SBS Business Report
For the year Ended December 31, 2017
（Security Code：2384）

Special FeatureSpecial Conversation

The Past and Next 30 Yearsof the SBS Group

Contents
Business Highlights

・・・・・・・・・・・・・・・・・・・・

01

Message from the President ・・・・・・・ 0 2
Special Dialogue ・・・・・・・・・・・・・・・・・・・・・・・・・・・0 3
Consolidated Performance ・・・・・・・・・ 0 7
Corporate Profile &Stock Information ・・・・・・・・・・・・・・・・・・・・・・・・ 1 0

BUSINESS HIGHLIGHTS 2017

SBS Group meets the various logistics needs withthe utmost quality.
Performance of the current fisical year
¥ 152.8 billion■Net Sales■Operating Proﬁt■Ordinary Proﬁt¥ 6.2 billion¥ 6.4 billion

4.4 billion¥ 21■Net Income Attributable¥to Owners of Parent■Dividend per share

Logistics 91.8％

Other 4.4％

（Human resources,
environment-related,marketing and solar
power generation）

Property
Management
3.8％

Sales
Composition

Adding logistics
support business to ourcore logistics business,
providing logistics
services with highadded value

An overview of businesses

Logistic
Business

General
Logistics●3PL ●International Logistics●Warehouse/Logistics Center Operation●Customs Clearance Handling ●Distribution Processing●On-site Logistics ●Office Relocation●Consultation Others

Food
Logistics●Three-Temperature Nationwide Logistics ●3PL
●Distribution Processing ●Home Delivery●Consultation●Delivery of Online Supermarket Orders
OthersSpecialized
Logistics

Logistics
SupportBusiness●Same-Day Delivery●Just-in-Time Delivery

Property●Development and Sale of Logistic Facilities
Management
OthersOthersOthers●Human Resources ●Environment-Related ●Marketing●Solar Power Generation Others

Important aims and strategy
Expanding 3PL businessand ensuring stablefoundations (by working
with the food industry)Business strategy

Overseasdevelopment focusing
on the Asian markets

M&A anddevelopment oflogistics facilities

International
strategy

Investment
strategyStrengthening of the Group's management foundations
Establishment of a low-cost operation system :creation of an environment enabling synergetic effectThreestrategies

3PL Corporate Group
which has the logistic
functions in all
directions, aiming tobecome a top-level.

＊The statements made in connection with the forecasts present in these materials are based on assumptions, which include
information available at the present time and uncertain components, which may affect future business results.The actual
business results may differ from the forecasts due to various causes that may affect them in the future.
Cover photos

1 SBS Business Report 2017

(Top) The first appearance of a Kanto Sokuhai sign, on the Someya Building (Ryogoku, Sumida-ku, Tokyo), 1989; (Center)
Leased Ryogoku Sanpei Building near Kuramaebashi (Yokoami, Sumida-ku), 1999; (Bottom) JASDAQ listing ceremony, 2003

MESSAGE FROM THE PRESIDENT

While absorbing the pressure from rising costs,
the operating income from our logistics businessreached a record high.
Ahead of our second foundation,
we put in place systems to go onto the offensive.
President

Masahiko Kamata

In the course of its business activities in the fiscal(with a total floor space of roughly 9,000 square

year ended December 31, 2017, the SBS Group

meters) in Ami-machi, Inashikigun, Ibarakiorganically promoted activities designed to gain

Prefecture, and of the tentatively named Osakaorders for new 3PL projects. At the same time,

Nanko Logistics Center (with a total floor space

we worked to quickly stabilize and streamlineof roughly 59,400 square meters) located inoperations at a new logistics space that was

Suminoe-ku, Osaka, our investment and recovery

established and commenced operations frompipeline is progressing according to plan. Both of

fiscal 2016 and over fiscal 2017. In addition, as

these logistics facilities are developing marketingmeasures to combat a shortage of labor, we

activities with the aim of reaching fully occupied

disseminated easy-to-understand information by

operations at the same time as completion.

