Yutaka Nagao, President
Contact:	Toshizo Kurisu, Executive Officer and Vice President, Responsible for Finance
	Tel: [phone] (from overseas)

Scheduled date of the submission of quarterly securities report:	February 8, 2023
Scheduled date of the commencement of dividend payment:	−
Preparation of supplementary materials on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes

(Amounts less than 1 million yen are discarded)

1. Consolidated financial results for the third quarter of fiscal year 2023 (cumulative: from April 1, 2022 to December 31, 2022)

(1)	Consolidated operating results
													(Percentages represent year-on-year changes)
				Operating revenue	Operating profit		Ordinary profit		Profit attributable to
							owners of parent
For the nine months ended	Millions of yen	%	Millions of yen		%		Millions of yen	%	Millions of yen		%
	December 31, 2022	1,395,967		1.7	66,400		(16.1)		64,235	(24.6)		39,087		(18.2)
	December 31, 2021	1,372,386		5.9	79,172		(11.8)		85,183	(6.5)		47,779		(16.0)
(Note) Comprehensive income:	For the nine months ended December 31, 2022:	41,099 million yen ((16.6)%)
				For the nine months ended December 31, 2021:	49,283 million yen ((20.7%))
				Basic earnings per share	Diluted earnings
				per share
For the nine months ended			Yen					Yen
	December 31, 2022			107.83					-
	December 31, 2021			128.78					-
(2)	Consolidated financial position
				Total assets	Net assets		Equity-to-asset ratio
As of			Millions of yen		Millions of yen					%
	December 31, 2022	1,160,733				611,581					52.2
	March 31, 2022			1,086,854				598,233					54.3
(Reference) Equity:	As of December 31, 2022:	605,367 million yen	As of March 31, 2022:	590,542 million yen
2.	Dividends
										Annual dividends
				First quarter		Second quarter			Third quarter		Fiscal year-end		Total
				Yen			Yen					Yen			Yen				Yen
Fiscal 2022			-			23.00						-			23.00				46.00
Fiscal 2023			-			23.00						-
Fiscal 2023 (Forecast)															23.00				46.00

(Note) Revisions to the forecasts most recently announced: None

3. Consolidated earnings forecasts for fiscal year 2023 (from April 1, 2022 to March 31, 2023)

							(Percentages represent year-on-year changes)
								Profit attributable to	Basic
	Operating revenue		Operating profit	Ordinary profit	earnings
		owners of parent
								per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	1,809,000		0.9	61,000	(21.0)	58,000	(31.2)	45,000	(19.6)	124.16

(Note) Revisions to the forecasts most recently announced: Yes

• Notes

1. Changes in significant subsidiaries during the nine months under review (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Application of specific accounting for preparing the quarterly consolidated financial statements: Yes

(Note) For details, please see "2. Consolidated Financial Statements and Significant Notes Thereto, (3) Notes to consolidated financial statements (Application of specific accounting for preparing the quarterly consolidated financial statements)" of the attached materials to the quarterly financial results report on page 12.

(3) Changes in accounting policies, changes in accounting estimates, and restatement

1. Changes due to revision to accounting standards, etc.: None

b. Changes other than a:	None
c. Changes in accounting estimates:	None
d. Restatement:	None

1. Number of issued shares (common shares)
   a. Number of issued shares as of the end of the period (including treasury shares)

As of December 31, 2022:	379,824,892 shares
As of March 31, 2022:	388,575,592 shares

1. Number of treasury shares as of the end of the period

As of December 31, 2022:	17,551,621 shares
As of March 31, 2022:	22,084,421 shares

1. Average number of shares during the period (cumulative from the beginning of the fiscal year)

For the nine months ended December 31, 2022:	362,501,978 shares
For the nine months ended December 31, 2021:	371,024,707 shares

*Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit firm.

