Maruzen Showa Unyu Co.,Ltd. Q2 FY2026 earnings call

• Core Interim Financial Performance

  • Delivered year-over-year revenue growth despite lower handling from a small subset of shippers and completed prior-year large spot plant projects, driven by new business wins and a diversified shipper base that offset volume declines.
  • Increased operating profit driven by freight rate optimization, operational efficiency improvements, higher share of high-margin business, lower goodwill amortization, and 500 million yen in gains from sales of investment securities linked to policy shareholding reduction.
  • Operating profit hit a new all-time high for the interim period.

• 9th Mid-Term Management Plan (FY2026 March - FY2028 March)

  • Initiated to respond to industry shifts: driver shortages, new regulations on multi-tier subcontracting for trucking, rising warehouse construction costs, and accelerating industry consolidation. The plan aims to transform the business model, implement cultural and organizational restructuring, and achieve the vision of becoming a "logistics partner that creates customers' future through technology and on-ground expertise."
  • Three core priorities: Sales expansion, strengthening business competitiveness, and transforming the corporate foundation.
  • Planned total investment: 400 billion yen for capital investment including DX, and 10 billion yen allocated for M&A. Targets a 35%+ consolidated dividend payout ratio over the 3-year plan, with active reduction of policy-held cross shareholdings.
  • 2028 March final year targets: 176.0 billion yen in revenue, 18.5 billion yen in ordinary profit, and 9-10% ROE.

• Recent Operational Initiatives

  • M&A: Completed acquisition of Nitto Fuji Unso, a logistics firm for the flour milling industry, in October 2025; renamed M&F Logistics. The acquisition fits the strategy of targeting logistics asset holding companies and logistics firms with direct shipper relationships to add sector-specific logistics expertise. Management expects combined flour logistics know-how to enable higher value-added services and drive industry-wide efficiency through shared logistics. To date, 440 million yen of the 10 billion yen M&A allocation has been used.
  • Network Expansion: Opened the Kinuhira Dangerous Goods Warehouse in Aichi Prefecture in July 2025, adding both ambient and temperature-controlled cold storage for dangerous goods to expand the company's dangerous goods logistics network and act as a distribution hub between the Kanto and Kansai regions. Three additional facilities are under construction for completion in August 2026: Hiroshima Warehouse (the company's largest Western Japan hub, supporting general and dangerous goods including toxic materials), Laem Chabang Warehouse in Thailand (the first overseas implementation of the company's domestic self-operated high-quality logistics model), and an expansion of the Hitachinaka Warehouse for agri-logistics, adding cold, air-conditioned, and crane-enabled storage. Additional facility investment will be actively pursued post-pandemic after a period of constrained investment.
  • Human Capital & Safety: Provides incentives for employees to obtain strategy-aligned certifications, currently focusing on toxic substance handling qualifications to support dangerous goods logistics expansion. Safety initiatives include AI-enabled drive recorders that reduced inattention-related accidents to zero, annual group-wide safe driving skill competitions, and company-wide quality control activities (MAQ Activities) to embed a culture of safe operations.

• Capital Allocation & Shareholder Returns

  • Over the 3-year mid-term plan, the company expects 53.0 billion yen in operating cash flow, plus 10.0 to 12.0 billion yen from cash on hand and policy share sales, with external financing available if needed. Allocation: 27.0 billion yen for logistics hub expansion, 3PL upgrading, and logistics platform development; 5.0 billion yen for DX; 8.0 billion yen for facility maintenance and renewal; 10.0 billion yen for M&A; 13.0 to 15.0 billion yen for shareholder returns. 7.3 billion yen has been invested in logistics hubs to date.
  • The company has never cut dividends since listing, and targets 12 consecutive years of dividend increases. For FY2026 March, an interim dividend of 90 yen per share (10 yen increase year-over-year) was declared, with a planned full-year dividend of 180 yen per share (10 yen increase year-over-year). Further dividend increases and opportunistic share buybacks are under consideration. Management is focused on improving ROE through higher margins, active shareholder returns, and policy shareholding reduction, and improving PER through expanded IR activity to increase market awareness and valuation.

For the FY2026 March Interim period: 1. Logistics Business (main segment): Achieved revenue growth with significant profitability improvement. It is broken into sub-segments: - Motor Freight Transportation: Increased revenue from higher volume of alcoholic beverages and power equipment-related products. - Port Transportation: Increased revenue from higher volume of alcoholic beverages, construction machinery import/export, and power generation raw materials driven by a recovery at major power generation manufacturers. - Warehousing: Increased revenue from the power manufacturer recovery, higher existing customer volume, and new synthetic resin business. - Logistics Ancillary Services: Decreased revenue due to completed plant project volume reduction and lower chemical product handling. 2. On-site Work & Machinery Cargo Handling Business: Achieved both revenue and profit growth with improved profitability. Overall, all segments delivered year-over-year revenue and profit growth, with no major changes to the overall revenue contribution structure across segments. Aggregate interim consolidated revenue was 72.239 billion yen, operating profit was 7.518 billion yen, and net profit attributable to parent shareholders was 5.98 billion yen, all up year-over-year.

• Full-year FY2026 March guidance is maintained at the initial forecast, with no upward or downward revision. The full-year forecast calls for 153.0 billion yen in revenue (+5.8% year-over-year), 16.0 billion yen in operating profit (+9.2% year-over-year), 16.5 billion yen in ordinary profit (+4.6% year-over-year), and 12.0 billion yen in net profit attributable to parent shareholders (+22.4% year-over-year). All full-year profit and revenue metrics are expected to hit new all-time highs, extending the streak of consecutive ordinary profit increases to 13 years dating back to the FY2014 March term.
  • For the Logistics segment (main segment), full-year guidance calls for 6.1% year-over-year revenue growth (7.6 billion yen increase, accelerating from 3% growth in the prior year) and 9.5% year-over-year operating profit growth (1.2 billion yen increase).
  • Upper-half (interim) new project acquisition missed the initial plan, but management expects continued volume growth from existing shippers, and will focus on acquiring large new projects in the second half. The recently acquired M&F Logistics will also contribute revenue in the second half.
  • The 9th Mid-Term Management Plan's 2028 March final year targets are maintained at 176.0 billion yen revenue, 18.5 billion yen ordinary profit, and 9-10% ROE.

• Uncertainty remains in the overall business environment, and U.S. tariff policy continues to present lingering concerns, though management notes that the company's highly diversified shipper base allows for meaningful risk dispersion.
  • The traditional logistics business model faces structural headwinds including persistent driver shortages, new regulations impacting the multi-tier trucking subcontracting structure, rising warehouse construction costs, and accelerating industry consolidation, which requires the company to transform its business model to remain competitive.

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