upgrading and expanding our Internet-based

Thanks to you and all concerned, the SBS

content and took steps to put in place systems

Group celebrated its 30th anniversary onthat would enable personnel to select from

December 16, 2017. I would like to take thisdiverse workstyle options. As a result of theseopportunity to express my sincere gratitude to all

initiatives, in the logistics business, we absorbedof our stakeholders for their support. The year

the pressure of upswings in labor, vehicle hiring

2018 will thus mark our second foundation. We

and fuel costs, and posted record-high operating

have put systems in place that will bring about

profit for the third consecutive year.

enhancements in our resources from both theWith regard to our investment strategy,

financial and sales standpoints and increase thehaving sold our trust beneficiary rights in two

speed at which we can go onto the offensive. In

facilities, in Saitama and Nagano prefectures,

anticipation of your continued support, I lookand commenced the construction of a logistics

forward to the changes that the SBS Group will

center accommodating three temperature zones

undergo in the years to come.

SBS Business Report 20172

Special Dialogue

Kenichi Iriyama

Masahiko Kamata

Managing Director andManaging Executive Oﬃcer
SBS Holdings, Inc.

President
SBS Holdings, Inc.

The Past and Next 30 Yearsof the SBS GroupInterviewer : Hisao Inoue (Journalist)

In 2017, the SBS Group marked 30 years since its
foundation. What would you say are the factorsthat have accounted for its survival in theintensely competitive logistics industry?

corporation. I believe that the public offeringin 2003 was also one of the turning points.
SBS Holdings is generally referred to as anowner-run company, but we do not think of
the company as our own private property.
While aware that, as a company, we are a

KamataOur growth was accelerated by“public entity of society,”we have become ahaving been able to break away from being acompetitive organization by placing an

business owned by individuals to becoming aemphasis on having employees demonstrate
the potential they possess to the full.
Iriyama I changed jobs from a financial institution
to this company in 2002, in the year before
listing. To speak frankly of my impressions atthat time, I wondered whether we could reallybe listed, as there were no written internal
regulations or approval documents. But thecompany changed with tremendous speed.
This was the result of strong determinationand the commitment of senior management tolist at all costs.

3 SBS Business Report 2017

SPECIAL CONVERSATION

If I remember correctly, you forecast theachievement of net sales of ¥200 billion under
the Medium-Term Management Plan, which
ran from 2014 to 2017, but this target has not
yet been achieved. Where did you fall short?

Kam ata

I had been making good on mypromises on the targets, set at the time of ourestablishment, of ¥10 billion in the 10th year and¥100 billion in the 20th year, and it was
regrettable that, in the end, the ¥200 billion
targeted in the 30th year since our establishment
was unfortunately not achieved. The main
contributory was our withdrawal from a subsidiary
in India in 2015. We had been expanding thescale of our business by bringing about successes
in M&A, but since this failure we have had torefrain from M&A activities.
In retrospect, I think that a certain amount of
pride arose from our experiences of success inpast M&A. To achieve the goal of ¥200 billion
there was only one overriding thought in my head,
and that was I wanted to implement this M&A at
all costs, and thus there were aspects where weneglected to make careful preparations. However,I do believe that we learned a lot from thatexperience, which will surely stand us in goodstead in terms of our future growth.
Iriyama

We did not achieve the target, but I

think that we possess the capability to grow on ourown even without M&A. After withdrawing fromthe subsidiary in India, once we had reorganized
our strategy and rebuilt the systems, we foundourselves in the situation of being on the offensive
again. It will be better, however, to think that wewill reach ¥200 billion as a result of continuingwith the M&A necessary for the SBS Group'sbusiness, and not as a target of ¥200 billion yen.

have actively accepted human resources froma wide range of industries outside logistics.
Companies that employ talented humanresources with diverse values are resilient anddo not collapse in crisis situations. Even if
something does happen, the springs to repel
the crisis come into play and the company willbounce back. Even when we withdrew from thepreviously mentioned situation in India, there
was quite a range of frank opinions expressed
within the company, which I feel are proof
positive of a sound organization. To bequeath
such a corporate culture, it is important to beable to discuss matters freely and openly in a
non-confrontational environment.
Iriyama

Referred to as the“Soldier of Fortune”

of the logistics industry, the SBS Group has been
trying out a succession of new ideas in theindustry. On the other hand, we do emphasize
the safeguarding of long-term employment anddo not terminate employees. In that respect,
as a venture business, I think it is rare for an
organization to combine innovation and akindly attitude toward matters concerning
personnel affairs. As this is something that is
typical of the SBS Group, I would like it to becherished.

