SBS Business Report
For the year Ended December 31, 2016
（Security Code：2384）

C o n t en t s

Business Highlights ・・・・・・・・・・・・・・・・・ 0 1
Message from the President ・・・ 0 2
Highlights ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 0 5
Topics ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 0 6
Consolidated Performance ・・・・・・ 0 7
Corporate Profile &Stock Information ・・・・・・・・・・・・・・・・・・・・・・1 0

BUSINESS HIGHLIGHTS 2016

SBS Group meets the various logistics needs withthe utmost quality.
Performance of the current fiscal year
■Net Sales¥ 149.0 billion■Operating Proﬁt■Ordinary Proﬁt¥ 7.5 billion¥ 7.8 billion

5.1 billion¥ 33■Net Income Attributable¥to Owners of Parent■Dividend per share

Logistics 88.9％

Other 4.2％

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

Property
Management
6.9％

Sales
Composition

Adding logistics
support business toour core logistics
business, providing
logistics services withhigh added value

An overview of businesses

Logistic
Business

General
Logistics●3PL●International Logistics●Warehouse/Logistics Center Operation●Customs Clearance Handling●Distributive Processing ●In-Building Logistics●Office Relocation ●Logistics Consulting Others

Food
Logistics●Three-Temperature Nationwide Logistics ●3PL
●Distributive Processing ●Home Delivery●Logistics Consulting●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.

1 SBS Business Report 2016

MESSAGE FROM THE PRESIDENTThe SBS Group worked steadily toward a
V-shaped recovery through continued

growth in its 3PL and logistics facility

development businesses. We have alsocommenced steps to build a foundationthat will help propel us into the next era.
President: Masahiko Kamata

Operating Conditionsin the Current Fiscal YearIn the current fiscal year, the fiscal year ended
December 31, 2016, the SBS Group continued toconfront a harsh operating environment. Despite
the positive flow-on effects of increased logistics
demand on the back of such factors as rapid
growth in the e-commerce industry as well as
reductions in fuel costs reflecting the downturnin crude oil prices, this harsh operating environment was mainly attributable to the series ofweather-related and other disasters, which
triggered a slump in logistics volumes, and theincreasingly pronounced shortage of drivers.
Under these circumstances, the SBS Group
worked in unison to expand its business operations and improve revenue and expenditures inan effort to bring about a V-shaped recovery
from the losses incurred by overseas subsidiaries during the previous fiscal year.

SBS Business Report 2016

2

MESSAGE FROM THE PRESIDENT

Undertaking the Group’s Largest
Ever Logistics Facility Expansion

Results for the Current Fiscal Yearand Our Outlook for Fiscal 2017

As far as the Group’s business strategy is con-

Taking into account each of these initiatives, net

cerned, every effort was made to open a succession

sales declined 5.7% compared with the previousof logistics facilities, with a combined floor spacefiscal year, to ￥149.0 billion. From a profit per-of 165,000 square meters, during the current

spective, operating profit climbed 40.5% year on

fiscal year. At the same time, energies wereyear, to ￥7.5 billion. Net income attributable tochanneled toward carrying out 3PL orders fromowners of parent came to ￥5.1 billion. This repre-

department store, major supermarket, and drug-

sented a V-shaped recovery and positive turn-store chain operators. Developed in-house, thisaround from the net loss attributable to owners ofincluded the Shin-Sugita Logistics Center, which

parent of ￥3.8 billion in the previous fiscal year.

in addition to providing e-commerce fulfillment

In 2017, the pace and scale of logistics real

services caters to wine storage, reefer delivery,

estate sales is projected to return to normal levels.

and other needs. Despite representing the

As a result, we are projecting a slight increase inGroup’
s largest every logistics facility expansion inrevenue and decrease in earnings. In specifica single fiscal year, this initiative was completed

terms, net sales are anticipated to reach ￥150.0

without incident.

billion. Operating profit and net income attribut-

Successfully Completed Work on
Three Logistics Facilities and Sold
One Building
Turning to the Group’s investment strategy, construction was completed at a multi-tenant distri-able to owners of parent are estimated to comein at ￥6.2 billion and ￥4.0 billion, respectively.

