SBS Business Reportfor the Year Ended December 31, 2023
January 1, 2023 to December 31, 2023

Message from the President
Consolidated Business Results
Revision of the Crisis Management
Public Relations Manual
Special Feature
News
Corporate Profile and Stock Information

Message from the President

After a Winter of Challenging
Business Conditions,Green Shoots of Growth Are
Starting to Appear
Masahiko Kamata, President and Representative Director
Before all else, on behalf of all of us at the SBS Group, I would
like to extend my most sincere condolences to everyone who
suffered the death of a loved one in the Noto Peninsula
Earthquake, which struck Japan s Hokuriku region on New Year s
Day 2024, and my best wishes for a rapid recovery to everyone
who suffered injury or loss in that disaster. I pray for the earliest
possible recovery for the region and, as a person involved in thelogistics industry, pledge to do whatever I can to effect an early
return to normal operations.

income attributable to owners of parent fell by 1,675 million yen（‒14.3%）to 10,056 million yen.
Challenging conditions are continuing in FY2024, including
high costs, labor shortages and an increase in the minimum
wage. Moreover, many shareholders have expressed concern
about the 2024 problem in logistics. Our answer is that theGroup has already formed a maintenance organization to manage
overtime, and a Group such as the SBS Group, with its
outstanding scale and organizational capabilities, has the means
to survive. Indeed, we see the current challenges as anopportunity to expand operating capacity. By moving forward withthe proactive management called for in SBS Next Stage 2025,
the three-year Mid-Term Management Plan that started in 2023,
the SBS Group is aiming for the top tier of the logistics business.

FY2023 was a year of new beginnings and fresh challenges.
The restrictions imposed in relation to the COVID-19 pandemic
were lifted, paving the way for normalization of business activity.
However, high cost of light and heating and high prices forresources and daily necessities lingered, feeding continuing
uncertainty about the direction of the economy. Similarly, in thelogistics industry, difficult conditions persisted, as marine
container shipping rates fell and slump in the semiconductor
industry continued, while depreciation in the yen raised prices,putting a damper on purchasing. These circumstances are
expected to endure in FY2024. In response, the SBS Group ismarshaling its strengths to reinforce its sales capabilities andsecuring major projects, nurturing the green shoots of new
growth. The SBS Group is pulling together to cultivate thesegreen shoots against the gales of a challenging businessenvironment and foster the bloom of new business opportunities.

Ｉn February 2024 the SBS Group completed construction of
Noda Seto Logistics Center. Located in Noda, Chiba Prefecture,
the Center is the Group s largest logistical facility. Later thisyear, the Group plans to start construction on another logistics
center, this time in Tomisato, Chiba Prefecture. On one floor（33,000 sqm）of a four-story building, Noda Seto Logistics
Center has established a dedicated EC logistics zone. Here our
one-stop EC platform service, EC Logistics Omakase-kun（Entrustment）, caters to customers EC logistics needs with aframework that delivers high quality at competitive prices. Overthe medium term, the Group aims to achieve annual net sales ofover 100 billion yen in this field, making EC logistics the second
most important pillar of Group operations after third-party
logistics（3PL）.

Consolidated business results were disappointing in FY2023.
Earnings growth was curtailed for the reasons described above,squeezed between falling logistics volumes and rising costs. Net
sales decreased by 23,569 million yen（‒5.2%）year on year to431,911 million yen, operating income decreased by 2,124
million yen（‒9.7%）to 19,719 million yen, and ordinary income
declined by 1,656 million yen（‒7.7%）to 19,747 million yen. Net

I ask all shareholders for your understanding of our businessactivities and growth strategy and once more request yourcontinued support and encouragement.