Looking back over the past 30 years, what
aspects you would like to see passed on as alasting legacy in terms of, for example,
corporate culture?
KamataI like the idea of a“multinational

force.”During the company growth process, we

SBS Business Report 20174

SPECIAL CONVERSATION

I would like to ask about the next 30 years.
What is your future sales target? And whatchanges do you see in the logistics industry,including the SBS Group?

the logistics industry. In the times to come, thetechnologies involved in autonomous vehicles
and drones will evolve, and there will bedramatic changes in the ways that trucks andwarehouses are managed. We have tothoroughly research and invest in these areas. A

KamataAs it is best to aim high, we aredifferent dimension in competition has alreadytargeting net sales of ¥1 trillion. When sales were

begun, and so in a few years’time, people who

at ¥3 billion, we were laughed at when floating

are not at all involved in logistics may be at thethe idea of putting an advertisement in the

top of this industry.

newspaper stating that our target was ¥200

Fortunately, logistics is not a task that will die

billion. However, this target is already withinout due to technological evolution. This issight. Since that time, our sales have ballooned inbecause even if the number of actual stores

size to nearly 70 times that amount. As ¥1 trillion

decreases, and the number of e-commerceis only five times as much as ¥200 billion, given

transactions made virtually via smart phone

our performance over the past 30 years, eveninstead of in showrooms increases,“real things”

thinking of that as a target is not a pipe dream.

will remain. We will remain aware that ourbusiness model will need to combine the virtualand the real.

Under the circumstances you have explained,
what type of company is the SBS Group aiming
to become?
KamataIt’s fine to be a company that hits ahome run even after being struck out. The
Iriyama

I think that aiming at ¥1 trillion overthe next 30 years is a realistic figure that canbe achieved by growing several percentage
points per year and will not even require ahigh growth rate.
KamataIn the coming years, the reorganizationin the logistics industry will gain pace. The logistics
industry is one in which scale is said to be whatcounts. Companies at around the ¥100 billion
mark are being weeded out and eliminated due tobusiness succession problems. If the SBS Group
deploys an M&A strategy based on this trend, itshould approach the ¥1 trillion in net sales
mark. When that happens, we will be among the
top five in the Japanese logistics industry.
There is another even more important matter,and that is to remain aware that the coming big
wave of technological innovation will also impact

5 SBS Business Report 2017

times are changing, and the risks involved in
not facing up to challenges becoming evergreater. I am aiming for us to be a company
that steadily advances one step at a time bytrial and error. Either way, I would like to havetalented employees, who will launch in-house
ventures and put together businesses, face up
to new challenges with a readiness to accept
that they would be allowed to fail. I think thatthe next generation of managers will emerge
from among the people with that kind ofexperience.
Iriyama

The birthrate is declining, theproportion of elderly people in the population
is increasing, and consumption styles willchange. Accordingly, the structure of logistics
will change, too. What might be the correct
answer has yet to be seen, but we would liketo firmly grasp and respond to those trends.

SPECIAL CONVERSATION

KamataFor short periods of time, we haveto raise our optimal pricing, that is to say
our tariff levels. Significant price increases

Iriyama

Improving our brand image is also

important. If you say kuroneko (black cat), forexample, that has become synonymous with aare continuing to be realized in homeparcel home delivery service. However, theredelivery businesses, in which three major

is not yet anything to bring service or quality

companies have formed an oligopoly. Aside

to mind from the mere mention of the SBS

from these three, there are roughly 66,000Group name. When that association is made,other companies competing ruthlessly in

we will truly be among the top companies.

the transportation industry, and it is currently
hard to raise prices, but we are reaching asituation that customers will understand. If we

And finally, do you have any messages forshareholders?

do not work toward improvements in wages
and investment in education and training, farfrom service improvements it will be to thedetriment of the business itself.