Utilizing IT to Push Forward the Group’sMarketing Activities While Conducting Research
into Next-Generation Logistics Services

bution center in Isogo Ward, Yokohama (total floor

The SBS Group is actively employing a wide range

space: 39,670 square meters) in February 2016.

of media to push forward its marketing activities.

This center boasts one of Japan’s largest ware-

In addition to its website, the Group is using a mix

houses specializing in the storage of wine. Workof case studies encompassing services directed

was also completed on a specialized logistics

toward specific customers together with online

facility for large-scale departments stores inadvertising. In this manner, we are promoting theTokorozawa, Saitama Prefecture (29,750 squareappeal of our services to customers. We havemeters) in March, and a logistics facility that canalso put in place a mechanism that allows us toaccommodate three temperature ranges in Miy-quickly pick up on customer needs and to put

agino Ward, Sendai (8,300 square meters) in Oc-

forward optimal solutions at the most appropriate

tober. This facility has commenced operations astime. The number of business inquiries througha major low-temperature logistics base in thethe WEB is steadily increasing with each year. In

Tohoku region.

order to increase loading rates and to conduct

Meanwhile, steps were taken to sell the

new service research, we are also utilizing IT to

Kawagoe Logistics Center (46,280 square meters).

actively develop next-generation logistics services.

In this manner, we were able to recoup invested

This includes a pilot test using 1,000 frontline

assets and improve our balance sheet, which

vehicles to assess a dynamic vehicle management

had suffered as a result of the withdrawal from ansystem developed in-house by project members

overseas subsidiary during the previous fiscal year.

with onsite experience.

3 SBS Business Report 2016

MESSAGE FROM THE PRESIDENT

Growing Awareness Toward the
SBS Brand

To Our Shareholders

Since integrating to a single brand in June

The SBS Group will celebrate its 30th anniver-2013, each and every member of the SBS

sary in December this year. I would like to takeGroup has adopted the same logo as a sign ofthis opportunity to express my sincere gratitudeuniformity. At the same time, we have contin-

to all shareholders for their understanding andued to steadfastly disseminate information

support to date. Looking to the future andregarding our common Group-wide brandwhat we believe should be our ideal visionusing a variety of media including newspaper

going forward, we are working diligently to develop

advertising, the Internet, and other publications

new logistics services and to increase operatingtargeting customers. The response to these

efficiency. As we advance, we will make every

initiatives and the SBS logo by customers andeffort to further enhance our corporate value

trading partners has been profound. We areby reforming the logistics function and drawing

convinced that the market is showing growing

on the indomitable spirit of challenge that firstlevels of awareness toward our presence. In

emerged across every corner of old warehouses

addition to further embracing the spirit of thethroughout downtown Tokyo 30 years ago.

SBS Group brand, each and every employee will

As we work toward achieving our goals, we

continue to engage in branding activities thatask for your continuous support and under-

employ a wide range of media going forward.

standing.

❶ Bolster sales capabilities and the SBS brand2017
SBS Group Policies❷ Further enhance the 3PL business❸ Move forward with logistical real estate developments❹ Be proactive in M&A❺ Promote overseas development

SBS Business Report 2016

4

HIGHLIGHTS

Drawing on Our Wealth of Food Logistics Knowhow to Provide
the Impetus for Entering the Fine Wine Logistics Market‒ Building a Wine Logistics Service Platform Over a Short Period of Time to Help
Capture Anticipated Consumption Growth ‒SBS Logicom Co., Ltd. launched a series of new logistics services focusing on wine fromautumn 2015. Completely overturning traditional concepts and standards as they apply towine, construction of a high-quality facility designated to store wine was completed within
the Shin-Sugita Logistics Center in February 2016. Steps are being taken to rollout these
new services. Attracting widespread acclaim, this includes the use of vehicles designed
exclusively for the handling of wine to ensure seamless temperature and humidity control
through to delivery. Making the most of its food logistics know-how, a major strength of the
SBS Group, we are undertaking tasks that require the utmost expertise and putting in placea logistics service platform that specializes in fine wines at a rapid pace.

