SBS GROUP

BUSINESS &CSR REPORTSBS GROUP
BUSINESS & CSR REPORT 2019

Contents

CONTENTSManagement Philosophy

01 - 02

We provide services,to achieve client satisfaction,

to meet shareholders’ expectations,and to be a company caring of its employees.
03 SBS Group Business Overview
05 The SBS Group’s Value Creation Process
07 Key Topics
09 Message from the President
11 Business Overview and Financial Results
15 External Environment and Management Strategy
17 Ascertaining and Responding to Management Risks
19 Contributions to the SDGs
21 CSR Promotion in the SBS Group

Long-term prosperity is rooted in paying the necessary attention
to people and in the enthusiasm of our employees.
Social responsibility is essential to corporate growth.
Harmony within the community,
efforts to make those around us happy, and contribution tosociety far and wide, is crucial.

CSR Message
Organizational Structure, CSR Management Framework

23 Environment

Customers

Key Indicators (Fiscal 2018 Results)
Review of Fiscal 2018 Initiatives
Mid-to-Long-Term Environmental Plan
Strengthening Reduction of CO2 Emissions from Vehicles

Editorial Policy
The SBS Group has published the Business & CSR Report since fiscal
2018 to report to all stakeholders on its business development andstrategies as a comprehensive logistics group, and on the progress of its
integrated CSR management efforts.
This report aims to provide insight into the business activities SBSGroup is pursuing from a short, medium and long-term perspective. The
details of the report are also designed to be simple and clear, so that itis accessible to a wide range of people.
We welcome frank feedback and impressions from readers.

Action Plan
Climate Change Risks

Total Distance Driven

Sales

126,053,307

km[Reporting Scope]
15 Domestic Consolidated Subsidiaries· SBS Ricoh Logistics System Co., Ltd.
· SBS Logicom Co., Ltd.
· SBS Logicom Kanto Co., Ltd.
· SBS Freight Service Co., Ltd.
· Nippon Record Center Co., Ltd.
· SBS Global Network Co., Ltd.
· SBS Flec Co., Ltd.
· SBS Flec-net 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, Inc.
Public Interest Incorporated Foundation· SBS Kamata Foundation

29 Safety & Social<Safety>

Employees

Review of Fiscal 2018 Initiatives
Education and Awareness-Raising, Accident Prevention*As of July 1, 2019,
Nippon Record Center
was absorbed into SBS
Logicom by merger.

billion yen

Environmental Issues Tackled by the SBS Group

Major Indicators (Fiscal 2018 Results)
Details of the Report

203.5

Training Curriculum

Safe Driving and Safe Operation Management<Society>All

Engagement between the SBS Group and Society, Engagement with Customers
Engagement with Employees, Engagement with Business Partners

43

Subjects

Actual Participants

5,095

Communication with Stakeholders
Social Contribution Activities

37 Governance
Major Indicators (Fiscal 2018 Results)

Shareholders

Society (Safety)

Environment

Dividend per Share

Number of Business Sites
with G-Mark Certification

Investment in the Environment

Corporate Governance[Reporting Period]
Fiscal 2018

Compliance[Information Disclosure]On the SBS Group website, in addition to the CSR section, the latest
information is published as it becomes available.
As well as information not listed in this report, the website also includes
extensive IR information.
https://www.sbs-group.co.jp

Information Security

Risk Management

43 CSR Data
45 Corporate Profile and Stock Information
46 Code of Behavior

22

yen

No split dividends(regular dividend, commemorative dividend)

153

business sites

3,854

million yen

03 - 04

SBS GROUP
BUSINESS & CSR REPORT 2019

SBS Group Business Overview

Transporting all manner of things safely,
securely and in an optimal environment
Truck Transportation / Modal Shift / International Logistics /Same-Day Delivery for Corporations / Company Relocation /On-site Logistics / Logistics Center Operation / 3PL*

General Logistics
Business

Number of Business Sites:*3PL (third-party logistics) is a service where we propose logistics reforms to consignors and are entrustedwith their logistics operations on a comprehensive basis. For more details, refer to the explanatory section
on “3PL Business” on page 15.

Food Logistics
Business

531

Processing in Logistics / Low Temperature Logistics /Home Delivery

Property Management
Business
Other Businesses

SBS Holdings, Inc.

Trucks and other road vehicles:

Forklifts:

Administrative Division: 892

Sales Division: 444

Characteristics: Holding company for the SBS Group
Number of Employees: 218
Number of Business Sites: 1
Number of Vehicles: 4
Renewable Energy Generating Capacity: 1,500 kW
Main Operations: Group strategy functions,company-wide strategy such as
corporate governance functions
https://www.sbs-group.co.jp/

4,497 1,382

Number of Employees:

Marketing Business / Real Estate Business / Pet Wellness Business /Insurance and Leasing / Environmental Business /Personnel Support

Number of Vehicles Owned

19,017

Operational Division: Drivers: 3,833
Warehouse Personnel: 12,053
Others: 1,795(Including 6,767 full-time
employees)*Including 241 employees with disabilities
M&A

As of December 31, 2018

SBS Ricoh Logistics System Co., Ltd.

SBS Flec Co., Ltd.

SBS Freight Service Co., Ltd.

SBS Global Network Co., Ltd.

SBS Asset Management Co., Ltd.

SBS Finance Co., Ltd.

*Including SBS SAN-AI LOGISTICS HIGASHINIHON CO., LTD.,SBS SAN-AI LOGISTICS KANTO CO., LTD., SBS SAN-AI
LOGISTICS TOKYO CO., LTD., SBS SAN-AI LOGISTICSCHUBU CO., LTD., SBS SAN-AI LOGISTICS KANSAI CO.,LTD. and SBS SAN-AI LOGISTICS KYUSHU CO., LTD.

*Including SBS Flecnet Co., Ltd.

Characteristics: Logistics Facility Development,
Real Estate Business

Number of Employees: 3,483

Number of Employees: 377

Number of Employees: 9

Number of Business Sites: 1

Number of Business Sites: 134

Number of Business Sites: 19

Number of Business Sites: 1

Characteristics: Transportation of precisionequipment for manufacturers,
international logistics, delivery forcorporations

Main Businesses:

Number of Vehicles: Trucks and other road vehicles: 739
Forklifts: 157

Number of Vehicles: Trucks and other road vehicles: 406
Forklifts: 62

Characteristics: International Air Cargo Transportation,
International Marine Cargo
Transportation, Customs Clearance
Agency Service, Warehousing andStorage, Domestic Transportation

Characteristics: Leasing and Insurance Sales

Characteristics: Low Temperature Logistics

Characteristics: Special-purpose Transportation,
Marine Container Drayage

Renewable Energy Generating Capacity: 1,500 kW

Joint purchasing of fuel and tires, insurance
agencyCertifications: G-Mark, ISO14001, ISO9001

Renewable Energy Generating Capacity: 212 kW

https://www.sbs-flec.co.jp/

Certifications: G-Mark, ISO14001, ISO9001,
Privacy Mark

Number of Employees: 3,829
Number of Business Sites: 103

http://www.amax.jp/

Number of Business Sites: 8

https://www.sbs-finance.jp/

Number of Vehicles: 3
Certifications: AEO Certification (Planned)
https://www.sbs-globalnet.co.jp/

https://www.sbs-freight.co.jp/

Number of Vehicles: Trucks and other road vehicles: 423

Number of Employees: 135

Number of Employees: 21

Forklifts: 555
Certifications: G-Mark, ISO14001, ISO27001,
ISO09001, AEO

Real EstateBusiness

International
Logistics

Logistics Facility
Development

Insurance andLeasing

https://www.sbs-ricohlogistics.co.jp/

Truck
Transportation

Company
Relocation

Logistics Center
Operation

3PL

Same-Day Delivery
for Corporations

International
Logistics

Processing in
Logistics

Environmental
Business

Truck
Transportation

Low Temperature
Logistics

Logistics Center
Operation

Processing in
Logistics

Home Delivery

Truck
Transportation

Low Temperature
Logistics

Processing in
Logistics

Company
Relocation

3PL

3PL

Nippon Record Center Co., Ltd.*SBS Staff Co., Ltd.

Marketing Partner, Inc.

Characteristics: 3PL for Packaged Software(Music and Video Media)

Characteristics: Temporary Staffing
Number of Employees: 140

Characteristics: E-commerce Support, Marketing
Services, Pet Wellness Business

Number of Employees: 775

Number of Business Sites: 20

Number of Employees: 29

Number of Business Sites: 1

Number of Vehicles: 32

Number of Business Sites: 1

Number of Vehicles: Trucks and other road vehicles: 11
Forklifts: 21

Certifications: Privacy Mark

Certifications: Privacy Mark

http://www.sbs-staff.co.jp/

http://marketing-partner.jp/

Certifications: ISO14001, Privacy Mark
http://www.nrc-jpn.net/

SBS Logicom Co., Ltd.

SBS Zentsu Co., Ltd.

SBS Sokuhai Support Co., Ltd.

*Including SBS Logicom Kanto Co., Ltd.

Characteristics: General Logistics

Characteristics: Logistics and Delivery of Foods in theThree Temperature Zones

Number of Employees: 5,486

Number of Employees: 3,872

Number of Business Sites: 90

Number of Business Sites: 94

Characteristics: Delivery for Corporations,
E-commerce Delivery, Environmental
Business, Logistics andManufacturing of Store Fixtures

Number of Vehicles:Trucks and other road vehicles: 1,034

Number of Vehicles:Trucks and other road vehicles: 1,595

Forklifts: 517

Forklifts: 32

Renewable Energy Generating Capacity: 6,812 kW

Certifications: G-Mark, ISO14001, ISO9001,
JAS Organic Agricultural ProductSubdivider Certification

Certifications: G-Mark, ISO14001, Green Management
Certification, GPN Certification,
ISO27001, Relocation Safety Mark

Logistics Center
Operation

Number of Business Sites: 58
Number of Vehicles: Trucks and other road vehicles: 266

Company
Relocation

On-site Logistics

Logistics Center
Operation

3PL

Pet Wellness
Business*As of July 1, 2019, Nippon Record Center was absorbed into
SBS Logicom by merger.

Forklifts: 38
Renewable Energy Generating Capacity: 175 kW
https://www.sbs-sokuhaisupport.co.jp/

Truck
Transportation

Modal Shift

MarketingBusiness

Personnel Support

3PL

Certifications: G-Mark, ISO14001, ISO9001

https://www.sbs-zentsu.co.jp/

https://www.sbs-logicom.co.jp/

Truck
Transportation

Processing in
Logistics

Number of Employees: 643

International
Logistics

Real EstateBusiness

Processingin Logistics

Logistics Facility
Development

Truck
Transportation

3PL

Low Temperature
Logistics

Logistics Center
Operation

Processing in
Logistics

Home Delivery

Truck
Transportation

Environmental
Business

Processing in
Logistics

Same-Day Delivery
for Corporations

E-commerce
Delivery

Truck
Transportation

Modal Shift

Low Temperature
Logistics

Low
Temperature
Logistics

Same-Day Delivery
for Corporations

Logistics Facility
Development

Logistics
Facility
Development

E-commerce
Delivery

3PL

Modal
Shift
Same-Day
Delivery for
Corporations
E-commerce
Delivery

Logistics Center
Operation

Logistics
CenterOperation

Home Delivery

Home
DeliveryInternational
Logistics

Environmental
Business

International
Logistics
Environmental
Business

Processing in
Logistics

Personnel
Support

Processing in
Logistics
Personnel
SupportCompany
Relocation

Insurance andLeasingCompany
Relocation
Insuranceand Leasing

On-site Logistics

MarketingBusiness

On-siteLogistics
MarketingBusiness

3PL
Real EstateBusiness

3PL

Pet Wellness
Business

Pet Wellness
Business

Real EstateBusiness

M&A
M&A*Refer to the CSR data on pages 43-44 for information on the number of business sites with certification.

2018 BUSINESS & CSR[Basic Policy]

HIGHLIGHT
Financial Capital (unit: million yen)
Financial condition
Total assets:

127,802

Current assets:

47,350

Fixed assets:

80,451

Current liabilities:

42,323

Long term liabilities: 46,968
38,510Net assets:
Cash Flow

Cash and cash equivalents:

11,534

Cash flows from operating activities: 11,671
Cash flows from investing activities: -8,127
Cash flows from financing activities: -1,420
Operating Results
Sales:

152,870

Operating income: 6,229
Ordinary income:

6,475

Net income attributable toowners of parent:Management
Plan

Improving earnings structure, developing new customers, strengthening
operating foundations, promoting CSR management and bolstering Group
coordination[Priority Issues]
Enhancing human resources (developing and retaining human resources),
creating comfortable work environments, business streamlining, promoting
compliance, improving risk management, promoting environmental
management (promotion of medium- to-long-term plan), eliminating vehicle
accidents, workplace accidents and product incidents.

BUSINESSINPUTS 2017

4,446

OUTCOMES 2018
Financial Capital (unit: million yen) (year on year)

Expansion of the 3PL Business

M&A

Rolling out 3PL in every direction

Addition of Ricoh Logistics System to the SBS Group

Financial condition

August 2018: Completed procedures to acquire of 66% of common stock

Operation of East Japan logistics center for stationery manufacturer: 1.5 times
year-on-year increase in sales

January 2019: Renamed SBS Ricoh Logistics

Warehouse storage and retrieval services for amusement businesses, etc.