In your response to globalization, what kind ofdevelopments will we see in the 3PL business,
which up to now has been regarded as astrength?
KamataWe have been keeping an eye on

ASEAN, but a broader global response will be
required in the years to come. The globalizationof shipper’s customers is also accelerating. In
the case of the 3PL business, which is entrustedwith general logistics operations, such as
packing, transportation and storage, we have to
go to every location where customers’bases
are located, regardless of the region.

KamataFrom now on, there will be dramaticchanges in the times, to the extent that theframeworks of industries themselves, includingthat of the logistics industry, will become
meaningless. Precisely because of such times, if
employees remain at a company that enables
them to think for themselves and where they
can work to realize their dreams and ideals,
results will come of their own accord. No
matter when the era, the industry will continue
to exist in a state of dislocation, as it always
has done in the past. We aim to become aleading company that contributes to society atlarge as an entity that is responsible forinnovation in logistics as a whole. Please
expect changes at and the growth of the SBSGroup in the years to come.

Three years ago, I interviewed President Masahiko Kamata on two occasions for an article in theweekly magazine published by Toyo Keizai and also covered the inner workings of the company.
In my line of work as a business journalist, I visit many companies. Even though ownercompanies have a distinctive atmosphere, including that brought about by“top-down”
management and the judging of others, my first impression of SBS was that it was a company
where I could be say that the“owner smell”was absent.
When I conveyed this unexpected observation to Kamata, he replied that,“When you do work
having only asked for an opinion face to face with your boss, you become an employee who cannot
think for yourself. When the number of that type of employee increases, individuals cannot
demonstrate the abilities they possess, and their performance will not improve either. In the end, it
is me, the shareholder, who loses out.”I was aware of trying to erase my company owner face.
Is this tenacity the trick to survive in the competitive logistics industry? No, that is not all. Hisparent’s business went bankrupt when Kamata was in the second grade at elementary school.
After graduating from high school and a spell as a truck driver, he started a business without
any means. At a time when it seemed that the business would grow steadily, the bubble burst
and he became a hard-working person who excelled at borrowing from his mother’s savings.
He seemed to have a talent for linking a setback to the next step. Not reaching the sales planof ¥200 billion may be a small setback when compared with the hardships of Kamata’s early life.
However, it is precisely because of the developments that followed the setbacks that the power ofthis company’s DNA should be freely demonstrated. Net sales of ¥1 trillion are by no means
beyond the bounds of possibility.

Introducing the Interviewer

Hisao Inoue
Journalist

Having worked at a major electronics
manufacturer, in 1992 Hisao Inouejoined The Asahi Shimbun Company,
where as a financial reporter he was
responsible for covering companies
that included Toyota and Nissan.
Having left the Asahi Shimbun in
2004, he currently writes on a wide
range of subjects for a variety of
media.

SBS Business Report 2017

6

CONSOLIDATED OPERATING PERFORMANCE IN THE CURRENT FISCAL YEAR

Consolidated Financial Results for Year Ended December 31, 2017
In the logistics business, demand increased due to the upswing in e-commerce activities, but the operating
environment was increasingly harsh due to increases in personnel and outsourcing expenses̶caused by ashortage of labor, including of drivers̶and other factors, such as the onset of higher oil prices. As measures torectify the shortage of labor and stabilize our overall competitiveness, we are endeavoring to secure talented
personnel by ﬂexible workstyle systems, which enable a variety of ways of working, and by upgrading andexpanding the recruitment information on the Internet and disseminating easy-to-understand information.