Underlying Strengths of the SBS Group’s Wine Logistics Services ❶Realizing thoroughgoing temperature and humidity control from storage through to delivery
Strict handling and control throughout the logistics process from the point of local production through to theend user are essential in preserving the brand value and quality of fine wines. As a result, it is absolutely vital tomaintain constant temperature and humidity levels during the entire logistics process. Wine
packed in reefer containers are delivered from the point of production and received at theShin-Sugita Logistics Center using dock shelters to avoid exposure to outside temperatures.
A 365-day/24-hour system is in place to ensure that temperatures and humidity levels aremaintained at 14°
C and 70%, respectively. Moreover, great care is taken to preserve thequality of wines during the transportation process through the use of vehicles designed
specifically and exclusively for the delivery of wine. In every facet of the logistics process,we employ designated facilities and equipment that deliver the highest performance.

Underlying Strengths of the SBS Group’s Wine Logistics Services ❷Training and allocating professional staﬀ with an intimate knowledge about wine
The fine wine logistics services offered through the Shin-Sugita Logistics Center are based first and foremost on a
genuine understanding and passion toward fine wines. It is therefore no coincidence that our professional staff
are receiving the highest praise for their knowledge. Staff are able to draw on theirwealth of experience to identify and classify at a glance a wide variety wines withlabels printed in diverse languages using different fonts or without bar codes. We
encourage our staff to obtain the appropriate qualifications issued by the Japan
Sommelier Association. We also hold lectures on a periodic basis led by wine
professionals. In this manner, we focus on providing onsite staff with the necessary
skills and understanding.

Underlying Strengths of the SBS Group’s Wine Logistics Services ❸Harnessing the collective strengths of the SBS Group to provide one-stop wine logistics services
The SBS Group is capable of providing a comprehensive range of wine logistics services. This includes (1)organizing the import of wines from their point of overseas production; (2) providing customs agency services
that encompass a host of procedures including import declaration and storage approval application; (3)overseeing acceptance and pre-shipment inspections by professional staff; (4) maintaining storage at constanttemperatures and levels of humidity; (5) undertaking the distribution process including affixing labels, sorting into
sets, and packaging, and; (6) arranging delivery using specialized vehicles. In addition to wines imported fromoverseas, we offer the same level of expertise for wines produced in Japan.

5 SBS Business Report 2016

TOPICS

Contributed ￥3 Million to Relief
Efforts for Areas Affected by the
Kumamoto Earthquake（SBS Group）

April

Undertaking the Group’s Largest Ever
Logistics Facility Expansion with theAddition of 165,000 Square Meters（SBS Logicom Co., Ltd.）In addition to centers owned and operated by thecompany coming online in Yokohama and Saitama, new facilities with a total of 165,000 square
meters of floor space were opened in various
areas including Chiba (Sakura, Inzai, Ichikawa) andHyogo (Sanda). The company has expanded thebaseload of its 3PL business encompassing wine,
department store, e-commerce, drugstore chain,and other operators.

Development and Launch of
NRC Safe and Relief Exercises

October（SBS Flec Co., Ltd.）

October

SBS Flec has consolidated its three-temperature zone
logistics operations in the Tohoku area at a center in
Sendai. Adhering strictly to specific standards in its
control and management of temperatures through theuse of cutting-edge frozen and chilled food distribution
equipment, the center serves as arelay base for the Hokkaido,
Tohoku, and Kanto regions whileproviding logistics services that canaccommodate three temperaturelevels on a 365-day/24-hour basis.

Measuring a maximum
seismic intensity of seven,
the Kumamoto earthquake
wreaked havoc on both
Kumamoto and Oita
Prefecture. The SBS Group
contributed ￥3 million torelief and reconstruction
efforts.

February to June

Construction Completed on the
Sendai Logistics Center（Nippon Record Center Co., Ltd.）

Playing a leading role, Nippon Record Center’s Health
and Safety Committee put in place the NRC Safe andRelief Exercise initiative in a bid to help improve thehealth of its employees. As a part of this initiative,
employees carry out exercises for three minutes prior to
the start of their work.
In this manner, Nippon Record Center
is helping to improve the health of its
employees by engaging in healthmanagement activities that enhance
the company’s growth potential.

