SBS Business Report
For the year Ended December 31, 2015
（Security Code：2384）
Co n t e n t s

Business Highlights ・・・・・・・・・・・・・・・・・・・・・・・・・ 01
Message from the President ・・・・・・・・ 02
Highlights ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 05
Topics ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 06
Consolidated Performance ・・・・・・・・・・・・ 07
Corporate Profile &Stock Information ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 10

BUSINESS HIGHLIGHTS 2015

SBS Group meets the various logistics needs withthe utmost quality.
Performance of the current term
■Net Sales¥ 157.9 billion¥ 5.3 billion■Operating Income■Ordinary Income■Net Income¥ 5.7 billion¥ △3.8 billion■Dividend per share ¥Logistics 90.8％

Other 3.8％

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

0

Property
Management
5.4％

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 ●Internal 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 2015

MESSAGE FROM THE PRESIDENT

Despite an increase in sales and profits

in Japan, we incurred a net loss in 2015.
This was largely due to the downturn inoverseas operations. Moving forward,
we will work toward a V-shaped
turnaround in 2016.

President: Masahiko Kamata

Operating Conditions in 2015
In fiscal 2015, the fiscal year ended December
31, 2015, the SBS Group continued to confronta harsh operating environment. Despite thepositive flow-on effects from the downturn infuel prices, this harsh operating environment
was largely due to an upswing in recruiting,subcontracting, and other costs owing to theshortage of drivers, weak personal consumption,and such factors as inclement weather, which
triggered a slump in the movement of goods.
Under these circumstances, the SBS Group
worked in unison to implement the business,investment, and other strategies set out under
its four-year medium-term management plan,
SBS Growth 2017 , which began in fiscal 2014.

Expanding the 3PL Business byReinforcing Marketing
Moving forward with efforts to carry out its
business strategy, the SBS Group took steps torenew its marketing organization in order tofurther expand the 3PL business. At the sametime, we established a marketing base for our
logistics and human resources businesses and

SBS Business Report 2015

2

MESSAGE FROM THE PRESIDENT

began cultivating new markets in earnest in thestore group in the city of Tokorozawa, Saitama

Kansai and western Japan regions. In our new

Prefecture. We also took steps to constructbusiness activities, we set up logistics centers

two large-scale logistics facilities including theto accommodate the needs of food products

Logistics Center in Isogo Ward, Yokohama where

manufacturers, major retailers, and other businessconstruction is ongoing. Fully fledged operations

operators including importers and distributors

are slated to commence at both facilities in the springof high-end wines . We also received an orderof 2016, bringing to the market an additional

for the CD and DVD logistics operations of

66,000 square meters of new logistics floor space.

Seikodo Co., Ltd., a prominent wholesaler ofIn this manner, we are working definitely towardmusic and video software. Looking toward the

securing customers.

fiscal year ending December 31, 2016, the SBSGroup experienced growth in the amount oforders received. This growth was particularly
strong in the Group’s center operations.

Restructuring Our Business
Platform in the ASEAN Region
In our overseas operations, we sold shares heldin SBS Transpole Logistics Pvt. Ltd. “Transpole”(),
a consolidated subsidiary based in India, andwithdrew from the company’s operations (details are disclosed separately). Meanwhile, we
commenced a container shipping business ona joint-venture basis in the Philippines, andThe new Sugita Logistics Center(completed in February 2016)

Increase in Sales and Profits in theDomestic Logistics Business;
Net Loss due to the Downturn inOverseas Operations

concluded a memorandum with a prominent

Accounting for each of the aforementioned factors,

local distribution group to execute a feasibility

the SBS Group reported an increase in sales

study on low-temperature food logistics opera-

and profits. In specific terms, net sales

tions in Vietnam. Through these and otherincreased 11.6% compared with the previous

initiatives, we took positive steps towardfiscal year, to ￥157.9 billion. On a year-on-year

restructuring our business platform in thebasis, operating income climbed 30.5%, to

ASEAN region.

