To Our Shareholders
To Our Shareholders
following is a brief report on the performance of Seino Holdings Co., Ltd. for
the fiscal year ended March 31, 2019, our 98th term (from April 1, 2018 to
March 31, 2019).
In the fiscal year under review, Japan’s economy moderately recovered with improvements seen in employment and income environment against a backdrop of an expansion in corporate earnings. Despite this improvement, however, the outlook remains uncertain due to successive natural disasters and increases in global economic uncertainty from prolonged trade friction between the U.S. and China, England’s Brexit problems and other factors.
In the transportation industry, the Seino Group’s mainstay business, while facing various management challenges, such as rising outsourcing costs and increasing personnel expenses under a strained labor supply/demand environment, consumer-related and production-related freight transportation are stable, and we have started to see the results of our initiatives aimed at receiving reasonable transport fees and charges.
Facing such circumstances, the Seino Group steadily implemented the various measures of the second year of the “Value-Up Challenge 2020: Take Off Toward Growth” medium-term management plan and pushed forward as a united group to improve our corporate value.
In addition, to enhance driver recruitment necessitated by low birthrate and aging population, the Company made the Seino Driving School (headquarters: Kaizu City, Gifu Prefecture) a subsidiary on November 1, 2018, for the purpose of expanding the scope and increasing the number of hired drivers by supporting those who specifically wish to obtain a large motor vehicle license and by establishing a training system for those who have not yet obtained a license.
As a result, operating revenue for the fiscal year ended March 31, 2019 was ¥618,436 million (up 3.7% year on year), operating profit was ¥31,209 million (up 11.9% year on year), ordinary profit was ¥33,629 million (up 15.5% year on year), and profit attributable to owners of parent was ¥21,216 million (up 5.8% year on year).
Transportation Services Business
In the Transportation Services Business, working under the medium-term management plan, we responded to the issue of the population decline and shortage of labor caused by low birthrate and aging population by promoting our strategic vision of “Gain efficiency through virtuous cycles” and strove to improve productivity by making the best use of the potential of our personnel.
At Seino Transportation Co., Ltd., the core company of the Transportation Services Business group, we expanded the scale of the Shizuoka branch (Shizuoka City) and relocated to a new building to strengthen the transportation network and improve operational efficiency.
In addition, we focused on securing the volume of freight handled through capturing and keeping new freight consignors by providing time value to customers through diagramming for the purpose of on time route departures in transportation between cities, and proposing transportation methods suited to customer demands while continuing negotiations to receive reasonable transport fees and charges, and fuel surcharges.
Meanwhile, there was an increase in the penetration rate of electronic signature use at the time of delivery, which was started to improve customer convenience and operational efficiency, and we introduced a web receipt query service. As a result, this enabled customers to search for receiving stamps on their own and simplified customer efforts to further improve customer satisfaction and operational efficiency.
In addition, we promoted transportation reform amid a shortage of labor by expanding modal shifts to switch part of long-distance routes to transportation by railways and ferries and by starting operation of articulated trucks, which led to improved earnings and a reduced environmental burden.
Furthermore, for the purpose of recruiting personnel and improving retention rates amid the shrinking population of Japan’s labor force, we enhanced the benefits package while also shortening working hours through labor reform and reduced the operational burden.
As a result of the above, operating revenue for this segment was ¥462,459 million (up 4.4% year on year) and operating profit was ¥24,475 million (up 16.7% year on year).
Vehicle Sales Business
In passenger vehicle sales, we worked to promote campaigns and other activities centered on original cars with special specifications and safety support cars. However, while the number of units sold increased for mini-sized vehicles with small engine displacement, the cycle of the new-model effect for the popular car models came to an end and very few new models were introduced, which led to the number of new vehicles sold in the current fiscal year ending lower than that of the previous fiscal year. Moreover, in used vehicle sales as well, the reduction in trade-in vehicles had an impact, and the number of vehicle s sold were lower than that of the previous fiscal year. In the service division, we strove to secure revenues by promoting vehicle inspections and vehicle maintenance and garage services, as well as the sales of products that lead to repeat visits such as maintenance packages and automotive coatings.
In truck sales, the number of units sold in Japan increased due to registration of heavy trucks ordered during the previous fiscal year, and the number of new vehicles sold increased year on year. While increasing the number of garage services through promoting vehicle maintenance and garage services, such as vehicle inspections, we also focused on sales of used-parts.