1st SBS Group
Driver Contest Held

November（SBS Group）

SBS Holdings held its first driver contest as a group.
This contest put to the test the safety skills of 21
competitors from seven Group companies. Grabbing
the steering wheel for the first time in 30 years, Masahiko Kamata, the Company’s president took a trial
run along the course.
Through this and otherinitiatives, the SBS Groupis endeavoring to raiseawareness toward safety
across the Group as awhole.

Pilot Test Utilizing 1,000 Vehicles
Initiated to Improve
Transportation Ef ﬁciency

November（SBS Logicom Co., Ltd.）SBS Logicom has developed a proprietary framework
to enhance truck transportation efficiency in thetransportation and delivery business. Using around
1,000 vehicles owned by the company, a network
has been configured that employs specialized
devices to track vehicle
movements in real time.
Through a pilot test, steps
are being taken to raise
the productivity of truck
transportation.

SBS Business Report 2016

6

CONSOLIDATED OPERATING PERFORMANCE IN THE CURRENT FISCAL YEARThe SBS Group achieved a V-shaped recovery a positive turnaround from the substantial drop in
earnings attributable to the losses incurred by a subsidiary in India in the previous ﬁscal year. This waslargely due to the sale of logistics facilities, a drop in operating expenses in line with movements in fuelprices, and the favorable eﬀects of price. In addition, successful steps were taken to reinforce the SBS
brand by bolstering eﬀorts aimed at disseminating information to users through the use of brochures
and the Internet, and to capture new orders as a part of the Group’s overall business strategy.

YOY
Change■ Net Sales

40.5％

5.7％
DOWN

(Millions of yen)

UP

(Millions of yen)
8,000

180,000

157,996
150,000

YOY
Change■ Operating Profit

127,935 132,205

141,535

149,054

7,514

7,000
6,000

120,000

5,347

5,000
90,0004,000
60,000

0

3,000

2012

2013

2014

2015

0

2016

YOY
Change■ Ordinary Profit

39.5％
UP

(Millions of yen)

7,842

8,000
7,000

4,116

4,098

2013

2014

2,876

2012

YOY
Change■ Net Income Attributable to
Owners of Parent－(Millions of yen)
6,000

5,118

2,725

5,772

2,000

1,626

1,549

5,000

3,779

4,000

0

2016

4,000

6,000

3,000

2015

3,648
-2,000

2,746

2012

7 SBS Business Report 2016

(3,815)

0

2013

2014

2015

2016

-4,000

2012

2013

2014

2015

2016

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

Year Ended December 31, 2016

Year Ended December 31, 2015

Net Sales

Operating Profit

Net Sales

Operating Profit

Logistics

132,487

2,266

143,391

2,072

Property Management

10,278

5,108

8,641

3,292

Other

6,288

321

5,963

238

Adjustment

̶

(182)

̶

(256)

Total

149,054

7,514

157,996

5,347● Logistics Business :Operations steadily commenced under 3PL agreements following the completion and leasing of new logistics
facilities with a combined floor space of 165,00 square meters during the current fiscal year. This in turnhelped the Company expand its operating footprint. Despite a downturn in revenues owing to contraction inoverseas logistics business operations, earnings grew at SBS Logicom and SBS Flec, two of the Group’s
mainstay companies.
● Property Management Business :Segment revenues and earnings increased substantially due to firm trends in rental income and the sale of the
Kawagoe Logistics Center in the first half of the current fiscal year.
● Other Business :The SBS Group was unable to secure the necessary staff due to the shortage of labor. This in turn led to
an increase in opportunity loss. However, segment sales and operating profit improved on the back ofrobust results in the marketing business.

■ 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

51,22045,00030,00038,12851,534

28,67730,9320

12/12(Millions of yen)
40,000（％）

2.5

30,0002.0

20,00027,78034,59029,947

29,21845

31,9981.66
1.39

Equity Ratio

35,091

26,483
1.95

15,000Net Assets

47,185

39,21527,372■ Net Assets, Equity Ratio

1.47

30

26.3％
1.5

10,000

1.0

0

26.7％

24.3％

22.5％

26.6％
15

1.37
13/12

14/12

15/12

16/12

12/12

13/12

14/12

15/12

16/12

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 2016

8

DIVIDEND■ Dividends per Share
（yen）
40

30

Basic Policy on the Distribution of Profits
The SBS Group has positioned the return of proﬁt to its

40.0

shareholders as an important management objective.