*Proper use of earnings forecasts and other noteworthy events

• Descriptions of the above financial projections and other data are based on information currently available to the Company and certain assumptions that the Company considers to be reasonable. Actual financial results may differ significantly from the projections for various reasons. For points to note when using such assumptions and financial projections, please see "1. Qualitative Information on Settlement of Accounts for the Nine months, (3) Explanation of consolidated earnings forecasts and other forward-looking statements" of the attached materials to the quarterly financial results report on page 7.
• The Company plans to post supplementary materials on quarterly financial results on the Company's website promptly after the announcement of the quarterly financial results.

Attached Materials
Index
1. Qualitative Information on Settlement of Accounts for the Nine months	2
(1)	Summary of operating results	2
(2)	Explanation of financial position	7
(3)	Explanation of consolidated earnings forecasts and other forward-looking statements	7
2. Consolidated Financial Statements and Significant Notes Thereto	8
(1)	Consolidated balance sheet	8
(2)	Consolidated statement of income and consolidated statement of comprehensive income	10
	Consolidated statement of income (cumulative)	10
	Consolidated statement of comprehensive income (cumulative)	11
(3)	Notes to consolidated financial statements	12
	(Notes to premise of going concern)	12
	(Notes when there are significant changes in amounts of equity)	12
	(Changes to the scope of consolidation and/or the application of the equity method)	12
	(Application of specific accounting for preparing the quarterly consolidated financial statements)	12
	(Segment information, etc.)	13
3. Supplementary Information	14
Operating revenue by segment	14

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1. Qualitative Information on Settlement of Accounts for the Nine months

1. Summary of operating results
   During the third quarter of the fiscal year ending March 2023, domestic demand was on a gradual recovery trend, with the normalization of economic activity, despite the lingering impact of COVID-19. On the other hand, inflationary pressure around the world is continuing, driven by the prices of natural resources and energy remaining high as well as the rise in raw material prices, due to the instability in global affairs. There are signs of slowdown in the economies of the U.S. and Europe, which have been continuously raising interest rates, and it remains hard to anticipate a full-fledged economic recovery.
   Moreover, COVID-19 has triggered a change in consumption behavior and lifestyles and the expansion of e- commerce in various industries, driven by more people working from home, as well as medical treatment and education taking place online.
   Under these circumstances, the Yamato Group focused on providing comprehensive value to address the needs of customers and society, in order to achieve sustainable corporate value enhancement through "Helping to enrich our society" which is part of our Management Philosophy, under the Group management structure in which we brought together the management resources of each Group company, and based on the Medium- term management plan "One YAMATO 2023" with the fiscal year ending March 2024 as the final year, towards innovating the supply chain to address changes in people's lifestyles and the distribution structure.
   Our consolidated financial results for the nine months ended December 31, 2022 are as follows.

				(Millions of yen)
Item	For the nine months	For the nine months	Change	Growth (%)
ended December 31, 2021	ended December 31, 2022
Operating revenue	1,372,386	1,395,967	23,580	1.7
Operating profit	79,172	66,400	(12,772)	(16.1)
Ordinary profit	85,183	64,235	(20,948)	(24.6)
Profit attributable to	47,779	39,087	(8,692)	(18.2)
owners of parent

For the nine months ended December 31, 2022, operating revenue was 1 trillion 395,967 million yen, up 23,580 million yen from the previous year.

This was largely attributable to the increase in parcel delivery volume as a result of capturing demand from the e-commerce domain where growth is continuing, as well as our focus on optimizing logistics for customers. Operating expenses was 1 trillion 329,566 million yen, up 36,353 million yen from the previous year.

This was due to the increase in costs associated with the promotion of our Medium-term management plan "One YAMATO 2023", such as the fact that we are still in the process of optimizing transportation and delivery operations between the EC logistics network, which we are building to address the growing EC demand, and in our existing network, in addition to higher hourly wages, fuel unit prices and electricity costs.

As a result, for the nine months ended December 31, 2022, operating profit was 66,400 million yen, down 12,772 million yen from the previous year.