Consolidated Business Results for the Fiscal Year Under Review
Net Sales

Operating Income／Ratio of Operating
Income to Net Sales(Right Axis)
Operating income（Million yen）

（Million yen）

500,000

455,481403,485

25,000431,911125,000

5,000

2020

21,844

19,71915,000257,192

10,000020,70620,000375,000

250,000

Ratio of operating income to net sales

2021

2022

2023

0

10,960

4.3

2020

5.1

4.8

4.6

2021

2022

2023

Ordinary Income／Net Income
Attributable to Owners of Parent
Net Income Attributable to
Owners of Parent

Ordinary income（％）
15（Million yen）

12

20,000915,000

6

10,000

3

5,000

0

0

25,00020,48910,883

21,404

10,79019,747

11,732

10,056

6,826

2020

2021

2022

2023

Revision of the Crisis Management Public Relations Manual
The SBS Group has revamped its Crisis Management Public Relations Manual. The Manual is revised to include clear descriptions ofcases of crises that can occur in our business as well as applicable countermeasures. The revised Manual will help the Group to prepare
for crises, detect risks early and bring an end to crises to prevent the spread of damage.

■ Main Crises for Which a Public-Relations
Response is Needed (excerpt)

Basic Sequence of Events in Emergency Response
A crisis
occursThe media discovers the crisis before the Group does; the Grouplearns of the matter when the media contacts Public Relations.

The Group detects Confirmation of
the situation
the problem

Risk type

Sample crisis

Legalviolation

Violation of laws governing operation of
freight vehicles
Violation of the Warehousing Business Act Etc.

NaturaldisasterEarthquake of intensity upper 6 or greaterand attendant tsunami
Etc.
Severe wind and rain or typhoon

Seriousaccident

Traffic accident, fire, environmental pollution
Etc.

● Confirmation is requested from the department

or location where the crisis occurred.

Establishment of a crisis response headquarters
Confirmation of the situation andcollection of information● Information is gathered from inside and outside the Group.

Removal by an employee, loss, transmission

Leak ofby error, virus infection, cyberattack, damage
customerfrom fraud（including financial damage）
information● A position paper is prepared.

Etc.

● Based on the position paper, questions such as whether toConsideration and determination
release public statements, how to disclose information and theof a public-relations response policy

Verbal gaffe or misstep by management
Social media storm
Compliance （Whether caused by an official post or an
employee s personal post）
failureViolation of a law or ordinance by an
employee
Etc.

scope of information to be disclosed are considered and decided.

Preparation for disclosure● A list of anticipated questions and their answers is prepared.
● News releases and media materials are prepared.

● Preparations are made to post information on a public website.
● Issuance of news releases

Disclosure

Labor
relations● Posting on official websites● Response through press conferences and individual interviews

Follow-up response

Employment issue(unfair termination, mass retirement）
Human-rights issue (harassment)
Excessive work hours, suicide, work accident
Etc.

Unlawful act（Insider trading, inappropriate accounting）
Financial Accusation from shareholders, shareholder
derivative lawsuit
Etc.

● Monitoring is conducted.

Revising the Crisis Management Public Relations Manual

Professional
Sustainability Promotion Division
SBS Holdings, Inc.

Yuji Shimizu

When the Great East Japan Earthquake struck on March 11, 2011, the disaster prompted the SBS Group to prepare a
Business Continuity Plan（BCP）Manual, for use in the event of another major earthquake. The BCP Manual forms
part of our risk management strategy.
Recently, in the wake of scandals at other companies, media conferences have become a common sight at Japanesecompanies. The SBS Group suffered unwelcome publicity a few years ago, when a fire broke out at a warehouse and
the Group was criticized for insufficient response and countermeasures. This background underscored the importanceof preparing a Crisis Management Public Relations Manual, so the Group revamped its existing Manual.
To revise the Manual, we reached out to coordinate and adjust with related departments and sections to determine
which risks had a chance of escalating into a crisis. I believe these efforts were beneficial in making the Group moresensitive than ever to the risks it faces.