Accelerated investment in logistics facility development

Boosting transportation and delivery capacity

Plans to increase floor area by approximately 495,000 square meters by 2023

Expansion through Group-wide roll-out

expertise possessed by the SBS Group, and allsynergies produced by intra-Group coordination

Social Capital
Relationships of trust forged with customers,
employees and all stakeholders associated with
the SBS Group, and the brand value of the SBSGroup

The energy and natural capital the SBS Grouprequires to operate

58,493

Long term liabilities: 65,130
48,173

Net assets:
Cash Flow

Cash and cash equivalents:

Sales:

Promoting labor-saving efforts by introducing IT on-site
Improving sales strength through enhanced Web-based
content

16,303

203,516 (33.1%↑)

Operating income:

8,240 (32.3%↑)

Ordinary income:

7,607 (17.5%↑)

Net income attributable to

Sharing information through customer management
systems

owners of parent:

General
Logistics

Property
Management
Business

M&A

4,409 (0.8%↓)

Capital for the Provision of Services
Number of Business Sites: 531, Vehicles: 4,497
Forklifts: 1,382

Human Capital
Number of Employees: 19,017

CSR
SafetyTransportation safety management, safety education, promoting efforts to acquire
G-Mark certification, driver contests, forklift operator contests

Energy and Natural Capital Invested
Vehicle fuel: 25,548.3 kl

Social 1 (Human resource development, occupational
health and safety, quality control)

Electricity: 44,740,083 kWh
Water: 127,524 m³

Paper: 59,259,924 sheets

Group education and training

Environment

Receipt of various awards related to the employment of people with disabilities

Promoting the introduction of energy-efficient lighting, promoting the adoption of
eco-friendly vehicles, education on eco-friendly and safe driving, maintaining
environmental certifications

Maintaining quality-related certifications

OUTCOMES NEXT

Social 2 (Social contributions)

Growth Strategy

Governance
Natural Capital

Current liabilities:

Operating Results

Number of Employees: 14,913

belonging to the SBS Group, all business

Fixed assets:

Cash flows from financing activities: 14,815

Human Capital

All intellectual property rights including licenses

61,975
109,821

Cash flows from investing activities: 22,433

Higher productivity

Forklifts: 814

Current assets:

Cash flows from operating activities: 12,398

Improved truck utilization rates

Number of Business Sites: 425, Vehicles: 4,103

171,796

Total assets:

Site integration for the apparel businesses and retailers

Capital for the Provision of Services

Intellectual Capital

05 - 06

SBS GROUP
BUSINESS & CSR REPORT 2019The SBS Group’s Value Creation Process

Coordinated company-wide questionnaires and information security-related
e-learning, training on dealing with targeted attacks, emergency response drills

Support in the social sector: Food banks and environmental preservation groups
Social contribution-oriented sales events
Traffic safety initiatives
Donation of used goods
SBS Kamata Foundation: Logistics research grants
Scholarship funding system (for students receiving social care)Achieve sales of 300 billion yen at an early stage
through organic growth
Maximize group synergy through “integration”
Evolve the Group’s unique 3PL business modelMedium-to-long-term Action
Promotion of the medium-to-long-term
environmental plan
IoT adoption at logistics facilities

SBS GROUP
BUSINESS & CSR REPORT 2019

Key Topics

General Logistics Business2018 BUSINESS topics
Improving Productivity in Sales and in
the Field

Expansion of the 3PL Business

SBS Flec

New orders and expansion of existing business have both performed favorably, leading to asales increase of 1.5 times over the previous year
Publication of case studies on website and PR magazine has facilitated reliable closings inorganizational sales
Results of new projects and expanded business in fiscal 2018 (excluding SBS Ricoh
Logistics)
Site integration for apparel businesses and retailers, operation of East Japan logistics centerfor stationery manufacturer, warehouse storage and retrieval services for amusementbusinesses, etc.
3PL at SBS Ricoh Logistics
Major consignors include the Ricoh Group, Otsuka Corporation and electricalcomponent-related trading companies. The 3PL business accounted for roughly 78% ofdomestic logistics business sales (for the year ended December 2018).

Sales (excluding overseas)

07 - 08

FY2016FY2017FY2018FY2019 Plan

1,317

1,398

1,793

2,172

3PL sales

547

588

889

1,129

Change ratio

6.8%

7.5%

51.2%

27.0%

Ratio to sales

41.5%

42.1%

49.6%

52.0%

Construction was completed on the
SBS Flec Ami Logistics Center, the first
three-temperature-compliance facility
developed in-house

Promoting labor-saving efforts on-site
Phased introduction of IT tools with theaim of labor-saving and development of
comfortable workplaces / introduction ofautonomous driving carts, wearable
devices and so on / effects including
productivity improvements and lower
turnover rate
Streamlining sales activities
Increase in the number of businessinquiries received from the website andhigher successful order rate / shortening
the time from order to launch by sharing
information with the use of customer
information systems, etc.

Truck Transportation, Same-day Delivery BusinessRoll-out of last-mile delivery business for e-commercefrom SBS Sokuhai Support to SBS Group companies
Utilizing the networks and expertise of SBS Flec, SBS
Logicom and SBS Zentsu to expand coverage areas
Roll-out of B-to-B and B-to-C delivery business acrossthe Group and expanding service regions
Utilizing the main Higashi-Meihan Expressway route andregional delivery network of SBS Ricoh Logistics to expand
into the Nagoya area
Improved truck utilization rates
Ascertaining per-vehicle utilization / sharing utilization status at formal meeting bodies /establishing a division dedicated to transportation sales

M&A

Property Management Business

Addition of Ricoh Logistics System to
the SBS Group

Accelerated Investment in Logistics Facility Development

The center is able to provide high-quality
food-specific 3PL services that support thethree temperature zones, namely room
temperature, refrigerated and frozen. Detailed
temperature settings tailored to productcharacteristics can be configured, catering to
the needs of products that require stringent
temperature and freshness control.

SBS Logicom

Completion of Construction of the
Jonanjima Logistics Center (provisionalname) Scheduled for Next Spring
Following on from the Yokohama Shin-Sugita
Logistics Center, the center will be thesecond center in the Tokyo metropolitan area
to be equipped with high-quality constanttemperature and humidity features, and is
expected to expand sales in areas such as
wine logistics. The center will also be
positioned as a warehouse jointly operated
with SBS Ricoh Logistics.

SBS Sokuhai Support

SBS Flec

The Environmental Division installed amercury-containing waste crusher at the
Shinonome Office (Koto Ward, Tokyo).
A crushing machine was installed to processwaste of products in which mercury is used(fluorescent tubes, cold cathode fluorescentlamps, HID lamps). This has made it possible
to absorb and remove the mercury gases
produced during disposal and prevent thedispersal of the gases into the atmosphere,
enabling environmentally friendly disposal.

SBS Staff

Launch of Bicycle-based Last Mile
DeliveryAt the Ichikawa Delivery Station, which
provides e-commerce delivery services,deliveries using power-assisted bicycles
specifically designed for delivery operations
were started. This will improve delivery
efficiency in build-up residential areas.

SBS Logicom

Service Launch of “Butsuryupro.com”, aRecruitment Service Site Specializing in
Logistics
For more than 20 years, SBS Staff has been
involved in temporary staffing andrecruitment services, and has now launched“butsuryupro.com”, which it developed using
the extensive expertise in staffing services
cultivated over this time. As well as listing
recruitment information specifically geared to
the logistics industry, the site accepts
registration from job seekers looking todevelop careers in the field of logistics.

Expanding 3PL Services into the Kansai
Area with Completion of the Nanko
Logistics Center, the Group’s Largest
The Nanko Logistics Center is the largest
logistics center operated by SBS Logicomand the first developed in-house in the
Kansai area. Since its completion
ceremony, the center has progressively
accepted the business of multiple
consignors including a drug store who is acustomer in western Japan.

Noda Seto Logistics Center
Ami Logistics Center

August 2018: Completed procedures toacquire 66% of common stock in Ricoh
Logistics System
January 2019: Renamed to SBS Ricoh
Logistics System
Synergy projects currently underway
1. Logistics facility development
2. Joint expansion of last mile delivery
business for e-commerce
3. Integration of overseas sites
4. Promotion of joint purchasing

Nanko Logistics Center

Noda Seto Logistics Center

Promoting the development of excellent logistics facilities, both in-house and leased, due toexpanded operating floor area
Plans to increase floor area by approximately 495,000 square meters from 2018 to 2023
Declining Trend in Impact of Logistics
Facility Liquidation Results
In the year ended December 2018,
operating income from the logistics
business accounted for the majorityof all income.
From fiscal 2019 onwards operating
income from the liquidation oflogistics facilities will continue at a
certain level.

Operating income

Logistics

Property management

3.3%

FY2019 (planned)

57.1%

39.7%

FY2018

52.2%

44.7%

FY2017FY20160%

Others

3.1%
6.5%
42.2%

51.4%
4.2%

29.4%

66.4%

50%

100%

Development of a Logistics Facility with
Leased Floor Area of Approx. 215,000
Square Meters - the Largest in theGroup’s History
Investment: Approx. 35 billion yen
About 7 minutes from the Kashiwa
Interchange on the Joban Expressway
E-commerce companies are expected
to be the main 3PL tenants
The adoption of IoT solutions including
automation and robotics is also being
considered

Name: Noda Seto Logistics Center
Building Site Area:

Address: Seto, Noda-shi, Chiba Prefecture
Total of Building A + Building B 115,857 m²
Building A: 53,208 m² / Building B: 62,649 m²

Floor Area:

Total of Building A + Building B: 265,964 m²
Building A: 122,602 m² / Building B: 143,362 m²

Start of Construction (Planned):

Building A: December 2019 / Building B: By the end of 2021

Completion of Construction (Planned): Building A: 2022 / Building B: 2023

SBS GROUP
BUSINESS & CSR REPORT 2019

Message from the President

Working to further enhance corporate
value through “integration”
In recent years, the logistics industry has seen a resurgencein companies reevaluating their logistics functions, driven by
an expanding e-commerce market and skyrocketingtransportation costs, combined with heightened demand forlogistics solutions. At the same time, the industry is underincreasing pressure to deal with rising costs in the areas ofhuman resources, subcontracted transportation and fuel aswell as increasing labor shortages.
Achieving sales of 200 billion yen through large-scale
M&A and growth of the logistics business
Under this environment, in fiscal 2018 the SBS Group
undertook the largest logistics facility development in its
history, made efforts to secure orders for 3PL projects andtook steps to improve the efficiency of existing businesses
while embarking on efforts to pursue large-scale M&A andstreamlining various business operating flows. Combined,
these moves represent proactive investments that will serveas the key to the next-generation SBS Group.
Each SBS Group company launched marketing campaigns
that combined websites, web-based advertising, PR publications
and other initiatives, together with proposal activities at theorganizational level, resulting in new orders and an expansionof existing businesses. For existing businesses showing
unfavorable profitability, we absorbed rising cost pressure
through proposals to improve efficiency, negotiations forprice revisions and other measures. In addition, managementlevel staff led efforts to develop diverse working styles andcreate a comfortable work environment in the field in aneffort to improve worker retention rates.
In August, we acquired 66% of the outstanding shares of
Ricoh Logistics System Co., Ltd., our largest-ever M&A
transaction. With its strengths particularly in production
logistics and logistics technology (LT), Ricoh Logistics
System is highly complementary to SBS Group companies interms of functional characteristics, and we expect thisacquisition to produce strong synergies through cooperation.
One of the strengths of the SBS Group is in the developmentof logistics facilities. In May we completed construction of athree-temperature-compliant logistics facility in Ibaraki
Prefecture, while in June we acquired 115,000-square-metersof land in Chiba Prefecture for a logistics facility and begansite preparation work. In March this year, construction of alogistics facility in Osaka was completed, launching at full

capacity operation as the SBS Group’s first 3PL base inwestern Japan. As the beginning of the next-generation SBSGroup, for the year in review we leveraged large-scale M&A
and growth in the logistics business to achieve 200 billion
yen in sales, a long-held dream since our founding, and also
managed to post a record operating income of 8.2 billionyen.
CSR in fiscal 2018: The start of new initiatives
Turning attention to the promotion of CSR management,
in fiscal 2018 we launched “Sincere Challenge 2030,” our
new medium- to long-term environmental plan to addressenvironmental issues, and have already achieved some results.
As the name of the plan suggests, moving forward we willcontinue to drive implementation of this plan with sincerity.
In the area of safety issues, we took the addition of Ricoh
Logistics System to the SBS Group as an opportunity torenew our efforts to enhance the sharing of information andinitiatives related to transportation safety management
throughout the Group. We will continue with these activities
moving forward and strive to further enhance safety quality.
On another front, the year before last we launched a public
interest incorporated foundation and started a project toprovide scholarship benefits to students receiving social
care, and received a large number of applications again in
fiscal 2018. In the future we aim to expand the scope of the
project to help even more people realize their dreams.
“Integration” as the Group keyword for fiscal 2019
At the SBS Group, we are a collective full of unique
individuals who have come together based on a resolve “toreform logistics!” Our keyword for fiscal 2019 is “Integration.”
By connecting and fusing organically, our Group companies
will maximize synergy and achieve our next goal: sales of 300
billion yen. I encourage all of our valued stakeholders tomaintain high expectations for the next-generation SBSGroup and thank you for your continued support.

Masahiko Kamata
President
SBS Group

09 - 10

SBS GROUP
BUSINESS & CSR REPORT 2019

Business Overview and Financial Results

Business Overview

Fiscal 2018 Operating Results

Sales
300,000

Business Environment
During the fiscal year ended December 2018, the domestic
economy remained stable, supported by steady corporate
activities associated with robust capital investment and a moderate
recovery in personal consumption. Nonetheless, a sense of
caution over slowing economic activity was further heightened due
to rising costs attributed to labor shortages and future concerns
about the Chinese economy and trade friction.
In the logistics industry, moves by companies to reorganize theirlogistics functions gained momentum against the backdrop of an
expanding e-commerce market and sharply rising transportation
costs, leading to growing demand for logistics solutions. Meanwhile,
since fuel prices have largely remained at high levels, in addition tolabor and contracted transportation costs ticking upwards again,
rising costs are placing pressure on profits and causing severe
economic conditions.

A Second Start-Up Era
In December 2017, the SBS Group observed its 30th anniversary,and positioned fiscal 2018 as the beginning of its second start-up
era. Based on the Group slogan “For Your Dreams,” the Grouphas made a concerted effort to pursue business activities to realize
the dreams of all stakeholders through logistics.

Business Strategy
The SBS Group has deployed a two-pronged marketing initiative
utilizing PR publications, websites and Internet advertisingcombined with organizational sales spanning the Group, as part ofits efforts to win orders for new 3PL projects and expand existing
businesses.
For existing businesses with subpar profitability, we have taken
steps to boost profit margins through proposals to improve
efficiency, negotiations for price revisions, among other initiatives.
To secure drivers and warehouse personnel, we have worked to
improve worker retention rates by offering comprehensive support fordifferent working styles that meet individual desires in the form offlexible working systems.
Initiatives to create synergy with Ricoh Logistics System Co.,
Ltd. (now SBS Ricoh Logistics System Co., Ltd.), which became a
new member of the SBS Group in August 2018, have entered theimplementation stage with projects to integrate overseas sites andorganize nationwide delivery networks.

