SBS Business Report
Shareholders' Newsletter for FY2020
January 1, 2020 - December 31, 2020

Words from the President
Consolidated Results
Special Feature
TopicsSocial Contribution of the SBS Group
Corporate Profile & Stock Information

Social Contribution of the SBS GroupSBS Flec Net to Accept TechnicalIntern Trainees from Vietnam
SBS Flec Net has started accepting Vietnamese technical interns from 2020. This is
an initiative based on the "Technical Internship System for Foreigners" established by
the Japanese government, with the cooperation of Mirai Kyosei Kyodo Kumiai（MIS
Association）, which has long been involved in accepting trainees under this system.
The main purpose of this program is to contribute to the development of humanresources who will be responsible for the economic development of Vietnam, and toacquire know-how in food logistics during the 11-month training period. In 2020, a
total of 12 trainees were accepted as the first-term trainees. We plan to continue thisprogram on a regular basis.

The first-term trainees start their training in April 2020
The first-term trainees were assigned to the Kitakyushu Branch of SBS Flec Net on April 1,
2020. At the orientation on the first day, after a welcome speech from the president,
Vietnamese employees who joined the company in 2018 gave a classroom lecture on the
products and practical training on site in Vietnamese.
The trainees took 11 months learning how to sort products in a chilled warehouse. They
received practical training immediately after arriving in Japan, while COVID-19 was
spreading rapidly, and they were forced to postpone the originally scheduled temporary
return to Vietnam in February 2021 due to the infection. SBS Flec Net has provided
maximum support to the first-term trainees, including the living environment. In the samemonth, seven more second-term trainees were assigned to the project, and together with thefirst-term trainees, 19 people are working on the site. After returning to their home country,
we hope that they will use the results of their on-the-job training to play an active role as
leaders in the next-generation logistics of Vietnam.

Susumu Kinoshita,
Representative of MIS Association

In recent years, Vietnam has been experiencing
remarkable economic development and thestandard of living of its people has been
rising. It is expected that various domestic
infrastructure development will become
urgent, and logistics is an important part of such infrastructure. I
hope that after returning to their home country, these technicaltrainees will utilize the latest logistics know-how they learned at SBS
Fleck Net and contribute to the development of Vietnam's logistics
network with pride as professionals.
The acceptance of technical intern trainees from countries withdifferent cultures cannot be achieved without the understanding of
the company on the accepting side. I would like to express mysincere gratitude to everyone at SBS Fleck Net for their continued
support of this meaningful international exchange program.

Technical Intern Trainee（1st term）

Chan Hau Kat
I have been assigned the task of using thelogistics system to read the barcodes of foodin the chilled storage and sort it for the local
supermarkets.
The second-term trainees who joined theprogram after me are still getting used to the job, so as a fellow
Vietnamese senior, I tell them how to handle the products carefully
and neatly, and not to talk while working. I also teach my juniors, "If
you can't read and write kanji, your work will be delayed, so let'sstudy hard."
There are many good people in the workplace, and I always get help
from them. As here is so good place to work, I would like to continuelearning Japanese after I return to Vietnam in the future, and thenreturn to Japan to work for SBS Fleck Net.

Technical Intern Trainee（2nd term）

Site Manager, SBS Flec Net Kitakyushu Sales Office

Chan Thi Huong

Ryuji Yamamoto,I am in charge of sorting food for shipmentin chilled food warehouses.
I enjoy working every day as there aremany kind people who always teach me
their work enthusiastically. In the job, I
always recalculate and check the number of items to be sorted sothat there are no mistakes. I am also careful to handle heavy
items carefully. During breaks, it is fun to talk with Japanesepeople. The employees sometimes give me sweets, which makes
me very happy.
After returning to Vietnam, I would like to take advantage of theskills I learned here and Japanese to get a job in food distribution.
I will do my best to acquire job skills here!