Initiatives for the entire Yamato Group

The Yamato Group has been working to stably provide logistics services, including TA-Q-BIN, while paying consideration to hygiene management of our employees. Moreover, based on the Medium-term management plan "One YAMATO 2023", which aims to provide comprehensive value to address the diversifying needs of customers and society, we have continued to implement the following measures:

• Enhancing value provision to corporate clients

In response to growing EC demand and changes in the supply chain of corporate customers, our Sales Drivers and the sales people covering corporate clients worked together to solve challenges faced by our clients and continue to provide value to cover the entire supply chain, through measures such as making maximum use of our facilities and the transportation & delivery network, achieving both inventory optimization as well as shortening the shipment and delivery lead-time, thereby helping clients optimize their logistics costs.

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• Structural reforms of our network operations

In order to address the growing EC demand, we continued to build the EC logistics network with a more simple operation process covering sorting, transportation and last-mile deliveries, mainly in the urban areas. We also promoted initiatives such as consolidating and enlarging the TA-Q-BIN Sales offices, redefining the functions of our terminals, enhancing operational efficiency using IT systems, and improving safety, quality and the work environment.

• Promoting strategies for achieving sustainable enhancement of corporate value

With the aim of sustainably enhancing our corporate value, we are engaging in initiatives under our Medium-term management plan "One YAMATO 2023" that involves promoting data and innovation strategies, reforming the management structure and reinforcing governance, engaging in an HR strategy which supports "Innovating Delivery Business," improving capital efficiency, and strengthening sustainable management.

As for our data strategy, we continued to develop digital data and strengthen digital platforms in order to further enhance our use of data. We are also providing services using digital data and improving our operations using digital data.

Meanwhile, we made progress in our innovation strategy with initiatives to promote open innovation, which entails discovering and collaborating with startups, as well as to invest in such startups with the aim of creating new businesses.

We are also working on sophisticating corporate governance, separating management supervision and execution, maintaining and enhancing management transparency, as well as strengthening governance with an emphasis on the speed of our decision-making.

As for strengthening our sustainable management, we are promoting management that considers the environment and society through measures such as connecting people, resources and information at a high level, and making our transportation more efficient, in order to achieve both sustainable growth and sustainable social development, under our two visions of "Connect. Deliver the Future via Green Logistics" and "Through Co-Creation and Fair Business Activities, Help Create a Society That Leaves No One Behind". In terms of the environment, we are promoting measures such as "introducing 20,000 EVs", "introducing 810 solar power generation facilities" and "improving the usage rate of renewable energy- based electricity", in order to achieve the target of "48% reduction in GHG in 2030, compared to FY March 2021" and "Climate neutrality (in-house emissions) in 2050". In the nine months ended December 2022, we announced our endorsement of the Task Force on Climate-related Financial Disclosures ("TCFD") and, based on TCFD, disclosed on our corporate website information on the risks and opportunities from climate change that may affect our business activities. Yamato will continue to accelerate its sustainability initiatives including those related to climate change and addressing social issues, thereby promoting sustainable corporate growth.

Business strategies of each segment

• Retail Business Unit
• The Retail Business Unit provides high-qualitysmall-lot parcel delivery services such as TA-Q-BIN, and as the starting point of business for the entire Group, has been working to provide value that addresses the needs of our customers by utilizing our strength of having points of contact with customers that is originates through the provision of TA-Q-BIN services, with our front-line employees monitoring and capturing changes in our customers in their lifestyles and business environments, and working with the sales people in charge of corporate clients and proposing solutions that utilize the Group's management resources. It has also been working to provide services that make delivery and pick-up more convenient, particularly the "Kuroneko Members" service, which has more than 50 million registered members, and the "Yamato Business Members" service, which is used by more than 1.5 million corporate clients, and also through efforts to upgrade various services other than those involving transportation that are beneficial in terms of people's lives and business.

• In the nine months ended December 31, 2022, we enhanced functions for when customers make requests on the web for TA-Q-BIN parcels to be picked up, as well as collaborate with flea market operators and operators of parcel lockers in the ground floor lobby areas of condominiums, to allow users to send parcels
• • 3 -