Shareholders Equity／Total Assets／
Shareholders Equity Ratio(Right Axis)

Earnings Per Share（Right Axis）／
Return On Equity／
Return On Assets
EPS

ROE

（％）

30.0

271.67

Shareholders
equity

ROA
（yen）
300

295.39253.2025.0

171.8815.0

400,000

250

10.0
5.0
0

17.9

13.4

14.2

150

5.0
2021

100,000

7.5

2022

6.6
2023

19.9

50

50,7550277,197

296,898 301,317

200,000

100

7.7

2020

254,550200

19.4

Shareholders
equity ratio（Million yen）

300,000
20.0

Total assets

0

2020

21.9

23.7

Dividends／
Dividend Payout Ratio(Right Axis)
Dividend per share

（％）
60

（yen）
80

45

60

30

40

15

20

0

0

Dividend payout ratio
（％）
80

61.0

65.0
60

55.0

40

35.0

26.4

60,671

70,381 79,578

2021

2022

2023

20.4

20.2

20.7

2020

2021

2022

25.7

2023

20

0

No. 1 strategic base for EC platform businessSpecialFeatureEC Noda Seto Logistics Center
Launches into Action

Building A of Noda Seto Logistics Center, located in Noda, Chiba Prefecture,launched operations on February 1, 2024 and a completion-of-construction
ceremony was held on February 16. The building s 165,000 sqm of floor spacemakes it the largest warehouse developed in-house by the Group. On the fourth
floor, with 33,000 sqm of floor space, the SBS Group has established its No. 1
dedicated base for e-commerce（EC）logistics, one of its most vital businessdomains. Leveraging economies of scale, the Group plans to install a diverse
succession of logistics-technology（LT）devices, progressing steadily toward
full-scale operation in fall 2024.

Mustering the combined strength of the
SBS Group to deliver EC logistical sharing services

Equipment that responds tocustomers diverse needs

On 33,000 sqm of floor space on one floor, a joint logisticalplatform is established in which multiple EC operators can work
together. A number of innovations here enable downsizing of
personnel and space and work standardization. For example,
Robots of various types are implemented here; these were
subjected to repeated evaluation of implementation effect andfunction at LT Laboratory, the Group s advanced robot solution
testing facility in Koshigaya, Saitama Prefecture. The Center
also enables standardization of workflow and services. These
innovations lead to cost savings for customers.

Among the wide array of equipment installed in the Center are
equipment with three temperature bands; a hazardous-goods
warehouse, where special products can be stored; equipment
for upgrading（repair）of returned items and equipment for
detailed distribution processing. The Center is also outfittedwith a pharmacy and photographic studio and can respond to
the needs of a wide range of businesses, including apparel,foodstuffs, cosmetics, health foods, pharmaceuticals andgeneral goods. A service menu of over 200 EC tasks andfeatures for sustainability enable the SBS Group to propose
operational designs catering directly to each client s needs.

Schematic floor plan of the 4th floor of EC Noda Seto Logistics Center
Note: Freezing and refrigeration facilities are located on the 1st ﬂoor. The hazardous-goods warehouse is located outside the Center.

Automated packing

Work area︵ up︶
Rampway︵ down︶Rampway

26 berths available

Work area

Work area

Cafeteria

TemperaturecontrolledstorageAutonomous
Automatic
case-handling
Guidedrobot（ACR） Vehicle（AGV）

Oﬃces

Photographing,measurement anddraft preparation

LoungeApprox. 310 m

From Noda Seto to Locations Throughout Japan:
Expanding the EC Logistics Platform Business
The SBS Group aims to achieve net sales in excess of 100 billion
yen（1 trillion yen in value of goods distributed）in the EC logistics
business by 2030. With EC Noda Seto Logistics Center as its hub,the Group is considering construction of strategic EC facilities not
only in the Kanto region but also in major regional cities such as
Osaka and Fukuoka. The SBS Group is rolling out a contract
logistics service, EC
Logistics Omakase-kun（Entrustment）, nationwide.