Deputy General Manager

We strive to create a good working environment
by face-to-face talking with employees.
Especially with technical trainees, frequent
communication is essential. Each of the 3
trainees has 1 instructor who gives careful guidance on businessprocedures and other topics. They also use their own educational
materials to train them about 30 minutes a day on how to write
Japanese characters, such as product names and land names, used intheir work. When people get used to work, they tend to forget thebasics, so we always strive to confirm and provide guidance on rulesthat have returned to the basics. I hope that the improvement of theskills of trainees will lead to the expansion of overseas transactions.
We would also like to establish a system to accept trainees who wish
to work in Japan after completing their training.

Words from the President

Under the COVID-19 crisis,
we aggressively responded to expanding
logistics demand, and achieved record
highs for both net sales and operating
income for the three consecutive years.
Masahiko Kamata, President and Representative Director
Business results for the fiscal year
ended December 2020

（Logistics Technology), resulting in structural changes in our business

In FY12/20, the logistics industry faced a challenging
business environment, including a decrease in demand for BtoB
logistics amid continued restraint in global economic activities
and a decline in exports and imports due to the expansion of
COVID-19. On the other hand, demand for daily necessities suchas food and daily products, as well as e-commerce demand,
continued to grow against the backdrop of "Stay-at-home trend"
due to people refraining from going out. SBS Group has beenproactively responding to this demand while placing the highest
priority on preventing infections and ensuring the safety ofcustomers, business partners, and employees.
In November 2020, we acquired a 66.6% stake in TOSHIBALOGISTICS CORPORATION（current SBS TOSHIBA LOGISTICSCORPORATION）and made it a consolidated subsidiary. As aresult, the SBS Group further expanded its service lineup andstrengthened its overseas network, thereby establishing a system
to further strengthen its logistics supply chain.
For the fiscal year under review, sales in the logistics businesswere almost unchanged, while sales in the property managementbusiness increased. As a result, net sales were 257,192 million
yen（up 0.6% year on year）and operating income was 10,960
million yen（up 7.7%）. Both consolidated net sales and operating
income reached record highs for three consecutive years.

business model, which has grown while balancing logistics, M&A, andmodel. With these in mind, the SBS Group will continue its proprietary

Future business activities
In the Logistics business, we anticipate further expansion of the
e-commerce market and rapid technological innovations utilizing LT

logistics facility development. At the same time, the Group will
enhance its competitiveness by actively investing in IT and LT and
accelerating collaboration with companies in other industries, aiming
to become the top tier in the logistics industry.
In the fiscal year ending December 2021, we will further strengthen
our sales activities and continue to aggressively work to bring in daily
necessaries and e-commerce, where demand is strong. Furthermore,
after incorporating the contribution of newly consolidated TOSHIBALOGISTICS CORPORATION to results and securitization of logistics
properties, we plan to increase sales and profits with net sales of 380
billion yen, operating income of 15 billion yen, ordinary income of
14.8 billion yen, and net income attributable to owners of parent of
8.4 billion yen. To achieve this, we will work together as a group to
carry out business activities and growth strategies.

Dividends
We regard the return of profits to our shareholders as one of ourmost important management policies. Our basic policy on the
distribution of profits is to enhance our internal reserves in order tobuild a stronger management foundation, to continuously maintaindividends, and to improve the level of dividends in accordance withour business performance. For the fiscal year under review, in light ofour solid business performance, we will increase the dividend pershare by 3 yen from the forecast to 35 yen. We highly appreciate yourcontinued support.