In office expansion efforts, the Ogaki branch of Netz Toyota Gifu Co., Ltd. (Ogaki City, Gifu Prefecture) relocated to a new building and the Lexus Yabuta dealership (Gifu Prefecture) of Toyota Corolla Gifu Co., Ltd. and the Unicla Jiko Co., Ltd. headquarters and maintenance factory (Nagoya City) are undergoing a full refurbishment.
a result of the above, operating revenue for this segment was ¥102,233 million
(down 1.1% year on year) and operating profit was ¥4,850 million (down 1.5%
year on year).
Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel, paper and paper products, and other products. As a result of an increased unit sales price in the sales of fuel and firm sales of domestic tissue papers, operating revenue for this segment was ¥33,518 million (up 6.2% year on year) and operating profit was ¥829 million (up 2.4 % year on year).
Leasing for Real Estate Services Business
In the Leasing for Real Estate Services Business, we strive to effectively utilize business resources by leasing the former truck terminal and store sites, which had been replaced mainly due to the impact of urban development and increasingly cramped conditions.
As a result of the above, operating revenue for this segment was ¥1,651 million (up 3.3% year on year), and operating profit was ¥1,334 million (up 7.7% year on year).
Other Business segment includes the information services business, the housing
sales business, the construction contract business, the passenger
transportation business, and the personnel services business. Operating revenue
for this segment was ¥18,574 million (up 12.9% year on year), and operating
profit was ¥901 million (down 2.0 % year on year).
In our outlook for the Japanese economy, we expect that the moderate tone of recovery will continue amid the ongoing improvement in the employment and income environments with positive effects also expected from various policy measures. Nevertheless, there are lingering uncertainties reflecting concerns such as the impact on the global economy from trade frictions due to the increase in protectionism and fluctuations in the financial and capital markets.
Facing such circumstances, the Seino Group will steadily implement the various measures of the three-year medium-term management plan “Value-Up Challenge 2020: Take Off Toward Growth,” which currently in the final fiscal year. While pursing the maximization of our corporate value, we will also strive to solve social issues through our business.
In our mainstay Transportation Services Business, we have started to see the results of our initiatives aimed at receiving reasonable transport fees and charges, but we also expect a reduction in the volume of freight handled after the consumption tax increase and an increase in personnel expenses and outsourcing costs due to the labor shortage.
Therefore, we will provide web services and shipping support systems designed to solve customer issues and propose overall logistics optimizations to further improve transportation quality and efficiency to link these efforts to productivity improvements. In addition, we will implement transportation reform including introduction of heavy vehicles such as articulated trucks, expansion of modal shifts and promotion of freight handling separation.
Moreover, we will proactively enhance the facilities and initiatives which contribute to the recruitment and improved retention rate of employees as well as maintain sites by rebuilding deteriorating and cramped facilities.
In addition, bearing in mind that the volume of freight transportation in Japan will shrink as the population declines and the conditions of low birthrate and aging population advance, we will also work on international transportation business including overseas expansion centering on the Asian region.
In passenger vehicle sales in the Vehicle Sales Business, we expect that the growth in the number of new vehicles sold will be eroded by the changes in the social structure such as low birthrate and aging population, and declining car ownership among young adults. As a result, we plan on keeping the business stable through expanding our portfolio of businesses relating to used car sales, car part sales, vehicle inspections and automotive repairs while focusing on new vehicle sales of mini-sized vehicles with small engine displacement. In truck sales also, we will make efforts to expand and enhance our portfolio of businesses relating to vehicle inspection and automotive repairs, and carry out initiatives for used vehicle part sales. We will carry out sales activities that are locally based while increasing employee satisfaction in addition to customer satisfaction through store renovations and introductions of the latest equipment.
In the Merchandise Sales Business and Other Business, we will expand our sales by strengthening existing businesses and develop new products designed from the viewpoint of the customer.
In the Leasing for Real Estate Services Business, we will work to develop our leasing and sales of idle real estate while effectively utilizing underutilized real estate.
While making steady efforts to achieve these business challenges, the Seino Group will work to strengthen the business foundation and contribute to our customers’ prosperity to achieve further growth.
To all shareholders, we sincerely ask for your ongoing encouragement and support into the future.
President and Chief Operating Officer