Sakai Moving Service Co.,Ltd. Q4 FY2025 earnings call

• Overall 2025 March Period Performance

  • The company faced mandatory large working hour reductions from the 2024 trucking industry regulatory reform, and prioritized quality and productivity improvement over volume growth for the period. Internal disruption from working hour constraints calmed by Q4, and the reduction in per-job working time minimized overall impact. Total moving volume was 818,000 units, which was within management expectations despite stagnant growth. Moving unit price increased 3.9% YoY to a 3rd consecutive all-time high on the back of price rationalization, though higher labor and contracted transport costs kept ordinary profit margin stable at 11.3%.
  • The company achieved top overall customer satisfaction in the GMO moving company ranking, and won the Prime Minister's Award at the Cabinet Office's "Digi Ta Koshien" digital innovation competition. It launched the optional "Ethical Moving" carbon offset program, which received over 5,000 applications in its first full month of operation.

• Strategic Priorities

  • The company targets becoming the world's best new life support group, with the goal of expanding its presence across consumer lifestyle services centered on moving core business. It completed its first acquisition of a peer moving company based in Fukuoka, and will accelerate future M&A to grow the group. It has recently begun full expansion into the 1 trillion yen BtoB and 1 trillion yen BtoG moving and relocation markets, leveraging existing technical capabilities for new growth.
  • Group adjacent business strategy: Prioritizes electrical construction, reuse, and clean service as core non-moving segments, with a long-term target of 300 billion yen in additional group revenue from adjacent segments (to reach a total group revenue target of 140 billion yen by FY2027). Electrical construction has grown external third-party sales significantly, and has expanded into new areas including fire safety equipment inspection and EV charging infrastructure installation and maintenance. Reuse business growth is supported by higher collection volume during moving jobs, with a new collaboration store opened in Kanagawa with Jimoty Spot to improve reuse profitability. Clean service is growing BtoB cleaning contracts for real estate management companies, with plans to expand into BtoC services in the future.
  • Human resource management: Hired 482 new graduates across the group for 2025, holds regular technical skill competitions to maintain service quality, and has improved employee engagement via updated work uniforms and hiring initiatives including referrals and converting experienced part-time workers to full-time positions, resulting in an annual turnover rate of 10.6%. It is trialing foreign skilled hiring in system roles to prepare for future labor supply shifts.
  • Market share: The company estimates its current share of the 500 billion yen Japanese moving market at 20%, up from 13.6% 10 years ago, with the top 5 major moving firms' combined share growing from 50% to 60.8% over the period, and Sakai capturing nearly all of the industry-wide share gain.

1. Moving Business: 103.385 billion yen, +3.3% YoY, accounting for ~85.4% of total consolidated revenue
2. Electrical Construction Business: 4.641 billion yen, +0.9% YoY, accounting for ~3.8% of total consolidated revenue
3. Clean Service Business: 5.470 billion yen, +3.9% YoY, accounting for ~4.5% of total consolidated revenue
4. Reuse Business: 6.833 billion yen, +10.0% YoY, accounting for ~5.6% of total consolidated revenue
5. Other Businesses: 0.692 billion yen, +4.5% YoY, accounting for ~0.6% of total consolidated revenue

By channel for moving revenue:

• General consumer channel: 13.734 billion yen, -4.1% YoY
• Internet channel: 35.722 billion yen, +1.1% YoY
• Corporate channel: 52.857 billion yen, +4.9% YoY (corporate client segment: +8.2% YoY to 20.689 billion yen; other corporate segments: +29.6% YoY to 1.692 billion yen)

• For the 2026 March fiscal year, management guides: consolidated revenue of 125.482 billion yen, +3.7% YoY; consolidated ordinary profit of 13.368 billion yen, +1.7% YoY; consolidated net income attributable to parent shareholders of 8.915 billion yen, +1.7% YoY.
• Non-consolidated standalone guidance: revenue of 107.022 billion yen, +2.9% YoY; ordinary profit of 11.815 billion yen, +0.8% YoY; net income of 7.941 billion yen, +0.8% YoY.
• The company set a medium-term target of 140 billion yen in total group revenue by FY2027, with 110 billion yen from core moving business and at least 30 billion yen from adjacent group businesses, targeting a 12% ordinary profit margin for core moving business.
• Dividend guidance: The company raised the target payout ratio to 45% (from 35% previously) for the 2025 March period, with a planned 87 yen regular dividend plus 10 yen commemorative dividend for the company's 55th anniversary. For FY2026, it guides 98 yen per share dividend, with a 45% payout ratio. Management will continue to evaluate opportunistic share buybacks to maintain balance between growth investment and shareholder returns.
• The company targets a balanced long-term channel mix of 50% corporate, 35% internet, 15% general consumer, and will maintain this mix going forward.

• The 2024 working hour regulatory reform has created compound pressure across the industry, affecting both the company and its contracted transport partners, and resulted in a decline in total moving job volume due to compliance focus. While management expects to fully overcome the challenge via scale, network, and productivity improvements, it continues to face operational constraints from the reform.
• Persistent industry-wide labor shortage and driver labor shortage, with driver job openings exceeding twice the number of available workers, and rising turnover driven by reduced earning potential from working hour cuts. While the company has strong recruitment capabilities, tight labor markets continue to pressure operations and increase labor costs.
• Rising input and procurement costs across the business. The company leverages scale and national network to mitigate cost increases, but still faces upward pressure on operating costs.
• Concentration of all core corporate functions in the company's Sakai City head office, which is located in an area at risk of damage from the expected Nankai Trough earthquake, creating business continuity risk.
• Over-concentration on the corporate channel could reduce general consumer brand awareness over time, creating long-term volume risk.

Q: What is the company's long-term plan for channel mix, and does it plan to shift weight to any specific channel over the next 3-5 years? / A: Historically, general consumer business made up 95% of revenue, but the channel mix has gradually shifted over decades as the company expanded corporate moving and digital channels. Currently, corporate business accounts for ~50% of total moving revenue, and management views 50% corporate, 35% internet, 15% general consumer as the ideal long-term mix that it will maintain going forward. The internet channel acts as an operational adjustment valve: it allows flexible scheduling of moving jobs to smooth peaks and valleys, since the company can offer discounts to internet customers to shift their moving dates, which is much harder to do with fixed-date corporate relocation projects. The company avoids over-weighting corporate business to prevent erosion of general consumer brand awareness, and will maintain a balanced channel mix.