￥5.3 billion, while ordinary income surged

Undertaking Large-Scale
Investments in Logistics facilities
on an Ongoing Basis

58.2%, to ￥5.7 billion. In stark contrast, andafter recognizing the Group’s inability to recovercertain receivables in connection with alarge-scale transaction undertaken by Transpole

Our investment strategy included the January

in the fiscal year under review, we incurred an

2015 completion and start of operations at theextraordinary loss of ￥11.9 billion following the

Nagatsuta Logistics Center in the city of Yokohama

decision to withdraw from that company’s

as a logistics base for large-scale beveragebusiness. As a result, the SBS Group recorded

manufacturers. In March, we began construction of aa total extraordinary loss of ￥13.5 billion and a

dedicated logistics center for a major department

net loss for the period of ￥3.8 billion.

3 SBS Business Report 2015

MESSAGE FROM THE PRESIDENT

Outlook for Fiscal 2016c a u s e d b y t h e G r o u p ’s n e t l o s s f o r t h eperiod. Looking ahead, we will work diligently
to expand our business and enhance our cor-

In fiscal 2016, the fiscal year ending December

porate value. Accordingly, we have posi-

31, 2016, we anticipate results in the domes-

tioned fiscal 2016 as a year during which we

tic logistics business as well as the property

will deliver a positive turnaround. As we en-

management business will surpass the levels

deavor to achieve our established goals, werecorded in fiscal 2015. Turning to the Group’skindly request the continued support and un-

overseas operations, net sales are projected

derstanding of all shareholders.

to decline substantially due to the withdrawal
from Transpole. From a profit perspective,
however, we forecast a significant positive
impact from the large drop in goodwill amortization. Taking each of the aforementioned
into consideration, and our belief that theGroup will not incur any additional losses
attributable the withdrawal from Transpole,
we are expect results in the current fiscal
year will enjoy a V-shaped turnaround.

Dividends in Fiscal 2015 andFiscal 2016
SBS Holdings’basic policy on the distribution of
profits call for the maintenance of stable dividends
and efforts to increase dividend levels in linewith the Group’s operating performance.
Taking into consideration the substantial net
loss of ￥3.8 billion, the Company has regretfully decided to forego the payment of theperiod-end dividend for the fiscal year underreview. Looking at dividends in fiscal 2016,
we plan to pay a quarterly dividend of ￥16
per share to shareholders of record as ofMarch 31, 2016 in addition to the usual period-end dividend of ￥16 per share.

To Our Shareholders
I would like to take this opportunity to apologize
to all shareholders for the considerable anxiety*Withdrawal from the operations of Transpole
Based in India, Transpole is a forwarder that
conducts business in a variety of countries including
China and Hong Kong. The SBS Group acquired thecompany’s shares in July 2014 in a bid to expand
its overseas operations.
In the fiscal year under review, however, theGroup experienced delays in recovering certain
receivables in connection with a large-scaletransaction undertaken by the company. Afterconsidering the probability of recovering thesereceivables going forward, we recognized thatrecovery would be extremely difficult. Moreover,and in light of Transpole’s tight funding situation as
well as the rapid deterioration in global economic
conditions, we determined that rebuilding thecompany’s operations would also be far fromstraightforward.
Taking each of the factors into consideration, we
decided to sell all of our interest in the company toa third party and to withdraw from the company’s
operations while writing off our investment in full in
the fiscal year under review.
Note: A forwarder does not maintain transportation or freight
handling modes in its own right. Forwarders are entities
that organize the shipment of goods using a variety ofshipping modes including ships and airplanes leased fromother parties.

SBS Business Report 2015

4

HIGHLIGHTS

Guided by the SBS Group’s corporate philosophy, each and every employee recognizes theessential nature of social responsibility in securing corporate growth. Striving to put thisphilosophy into practice, the Group works closely with stakeholders to contribute broadly to thepleasure and continued development of society. Here, we introduce certain examples of theGroup’s CSR activities.