Investment Strategy
In the area of M&A, in August 2018 we acquired shares in Ricoh
Logistics System Co., Ltd. and made it a consolidated subsidiary.
As part of this effort we have sought to enhance production
logistics, our nationwide delivery network, logistics technology (LT)and our overseas businesses.
In the development of logistics facilities, in May we completed
construction and began operation of a three-temperaturecompliant logistics facility in the town of Ami in Inashiki District,Ibaraki Prefecture. Then in June, we acquired 115,000-squaremeters of land in Seto in Noda, Chiba Prefecture for a logistics
facility and began site preparation work. Meanwhile in Nanko,
located in Osaka’s Suminoe Ward, we bolstered infrastructure
catering to the rising demand for 3PL businesses with theconstruction of a logistics facility boasting a total floor area ofaround 60,000 square meters (completed in March 2019). In
November, we transferred part of the trust beneficiary rights fora logistics facility in Nagatsuta, located in Midori Ward,
Yokohama, and in doing so recovered our investment capital.
With the expanded operating floor area, we have put in placeoutstanding logistics facilities, both in-house and leased. Over a
five-year period from 2018 to 2023, we plan to increase the area
under operation by approximately 480,000 square meters.

2018 (Results)

Increased Floor Area
(Unit: Square Meters)
13,626First Half

240,000
180,000

Full Year

157,996

Approx.

495,000

square meters

Remarks

LeasedIn-house

11,203

2,423

Iwatsuki, Iruma, Ami

18,537

Nanko, Osaka (Operating); Fukuoka(September); Odaka, Nagoya (October)

2019

8,200

8,200

2020

18,51818,5182021

15,43015,430Kanazawa, Yokohama (Development)

2022

48,00048,000

Building A, Seto, Noda

2023

32,00032,000

Building B, Seto, Noda

Under Consideration

35,00035,000Under consideration in Chubu area

Total

157,148

203,516
149,054

152,870

2016

2017

Logistics BusinessIn the Logistics Business, sales increased to 188,627 million
yen (up 34.3% over the previous fiscal year). This was due to theinclusion of the results of SBS Ricoh Logistics System Co., Ltd.
in the scope of consolidation from the third quarter, as well as
continued new orders in the 3PL business and expansion ofexisting businesses by existing Group companies. Operating
income increased 69.8% year on year to 4,572 million yen,despite increases in personnel, vehicle hire and fuel costs, withthe steady realization of cost reduction initiatives and rate
optimization contributing to the increase.

Property Management Business
The Property Management Business posted sales of 8,712
million yen (up 42.2% year on year) and operating income of 3,913
million yen (up 19.4%). The Rent Business remained stable, andthe Development Business transferred a portion of the trust
beneficiary rights to the Nagatsuta Logistics Center, a logistics
facility located in Midori-ku, Yokohama. As a result, both net sales
and operating income increased.

The Other Businesses segment posted sales of 6,716 million
yen (up 0.2% year on year) and operating income of 273 million
yen (down 33.7% year on year). This was mainly due to anincrease in advertising expenses and recruitment-related expenses
such as office relocation in the Human Resources Business, whichweighed down on profits.

126,944

120,000
60,000
0

2015

2018

2019

Operating income
10,000(Million yen)First Half

Other Businesses*As of July 31, 2019

26,718(Million yen)

8,000
6,000

Full Year

8,240

7,514
6,229

5,347

5,547

4,000
2,000
0

2015

2016

2017

2018

2019

Ordinary income
10,000(Million yen)First Half

8,000
6,000

Full Year

7,832

7,607
6,475

5,772

5,472

4,000
2,000
0

2015

2016

2017

2018

2019

Net income attributable to owners of parent
6,000(Million yen)First Half

Increase in Floor Area by 2023

Logistics facilities scheduled for commencing operation
Fiscal Year

The Logistics Business experienced dramatic growth, postingsales of 203,516 million yen (33.1% up from the previous fiscal
year). Operating income was 8,240 million yen (up 32.3% year onyear) on the strength of the growth of existing businesses in the
Logistics Business, successful rate optimization and businessstreamlining efforts, and the securitization of large-scale logistics
facilities implemented in the Real Estate Development Business.
Net income attributable to owners of parent fell to 4,409 million
yen (down 0.8% year on year) due to increased tax expenses andnet income attributable to non-controlling interests.

11 - 12

4,000

5,111

4,446

4,409
3,356

Full Year2,000
0-3,815-2,000-4,000

2015

2016

2017

2018

2019

*Forecast Figures for Fiscal 2019

Operating Results for the First Half of Fiscal 2019 and Forecast Results for the Full Year

Jonanjima; Kanazawa, Yokohama (Leased)

130,430*Shaded areas indicate projects already operating (excluded from calculation of total area)

For the first half of the fiscal year ending December 2019, theLogistics Business performed steadily, particularly the 3PL
business. In addition, the results of SBS Ricoh Logistics were
newly included, and revenue was posted due to the securitizationof logistics real estate that had been planned for the current fiscal
year. Accordingly, sales in the first half of the fiscal year increased
to 126,944 million yen (up 64.5% over the same period in theprevious year). Similarly, operating income was 5,547 million yen(up 137.3%) and net income attributable to owners of parent was
3,356 million yen (a 174.8% increase), revealing significant growth.
For the full fiscal year, we forecast sales of 250,000 million yen,operating income of 9,000 million yen, and net income attributableto owners of parent of 4,800 million yen.

13 - 14SBS GROUP
BUSINESS & CSR REPORT 2019

Business Overview and Financial Results

Assets and Liabilities

Cash Flow

Total assets for the fiscal year stood at 171,796 million yen, an
increase of 43,994 million yen from the previous fiscal year.
The balance of current assets was 61,975 million yen (an increase of
14,625 million yen from the previous fiscal year). With the new inclusionof SBS Ricoh Logistics System Co., Ltd. in the scope of consolidation,
cash and deposits, notes and accounts receivable increased.
The balance of fixed assets stood at 109,821 million yen (anincrease of 29,370 million yen from the previous fiscal year). Thisis primarily due to the construction of logistics facilities andacquisition of land for logistics facilities, the acquisition andreplacement of vehicles, and increased goodwill due to theacquisition of SBS Ricoh Logistics System Co., Ltd.
The balance of current liabilities stood at 58,493 million yen (up16,170 million yen from the previous fiscal year). The main factors
behind the increase are the increase in notes and accounts
payable-trade in connection with the new inclusion of SBS Ricoh
Logistics System Co., Ltd. in the scope of consolidation, as well as
an increase in short-term loans payable.
The balance of long-term liabilities was 65,130 million yen (anincrease of 18,162 million yen from the previous fiscal year). The
increase is mainly attributed to growth in long-term loans payable.
The balance of net assets was 48,173 million yen (an increase of
9,662 million yen from the previous fiscal year). The main factors
behind the increase were higher retained earnings resulting fromthe recording of net income attributable to owners of parent and anincrease in non-controlling shareholders’ equity.
Unit: 100 million yen

Net cash provided by operating activities was 12,398 million yen(an increase of 727 million yen compared with the previous fiscal
year). The main factors for the increase include a decrease ininventories of 2,894 million yen in addition to income before income
taxes of 7,467 million yen and depreciation and amortization of
5,536 million yen.

Net cash used in investing activities was 22,433 million yen. Thiswas mainly due to the acquisition of land for logistics facilities,
construction work and the replacement of vehicles amounting to
11,068 million yen for the purchase of property, plant andequipment and intangible assets, and the purchase of shares ofsubsidiaries resulting in changes in the scope of consolidation due
to M&As amounting to 11,100 million yen.

End of FY2018

End of FY2017

Current liabilities
584

Current assets
619
Current liabilities
423

+161

+146

Long term liabilities
469

Fixed assets
804

Cash Flows from Operating Activities

End of FY2017200

End of FY2018(100 million yen)
+123
Operating
CF

160

-224
Investing
CF

120
80

+148
Financing
CF

163

115

40
0

Balance of cash andequivalents at theend of the period

Balance of cash andequivalents at theend of the period

Cash Flows from Investing Activities

Change in Consolidated Balance Sheet

Current assets
473

Cash and cash equivalents (hereinafter referred to as "cash")increased by 4,768 million yen from the end of the previous fiscal
year, to 16,303 million yen. The main reasons for the changes ineach cash flow are as follows.

Long term liabilities
651

Fixed assets
1,098

Net assets
385

+182

+294

Total Assets: 127,800 million yen

Cash Flows from Financing Activities

Net assets
481

Net cash provided by financing activities increased to 14,815
million yen (up 16,235 million yen from the previous fiscal year). Thiswas mainly due to proceeds from long-term loans payable of
25,000 million yen, repayments of long-term loans payable of
9,484 million yen, and cash dividends paid of 834 million yen.

+96

Total Assets: 171,700 million yen +439

Cash Management System Utilization
The main working capital of the SBS Group is sales cost including
vehicle hire, outsourcing expenses and personnel expenses, and operating
expenses including selling, general and administrative expenses.
Additionally, demand for funds aimed at investment includes the ordinary
updating of vehicles, the acquisition of shares in subsidiaries and affiliatecompanies, the acquisition of land associated with logistics facilities
developed in-house, the costs of construction work, capital investment,
and so on.
The SBS Group has established a system where a holding company
procures the funds required for the entire Group in a centralized fashion. In
addition to receiving lines of credit from multiple banks so that working
capital can be secured flexibly, the SBS Group also procures long-term
funding in a systematic fashion to address funding capitals aimed atinvestment. The procured funds are put to the best and most effective use
within the Group through a cash management system. Specifically, thissystem adjusts funding surpluses and shortages between subsidiaries(cash pooling) and performs payment operations on their behalf.

Trends in Finances
Working from a medium-to-long-term perspective, the SBSGroup intends to achieve the sustainable growth of its businesses
and boost earnings capability and capital efficiency. Additionally,
as a part of key business and investment strategies, we will pursue
the stable growth of the 3PL business by systematically iterating
on a cycle of the in-house development and securitization oflogistics facilities. In the interests of maintaining a balance
between proactive investment activities and maintaining financial
health, we have set 30% as a target shareholders’ equity ratio.

The shareholders’ equity ratio for the fiscal year in review was
23.1% (down 5.4% from the previous fiscal year) due to anincrease in long-term borrowing in connection with M&A activities.
Meanwhile the net DE ratio, which represents the ratio of net
interest-bearing debt to shareholders’ equity, shifted from 1.26 in
the previous fiscal year to 1.44.
Moving forward, we will continue to actively pursue investments
under a basic growth-oriented policy while engaging in business
operation that is mindful of financial health.

Change in the shareholders’ equity ratio

Change in net DE ratio

2,000(100 million yen)(%)

Total assets

1,717

Shareholders’ equity

1,600
1,200
800
400
0

35

1,044

1,223

274

289

2013

30

28.5
26.6

24.3
318

2014

22.5
280

2015

325

2016

364

2017

600

Shareholders’ equity
Net DE ratio

23.1

24.1 25

397

422

2018

2019

400
300

15

100
0

515

471

3.0

274

286

307

1.95

2012

1.48

1.37
2013

357

393

418
2.0

264

1.66
1.39

319

562
2.5

449

392

381

200
20

565

512

500

1,278

1,083
26.7

26.3

2012

1,248

700

(%)

Net interest-bearing debt

1,756

Shareholders’ equity ratio

1,311

40

(100 million yen)

1.44

1.34 1.5

1.26
2014

2015

2016

2017

2018

2019

1.0

Shareholder Return

Dividend25

The Company considers the return of profits to shareholders
to be one of its most important management priorities. The
Company’s basic policy on the distribution of profits is, while
retaining sufficient internal reserves, maintain continuous
dividends, and improve the level of dividends in line withbusiness performance.
For the fiscal year in review, the Company paid a year-end
dividend of 22 yen per common share in light of a comprehensive
assessment of the SBS Group’s business performance andfinancial situation. This marks an actual dividend increase of 4
yen per share from the previous fiscal year which, including the
3-yen commemorative dividend to mark our 30th anniversary,was 21 yen.
For fiscal 2019, the Company plans to pay a year-end
dividend of 23 yen per share.

(yen)

23

21

22

23

20
15

15

10
5
0

2014

2015

2016

2017

2018

2019

(planned)

SBS GROUP
BUSINESS & CSR REPORT 2019

External Environment and Management Strategy

15 - 16

Management Policy
The SBS Group supports the efficient corporate activities of its customers by playing a part in the supply chain based on its
combined proposal-making capabilities, expertise and problem-solving abilities as a group of 3PL companies possessing
logistics functions in every direction.
Moreover, as a company involved with logistics, a part of social infrastructure that is vital to people’s daily lives, we promote CSR
management rooted in consideration for the environment, ensuring safety, engagement with society and sound management.

Medium-to-long-term Management Strategies
Recently the logistics industry has approached a period of
structural upheaval of unprecedented proportions against the
backdrop of labor shortages and technological innovation.
Amid increasingly dire labor shortages, initiatives directed at thepractical utilization of innovative technologies such as IoT, AI
and robotics are accelerated. At the same time, with commercial
distribution in continual flux due to the rapid expansion of the
e-commerce market, logistics itself is being force to makedrastic reforms to adapt to these new realities.
The SBS Group sees this paradigm shift in the management
environment as a positive, and aims to survive the fierce competition
between companies by continually driving its own change.
Further Strengthening of the 3PL Business and Establishmentof a Unique Service Model
The SBS Group is employing a range of methods to enhance
its strength in the 3PL business. We will proactively consider
and implement measures to expand new orders through web
marketing and improved sales capabilities, pursue efficiency
improvements by enhancing field capabilities, and proceed with
M&A activities to raise the level of business and expand thefields in which we operate.

In addition to proposing 3PL including logistics facility
development as a unique solution offered by the SBS Group, in
the future we will strive to establish a service model that is
unique to the SBS Group to help customers solve their logisticsrelated issues by incorporating the introduction of automation
technologies, AI-related equipment and other advances.
Maintaining Financial Health through Logistics Facility
Development and the Securitization of Existing Facilities
We work to develop logistics facilities in-house in order topromote the expansion of the 3PL business and higher service
levels, and maintain financial health by securitization of thosefacilities soon after completion.
About the 3PL Business3PL (third-party logistics) is a service where we propose logistics reforms to consignors and are
entrusted with their logistics operations on a comprehensive basis. The SBS Group defines
logistics services meeting the criteria of direct contracts with consignor companies,
medium-to-long-term plans and the joint entrustment of multiple services as 3PL. As part of the
3PL business we are entrusted with and undertake a range of operations arising in the supply chain
field on behalf of customers, including transportation, packing, storage, cargo handling andinformation management.
The SBS Group leverages its strengths in consulting to achieve customers’ ideal logistics visions,the development and operation of information systems, the in-house development and provision oflogistics centers and outstanding low cost operations to provide valuable 3PL services tocustomers in every line of business.