Quarterly
dividend

Commemorative
dividend¥10.0

Accordingly, our basic policy on the distribution of

16.0

proﬁts is to maintain a steady stream of ongoing
dividends while working to increase dividend levels inline with the Group’s operating performance. In

20

implementing this policy, we also take into

15.0

17.0

17.0

10

consideration the need to boost internal reserves toensure a stronger management base. Based on the
aforementioned, we plan to pay a period-end dividend0

for the ﬁscal year ending December 31, 2017 of \17

0
2013

2014

2015

2016

2017
（Forecast）

per share.

Notes:The Group conducted a three-for-one split of common shares on June 1, 2014.
The commemorative dividend distributed in 2013 commemorates the Group’s listing on the First Section of the Tokyo Stock Exchange.

PERFORMANCE FORECASTS (For the Year Ending December 31, 2017)

Net Sales¥ 150,000 million¥ 6,200 million

Operating
ProfitYOYchange

0.6 ％
UP

YOY
change17.5 ％
DOWN

Ordinary
Profit¥ 6,400 million

Net Income
Attributable to¥
Owners of Parent

4,000 million■ By Segment

YOYchange18.4 ％DOWN

YOYchange21.8 ％
DOWN(Millions of yen)

Logistics

Property
Management

Other

Total

Net Sales

136,500

6,800

6,700

150,000

YOY Change

3.0％－33.8％

6.5％

0.6％

Operating Profit

2,500

3,600

350

6,200

YOY Change

10.3％－29.5％

9.0％－17.5％

Operating Margin

1.8％

52.9％

5.2％

4.1％

9 SBS Business Report 2016

CORPORATE PROFILE & STOCK INFORMATION (As of December 31, 2016)■Corporate Proﬁle■ Stock Information

Company nameSBS Holdings, Inc.

President

Masahiko Kamata

FoundedDecember 16, 1987

Paid-in Capital¥3,920.75 million

Net sales¥149.0 billion (consolidated)

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 Transport 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.
*It has been merged into SBS Logicom Co., Ltd. effective
January 1, 2017.

Shares authorized

154,705,200

Shares issued

39,718,200(including 2,100 shares of less than one trading unit)
Trading unit stock system

Yes (100 shares)

Shareholders

4,891■Major Shareholders
Ratio of
Shares Held(%)

Shareholder

SharesHeld

Masahiko Kamata

14,888,400

37.48

Japan Trustee Services Bank, Ltd.
(trust account)

3,652,500

9.19

SBS Holdings Employee ShareOwnership Association

1,535,700

3.86

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)

758,600

1.90

CBNY-GOVERNMENT OF NORWAY

704,300

1.77

STATE STREET BANK AND TRUSTCOMPANY 505224

650,000

1.63

3E Holdings Co., Ltd.

468,000

1.17

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

■Distribution of Shares by Shareholder Type■ Directors and Auditors
President

Masahiko Kamata

Senior Director

Kenichi Iriyama

Directors

Masato Taiji
Yoshitsugu Sato
Jiro Iwasaki
Tetsuya Sekimoto

Audit & Supervisory Board
Member (full-time)

Yasuhiro Yamashita

Audit & Supervisory Board
Member (outside)

Shigetaka Shomatsumoto(Shares issued: 39,718,200)
Japanese Corporations

Securities firms

Non-Japanese Corporation

Treasury stock

678,062 shares（1.71％）

2,351,400 shares（5.92％）

423 shares（0.00％）

4,502,905 shares（11.34％）

Financial institutions

7,903,100 shares（19.90％）Individuals
and others

24,282,310 shares（61.14％）Masahito Takeda

Notes:Jiro Iwasaki and Tetsuya Sekimoto are outside directors.
Shigetaka Shomatsumoto and Masahito Takeda are outside
auditors.

SBS Business Report 201610