Approx. 115 m

Main corridor

Oﬃces

Ne w s
In-House-Developed Logistics Facilities Open in Succession in Ichinomiya,
Kashiwazaki and Noda Seto
SBS Group

In April 2023, the SBS Group opened the Ichinomiya Logistics
Center（in Ichinomiya, Aichi Prefecture）, its first in-housedeveloped logistics facility in Japan s Chubu region. Great efforts
were made to achieve maximum efficiency, including full-fledged
implementation of LT such as shelf-transport robots. In September
2023, SBS Toshiba Logistics completed construction of
Kashiwazaki Warehouse（in Kashiwazaki, Niigata Prefecture）,
the first Group warehouse in the Shinetsu region. In both thesefacilities as well as Building A of Noda Seto Logistics Center（inNoda, Chiba Prefecture）, which opened in February 2024, the SBSGroup is accelerating the expansion of its network of logistics
bases and in-house-developed logistics facilities while actively
installing LT equipment. The Group is moving rapidly to automate
operations and reduce personnel needs.

Ichinomiya Logistics Center

Building A of Noda Seto Logistics Center

Kashiwazaki Warehouse, Kashiwazaki Logistics Center

Logistics Industry s First Positive Impact
Finance Agreement, for 35 Billion Yen

EC Operator K2 Joins the SBS Group, Merges with
Toyo Warehouse & Transportation Co., Ltd.

SBS Holdings

SBS Logicom

With MUFG Bank, Ltd. and Mizuho Bank, Ltd. as the loan arrangers,in March 2023 SBS Holdings concluded syndicated positive impact
finance agreement, the first such financing arrangement in thelogistics industry. The agreement was for investment-type financing
of an operating company, with no restrictions on application of funds.
Total value of the scheme is 35 billion yen. The agreement was
based on the positive impact finance principle, advocated by theUnited Nations Environmental Programme Financing Initiative.
Funding was initiated when it was confirmed that the purpose of theloan was for corporate activities that deliver positive impact in theenvironmental, social or economic sphere.

In January 2023, SBS Logicom Co., Ltd. acquired all shares of K2
Corporate Partners（ K2 ）. In October 2023, in an absorption
merger, SBS Logicom merged with Toyo Warehouse &Transportation Co., Ltd., a wholly owned subsidiary of SBS Logicom.
Since its establishment in 2014, K2 has been engaged in operations
such as support for websites specializing in EC. Going forward, K2
will be the main Group company in charge of expanding the Group s
EC logistics business. For over 60 years, Toyo Warehouse &Transportation had leveraged its strengths in asset-type, combined,
integrated logistics from customs to end user. Synergies are
expected from this management integration.

Commendation for Modal Shift Eﬀorts

Acceleration of Introduction of EVs
for Last Mile Transport

SBS Toshiba Logistics

SBS Group

At the Awards for Excellent Business Entities Working on Modal
Shift Ceremony 2023, sponsored by the Japan Association for
Logistics and Transport, SBS Toshiba Logistics Corporation
received the Excellent Business Entity Working on Modal Shift award
in the New Development
Category. SBS Toshiba
Logistics is working hardto achieve modal shift by
reducing CO2 emissions
in transportation andeasing burdens on drivers.

In September 2023 SBS RICOH LOGISTICS SYSTEM CO., LTD. held aceremony commemorating receipt of its first F1 VAN, a next-generationelectric vehicle（EV）. Similarly, in December 2023 SBS Sokuhai Support
Co., Ltd. introduced additional EVs for last-mile delivery. With a view to
reducing CO2 emissions and reaching its sustainability targets, the SBSGroup aims to replace some 100 vehicles with EVs in FY2024.

Corporate Profile and Stock Information■ Corporate Profile
Company NameSBS Holdings, Inc.

Representative Director

Masahiko Kamata

Established

December 16, 1987

Capital3.92 billion yen

Net Sales

431.9 billion yen（consolidated)＊For the year ended December 31, 2023

Location

8-17-1, Nishi-Shinjuku, Shinjuku-ku, Tokyo, 160-6125, Japan
Sumitomo Fudosan Shinjuku Grand Tower 25F■ Stock Information
Number of Shares Authorized

154,705,200 shares

Number of Shares Issued

39,718,200 shares
Yes（100 shares）

Unit Stock System

5,495

Number of Shareholders

Tel: 03-6772-8200（main switchboard）
Business Activities

Logistics business, property management business,marketing business, human resources business, etc.