■ Net Sales

YOY
ChangeYOY
Change■ Operating Profit

17.1 ％

2.6 ％

DOWN

UP

(Millions of yen)

(Millions of yen)

180,000

8,000

157,996
150,000

132,205

141,535

149,054 152,870

7,514

7,000

6,229
6,000

120,000

5,347

5,000
90,0004,000
60,000

0

4,116

4,098

2013

2014

3,000

2013

2014

2015

2016

2017

YOY
Change■ Ordinary Profit

17.3 ％
DOWN(Millions of yen)

7,000

6,475

4,000

13.0 ％

5,111

4,446

2,725
1,549
（3,815）0-2,000

3,000
0

YOY
Change

4,000

2,000

3,648

2017

DOWN

5,000

3,779

2016

■ Net Income Attributable to
Owners of Parent

6,000

5,772

6,000

2015

(Millions of yen)

7,832

8,000

0

2013

7 SBS Business Report 201７

2014

2015

2016

2017

-4,000

2013

2014

2015

2016

2017

CONSOLIDATED OPERATING PERFORMANCE■ Performance by Segment(Millions of yen)

Year Ended December 31, 2017

Year Ended December 31, 2016

Net Sales

Operating Profit

Net Sales

Operating Profit

Logistics

140,422

2,692

132,4872,266

Property Management

5,745

3,278

10,278

5,108

Other

6,703

413

6,288

321

Adjustment

̶

(154)

̶

(182)

Total

152,870

6,229

149,054

7,514● Logistics Business :SBS Logicom Co., Ltd., SBS Flec Co., Ltd. and SBS Sokuhaisupport Co., Ltd., made steady progress in acquiring neworders and expanding business from existing customers, increased sales and contributed to growth in logisticalvolumes as of the end of the year. Despite an upswing in labor, vehicle hiring, and fuel costs, earnings werefavorably impacted by freight rate adjustments and steps aimed at strengthening cost reduction endeavors.

● Property Management Business :The Group sold its interests in two buildings̶a logistics center in Yoshikawa, Saitama Prefecture, and a logistics
facility in Chikuma, Nagano Prefecture̶but even if both are combined, the scale of sales activities fell short ofthe level of logistics facility sales undertaken during the previous fiscal year, thus the property managementbusiness suffered declines in revenue and earnings.

● Other Business :In the other business, the Group’s human resources, marketing, and solar power generation businesses grewsteadily and recorded increases in revenue and earnings.

■ Net Debt, Total Shareholders' Equity（left）,
Net Debt-to-Equity Ratio（right）
Net Debt

Total Shareholders' Equity

Net Debt-to-Equity Ratio(Millions of yen)
60,000（Times）
3.0

51,22045,00030,00051,53447,18530,77831,9701.66

15,000

13/12

14/12

1.26

15/12

16/12

(Millions of yen)
40,0002.5

30,0002.0

20,000Equity Ratio

38,51035,091（％）

34,53329,947

29,218

45

30

26.7％

1.48

1.37

Net Assets

35,747

26,4831.95

044,94339,21528,630■ Net Assets, Equity Ratio

17/12

1.5

10,000

1.0

0

13/12

24.3％

14/12

22.5％

15/12

26.6％

28.5％
15

16/12

17/12

0

Notes:Net debt = long-term loans + short-term loans + bond - cash and deposits
Net debt-to-equity ratio = net debt/total shareholders’equity

SBS Business Report 20178

DIVIDEND■ Dividends per Share
Basic Policy on Profit Distribution

（yen）
40

Quarterly
dividend

The SBS Group considers the return of proﬁts toshareholders an important management objective.

16.0

30th anniversarycommemorative
dividend30

Accordingly, our basic policy on proﬁt distribution calls
for the maintenance of stable dividends and eﬀorts to

3.0

20

21.0

15.0
17.0

10

18.0

increase dividend levels in line with operating
performance, balanced against augmenting internal
reserves to ensure a stronger management base.
The Company is planning a period-end distribution of¥21 per share for the ﬁscal year ending December 31,

0

0
2014

2015

2018.
2016

2017

2018
（Forecast）

Notes:The Group conducted a three-for-one split of common shares on June 1, 2014.