■ Kamata Foundation■ C SR R e port (in Ja pa n e se onl y )The SBS Kamata Foundation was established tosupport academic research into society’s basic
infrastructure, with a particular focus on the logistics
function. Drawing on the results of research in suchareas as logistics efficiency and accident prevention,
the Foundation is contributing to the developmentof industry while working to enhance people’s lives.
As a part of this support, the general public wasinvited to apply for research grants covering a wide
variety of channels including academic research,workshops, symposiums, and seminars in October
2015. Working through the Foundation, the SBS Groupis contributing to the growth and development oflogistic functions that are useful to society.

The SBS Group issues an easy-to-understandpublication outlining details of its CSR activities.
Launched in 2009, this annual publication was
issued for the seventh time in 2015. The 2015 CSR
Report included special features on the Group's
internal logistics operations, which are attracting
interest as environmental
measures in densely
populated commercial andbusiness areas. For moredetails, please refer to theCompany website.

URL : http://www.sbs-group.co.jp/hdg/csr/report/■ Community Activities■ Life C a re Activitie s

The SBS Group vigorously engages in a variety ofcommunity contribution activities. In September
2015, Group employees participated in a traffic
safety street campaign in Kameido, Tokyo. In October
2015, a power walking training session was held
within the grounds of the Company’s head office.
This initiative was designed to promote the health ofpeople working at local government agencies aswell as the Group’s employees. Again in October
2015, children of employees of NIPPON RECORD
CENTER Co., Ltd. were invited to attend a workplace
tour. The goal of this tour was to provide the familiesof employeeswith a deeper
understandingof the company
and its operations.

Marketing Partners Co., Ltd., a company thatengages in the online sale of premium pet foods
while providing e-commerce support services,co-sponsored and participated in the PET DAY
2015 AUTUMN initiative held in October 2015.
The purpose of this initiative was to help people
see and enjoy the pleasures of pets. Focusing
mainly on owners who had recently lost a pet, PET
DAY 2015 AUTUMN was
an opportunity to focus
on life care activities
through music and books
and to welcome a new
family member throughthe adoption of a homelesspet.

Power walking
training session

5 SBS Business Report 2015

TOPICS

Business and Capital Tie-up with
Seikodo, a Large Music and Video
Software Wholesale Company(SBS Group)

March

The operations of a subsidiary of Seikodo Co., Ltd.
a prominent wholesaler of music and video software, were integrated withNIPPON RECORD CENTER
Co., Ltd. Based on thisintegration, steps weretaken to conclude a basic
agreement for the consignment of logistics.

Launch of SBS Sokuhai Support(SBS Sokuhai Support Co., Ltd.)

July

Container Transport Business
Launched in the Philippines

August(SBS Group)

SBS Logistics Philippines, Inc. was launched as a
joint venture with Sky Freight Forwarders Inc., aleading forwarder in thePhilippines and core companyof the De Guzman Group.
SBS Logistics Philippines
engages in container transportation (drayage) activities.

Full-Service Contracting from
Import to Delivery of High-End
Wines

November(SBS Logicom Co., Ltd.)

Following the merger of SBS Support Logi Co., Ltd.
and SBS Sokuhai Co., Ltd., SBS Sokuhai Support
Co., Ltd. was newly launched on July 1, 2015. This
new company is engaged in the express deliveryof small packages between companies as well as
wide-ranging environmental activities including
the collection
and intermediate
processing ofindustrial waste.

Further expanding the coverage of its logistics business activities, SBS Logicom began offering a fullrange of wine services from November 2015. As aone-stop logistics provider, the company’s activities
extend from the import ofhigh-end wines throughcustoms clearance, storage,
distribution, and reefer
delivery to restaurants
and retail stores.

Two Star Rating under the Tokyo
Metropolitan Government’s FuelConsumption Evaluation System

Received the Director-General’sAward at the Green Logistics
Partnership Conference

August(SBS Transport Co., Ltd.)As a part of efforts to further
improve its fuel consumption andreduce CO 2 emissions, SBS Transport Co., Ltd. applied for anassessment under the Tokyo Metropolitan Government’s annual
freight transportation evaluation
system. As a result, the company
received a two star rating.