Consolidated
Subsidiaries

SBS Toshiba Logistics Corporation（January 1, 2024）

TL Logi Service Co., Ltd.
Toshiba Logistics（Shanghai）Co., Ltd.
Toshiba Logistics（Hangzhou）Co., Ltd.
Toshiba Logistics（Dalian）Co., Ltd.
Toshiba Logistics Hong Kong Co., Ltd.
Toshiba Logistics（Singapore）Pte. Ltd.
Toshiba Logistics（Philippines）Corporation
TL Forwarding Service（Philippines）Corporation
Toshiba Logistics（Thailand）Co., Ltd.
TL Service（Thailand）Co., Ltd.
Toshiba Logistics Malaysia Sdn. Bhd.
Toshiba Logistics Vietnam Co., Ltd.
Toshiba Logistics India Private Limited
Toshiba Logistics America, Inc.
Toshiba Logistics Europe GmbHSBS RICOH LOGISTICS SYSTEM CO., LTD.
SBS SAN-AI LOGISTICS CO., LTD.
RICOH LOGISTICS CORPORATION［USA］
RICOH INTERNATIONAL LOGISTICS（H.K）Ltd.
Ricoh International Freight Forwarding（Shenzhen）Co., Ltd.
SBS Logistics（Thailand）Co., Ltd.
SBS Vietnam Co., Ltd.
Jass Co., Ltd.
SBS Global Network Co., Ltd.

SBS Logicom Co., Ltd.
SBS Freight Service Co., Ltd.
SBS Logicom Kanto Co., Ltd.
Kyokushin Unyu Kaihatsu（K.U.K. LINE）

SBS Flec Co., Ltd.
SBS Flecnet Co., Ltd.
Hinomaru Kyuso K.K.

SBS Sokuhai Support Co., Ltd.
SBS Zentsu Co., Ltd.
SBS Furukawa Logistics Corp.
SBS Staff Co., Ltd.
SBS Finance Co., Ltd.
Marketing Partner, Inc.
SBS Asset Management Co., Ltd.
LMAX Co., Ltd.

■ Directors （as of March 27, 2024）
Representative Director

Masahiko Kamata

Director

Shuichi Hoshi

Director

Masato Taiji

Director

Yasuhito Tanaka

Director

Natsuki Gomi

Director

Katsuhisa Wakamatsu

Outside Director

Jiro Iwasaki

Outside Director

Yoshinobu Kosugi

Director（Full-time Audit & Supervisory Committee Member）

Takashi Endo
Outside Director（Audit & Supervisory Committee Member）

Masato Matsumoto
Outside Director（Audit & Supervisory Committee Member）

Sachie Tsuji■ Major Shareholders（as of December 31,2023）
Shareholder Name

Number of
Shares Held

Shareholding
Ratio
（%）

Kamata Kikaku Co., Ltd.

19,888,400

50.07

The Master Trust Bank of Japan, Ltd.（trust account） 2,464,100

6.20

Custody Bank of Japan, Ltd.（trust account）

2,195,600

5.52

SBS Holdings Employee Share Ownership Association

1,200,800

3.02

Masaru Wasami

1,078,600

2.71

TOBU Properties Co., Ltd.

1,001,000

2.52

GOVERNMENT OF NORWAY

655,409

1.65

Junichi Ouchi

601,400

1.51

Bansei Institute for General Research Co., Ltd.

410,000

1.03

UEDA YAGI TANSHI Co., Ltd.

366,200

0.92＊The ratio of shares held against the number of shares issued is truncatedafter the second decimal place.

■ Distribution of Shares by Shareholder Type（number of shares issued: 39,718,200 shares）

Non-Japanese corporations

Securities firms

3,466,710 shares（8.73％）

340,130 shares（0.86％）

Treasury stock

Financial institutions
5,190,800 shares（13.07％）

Individuals and others
7,764,283 shares（19.55％）

Japanese
corporations
22,955,488 shares（57.80％）789 shares（0.00％）