Development and Enhancement to Meet Challenges
Maximizing Group Synergy
In a rapidly-changing management environment that includes
changes to the social structure and the advance of technologicalinnovation, the SBS Group recognizes the importance of
maintaining the transparency and efficiency of management
and maximizing Group synergy to survive intensifying competition
between companies.
Priority issue: building a cooperative framework with SBS Ricoh
Logistics System Co., Ltd.
Retaining and Cultivating Human Resources, Developing
an Energetic Corporate Culture
To continue to achieve future growth, it will be essential to retain
the logistics human resources promoting our core 3PL business,the global human resources driving overseas development andthe professional human resources driving logistics facility
development and incorporating future technological innovations.
At the same time, with the dwindling working population, we
see the stable retention of drivers and other management
resources that support the foundations of the logistics businessas a key management issue, and to that end we are taking
steps to improve personnel systems, hire and cultivate talented
human resources, and develop an environment in which eachindividual employee can enjoy job satisfaction, pride andmotivation.

Continual Promotion of CSR Management
In addition to ensuring work safety and taking measures toprevent traffic accidents, we implement thorough environmental
conservation initiatives, including the promotion of eco-driving
and measures to reduce the environmental impact attributed to
our vehicles and logistics facilities. Moreover, we pursue thefurther enhancement of our corporate governance system that
includes these initiatives.
Issues to be Addressed in Relation to Social Responsibility
Human rights: further reforms to awareness and action /definitive action on diversity / eradication ofharassment
Labor: Prompt and steady compliance with laws and regulations
Implementation of measures to address labor shortages
and improve work environments
Safety: Appropriate operational management of vehicles toprevent accidents and stepped up safety measures
Climate change: Action on various risks
SDGs: Helping to solve social issues through businessactivities
CSR management: Promoting emerging CSR management
practicesState of the External

Major Recent and Upcoming Events

Economic Conditions

Trends in the Logistics Industry

Human Resources and Society

Environment Surrounding
the SBS GroupTokyo Olympics and Paralympics
Increase in the consumption tax[Domestic]
Improving employment andincome environment
Expanding inbound demand
Rising capital expenditure
sentiment
Stable share prices
Ingredients for rising share prices[Challenges]
Expanding transportation capacity,enhancing services, high added value[Human Resources]
Worsening labor shortages
Worsening work environments for truck drivers
and aging drivers
Expected increase in foreign workers
Long-term decline in the working age population

The SBS Group continuallymonitors and analyzes theeffects of the external
environment to make critical
determinations of risks andopportunities.
We also identify a range ofchallenges and recognize
what should be done tocreate value.

[World]Slowing US, Chinese andEuropean economies
Uncertain overseas situations[Logistics Industry]
Worsening labor shortages
Worsening profitability andproductivity
Declining efficiency (morefrequent deliveries of smaller
quantities)[Customer Needs]
More diverse services, handling of high-frequency
small quantity deliveries, stable transportation capacity[Movement]
Competition
Increased competition due to e-commerce business
operators developing in-house logistics systems
Restructuring
Logistics cooperation (development of sharing platforms, etc.)
Supplementing of logistics functions (or services)
Alliances with other companies including industry players
Paradigm Shifts due to Digitization
Utilization of IoT, AI and automation technologies
Telematics
Use of big data
ETC 2.0[Society]
Climate change (awareness of climate change
and demands to disclose information on action)
Requirements for appropriate operational
management of vehicles and stronger safetymeasures
Review of labor laws and regulations
Heightened interest in workstyle reforms
Demands for productivity improvements acrossJapan

SBS GROUP
BUSINESS & CSR REPORT 2019

Ascertaining and Responding to Management Risks

17 - 18

Ascertaining and Responding to Management Risks
The SBS Group makes every effort to avoid risks that could impact its management results, financial situation or share price,and to respond whenever such risks emerge.

Major Risks That Pose a Threat to Management Activities

Risks due to changes in
economic conditions

Risks due to sharp rises
in fuel prices

The businesses operated by the SBS Group are affected by economic and business trends in Japan andoverseas, and by fluctuations in transportation demand among enterprise customers. In the event ofsluggish consumption due to a domestic economic contraction, a fall in import/export volumes triggeredby a sharp appreciation of the yen or a serious contraction in an overseas economy, our operating results
or financial conditions may be impacted.
The use of fuels such as light oil and gasoline is essential in the logistics business. But when fuel prices
increase due to steep rises in crude oil prices or fluctuating exchange rates, they represent a factor that
increases costs. The SBS Group pays careful attention to market trends while preparing budgets thatincorporate price fluctuations to some extent. When price rise more than expected or shipping charges
cannot be raised sufficiently to offset increased costs, operating results and financial conditions could be
affected.

Risks due to interest rate
fluctuations

As important growth strategies, the SBS Group engages in M&A activities and logistics facility
development to advance its 3PL business, and chiefly relies on borrowing from financial institutions to
procure the funds necessary for these activities. While working to repay interest-bearing debt through thesecuritization of logistics facilities, operating cash flow and otherwise, we also take steps to fix interest
rates, but our operating results and financial conditions may be affected depending on trends in financial
policies.

Risks due to M&A
activities

When expanding its existing businesses and entering new fields of business, the SBS Group implements
M&A activities, capital participation and capital tie-ups as part of its business strategy. If the progress ofbusiness plans following an acquisition or tie-up faced significant delays compared with initial forecasts,
the delays could impact operating results and financial conditions.

Risks due to the realestate business

The SBS Group pursues logistics facility development and sales operations as part of its real estatebusiness. When we develop new logistics facilities, the securing of customers, whether lease or sale, is aprecondition, and we only start on construction once the shippers or customers have been determined,
and after clarifying details such as intended use, specifications, lease amount and lease period. However,there may be cases in which the posting of sales and profits is delayed or is disproportionately allocatedto certain time periods due to the timing of when an order for a logistics facility is received, the scale andspecifications of the project, or the timing for completion or sale.

Risks due to legislativechanges

The SBS Group is affected by various laws and regulations. In our core logistics business, for example,
various business laws related to logistics apply to cargo vehicle transportation operations, warehousing
services and customs brokerage. In the real estate business, the Building Standards Act and Financial
Instruments and Exchange Act play a part, and in personnel support, the Worker Dispatch Act must be
followed. These laws and systems are expected to be amended, strengthened or interpreted differently toreflect changing social conditions. The SBS Group engages in management with the observance of laws
and regulations as a key priority, and is likely to shoulder new burdens or need to change how it runs its
business in responding to these changes.

Business continuity risks
due to the concentrationof business areas

Industry and consumer activity is concentrated in the Tokyo Metropolitan Area as a central part of theJapanese economy that is attractive as a large-scale logistics market and represents an important
logistics point between Japan and overseas locations. Since the SBS Group has declared the acquisitionof this robust logistics demand as a management strategy, its logistics centers are necessarily
concentrated in the Tokyo Metropolitan Area. If an incident such as a large-scale disaster were to occur inthe area, business continuity could become difficult due to damage suffered by consignor companies or
SBS facilities, congestion or interruptions to traffic networks, or the shutdown of lifelines.

Risks due to disasters
and other incidents

The SBS Group conducts its business activities primarily through truck-based transportation and theoperation of logistics centers. In the event of an incident such as a large-scale disaster, business
continuity could become difficult due to damage suffered by consignor companies or SBS facilities,
congestion or interruptions to traffic networks, or the shutdown of lifelines.

Risks due toserious incidents

Since the SBS Group uses public roads to transport customers’ products and goods using trucks andother road vehicles, in the event we cause a serious accident involving loss of life, we could be subject tolegal action from victims, lose the trust of customers or social credibility, or be affected by administrative
measures such as the suspension of vehicle use or a suspension of business.

Risks due to system
shutdowns

The SBS Group utilizes computers and networks for a range of applications from business systems to
manage customers’ cargo information, inventory control and customs processing to in-house systems
that handle accounting, staff, salaries and other operations. If any of these systems were to fail due tomalfunction, computer viruses, hacking, natural disasters or other incidents, the provision of services tocustomers may be interrupted, business processing may be delayed, or operations may be thrown into
confusion.

Risks related to the
management ofcustomer information

The businesses run by the SBS Group involve the handling of a great deal of customer information,
including personal information. The SBS Group has established corporate ethics regulations and personal
information management regulations, and makes every effort to manage customer data and personal
information appropriately, but in the event of an incident such as the leaking of customer information or
the loss of data, operating results or financial conditions could be impacted.

Risks related
to compliance

The SBS Group has established Group compliance regulations to promote the development of systems
and mechanisms to ensure that the officers and employees who make up the SBS Group act inaccordance with compliance requirements, and prescribed a Group-wide code of behavior, making every
effort to cultivate an honest, fair and transparent corporate culture. However, in the event of an
infringement of related regulations or improper conduct on the part of an officer or employee, the SBSGroup could suffer the loss of social credibility, suspension of business from customers, or claims forcostly monetary penalties or compensation.

Risks related tooverseas expansion

The SBS Group is working to expand its business activities overseas to achieve continued growth in the
future, but operating results or financial conditions could be impacted in the event of changing economic
conditions, recession, exchange rate fluctuations, political or legislative changes, and social turmoil due
to factors such as terrorism, war or disease, in an area into which the Group has expanded.

Risks related to theacquisition anddevelopment of
human resources

The SBS Group focuses on recruitment activities in an effort to secure human resources and works toenhance the wide-ranging training it provides to current employees based on their positions within theorganization. However, amid increasingly intense competition to acquire the necessary human resourceson an ongoing basis and a rapidly changing employment environment, if we are unable to secure humanresources in a timely fashion, experience a large exodus of human resources to elsewhere or if thedevelopment of human resources does not proceed according to Group plans, our business development,
operating results or growth forecasts could be significantly impacted.

Risks associated withclimate change

In terms of physical risks associated with climate change, our operating sites near ports or harbors could
suffer damage due to torrential rains or other events, and workers could be more susceptible to heatstroke due to rising temperatures. Additionally, regulatory risks involve higher costs due to more stringent
regulations on CO2 emissions based on international agreements and the introduction of carbon pricing.
The SBS Group is pursuing initiatives to deal with climate change risks from a long-term perspective.

Group risk
management

The SBS Group has established the SBS Group Risk Management Regulations andendeavors to thoroughly manage risks concerning all events that could pose threats tomanagement activities. We have also established the SBS Group Risk Management Council,
comprising members selected from SBS Group companies, to maintain and operate the risk
management system. We separate risks into Group-wide risks and risks affecting individualGroup companies, monitor the status of measures to deal with each risk, and strive to prevent
risks from occurring.

SBS GROUP
BUSINESS & CSR REPORT 2019

Contributions to the SDGs

19 - 20

As a company responsible for logistics, the SBS Group takes part in the process of achieving the Sustainable Development Goals(SDGs) being pursued by the world towards 2030.
Agenda 2030, which all 193 members of the United

The SBS Group’s Business Activities and the SDGs
In conducting business operations as a “3PL corporategroup possessing omnidirectional logistics functions,” the SBSGroup focuses on social needs that emerge out of the myriad
issues the world faces. We regard the SDGs as one of the mostimportant international documents for determining these issues
and utilize them accordingly. The SBS Group also hopes toplay as great a role as possible in the process of realizing theworldwide vision presented by the SDGs by the year 2030.
The SBS Group continually improves and strengthens themission-critical infrastructure of logistics, and enhances the

Nations agreed to adopt in September 2015, is aplan to eliminate extreme poverty, inequality andefficiency, convenience and sustainability of industrial activities
and general daily life in society (goals 8, 9 and 11). We havealso stepped up efforts to make logistics safer, to reduce theirenvironmental impact, and to make logistics a fulfilling
occupation for employees (goals 3, 4, 7, 12, 13 and 15).
Through the foundation established by the Company, we areworking to expand opportunities for inclusive and equitableeducation (goal 4). Through this process, the SBS Group
engages in dialogue and coordination with organizations andindividuals with a wide range of perspectives.

injustice and preserve the global environment over
15 years to achieve a better future. In the Sustainable
Development Goals (SDGs) established by this plan,
the future role of economic society and a vision of
corporate activities are reflected.