Consolidated Results for the fiscal year under review■

Net sales/
Operating income（right axis）
Net sales

Operating income（Million yen）■

Ordinary income/Net income
attributable to owners of parent
Ordinary income

10,172 10,883（Million yen） （Million yen）

300,000

30,000255,548

10,000203,516200,000

20,000152,870

7,607

6,229
2017

8,240

2018

2019

Shareholders' equity

10,96010,0000

0■

Net assets / Shareholders
equity ratio（right axis）
Net assets

70,05956,52844,94353,98739,32235,74744,52750,2933.0

68,1462.5

60,00048,1732.0

40,000

2019

2020

0

1.44
1.26

2017

2018

1.21

2019

1.39

2020

1.5

20,000

1.0

0＊Net interest-bearing debt = long-term and short-term loans+ bonds - cash and cash equivalents＊Net D/E ratio = Net interest-bearing debt / Shareholders' equity

45

54,07738,51030

28.5
20,000

2018

（％）
60

80,0004,446 4,409

2017

Shareholders equity ratio（Times） （Million yen）

80,00040,000

2,000

2020

Net D/E ratio（Million yen）

6,826

6,000

4,000

10,176

Net interest-bearing debt

60,000

6,475
6,079

100,000

Net interest-bearing debt/Shareholders' equity/
Net D/E ratio（right axis）

257,192
8,000

0Net income attributable toowners of parent

■

23.1

2017

2018

25.1

2019

19.9

2020

15

0

Special Feature
Breakthrough to become a top group of domestic logistics companies!
SBS TOSHIBA LOGISTICS CORPORATION will begin operations
on January 1, 2021.
Unparalleled M&A strategy to steadily drive the SBS Group's growth
Immediately after its listing in 2003, the SBS Group expanded its operations through acquiring more than 20 companies, centered on
logistics businesses that play a leading role in the logistics of Japan's leading companies, including SBS Flec（formerly Yukijirushi
Butsuryu）, SBS Logicom（formerly Tokyu Logistic）, and SBS RICOH LOGISTICS SYSTEM（formerly RICOH LOGISTICS SYSTEM）.
For the SBS Group, a venture company that was founded in 1987 and has a short history, M&A is not simply a means to increase sales.
This is one of the essential measures for a logistics "mega-venture" to create high added value through the
expansion of a wide range of logistics services and the fusion of "talent" with high knowledge and excellent DNA ofnational brand companies.

About SBS TOSHIBA LOGISTICSSBS TOSHIBA LOGISTICS uses its global network todevelop logistics services for energy-related social
in fra s truct ur e, semic o n d u c t or s , I T , a n d cons umer
electronics.
Our strength lies in the "4PL"* that we have built
together with Toshiba Group.
Although 4PL has long been a domain for SBS RICOHLOGISTICS SYSTEM, SBS Logicom, and others, theparticipation of TOSHIBA LOGISTICS will enable us topropose to customers worldwide, regardless of size or
industry, as the SBS Group's main solution.

* What is 4PL（Fourth Party Logistics）?
Solutions added to 3PL（logistics operations and their
management are comprehensively entrusted）that provide
consulting services for planning and promoting logistics
strategies from the perspective of the entire supply chain. We
support the solution of management issues from the aspect oflogistics by being involved from the planning of strategies inline with customers' management strategies.

Benefits of 4PL① Discovering potential issues through visualization of
the entire supply chain② Propose improvement measures not only to reduce
logistics costs but also to reduce inventories and fixed
assets
③ We can reallocate human resources in the logistics
department to growth areas.

Implementation/
Co-creation
Strategy

The SBS Group believes that the "crux" of M&A is not in theprocess of reaching an agreement, but in the post-merger
integration（PMI）phase. We have a unique and one-of-a-kind
operation. While sharing management resources such as
warehouses, vehicles, and systems throughout the Group to control
costs, we respect the autonomy and corporate culture of the
management of each Group company, and maintain their own
approaches in terms of employment systems for management
and employees, and relationships with business partners.
Our stance is to allocate the surplus generated by the sharingof resources to new growth areas.
The DNA of the organization that each company has cultivatedover many years is important, and the Group as a whole will
pursue value created through the intersection of diverse values.