December(SBS Logicom Co., Ltd.)SBS Logicom received the Director-General’sAward as one member of a collective group ofseven companies at the Green Logistics Partnership Conference. The Green Logistics Partnership
Conference is an initiative that supports collaborationb e t w e e n consignor
companies and logistics business operators
aimed at establishingsustainable logistics
mechanisms.

SBS Business Report 2015

6

CONSOLIDATED OPERATING PERFORMANCE

Against the backdrop of a harsh operating environment, net sales increased compared with theprevious ﬁscal year. This increase was largely attributable to the full contributions of overseas
subsidiaries and growth in the domestic logistics business. From a proﬁt perspective, operating income
and ordinary income increased substantially. This was mainly due to the decrease in fuel prices coupledwith freight rate adjustments and foreign exchange gains. In contrast, SBS Holdings incurred a net loss
for the period under review owing primarily to the write-oﬀ the Company’s entire investment in SBSTranspole.

YOY
Change■ Net Sales

YOY
Change■ Operating Income

30.5％

11.6％

UP

UP

(Millions of yen)

(Millions of yen)

180,000

6,000

5,347

157,996
150,000

120,000

121,148

127,935 132,205

141,535

5,000

4,000

90,0003,000

60,000

2,000

0

2011

2012

2013

2014

2015

YOY
Change■ Ordinary Income

0

4,116

4,098

2013

2014

2,876
2,153

2011

2012

■ Net Income

2015

YOY
Change

58.2％

－

UP

(Millions of yen)

5,772

6,000

(Millions of yen)

4,000

2,725

2,502

5,000

1,626

2,000

3,779

4,000

1,549

3,648

△3,815

0
3,000

2,000

0

2,746
-2,000

1,633

2011

7 SBS Business Report 2015

2012

2013

2014

2015

-4,000

2011

2012

2013

2014

2015

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

Year Ended December 31, 2015

Year Ended December 31, 2014

Net Sales

Operating Income

Net Sales

Operating Income

Logistics

143,391

2,072

129,884

1,624

Property Management

8,641

3,292

5,103

2,359

Other

5,963

238

6,548

344

̶

△256

̶

△229

157,996

5,347

Adjustment
Total

141,535

4,098● Logistics Business :Segment sales increased on the back of the inclusion of SBS Transpole in the Company’s scope of
consolidation as well as robust results in the 3PL business. Buoyed by such positive flow-on effects as thedecrease in fuel prices together with freight rate adjustments, operating income also improved.
● Property Management Business :The Nagatsuda Logistics Center commenced operations in January 2015 leading to an upswing in rental income.
Buoyed also by the liquidation of a part of logistics facilities for sale, both segment sales and profits increased.
● Other Business :Both segment sales and profits declined. This largely reflected the increase in recruiting costs triggered bya shortage of personnel in the human resources business and the impact of the sale of a marketingbusiness subsidiary.

■ Net Debt, Total Shareholders' Equity,
Net Debt-to-Equity Ratio■ Net Assets, Equity Ratio

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

Net Assets (left)(Millions of yen)
60,000（Times）
3.0

51,22045,00030,00039,09038,12824,82827,372

28,67735,09130,932 2.09
24,6752.5

30,0002.0

20,00025,137

1.66

1.57
1.39

0

11/12

12/12

1.5

10,0001.0

027,78029,947

29,218

45

30

24.6％
15,000（％）

51,534

39,215Equity Ratio (right)(Millions of yen)
40,000

26.3％

26.7％

24.3％

22.5％

15

1.37
13/12

14/12

15/12

11/12

12/12

13/12

14/12

15/12

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 20158

DIVIDEND■ Dividends per Share

Basic Policy on the Distribution of Profits
The SBS Group has positioned the return of proﬁts to
its shareholders as an important management objective.
Accordingly, our basic policy on the distribution of
proﬁts is to maintain a steady stream of ongoing