10 SDGs Related to SBS Group Initiatives
3.6

Ensure healthy lives and promote well-being for
all at all ages

3.9

4.3

Ensure inclusive and equitable quality educationand promote lifelong learning opportunities for all

4.4

By 2020, halve the number of global deaths and injuries from roadtraffic accidents.
By 2030, substantially reduce the number of deaths and illnesses fromhazardous chemicals and air, water and soil pollution andcontamination.
By 2030, ensure equal access for all women and men to affordable andhigh-quality technical, vocational and tertiary education, including
university
By 2030, substantially increase the number of youth and adults who
have relevant skills, including technical and vocational skills, foremployment, decent jobs and entrepreneurship

Make cities and human settlements inclusive,
safe, resilient and sustainable

Ensure sustainable consumption andproduction patterns

Ensure access to affordable, reliable, sustainable

7.2

and modern energy for all

7.3

By 2030, increase substantially the share of renewable energy in the
global energy mix
By 2030, double the global rate of improvement in energy efficiency

Take urgent action to combat climate change
and its impacts

8.2

Promote sustained, inclusive and sustainable

8.5

economic growth, full and productive
employment and decent work for all

8.8

9.1

Build resilient infrastructure, promote inclusive
and sustainable industrialization and foster
innovation

9.4

Achieve higher levels of economic productivity through diversification,technological upgrading and innovation, including through a focus on
high-value added and labor-intensive sectors
By 2030, achieve full and productive employment and decent work for
all women and men, including for young people and persons withdisabilities, and equal pay for work of equal value
Protect labor rights and promote safe and secure working
environments for all workers, including migrant workers, in particular
women migrants, and those in precarious employment
Develop high-quality, reliable, sustainable and resilient infrastructure,including regional and trans-border infrastructure, to support
economic development and human well-being, with a focus onaffordable and equitable access for all
By 2030, upgrade infrastructure and retrofit industries to make themsustainable, with increased resource-use efficiency and greater
adoption of clean and environmentally sound technologies andindustrial processes, with all countries taking action in accordancewith their respective capabilities

11.2 By 2030, provide access to safe, affordable, accessible andsustainable transport systems for all, improving road safety, notably
by expanding public transport, with special attention to the needs ofthose in vulnerable situations, women, children, persons withdisabilities and older persons
11.6 By 2030, reduce the adverse per capita environmental impact of
cities, including by paying special attention to air quality and municipal
and other waste management

12.5 By 2030, substantially reduce waste generation through prevention,
reduction, recycling and reuse

13.3 Improve education, awareness-raising and human and institutional
capacity on climate change mitigation, adaptation, impact reductionand early warning

Protect, restore and promote sustainable use ofterrestrial ecosystems, sustainably manage
forests, combat desertification, and halt and15.8 By 2020, introduce measures to prevent the introduction andsignificantly reduce the impact of invasive alien species on land andwater ecosystems and control or eradicate the priority species

reverse land degradation and halt biodiversity loss
Strengthen the means of implementation andrevitalize the Global Partnership for Sustainable
Development

17.17 Encourage and promote effective public, public-private and civilsociety partnerships, building on the experience and resourcing
strategies of partnerships

SBS GROUP
BUSINESS & CSR REPORT 2019

CSR Promotion in the SBS GroupCSR Message
What does it mean to deliver goods?
To deliver goods
is to connect goods with people.
To connect goods with people
is to link people’s lives together
and to connect society.
We will continue to deliver goods,

The SBS Group promotes CSR (corporate social responsibility)
and management in an integrated way based on the GroupManagement Philosophy and Code of Behavior.
We have classified important CSR themes into four fields,
namely environment, safety, social and governance. For each ofthese fields, we have further established important tasks and major
initiatives, which we tackle in an ongoing and multi-faceted fashion.
As two of these fields, the environment and safety, are regarded as
major issues for the Group’s core business of logistics, we focus
on them with the highest priority.
Promotional organizations (Group meetings) have been set up
for each of the four fields to implement activities and share information. Additionally the CSR Promotion Committee, which oversees
these organizations, comprises representatives of SBS Group
companies and assumes a pivotal role in coordinating the promotion of CSR activities as a Group-wide organization. The committee’s remit includes determining policy and approving specificmeasures.

Organizational Structure
CSR Promotion Committee
Risk Management Meeting
Compliance Meeting
Environmental Management Promotion Meeting
Transportation Safety Promotion Meeting
Information Security Promotion Meeting
Safety and Health Committee

SBS Kamata Foundation

CSR Management Framework

to bring stability to people’s lives,
and realize a sustainable society.

21 - 22

Promotion Organization
FieldsMain Issues

Important Tasks

Major Initiatives

Integrated CSR
Meeting(representatives fromGroup companies)

Environment

Consideration for
the environment(Reduction of CO2
emissions, energy
conversation)

Ensuring safety(zero accidents)

Safety & Social

Social engagement

Governance

Issue-Specific Group
Meetings(managers of thedepartments responsible ateach Group company)[Three pillars ofenvironmental
measures]Eco-driving (vehicles)
Energy conservation(facilities)
Environmental actions(employees)[Mid-to-Long-Term
Environmental Plan]
Eco and safe driving training
Introduction of eco-friendly vehicles
Modal shift
Introduction of energy-saving lights
Creation of renewable energy
Environmental actions taken within a
5-meter radius

Environmental
Management
Promotion Meeting

Transportation safety
management
Thorough prevention of
accidents(education, healthmanagement, factor
analysis and risk
prediction)
Enhanced safetymeasures

Safe driving training
Eco and safe driving training
Analysis of near-miss accidents
Regular health checks
SAS screening tests
Introduction of digital tachometersand driving records
Driver contests
G-Mark certification

Transportation Safety
Promotion Meeting

Human resource
development
Occupational healthand safety
Quality control
Social contribution

Unified Group training
Correspondence courses
Counseling services provided byindustrial physiciansFirst aid courses
Introduction of AEDs
Commending social contributions
Subsidized projects

Internal control
Internal reporting hotline
Compliance training
Risk management
Sound management
Information security
measuresBusiness continuity
management

Compliance tools
Counseling room for all workplaceconcerns
Hotline to Audit & Supervisory Board
members
External reporting hotline
Business continuity planning (BCP)
Information security seminars

CSR
Promotion
Committee
Safety and HealthCommittee
SBS Kamata
Foundation

Compliance Meeting
Risk Management
Meeting
Information Security
Promotion Meeting

SBS GROUP
BUSINESS & CSR REPORT 2019

Environment

Key Indicators (Fiscal 2018 Results)

Review of Fiscal 2018 Initiatives

Number of employees taking eco andsafe-driving training (cumulative total)

In fiscal 2018, a large company became a member of the SBSGroup. In addition, the logistics business performed steadily,and both total CO2 emissions and major energy usage were attheir highest levels since measurements were begun. On theother hand, CO2 emissions per unit of sales showed a drop of
8.39% compared with the previous year, indicating that the SBSGroup has improved its environmental performance.
In Environmental Action 2020 (2018 results are listed in page23), the action plan that is part of our Sincere Challenge 2030

1,500

Number of eco-friendly vehicles introduced(cumulative total)

3,914

23 - 24

Mid-to-Long-Term Environment Plan, we achieved generalgoals including the CO2 emissions per unit of sales mentioned
above. We will continue to tackle these efforts next year andbeyond.
The number of business sites that have installed energy-saving
lighting, including partial installation, increased to a cumulative
total of 50 sites. Compared with the lighting used previously, thisis seen as having the effect of reducing CO2 emissions byapproximately 2,200 tons annually.

Energy Usage and CO2 Emissions (Scope 1, Scope 2)

Amount of freight transported by rail

250,955

VehiclesFacilities

Business sites where energy-saving lighting
has been introduced (cumulative total)

50

business sites

Electric PowerLight Oil

44,740,083 kWh

57,740 ℓ

LP GasType A Heavy Oil

66,908 ㎥

51,704 ℓ

City Gas

Running Water

20,310 ㎥

127,524 ℓ

Vehicle Fuel (light oil, CNG, LNG, gasoline)

25,548,272 ℓ

Total CO2 emissions(compared with the previous year)

Environment

17.2

Gasoline

6,388 ℓ% increase

CO2 emissions per unit of sales(compared with the previous year)

8.39

Vehicle Total

Facility Total

68,572 t 12.4% increase

22,223 t 34.9% increase
Total Emissions

90,795 t 17.2% increase% decrease

For details about our basic policy on the environment andthe structure for promoting environmental initiatives,
please check our website.
TOP > CSR Initiatives
https://www.sbs-group.co.jp/sbsh/csr/

Scope 1

Scope 2

Direct Emissions from Energy Sources

Indirect Emissions from Electric Power Purchasing, etc.

69,305 t 12.49% increase

21,490 t 35.23% increase*Increase or decrease is in comparison to the previous year

Usage of Electric Power, Paper and Water (fiscal 2018)

Electric
Power

Paper

Usage

Usage

Water
Usage

44,740,083 kWh

59,259,924 sheets

127,524 ㎥

Specific Consumption

235,000 kWh

Specific Consumption

3,115.68 sheets

Specific Consumption

Year-to-year

Year-to-year

Year-to-year

7.12% increase (specific consumption)

5.11% increase (specific consumption)*Specific consumption is per employee (fiscal 2018: 19,017 employees)

6,71 ㎥

10.05% decrease (specific consumption)

SBS GROUP
BUSINESS & CSR REPORT 2019

Environment

Mid-to-Long-Term Environmental Plan
The SBS Group started its third mid-to-long-term environmental
plan from fiscal 2018.
Dubbed “Sincere Challenge 2030,” the plan comprises a

25 - 26

Action Plan
slogan, medium-to-long-term priority issues and a medium-term
action plan (Environmental Action 2020). We will work on thisplan in a sincere and proactive way.

The SBS Group is implementing Environmental Action 2020as the action plan of the Sincere Challenge 2030 Mid-toLong-Term Environmental Plan. The plan sets six aims and 10
environmental actions related to priority issues in the medium
term, and defines medium-term goals (currently covering fiscal
2018 to fiscal 2020) to be achieved.

In fiscal 2018, the SBS Group managed to achieve its goals
for reduced CO2 emissions per unit of sales, reduced water
usage per employee, improved eco-friendly vehicle ownershiprate, eco-driving promotion, environmental action awarenessraising, and support for environmental groups.

Environmental Action 2020
Results / Achievement Status

Goal
Aim

Action2018

Preventing global
warming

SBS Group Mid-to-Long-Term Environmental Plan

Plan Name

SloganPriority Issues

2019

2020

Reduction in CO2emissions per unit ofsales

At least 3% year-to-year-8.39%(52.08 tons / 100 million > 47.71 tons /100 million)○

Reduction of CO2
emissions per distancetraveled in vehicles

At least 1% year-to-year

3.85%(0.52 t/km→0.54 t/km)△

Reduction in water
usage per employee

At least 1% year-to-year-9.99%(7.45 ㎥→6.71 ㎥)○

At least 15%
year-to-year

5.11%(2,964 sheets > 3,116 sheets)△

Active promotion

As a result of the sampling that was
conducted, it was determined that
there is a need for common rules on
sorting and waste handling. Fromfiscal 2019, we will look at developing
common Group-wide guidelines.

△

Resource
conservation[water and forests]

Reduction in PPC paper
usage per employee

Resource recycling

Visualization ofindustrial waste
product recycling

At least 5%
year-to-year

At least 10%
year-to-year

Sincere Challenge 2030
“We take on the challenge of making an eco-friendly society full of green!”
Mid-term

Long-term

Curtailment of CO2 emissions (reduction of carbon
emissions from vehicles and facilities)
Promotion of resource recycling (effective use andrecycling of waste)
Conservation of natural resources (reduction of useof copying paper and water)

Development ofgreen logistics
services

Education

Strengthening Reduction of CO2 Emissions from Vehicles
Social contribution

If based on Japan’s nationally determined contributions interms for target energy-derived carbon dioxide emissions ineach sector in the Paris Agreement made at the Framework
Convention on Climate Change, 2030 energy-derived CO2
emissions in 2030 will need to be a 26% reduction from 2013
levels (24% reduction from 2005 levels, corresponding toroughly 927,000,000 tons of CO2), and in the transportation
sector, a reduction of 28% from 2013 levels (32% reduction

from 2005 levels), or roughly 163,000,000 tons of CO2. To
achieve these reductions by the year 2030, the SBS Groupcalculates it will need to replace at least 1,000 medium-sized
vehicles with next-generation vehicles (electric or hydrogenpowered, etc.). Moving forward, we will pay close attention tonational policies and the development trends of automotive
manufacturers to formulate solid plans and find the right time tointroduce these vehicles.

Expansion of
applicablebusiness sites

Sampling

Improved fuel efficiency

At least 1% year-to-year-0.2%(4.94 ℓ/km→4.93 ℓ/km)△

Improved eco-friendly
vehicle ownership rate

At least 3% year-to-year

5.59%(85.50％→91.09％)○

Commendations will start from fiscal
2019, when development of thesystem will have been completed.

—

Eco-driving promotion

Strengthening reduction of CO2 emissions fromvehicles (formulation and implementation of planfor introduction of next-generation vehicles)

2018

Development ofan evaluation andcommendation
systemLaunch of theevaluation andcommendation
systemFirm establishmentof the evaluationand commendation
systemYear-to-year increase in EMS introduction rate

8.43%
(2,159 > 2,341)○

Awareness-raising ofenvironmental action(posters, etc.)

Active promotion

Sincere Challenge 2030 posters werecreated and displayed at the businesssites of Group companies.

○

Support forenvironmental groups

Providing support to at least one group

One environmental group was supported
and provided assistance with its activities.

○

SBS GROUP
BUSINESS & CSR REPORT 2019

Environment

Climate Change Risks

Environmental Issues Tackled by the SBS GroupThe SBS Group recognizes risks due to climate change asimportant management challenges. As an enterprise
responsible for part of social infrastructure, risks due to climatechange are an issue that cannot be ignored, and to achievesustainable management, we believe it is necessary toappropriately ascertain and manage these risks, and to respondand adapt to them as appropriate.

■ Risks Due to Physical Impact
To the SBS Group, which maintains many business sitesaround ports and harbors, disasters caused by weather
phenomena believed to be affected by global warming, including
typhoons of increased severity, storm surges and frequent
torrential rains, pose risks to business continuity. To addressthese risks, we consider site conditions and facility design withflood damage in mind when establishing new logistics sites, andhave prepared for emergencies with the creation of the SBSGroup Business Continuity Plan, which sets out the measures tobe taken in the event of a disaster. Additionally, with risingtemperatures in recent years, workers face a significantly
heightened risk of heat stroke. To the SBS Group as an employer
of large numbers of drivers and warehouse personnel, risks toemployee health represent a serious issue. We will takemultifaceted measures to deal with these risks, including the
installation of additional water supply equipment, the regular
stocking of supplies, the provision of goods to help workers copewith the heat, careful monitoring of high-temperature warning
information, and efforts to alert workers to the dangers.

■ Risks Due to Regulations
The strengthening of regulations based on international
agreements such as the United Nations Framework Convention
on Climate Change (Paris Agreement) could be a risk that placespressure on management costs. There is a possibility of new
regulations and systems (carbon taxes, taxes on fuel and energy
consumption, etc.) being advanced, and for the SBS Group asa transportation business operator, for example, we may bepressured to upgrade our vehicle fleet to next-generation
vehicles and switch to more energy-saving facilities at an earlystage. To address these risks, we will pay close attention tonational policies while developing steady plans and makepreparations so that we can swiftly invest in vehicles andequipment when the time comes.

This is a plan to ensure business continuity in the event of a major disaster and isprepared in according with the SBS Group basic policy on business continuity
planning. The plan gives top priority to safeguarding people’s lives.

United Nations Framework Convention on Climate ChangeThis convention sets out an international framework to prevent the various
adverse effects that are caused by global warming, with the ultimate aim ofstabilizing the concentration of greenhouse gases in the atmosphere. The Paris
Agreement (2015) was adopted as a new international framework that includes
greenhouse gas emissions reductions for the year 2020 onwards.