PERFORMANCE FORECASTS (For the Year Ending December 31, 2018)

Net Sales¥ 160,000 million

YOYchange¥ 7,000 million

YOYchangeOperating
Profit

4.7％
UP

12.4％
UP

Ordinary
ProfitNet Income
Attributable to
Owners of Parent¥ 7,200 million¥ 4,400 million■ By Segment

YOYchange

11.2％
UP

YOY
change1.0％
DOWN(Millions of yen)

Logistics

Property
Management

Other

Adjusted Total

Net Sales

145,500

7,500

7,000

160,000

YOY Change

3.6％

30.5％

4.4％

4.7％

Operating Profit

3,250

3,450

500

7,000

YOY Change

20.7％

5.2％

21.0％

12.4％

Operating Margin

2.2％

46.0％

7.1％

4.4％

9 SBS Business Report 2017

CORPORATE PROFILE & STOCK INFORMATION (As of December 31, 2017)■Corporate Proﬁle■ Stock Information

Company nameSBS Holdings, Inc.

President

Masahiko Kamata

FoundedDecember 16, 1987

Paid-in Capital¥3,920.75 million

Net sales¥152.8 billion (consolidated)*For the year ended December 31, 2017

Head oﬃce

4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan
Tel: +81-3-3829-2222(main)
Fax: +81-3-3829-2822

Lines of Business Logistics, property management,
marketing, human resources, etc.
Consolidated
Subsidiaries■Domestic
SBS Logicom Co., Ltd.

SBS Freight Service Co., Ltd.
Nippon Record Center Co., Ltd.
SBS Global Network Co, Ltd.
SBS Logicom Kitakanto Co., Ltd.
SBS Logicom Minamikanto Co., Ltd.

SBS Flec Co., Ltd.
SBS Flecnet Co., Ltd.
SBS Zentsu Co., Ltd.
SBS Sokuhai Support Co., Ltd.
SBS Staff Co., Ltd.
SBS Finance Co., Ltd.
SBS Asset Management Co., Ltd.
L-MAX Co., Ltd.
Marketing Partner Co., Ltd.

■Overseas

SBS Logistics Singapore Pte. Ltd.
（Regional Headquarter of Asia）

Number of shares authorized

154,705,200 shares

Number of shares issued

39,718,200 shares
including 1,422 fractional shares

Unit Stock System

Yes (100 shares)

Number of shareholders

3,702■Major Shareholders
Ratio of
Shares Held(%)

Shareholder

SharesHeld

Masahiko Kamata

14,888,400

37.48

Japan Trustee Services Bank, Ltd.
(trust account)

4,271,200

10.75

SBS Holdings Employee ShareOwnership Association

1,486,100

3.74

SMBC TRUST BANK Designated
Securities Trust

1,200,000

3.02

TOBU Properties Co., Ltd.

954,800

2.40

Junichi Ouchi

875,000

2.20

The Master Trust Bank of Japan, Ltd.
(Trust Account)

825,400

2.07

STATE STREET BANK AND TRUSTCOMPANY 505224

675,000

1.69

BNP Paribas Securities

642,200

1.61

NORTHERN TRUST CO.（AVFC）RE IEDU UCITS CLIENTSNON LENDING 15 PCT TREATY ACCOUNT

468,800

1.18

Note: The ratio of shares held against number of shares issued
is truncated after the third decimal place.

■ Directors and Auditors (As of March 28, 2018)■Distribution of Shares by Shareholder Type

President

Masahiko Kamata

Number of share issued: 39,718,200 shares

Senior Director

Kenichi Iriyama

Directors

Taiji Masato
Yoshitsugu Sato
Jiro Iwasaki
Tetsuya Sekimoto

Audit & Supervisory Board
MemberYasuhiro Yamashita (full-time)
Shigetaka Shomatsumoto
Masahito Takeda

Notes: Jiro Iwasaki and Tetsuya Sekimoto are outside directors.

Japanese corporations

Securities firms

2,052,900 shares（5.17％）

1,548,500 shares（3.90％）

Non-Japanese corporations

Treasury stock
472 shares（0.00％）

4,225,943 shares（10.64％）

Financial institutions

8,554,500 shares（21.54％）

Individuals
andothers23,335,885 shares（58.75％）

Shigetaka Shomatsumoto and Masahito Takeda are outside
audit & supervisory board members.

SBS Business Report 201710