Example of PMI at SBS RICOH LOGISTICS SYSTEM（join the SBS Group from August 2018）●Share management resources:

Integration of core systems, integration of bases, joint operationof sites●Creating new value:

Expansion of sales divisions and information systems divisions,and inter-group restructuring, establishment of new bases andexchange of personnel within the Group

Toshiba GroupBe responsible forToshiba Group's logistics

4PL
Logistics
Consulting

Diversity is the source of competitivenessThe unique PMI of SBS group

Reformproposals
Management

3PL
Operations

Sharing SBSGroup's resources
Developing a highvalue-added
logistics network

SBS Group
Share 4PL functions
among SBS GroupTOSHIBALOGISTICS

Introduce a new culture
to the SBS GroupStrengthen overseas
logistics markets inNorth America and EuropeT o pi c s
J
a
n
u
a
r
y

Opened the donated course
at the University of TokyoSBS Group
In order to contribute to the resolutionof issues faced by the logistics
industry, we established a donatedresearch division for advanced logistics
science at the Research Center for
Advanced Science and Technology,
the University of Tokyo, jointly with twoother companies.
We have begun education for thedevelopment of advanced logistics personnel.
F
e
b
r
u
a
r
y

SBS Group takes on a new dimension with the strengths
of "challenge" and "speed," the DNA of a venture company"Logistics is an infrastructure industry. In order to contributeto more customers, therefore we must expand the scale ofour business." This is our belief and pleasure since thefounding of the SBS Group.
After the consolidation of SBS TOSHIBA LOGISTICS, the
SBS Group is expected to rank 10th among domestic
logistics companies excluding air transportation, shipping,and railroads, and also 5th among 3PL companies.
Going forward, as one of the major domestic logistics
companies, we will grow dramatically to become a group of
professionals responsible for logistics for a broader range ofcustomers.

(Net sales/Billions of yen)

5,0002020 TOSHIBA LOGISTICS

Current: SBS TOSHIBA LOGISTICS

2018 RICOH LOGISTICS SYSTEM

4,000

Current: SBS RICOH LOGISTICS SYSTEM

companies, including
2006 2
Zentsu3,000

Current: SBS Zentsu

companies, including
2005 9Tokyu Logistic

2,000

0

SBS Logicom & SBS RICOH LOGISTICS SYSTEM

2 of the 3 logistics facilities at the SBS
Logicom Yokohama Kanazawa Branch
were dismantled and newly established.
Construction is scheduled forcompletion in July 2021, and we will
begin joint operation of a large-scale
3PL with SBS RICOH LOGISTICS
SYSTEM, aiming to realize high-level
3PL services that combine thestrengths of both companies.

M
a
r
c
h

Reorganization to accelerate
growth strategies
SBS Holdings

In preparation for the increasing
importance of technologicaldevelopment symbolized by robotics
technologies, AI, RPA, etc.,
reorganization to accelerate thegrowth strategy in April.
We established the IT Planning
Devision, which plans and proposes
IT strategies, and the LT Planning
Devision, which is responsible for
initiatives in the logistics technology
field.

A
u
g
u
s
t

Acquired shares of
HINOMARU KYUSO
SBS Flec

Acquired a portion of the shares（49% shareholding）of HINOMARUKYUSO, K.K., which operates a delivery network throughout
Shikoku, focusing on food distribution in three temperature zones.
We can expect highsynergies by strengthening
our delivery networkand enhancing our
responsiveness to supply
chain management.

Current: SBS Logicom

companies, including
2004 10
Yukijirushi Butsuryu

1,000

The groundbreaking ceremony of the Yokohama
Kanazawa Distribution Center (tentative name)Current: SBS Flec1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 29 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 2 X
7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 X

N
o
v
e
m
b
e
r

Japan Future Logistics Fund
decides ﬁrst investment target
SBS Holdings

Concluded the first investment
contract in the Japan Future Logistics
Fund, which was established jointlywith the Development Bank of Japan,Inc.
We have decided to invest in Ai&Ai
Chiba Chuo Co., Ltd. which isengaged in light cargo transportationsuch as online supermarket delivery,
route delivery, etc. in Chiba Prefectureand eastern Tokyo.