Global Environmental
IssuesGlobal warming

Number of employees taking eco-driving training (cumulative total)

The SBS Group’s Initiatives
Energy conservation, the creation of renewableenergy, promoting eco driving, introduction of
eco-friendly vehicles, modal shift, promotion of
eco tires, activity awareness-raising

Air Pollution

Introduction of eco-friendly vehicles, reductionof aging vehicles

Depletion of
the ozone layer

Compliance with Act on the Rational Use andProper Management of Fluorocarbons

Resource recycling

Company-wide 3R promotion (implemented
on a trial basis since fiscal 2018), promotion ofretread tires, activity awareness-raising

Forest conservation

Use of FSC certification, support for conservation groups, promotion of paperless operations

Water issues

Water conservation, activity awareness-raising■ Initiatives Related to Vehicles
The SBS Group is striving to foster a deeper culture of
eco-driving through eco-driving (fuel-efficient driving) training(eco and safe-driving training: eco-driving workshops
conducted in group settings) and through actual practice(voluntary fuel efficiency management: having drivers ascertain
the effects of their own driving by recording supplied fuel,distances driven and fuel efficiency by hand to raise awarenessof fuel-efficient driving) in a two-pronged effort.

■ Initiatives Related to Facilities

Cause

EffectCountermeasures

Changing rainfall patterns (typhoons ofincreasing severity, frequent torrential rain,
heavy snowfall, etc.)- Direct damage to logistics facilities(facility equipment, customer products)- Impeding securing of operational personnel and the operation of vehicles

Strengthening of risk countermeasures anddisaster response management at facilities
located in high-risk regions

Changing temperatures

Health risks to workers (heat stroke, etc.)- Careful monitoring of high-temperature
warning information, and warnings to workers(encouraging rehydration, providing preventative information, thoroughly disseminating
rules on action to take when a worker feels ill)
- Installation of additional water supply
equipment, regular stocking of supplies,
provision of goods to help workers cope withthe heat, etc.

Changing management status of business
partners (reduced production and sales
volume, etc.)

Economic and financial impact－

Market stoppages or the cutting off ofimport/export routes due to disasters or
conflicts caused by global warming

Impact of vehicle fuel shortages on
operation

Increased installation of in-tanks at businesssites

Strengthening of domestic environmental
regulations due to international agreements(carbon taxes, taxes on fuel and energy
consumption, emissions trading)Pressure on management due to increased
costs- Enhanced investment in the environment(introduction of next-generation vehicles,
energy-saving lighting, carbon offsetting, etc.)- In-house use of renewable energy

Delays in environmental measures under
decarbonization trends against the
backdrop of international agreements andother developments

Damage to trust from stakeholders(reduced competitiveness, falling shareprices, etc.)

Enhanced environmental management structure(environmental initiatives, information disclosure,etc.)

Physical

Regulations(transition,etc.)

The SBS Group pursues initiatives to deal with major issues
concerning environmental conservation, with a focus on
measures that relate to vehicles and facilities.

SBS Group Business Continuity Plan

The SBS Group’s Climate Change Risks and Countermeasures
Type

27 - 28

The SBS Group is promoting energy savings at its facilities
through a range of energy conservation measures including the
introduction of energy-saving lighting (LED, electrodeless lamps,etc.), primarily at existing large-scale centers and new centers.
Energy-saving lighting has now been introduced at 50 businesssites, and the effects of doing so have been visualized. We willcontinue to actively promote these activities.

■ Other Initiatives
The SBS Group is also addressing modal shift. In addition to
reducing environmental impact, modal shift is a means oftransportation that contributes to society by addressing theshortage of drivers. In 2015, SBS Logicom took part in the
promotion of modal shift for liquor sellers and helped drasticallyreduce CO2 emissions. As a result, we received a jointcommendation as an Excellent Green Logistics Business.

■ Environmental Actions Taken within a 5-Meter Radiusand Awareness-Raising Concerning the Mid-to-LongTerm Environmental Plan
To encourage each and every employee to consider theenvironment, the SBS Group has adopted the slogan“environmental actions taken within a 5-meter radius.” We callon employees to continually put into practice six environmental
actions and also endeavor to raise awareness of the Sincere
Challenge 2030 mid-to-long-term environmental plan.

1,500(as of December 31, 2018)*Does not include the results of individual training at Group companies.

Number of business sites where energy-saving lighting has been
introduced (cumulative total including sites with partial introduction)

50

business sites*This initiative has helped curb CO2 emissions by more than 2,200 tons annually.

Modal Shift (fiscal 2018)

256,204t

By seeking to shift the means of transportation for cargo and people, in cargotransportation the movement of goods by cargo truck is switched to rail orcoastal vessel-based transportation. Since attention was drawn to modal shift
at the 3rd Conference of the Parties under the United Nations Framework
Convention on Climate Change (Kyoto Meeting) in 1997, various countries
have pursued initiatives, and efforts have also been promoted by Japan’s
Ministry of Land, Infrastructure, Transport and Tourism.

SBS GROUP
BUSINESS & CSR REPORT 2019

Safety & Social

Major Indicators (Fiscal 2018 Results)<Safety>
Number of Transportation Safety Promotion
Meetings Held

4

Review of Fiscal 2018 Initiatives (Safety)
The SBS Group promotes transportation safety based on thethree pillars of education & awareness-raising, accident
prevention and safe operational management. In the area of
education & awareness-raising, in fiscal 2018 we added healthofficer examination preparatory seminars to enhance our
occupational health and safety performance. With regard to
accident prevention, we conducted a thorough survey of heat

Number of Group Safety Training Sessions
Conducted

23

29 - 30

stroke that led to measures to prevent it in an effort to improvehealth management. Additionally, in response to a large
warehouse fire that occurred last year, the checks of fire
prevention measures at logistics facilities which had alreadybeen started were further reinforced. Monitoring is also
underway. Across the Group, a single major accident occurred,
the same as the previous year.

Priority Risks
Strengthening employee health management, reducing major accidents, strengthening fire prevention measures at logistics facilities

Priority Issues
Group-average Fuel Efficiency

4.93

Improving fuel efficiency through eco-driving training and enhancing awareness of safe driving
Preventing accidents by conducting safe operational training for trucks and forklifts

km/l

Strictly enforcing daily inspections of forklifts through the creation of a daily inspection manual
Skill improvement initiatives to foster the development of operational managers, health officers and other key personnel

Safety & Social

Number of Business Sites with G-Mark
Certification (certification rate)

153

SBS Group Transportation Safety Managementbusiness sites (86.4%)

Risk management

Policies and priority issues

Number of Serious Accidents

1

For details about our basic policy andpromotion system regarding safety,
please check our website.
TOP > CSR Initiatives
https://www.sbs-group.co.jp/sbsh/csr/

Transportation Safety Promotion Meeting

Education and Awareness-raising

Accident Prevention

Safe Driving and Safe Operation
Management

Group safety education- Truck safe driving training sessions- Eco and safe-driving training- Forklift safe operation training sessions- Logistics quality seminars- Operational manager examination
preparatory seminars- Operational manager skill improvement
seminars- Workshop on utilizing general aptitude
diagnosis- First-aid classes- Health officer examination preparatory
seminars

Accident factor analysis

Roll calls and alcohol checks

Near miss incident information collection
and dashcam video analysis

Daily inspections

Call for proposed safety slogans

Introduction of vehicles equipped withsafety features (collision avoidance,
reduced braking, road deviation prevention)

Affixing of eco and safe driving vehicle
stickers

Risk prediction training

Fitting of driving support equipment(digital tachograph, dashcam, rear-view
camera)Aptitude diagnosis
Regular SAS screening examinations andhealth checkups
Stress checks / consultations withindustrial physicians

Business audits, touring follow-ups,business site self-inspections
Acquiring certification (G-mark) as abusiness site with excellent safety
Truck driver / forklift operator contests

Training for persons causing accidents
Occupational health and safety movement
Safe operation award
Logistics facilities fire prevention measures
Blood pressure measurements
Heat stroke countermeasures

SBS GROUP
BUSINESS & CSR REPORT 2019

Safety & Social

31 - 32<Society>

Education and Awareness-Raising

Safe Driving and Safe Operation Management■ Group Safety Education■ Driver & Operator Contests

With reports of serious accidents attracting the attention ofsociety, operation managers have become increasingly
important. The SBS Group focuses on cultivating and improving
the skills of operation managers and strives to raise the level oftransportation safety management capabilities across theGroup. In fiscal 2018 we began offering preparatory seminars
for health officer examinations and also pursue enhanced
occupational health and safety management.

We have been holding contests since fiscal 2016 with the aimof having drivers and operators compete over their knowledge ofadvanced driving skills, inspection technologies and related laws
and regulations in order to raise awareness of their social
responsibilities as drivers and operators by honing skills throughfriendly competition and acting as exemplary representatives of

their respective workplaces. In fiscal 2018, the SBS Group Driver
Contest was held for the third time, and the SBS Group Forklift
Operator Contest was held for the first time.
We will continue to hold these contests to improve theawareness and skills of individual drivers and cultivate a Groupidentity that pursues safe driving and operation.

3rd SBS Group Driver Contest

1st SBS Group Forklift Operator Contest- Operation manager examination preparatory
seminars- Operation manager skill improvement training- Eco and safe-driving training- Truck safe driving training sessions- Forklift safe operation training sessions- Logistics quality seminars- First-aid classes- Courses on utilizing general aptitude diagnosis
for operation managers- Health officer examination preparatory seminars

Saturday, November 17, 2018
Saitama Prefecture Comprehensive
Truck Training Center
Competitors: 24
Related Personnel: 176
Total Participants: 200(1) Regular inspections(2) Academic examination(3) Practical driving skills

Number of
Sessions Held29

Number of Trainees

902■ Fitting of Driving Support Equipment*Excludes individual training conducted by Group companies.

■ Safety Slogan
Each year the SBS Group accepts proposals from employees
for a safety slogan to be used in Group-wide awareness-raising
activities to foster pride as professionals with responsibility forsafety. The slogan for fiscal 2019 was selected from a record
10,629 submissions.

Fiscal 2019 SBS Group Safety Slogan

Trust comes from safety,
security and zero accidents
Takao Chisaka, Kiso Sales Office
SBS Zentsu Co., Ltd.

■ Affixing of Eco and Safe Driving Vehicle Stickers

Saturday, June 9, 2018
Toyota L&F Customers Center Tokyo
Competitors: 17
Related Personnel: 53
Total Participants: 70(1) Regular inspections(2) Academic examination(3) Practical operating skills

Number of Vehicles Equipped with Driving Support Equipment

The SBS Group has proceeded to fit its vehicles with digitaltachographs (including switch-overs from analog systems). A
digital tachograph sounds a warning alarm when a driver exceeds
a speed limit or brakes suddenly. We are also steadily equipping
vehicles with dashcams. The company monitors these records
and makes drivers aware of areas for improvement as necessary.
In addition, we have made steady progress in the installation ofrear-view cameras, which prevent collision accidents when avehicle is reversing.

Digital / Analog Tachographs

3,554

vehiclesDashcams

2,937

vehicles■ Fire Prevention Measures at Logistics Facilities

Since December 2017, this sticker has been affixed to all
SBS Group cargo vehicles. The sticker represents our promise
to society that SBS Group vehicles take the environment andsafety into consideration. We are conscious of being
eco-friendly and safe drivers, and are committed to eco andsafe driving.

Accident Prevention■ Driver Health Management■ Employee Heath Management

The SBS Group not only takes steps to prevent overwork but
also makes thorough efforts to regularly conduct healthcheckups and perform SAS (sleep apnea syndrome) screenings
to prevent accidents attributable to employee health. SAS
screening tests not only involve secondary screening but also
regular monitoring after testing. Additionally, since there has also
been an uptick in accidents related to brain disorders acrosssociety, we continually monitor the state of health of drivers byconducting brain MRI scans as necessary in order to ensure
safety and peace of mind in our transportation operations.

In light of recent rising temperatures, since fiscal 2018 the
SBS Group has stepped up measures to combat heat stroke in
its warehouses. We have thoroughly investigated information
related to incidences of heat stroke and installed additional air
conditioning equipment to enable proper temperature
management within warehouse facilities. In addition, we actively
advise drivers to run air conditioning continuously. As a result,
we have managed to halve the number of heat stroke cases
compared with the previous year. We will continue to address
this issue with the aim of completely eliminating cases of heatstroke among our employees.

In response to a large-scale warehouse fire that occurred atanother company in 2017, the SBS Group created its own fire
prevention measures check sheet based on guidelines from the
Ministry of Land, Infrastructure, Transport and Tourism and the Fireand Disaster Management Agency. All Group logistics facilities are
required to perform periodic checks and report on the results. Criteria
have been established for the items to be checked, and when thecriteria are not met, facilities are obligated to take corrective action.
We strive to continually raise the level of fire prevention methods by
iterating on this cycle of checks and improvements.

Rear-View Cameras

3,589

vehiclesSafety Activities 2018

Eco and Safe-Driving Training

Safe Driving and Operation Training Sessions

Maintenance Manager Courses

SBS GROUP
BUSINESS & CSR REPORT 2019

Safety & Social

Engagement between the SBS Group and Society
The SBS Group undertakes its corporate activities with the
involvement of various stakeholders.
The SBS Group regards the customers to whom it provides
services, as well as shareholders and investors, the employees
who work together with the Group, business partners including
suppliers and contractors and the local communities where theGroup does business as major stakeholders.
To stakeholders, we commit to putting the customer first,

Engagement with Employees
making appropriate information disclosures, developing a
comfortable workplace, cultivating partnerships andcontributing to local communities, and we endeavor to reflect
these commitments in our corporate activities throughwide-ranging dialogue with stakeholders. We have established a
Code of Behavior prescribing compliance with laws, manners
and morals, environmental conservation and social contribution
as a corporate citizen, and strive to coexist with society.

Engagement with Customers■ Quality Management System■ Provision of Information

Each Group company in the SBS Group has established aquality management system and we endeavor to maintain andimprove the quality of the transportation and services weprovide. In addition to the international ISO9001 standard thatindicates systematic requirements for quality management
systems, we have also obtained other appropriate certifications
including ISO27001 certification for information security
management systems, the Privacy Mark related to theprotection of personal information, as well as JAS Organic
Agricultural Product Subdivider Certification and the Relocation
Safety Mark.