（yen）
40.0
40.0
40
Commemorative Commemorative
dividend
dividend30

10.0

Quarterly
dividend

16.0

10.0

dividends while working to increase dividend levels inline with the Group’s operating performance. In
implementing this policy, we also take into
consideration the need to boost internal reserves toensure a stronger management base.
However, taking into consideration the substantial net

20

15.0

16.0

10

0

loss for the period under review, we have regretfully
decided to forego the payment of the period-end
dividend.
Looking at dividends in ﬁscal 2016, we plan to pay a

0
2012

2013

2014

2015

2016
（Forecast）

quarterly dividend of \16 per share to shareholders ofrecord as of March 31, 2016 in addition to the usual
period-end dividend of \16 per share.

Notes:The Group conducted a three-for-one split of common shares on June 1, 2014.
The commemorative dividend distributed in 2012 commemorates the Group’s listing on the Second Section of the Tokyo Stock Exchange.
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, 2016)

Net Sales¥ 145,000 million¥ 6,200 million

Operating
IncomeYOYchange8.2％down
YOYchange16％UP

Ordinary
IncomeNet Income¥ 6,200 million¥ 3,600 million■ By Segment

YOYchange7.4％UP
YOY
change－(Millions of yen)

Logistics

Property
Management

Other

Total

Net Sales

128,200

10,5006,300

145,000

YOY Change△10.6％+21.5％

+5.7％

△8.2％

Operating Income

1,200

4,700

300

6,200

YOY Change△42.1％+42.8％+26.1％+16.0％

Operating Margin

0.9％

44.8％

4.8％

4.3％

9 SBS Business Report 2015

CORPORATE PROFILE & STOCK INFORMATION (As of December 31, 2015)■Corporate Proﬁle■ Stock Information

Company nameSBS Holdings, Inc.

Shares authorized

154,705,200

President

Masahiko Kamata

Shares issued

39,718,200

FoundedDecember 16, 1987

Paid-in Capital¥3,920.75 million

Net sales¥157.9 billion (consolidated)

Number of
Employees

14,191 (consolidated)

Head oﬃce

4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan(including 2,100 shares of less than one trading unit)
Trading unit stock system

Yes (100 shares)

Shareholders

4,393■Major Shareholders
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.
A-MAX Co., Ltd.
L-MAX Co., Ltd.
Marketing Partner Co., Ltd.
■Overseas
SBS Logistics Holdings Singapore Pte. Ltd.
（Regional Headquarter of Asia）
SBS Transpole Logistics Pvt. Ltd.（India）

Ratio of
Shares Held(%)

Shareholder

SharesHeld

Masahiko Kamata

14,888,400

37.48

Japan Trustee Services Bank, Ltd.
(trust account)

4,144,000

10.43

SBS Holdings Employee ShareOwnership Association

1,569,300

3.95

SMBC TRUST BANK Designated
Securities Trust

1,200,000

3.02

Junichi Ouchi

928,200

2.33

TOBU Properties Co., Ltd.

909,800

2.29

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

830,400

2.09

CBNY-GOVERNMENT OF NOR WAY

791,294

1.99

STATE STREET BANK AND TRUSTCOMPANY 505224

750,000

1.88

3E Holdings Co., Ltd.

468,000

1.17

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

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

Masahiko Kamata

Senior Director

Kenichi Iriyama

Directors

Taiji Sugino
Makoto Watanabe
Jiro Iwasaki
Tetsuya Sekimoto

Audit & Supervisory Board
Member (full-time)

Yasuhiro Yamashita

Audit & Supervisory Board
Member (outside)

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

Securities firms

Non-Japanese Corporation

Treasury stock

869,327 shares（2.19％）

1,992,627 shares（5.02％）

385 shares（0.00％）

4,924,100 shares（12.40％）Financial institutions

8,518,000 shares（21.44％）

Individuals
and others

23,413,761 shares（58.95％）

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

SBS Business Report 201510