CORPORATE PROFILE ＆STOCK INFORMATION■ Corporate Profile■ Stock Information

Company NameSBS Holdings, Inc.

Number of shares authorized

President

Masahiko Kamata

Number of shares issued

FoundedDecember 16, 1987

Paid-in Capital¥3,920.75 million

Net sales¥257.1 billion（consolidated）*For the year ended December 31, 2020

Head Oﬃce

39,718,200 shares
including 2,590 fractional shares
Yes（100 shares）

Unit Stock System

3,911

Number of shareholders

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

Lines of Business

154,705,200 shares

Logistics, property management, marketing,■ Major Shareholders

human resources, etc.
Consolidated
Subsidiaries（January 1, 2021）

SharesHeld

Ratio of
Shares Held（%）

Masahiko Kamata

14,388,400

36.22

The Japan Custody Bank, Ltd.（Trust Account）

5,156,200

12.98

The Master Trust Bank of Japan, Ltd.（Trust Account） 1,575,700

3.96

SBS Holdings Employee Stock Ownership Plan

1,354,100

3.40

SMBC Trust Bank, Ltd., as a trustee for securities trusts

1,200,000

3.02

Sumitomo Mitsui Trust Bank, Limited（Trust Account A13） 1,000,000

2.51

Tobu Real Estate Co., Ltd.

986,000

2.48

Junichi Ouchi

800,000

2.01

Masaru Wasami

576,700

1.45

Hiroshi Date

449,800

1.13

Shareholder

SBS TOSHIBA LOGISTICS CORPORATIONTL Logistics 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（THAILAND）Co., Ltd.
TOSHIBA LOGISTICS VIETNAM Co., Ltd.
TOSHIBA LOGISTICS AMERICA, Inc.
TOSHIBA LOGISTICS EUROPE GmbHSBS RICOH LOGISTICS SYSTEM Co., Ltd.
SBS SAN-AI LOGISTICS Co., Ltd.
RICOH LOGISTICS CORPORATIONRICOH INTERNATIONAL LOGISTICS（HK）Ltd.
Ricoh International Freight Agency（Shenzhen）Limited Company

SBS Logicom Co., Ltd.
SBS Freight Service Co., Ltd.
SBS Global Network Co., Ltd.
SBS Logicom Kanto Co., Ltd.

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

SBS Flec Co., Ltd.
SBS Flec Net Co., Ltd.

SBS Zentsu Co., Ltd.
SBS Sokuhai Support Co., Ltd.

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

SBS Staff Co., Ltd.
SBS Finance Co., Ltd.

Japanese corporations

Securities firms

SBS Asset Management Co., Ltd.

2,513,120 shares（6.33％）

978,321 shares（2.46％）

L-Max Co., Ltd.

Marketing Partner, Inc.

■ Directors and Auditors （As of March 25, 2021）

Treasury stock

Non-Japanese corporations
3,892,373 shares（9.80％）

Individuals
andothersFinancial institutions

Representative Director

Masahiko Kamata

Directors

Kenichi Iriyama

Directors

Masato Taiji

Directors

Yasuhito Tanaka

Directors

Katsuhisa Wakamatsu

Directors

Hajime Kato

Directors
Outside Director

Hiroaki Sato
Jiro Iwasaki■ Changes in Dividends

Outside Director

Tetsuya Sekimoto

Outside Director

Shuichi Hoshi（Yen）

21,531,011
shares（54.21％）

10,802,800 shares（27.20％）40

35.0

Directors（Full-time Audit Committee Member）

Yasuhiro Yamashita
Outside Director（Audit Committee Member）
Masato Matsumoto
Outside Director（Audit Committee Member）

21.0

30

30th anniversarycommemorative
dividend20

3.0

Sachie Tsuji

30.0
22.0

18.0
10

0

2017

2018

2019

2020

575 shares（0.00％）