In addition to disclosing information about the business
operations it is entrusted with, the SBS Group earns the trust of
stakeholders by providing a range of information with a focus on
customers.
The LOGILINK, a logistics-oriented PR publication issued by
SBS Logicom for customers, has earned a favorable reception
among companies, groups and government organizations as a
medium for disseminating useful information to those
responsible for and involved with logistics, including casestudies of logistics solutions and the latest information.
Everything from the expertise and functions of SBS Logicom
logistics services to the ingenuity of its staff is introduced in aneasily understood format that illustrates SBS Logicom’s
collective strength as a logistics company.
On another front, SBS Flec has produced “Specialists inFood Logistics,” a web-published documentary highlighting thework and appeal of the Flec Group specializing in food logistics
over more than six decades. The documentary mainly targets
new customers and job seekers, but also provides thoroughinsight into the corporate values of SBS Flec.

■ Implementation of Improvement Activities
The SBS Group conducts a wide range of improvement
activities and holds an Improvement Contest designed torecognize achievements in those endeavors and shareoutstanding expertise. For its part, SBS Ricoh Logistics Systemholds a Global KAIZEN Contest under the themes of KAIZEN
and Reform incorporating management issues. Meanwhile at
SBS Zentsu, the Home Delivery Division responsible for thedelivery of foods at the four temperature ranges holds
Improvement Example Presentations to develop a comfortableworkplace environment, and has workers compete and learn
home delivery customer service skills through the “Customer
Service Master Contest.” SBS Flecnet holds Business
Improvement Presentations with the aim of providing better
services and developing an improved work environment. Eachof these initiatives is not only an opportunity to raise awarenessof issues and share lessons, but is also positioned as anopportunity to develop a positive corporate culture.

1. We will implement human resource development as a part ofour management strategy and human resource strategy, andfoster human resources able to contribute to the growth anddevelopment of the Group.
2. We will cultivate human resources through a broad range ofeducation and training, and strive to build up the Group’s
personnel-based assets.
3. We will assist employees in achieving their self-actualization
goals through life-long education.
The composition of training is systematically organized into
tiered training, theme-specific training, specialist training andpersonal development support, and is designed to help
employees improve their skills and develop their careers.

■ Developing an Environment in Which Everyone canSucceedThe SBS Group strives to develop an employment
environment in which anyone can succeed in ways appropriate
to the respective business site, including those who are
disadvantaged in some way. In fiscal 2018, the SBS Group
received two awards related to the employment of persons withdisabilities.
In recognition of its active efforts to employ persons withdisabilities, SBS Zentsu received a commendation from thehead of the Saitama Labor Bureau.
Meanwhile, Rie Yamazaki from the Oita Sales Office of the
SBS Flecnet Kyushu Logistics Division was recognized forovercoming her disability and demonstrating independence as amodel worker, and received an award for excellent work as an
employee with a disability.

Human Resource Development and Educational Support (Fiscal 2018)

43
5,095

Curricula:
Total Trainees:*See the CSR data on pages 43-44 for a breakdown of the curricula.

Engagement with Business Partners
The services provided by the SBS Group are also supported
through the cooperation of many business partners. We regard
our business partners as fellow entities executing businessgoals in tandem with the SBS Group. Accordingly, we endeavor
to fulfill our obligations and develop in step with these business
partners, in keeping with laws and ethics.

The SBS Group strives to engage in dialogue as well as
disclose and provide information by developing and utilizing
various means of communication with stakeholders.

business sites

Communication with
Customers

Communication
with Employees

Communication with
Shareholders and InvestorsMedia
Communication

WebsiteCommunication

LOGILINK publishedby SBS Logicom

Publication of the SBS Express
Group magazine

Total Financial Results
Briefing Attendees

Press Releases
IssuedNumber of Visitors

1

4

117

53

times

Publication of CSR News

ISO27001 (Information Security Management Systems)

business sites

The SBS Group provides wide-ranging education andtraining to all employees working at Group companies inaccordance with the following Basic Policy on Human Resource
Development.

Communication with Stakeholders

ISO9001 (Quality Management Systems)

97■ Human Resource Development

LOGILINK vol.7“Specialists in Food Logistics”

72

33 - 34

View the video here.
SBS Flec Website (https://www.sbs-flec.co.jp/)
SBS Flec TV (http://cowtv2.jp/c3/sbs-flec-tv/)

1
Compliance Newsletter

12

times

(twice a year)

Responses to Investors
and Analysts

107

responses (as required)

1,048,397

visitors(116,240 visitors)

Page Views

4,591,066(680,614 views)*Figures in parentheses are for
SBS Holdings, Inc.

views

SBS GROUP
BUSINESS & CSR REPORT 2019

Safety & Social

35-36

Social Contribution Activities■ Support for the Social Sector

The SBS Group provides support to groups engaged in
non-profit activities with considerable social significance while
utilizing the Group’s strengths.
We provide advice and make proposals to Second Harvest
Japan (2HJ), an accredited NPO working to build a food safety
net for people without enough food, in relation to transportation
support, warehouse operation and vehicle operation to linkcompanies wishing to donate food with 2HJ distribution sites.
2HJ is promoting the “Tokyo 2020: Food for 100,000” project,which aims by 2020 to support 100,000 people in the Tokyo
area and 60,000 people in the Kanagawa and Saitama areas
who are suffering from a lack of food, and the SBS Group isproviding assistance to help 2HJ reach this goal.
We also subsidize and support the activities of The
Organization for Industrial, Spiritual and Cultural Advancement(OISCA), which works to develop human resources in the areasof rural development and environmental conservation, primarily
in the Asia-Pacific region.

■ Activities in Which Employees Also Take Part

In a meeting room in Olinas Tower (Sumida-ku, Tokyo), where
SBS Holdings has established an office, sales drives to offer
sweets created at the Sumida Ward Community Workshop* toemployees, and sales drives to support earthquake reconstruction
are held regularly.
As a trucking business operator that makes use of publicroads, the SBS Group also believes it has an obligation to set a
good example in terms of traffic safety. To achieve safety andsecurity on the roads, we also cooperate with traffic safety
activities and traffic safety classes held each spring and autumn
by local police forces, traffic safety organizations and trucking
associations.
The SBS Group takes part in and supports a range of used
item collection initiatives.
Items collected: books, DVDs, CDs, toothbrushes,
school satchels, stamps*A vocational aid care center established by Sumida-ku in 1988 for people who find it difficult to gain
employment primarily due to intellectual disabilities.

■ SBS Kamata Foundation
The SBS Kamata Foundation is a support foundation thatprovides grants for excellent logistics research and offers
scholarships to students receiving social care.
SBS Kamata Foundation Website (https://www.sbs-kamatazaidan.or.jp/)

Scholarships for Students Receiving Social Care

Grants Issued in
The foundation conducts aid activities
Fiscal 2018with the aim of supporting academic
research into logistics, which is part of thesocial infrastructure, and contributing to
the development of the industry as a whole
and the betterment of people’s lives, for instance by using the
fruits of research to improve logistics efficiency and prevent
accidents.

Number ofThis project provides scholarship
Scholarship Recipientsfunding to motivated and talented
in Fiscal 2018students and other persons to prevent
them from abandoning education foreconomic reasons, with the aim ofcontributing to equal opportunity in
education and the development of human resources, while
helping enhance education and welfare.

Applicable Research: (1) academic research and (2) the holdingof research workshops, symposiums,
seminars, etc. that contribute to thepromotion or development of logistics are
eligible.

Application Requirements: Students who are generally at least
18 years old and have been acceptedfor enrollment into higher education,
who are children residing in a childwelfare home or living in a foster
home in the Kanto region, and whoplan to advance to university, juniorcollege, a vocational school or similar

9Social contributionoriented sales drives

2*Examples of the themes addressed : improving logistics efficiency, improving safety in cargotransportation and reducing the impact on the global environment (reducing CO2 emissions) throughbetter logistics systems
Grant Amounts: Total of 3,000,000 yen, up to 500,000 yen per individual grant.

Earthquake recoveryoriented sales drives

1

Social Contribution-Oriented Sales Drives

Spring traffic safety
initiatives

1

Autumn traffic
safety initiatives

1

Traffic safety initiatives

Fiscal 2018 SBS Group Social Contribution Award
Nippon Record Center Co., Ltd.: Contributions to the local community
To date Nippon Record Center has actively promoted anumber of exchange development initiatives with the local
community and employees. In addition to running sessions to
exchange views with local residents, the company runs power
walking classes to the public, and offers etegami picture letterclasses and workplace tours for the children of employees.
As a part of its efforts in fiscal 2018, “ME-BYO Supporter
Educational Training was held as part of the ME-BYO improvement
and promotional activities run by Kanagawa Prefecture. Over 50
members of the local community association took part in the event,which was received favorably. The company also planned a sweet
potato digging experience for employees’ children. Thirty-one
children enjoyed the experience of digging for sweet potatoes.
Nippon Record Center’s activities contribute to the community

Logistics Research Grants

in a wide range of ways, from dialogue with local residents toimproved education and cultural engagement, the promotion ofhealth and job creation. As a result, these ideal activities developed
sustainability not only internally but across the region. The company
was also recognized for combining those activities with efforts topreserve and maintain employment.
*As of July 1, 2019, Nippon Record Center was absorbed into SBS Logicom by merger.

ME-BYO Supporter Educational Training

Sweet Potato Digging Experience

35

Scholarship Amounts:

300,000 yen per student (as a higher
education allowance)

Grants Issued in Fiscal 2018
Grant Amount(thousand yen)

Name of Affiliate Organization

Position

Name

Research Subject

Department of Electrical andElectronic Engineering, Faculty ofEngineering, Shizuoka University

Assistant Professor

Masahiro Aoyama

Research into motors appropriate for a dynamic
wireless power transfer system for transportationequipment

500

Faculty of Distribution and Logistics
Systems, Ryutsu Keizai University

Associate Professor

Norie Yokoi

Possibility and potential methods for the
integration of logistics and marketing: initiatives tosolve logistics issues from a marketing perspective

500

Advanced Materials Science,
Graduate School of Frontier
Sciences, The University of Tokyo

Specially Appointed
Associate Professor

Shunichiro Watanabe

Development of print process-type antennas inwirelessly powered RFID tags achieving a smart
logistics society

500

Mechanical Engineering Course,
Graduate School of Science andEngineering, Ehime University

Associate Professor

Jae Hoon Lee

Development of handcarts that can moveautonomously

500

Faculty of Business and Commerce,
Aichi Gakuin University

Professor

Hirofumi Tange

Research into the promotion of health-oriented
management in the logistics industry

500

Faculty of Distribution and Logistics
Systems, Ryutsu Keizai University

Professor

Yuji Yano

Research into the deployment of joint logistics
through horizontal and vertical coordination

499.14Center for Integrated Disaster
Information Research, Interfaculty
Initiative in Information Studies,
The University of Tokyo

Specially Appointed
Assistant Professor

Saneyuki Udagawa

Research and development of map exercise
learning materials for relief supply logistics inthe event of a disaster

500

Flight and Control, Graduate
Department of Aerospace
Engineering, Nagoya University

Professor

Susumu Hara

Development of an anti-tip mechanism during thelanding of multicopter drones used for logistics

500

Department of Electrical Engineering,
Faculty of Science and Technology,
Tokyo University of Science

Associate Professor

Dairoku Muramatsu

Development of a passive-type intra-bodycommunication-based picking system to improvethe efficiency of logistics work

500

SBS GROUP
BUSINESS & CSR REPORT 2019

GovernanceOutside Directors

3(out of 8 directors)

Assessment of Internal Control Related
to Financial Reporting for Fiscal 2018

Valid

Resolutions of the Annual General Meetingof Shareholders for the 32nd Period
Item 1: Appointment of eight directors(three of whom are outside directors)
Item 2: Appointment of one Audit &Supervisory Board member
Item 3: Appointment of one substitute Audit& Supervisory Board member

Convening of the Fiscal 2018
CSR Promotion Committee

1■ Purpose and Basic Approach
By achieving the Group Management Philosophy and Code of
Behavior established based on its founding spirit, the SBS Groupaims to maintain a positive relationship with its stakeholders andendeavor to build an effective management structure by enhancing
the efficiency, soundness and transparency of its management.
In addition, the SBS Group will adopt the basic approaches
of ensuring management transparency towards its shareholders
and other stakeholders, maintaining management efficiency andconducting business activities consistent with business ethics
and practicing CSR management, while striving to enhance andstrengthen corporate governance in keeping with the following
policies.
●To ensure substantial equality with respect to shareholders,the Company will endeavor to enhance managementtransparency through the proactive disclosure of information,and develop an environment in which shareholders can
exercise their rights appropriately.
●The SBS Group will make every effort to respect and maintain apositive relationship with its stakeholders, including employees,
customers, business partners and local communities, to enhance
corporate value in the medium and long term, in accordance with
its Group Management Philosophy and Code of Behavior.
●In light of its fiduciary duty to shareholders, the Company’s
Board of Directors will appropriately carry out its roles andresponsibilities, including making decisions regarding theimplementation of important business of the SBS Group,
monitoring the progress of such operations, and supervising

the attainment of business plans and the management philosophy, in the interests of the sustainable growth of the company
and the enhancement of corporate value over the medium andlong terms.
●The Company will develop an investor relations structure
headed by the President and Director and will promotedialogue with shareholders and investors in an effort to achievesustainable growth and enhance corporate value over the
medium and long terms.

■ Structure
SBS Holdings has adopted the system of a company with an
Audit & Supervisory Board. Under this system, the Board of
Directors is responsible for making important management
decisions and overseeing the execution of business operations.
Working independently from the Board of Directors, the Audit &Supervisory Board and its members are responsible for conducting strict auditing of statutory requirements. Several outside
directors are appointed to the Board of Directors to bolster its
monitoring function. SBS Holdings has also adopted an executive officer system in order to clarify the executive responsibilities
of officers while ensuring the proper delegation of authority.
Through these efforts, SBS Holdings has developed a systemthat enables business operations to be carried out flexibly.
To ensure that directors and Audit & Supervisory Board
members fulfill their respective roles as required, when appointed
they are briefed on matters primarily concerning their obligations
and responsibilities, and are offered the necessary support for
self-improvement.

Corporate Governance Structure
Appointment / Dismissal

General Meeting of Shareholders

Appointment / Dismissal

Appointment / Dismissal

SBS Holdings, Inc. (the Company)

Audit & Supervisory
Board

Audit

Board of Directors
Supervision

Coordination
Coordination

Investigation

Instruction

Internal Audit
Department

Reporting

Representative
Director

Reporting

ReportingGovernanceSee the SBS Group website for details about corporate
governanceTop > Investor Relations > Corporate Governancehttps://www.sbs-group.co.jp/sbsh/ir/governance/

Corporate GovernanceAccounting Auditor

Major Indicators (Fiscal 2018 Results)

37 - 38

Audit

Corporate Planning / Human

Audit

Resources / Finance, etc.

Audit and Reporting

ReportingInstruction

Management
Control

SBS Group Companies

CSR Promotion
Committee
Risk Management Meeting
Compliance Meeting
Environmental Management Promotion Meeting
Transportation Safety Promotion Meeting
Information Security Promotion Meeting

Discussion and ReportingSBS GROUP
BUSINESS & CSR REPORT 2019

Governance

39 - 40

Compliance■ Board of Directors
The Board of Directors meets at least once a month, where
it discusses and decides on management issues, new business
policies and other important matters.
The Board of Directors comprises eight directors, three ofwhom are outside directors. The outside directors fulfill theirroles and responsibilities to enhance corporate value, including
offering advice and guidance related to management from an
independent standpoint, attending important Group meetings,
and providing recommendations as necessary.

■ Audit & Supervisory Board
Independent of the Board of Directors, the Audit & Supervisory
Board meets at least once a month. At the meetings, which areattended by Audit & Supervisory Board members and members of
the Internal Audit Department, the status of audits and mattersidentified in audits are reported on, compliance with statutory
requirements is verified, and information is shared to promoterecognition of issues.
The Audit & Supervisory Board members comprise one
full-time auditor and two part-time auditors. These members
endeavor to collect information by attending important meetings
such as meetings of the Board of Directors, viewing important
documents and checking the implementation status of operations,and strive to enhance the internal checks and balances function.

formation of new ideas and principles that are not beholden to
customary practices.

■ Evaluating the Effectiveness of the Board of Directors
SBS Holdings has been analyzing and evaluating theeffectiveness of the Board of Directors since fiscal 2016 in aneffort to improve its functioning.
Specifically, we conduct surveys of the directors and Audit &Supervisory Board members, and then analyze and evaluate theresults. For the fiscal 2018 survey, we asked respondents about
the following items on a five-point scale, as well as providing
space for respondents to supplement their assessments andinclude other opinions.
(1) Composition of the Board of Directors (two questions)(2) Operation of the Board of Directors (five questions)(3) Matters taken up by the Board of Directors (eight questions)(4) Systems supporting the Board of Directors (four questions)
19 questions in total

Meetings of the Board of Directors and Attendanceby Outside Directors (Fiscal 2018)
Board of Directors
Meetings

State ofAttendance

Audit &
Supervisory Board

14

14

OutsideDirectors (3)14 out of 14

14 out of 14

Outside Audit &Supervisory
Board Members(2)

14 out of 14

14 out of 14

Independent Officer○

OutsideDirector

○

○

Name

Reason for Appointment

Jiro Iwasaki

Jiro Iwasaki brings a wealth of experience and broad insight concerning
management from many years as a company officer, and was appointed on the
expectation that his experience and knowledge as an outside officer can bereflected in the management of SBS Holdings.

Tetsuya Sekimoto

Tetsuya Sekimoto possesses extensive experience and expert knowledge as an
attorney as well as experience and knowledge as an outside officer, and was
appointed on the expectation that these experience and knowledge can be utilized
for the compliance management of SBS Holdings.

Shuichi Hoshi

Shuichi Hoshi worked for many years as the head of the food logistics department
for a general trading company and was appointed on the expectation that thebusiness experience he accumulated there and managerial acumen he has
cultivated as a company officer can be utilized as a director of SBS Holdings.

Masahito Takeda

Masahito Takeda was appointed on the expectation that his many years ofexperience and insight regarding finance and accounting work can be reflected in
the auditing of SBS Holdings.

Masato Matsumoto

Masato Matsumoto possesses extensive experience as a corporate manager at afinancial institution along with considerable knowledge regarding finance andaccounting. He was appointed on the expectation that his broad knowledge inthese areas can be reflected in the auditing of SBS Holdings.

Outside Audit &Supervisory
Board Members

Number of times the Compliance Meeting was convened

2

Awareness-raising materials distributed to all employees●Compliance Card
●Compliance Manual●Compliance Rulebook

We try to increase awareness of compliance by providing
regular training and disseminating information to employees. In
tiered training, we provide instruction on compliance in a broad
sense, while in specialist training, we provide guidance tomanagers under the theme of harassment. We also regularly
distribute educational materials to the persons in charge andconduct follow-ups to ensure they can provide on-site
guidance. “Compliance Newsletter” is issued to all employees tocommunicate compliance-related paradigms and news, and we
also produce original compliance training videos to be screened
during training and on-site.

■ Establishment of Consultation and Internal Reporting
Hotlines

Outside Officers
Title

The SBS Group has established the SBS Group Code of
Behavior and SBS Group Compliance Regulations, and iscommitted to developing and promoting its compliancesystems. Playing a central role in this effort is the SBS Group
Compliance Meeting, which comprises members appointed
from SBS Group companies. In addition to playing a pivotal rolein awareness-raising activities, the Compliance Meeting also
monitors, confirms and investigates compliance violations anddrives improvements. In addition, by distributing a range ofawareness-raising materials including the SBS Group Compliance
Manual to all Group employees and thoroughly ensuring theobservance of compliance requirements, the SBS Group makes
every effort to promote fair and ethical behavior and activities.

■ Initiatives to Increase Awareness■ Outside Officers
SBS Holdings has been working to expand its ranks ofoutside officers to bolster management supervisory functions.
These efforts are also expected to achieve highly independentand transparent monitoring functions and play a part in the■ Management

The SBS Group has established and operates hotlines
through which all employees working in the SBS Group can seek
consultation or make reports when they become aware of anissue with the workplace environment or business operations, orof conduct that violates laws, internal regulations or corporate
ethics. There are three types of hotline, the “General Workplace
Consultation Office (staffed by compliance personnel), theAuditor Hotline (staffed by Audit & Supervisory Board members)
and the Outside Reporting Hotline (staffed by attorneys). The
General Workplace Consultation Office allows an employee toselect the contact details (direct dial) of the consultant (male orfemale) they will speak to.

■ Compliance Awareness Survey
The SBS Group periodically conducts compliance awarenesssurveys to ascertain the extent of compliance awareness among
employees and to monitor changes in the environment surrounding
employees. The survey results are used to roll out new measures,and when issues come to light in the consultation or reporting
hotlines, corrective measures are implemented.

Number of compliance-related training sessions

9*Tiered training + specialist training (harassment)

Provision of educational materials to persons in charge

5

times

Publication of dedicated “Compliance Newsletter” to employees

12

times

Number of consultations fielded by compliance consultation hotlines

862018 compliance awareness survey respondents

4,794

SBS GROUP
BUSINESS & CSR REPORT 2019

GovernanceRisk Management

Information Security■ SBS Group Crisis Management Structure

The SBS Group recognizes that appropriately protecting andmanaging all kinds of information on customers and otherstakeholders is an important social responsibility. Based on thisbelief, we have established an information security policy andvarious standards, and have established an effective management
structure to deal with various information risks.
In fiscal 2018, we looked to the lessons from information
security incidents that occurred in the previous year and continued
to make significant enhancements to our security measures.
Those advancements include reinforcing technological defenses,
improving employee literacy through better information security
education, and increasing the speed of system recovery.

With the Risk Management Meeting playing a central role,
information is shared on crisis management matters under thejurisdiction of each meeting body. When a determination ismade that a crisis has occurred, a company-wide response isinitiated in accordance with the Crisis Management Manual.

Risk Management Meeting

Main Crisis Matters●Information Security Promotion Meeting

Major security incidents, cyber-attacks, system failures●Transportation Safety Promotion Meeting
Vehicle and industrial accidents that involve human life
●Compliance Meeting
Corporate scandals such as inappropriate labor management,
fraudulent accounting or inadequate information management●Disaster Response Management (Business Continuity Plan)
Natural disasters such as major earthquakes

Transportation Safety Promotion Meeting

Compliance Meeting

Information Security Promotion Meeting

Information Security Policy
We have established the SBS Group Basic Policy on
Information Security and declared a Group-wide commitment totackling information security.

■ BCP and BCM

Ensuring Driver Safety

The SBS Group recognizes that in the interest ofsafeguarding people’s lives, it has a social responsibility tocontinue to perform business activities with a focus on logistics
as a part of social infrastructure in the event of a major disaster,and has formulated a business continuity plan (BCP)
accordingly. The BCP clearly stipulates matters such as
conditions for countermeasures, advance preparation, initial
response and restoration efforts. We also focus on business
continuity management (BCM), to ensure that the BCP we haveformulated functions properly.

To ensure driver safety, all Group-operated vehicles areprovided with emergency supplies (water, emergency toilets,
thermal sheets for protection against cold). Additionally, mutual
acceptance arrangements have been made so that certain
locations can be used as driver evacuation locations during an
emergency.

Emergency Response Drills
The SBS Group periodically conducts emergency response
drills to prepare for major disasters and other emergencies. The
drills focus on setting up an emergency headquarters andalternate sites during an emergency, coordinating informationsuch as the state of damage and safety at each Group company
and site, and sharing all related information. The specificscenario is changed for each drill.

Development of an Intra-Group Emergency Contact Network
An emergency contact structure and emergency contact
network is maintained and managed to confirm the safety of
employees and share site damage reports as quickly as
possible in the event of an emergency, facilitating business
continuity.

Developing Site Information and Sharing Hazard Risks
As part of BCM initiatives, site information including hazard
risks* is centrally managed and shared throughout the Group.
Sharing information allows the SBS Group to standardize themeasures taken to address issues and facilitates coordination
with nearby business sites.
*Government-issued hazard maps are used.

Dedicated Disaster Information Portal Site for Employees
The SBS Group has set up the SBS Group Disaster
Information Portal Site as a dedicated site for employees toshare business continuity-related information such as the stateof damage in the Group in the event of an emergency. At regulartimes the site provides useful disaster prevention information.

■ Certified by the Tokyo Metropolitan Government as
a Company Discouraging the Simultaneous Return
Home of Employees during a Disaster
SBS Holdings (based in Sumida-ku, Tokyo) has beencertified as a company discouraging the simultaneous returnhome of employees during a disaster.
The certification recognizes the steps taken by SBS Holdings
to stockpile food and supplies for a disaster and the status ofvarious facilities allowing employees to take refuge in the offices.
SBS Holdings is also part of disaster prevention cooperative
agreements with Sumida-ku and non-governmental organizations.

SBS Group Basic Policy on Information Security
1. We will observe laws, government-issued guidelines andother norms related to information security.
2. We will clarify responsibilities related to information security
and establish systems to implement information security
measures.
3. We will identify information security risks and take appropriate
personal, organizational, technical and physical measures.
4. We will conduct training and raise awareness concerning
information security, and ensure that all employees are able tocarry out their work with an awareness of information security.
5. We will carry out inspections of our information security-related
management systems and initiatives, and conduct ongoing
reviews and make continual improvements.

Information Security Management
The SBS Group has established the SBS Group Information
Security Policy. In accordance with the policy we strive to firmly
maintain security levels, with the Information Security Promotion
Meeting playing a central role in monitoring the status of security
measures on a Group-wide basis while promoting education
and awareness-raising related to information security.

Protection from Threats
We have installed anti-virus tools that use artificial intelligence(AI) to prepare against unknown threats. We have also put inplace next-generation firewalls in an effort to reinforce defenses
against attacks from the inside and outside alike.

Responding to Vulnerabilities
By introducing a security operation center (SOC) service, wehave enhanced monitoring and checking functions. We also
perform inspections of public server vulnerabilities andinvestigate security intrusions of servers and PCs in an effort tomaintain safety.

41 - 42

Education and Awareness-Raising● Seminars

We offer purpose-built curricula for information security
personnel at various organizational levels and Group
companies.
Fiscal 2018 seminar attendees

123● e-Learning

We conduct regular awareness-raising activities, including
requiring employees across the Group to undergo e-learning
training once a year.
Employees undergoing training in fiscal 2018

2,571

● Investigating Actual Conditions Using Simulated Emails ofTargeted Attacks
Follow-ups (targeted training, etc.) will be conductedbased on the results in an effort to raise literacy levels
regarding these threats.
Third-Party Verification
We periodically commission management reviews by
specialist information security firms to improve the level andquality of our information security management.

CO2 Emissions

Water Usage

CO2 (t)Emissions per unit of net sales

120,000
100,000■Vehicles■ Consumption per Unit

7.0

116,000

80

6.0

40

88,0005.5

20,00020

74,0000060,00040,000

2014

2015

2016

2017

2018

Facilities

19,215

17,347

17,412

16,47522,223

Vehicles

61,07959,46360,20461,026

68,572

Total

80,29476,81077,61677,50190,795Emissions perunit of net sales 62.40

57.57

55.73

52.09

47.77

Shibayama Solar Power Plant

5.0
4.5
2013

2014

2015

2016

2017

2018

Usage

78,887

79,68273,828

101,642

111,175

127,524

Consumption
per Unit

5.81

5.66

5.20

7.01

7.45

6.71

4.0

Copy Paper Usage (thousand sheets)■ Usage

38,00034,00030,000
2013

2014

2015

2016

2017

2018

Usage

34,50835,52832,42433,40532,75444,740Consumption
per Unit

2.54

2.52

2.28

2.30

2.19

2.35

7,222

Recycled plastics

719

(0)

Nagatsuta Logistics Center

935

Scrap metal

1,864

(464)

Toyohashi Logistics Center

221

Waste wood

316

(54)

822

(0.24)

830

Nishinihon Logistics Center(Kyotanabe)

617

Shin-Sugita Logistics Center Branch

1,072

Shibayama No. 2 Solar Power Plant

710

Shin-Tokorozawa Logistics Facility

940

Kimitsu Branch

268

Nanko Logistics Center Branch

1,490

Yoshikawa Branch

223

Total

11,017

Paper and other waste

10,943 (866.24)

Total

SBS Ricoh Logistics

-

21

21

21

100%

SBS Logicom

1

32

33

36

91.70%

3,500

SBS Freight Service

1

13

14

14

100%

SBS Flecnet

1

20

21

25

84.00%SBS Zentsu

5

51

56

73

76.70%SBS Sokuhai Support

-

8

8

8

100%

SBS Group Total

8

145

153

177

86.40%■ Consumption per Unit

3,300

3.2

51,0003,100

2.8

44,0002,900

2.4

37,0002,700

2.030,000

2013

2014

2015

2016

2017

2018

Usage

37,143

41,191

41,29546,04944,20559,251

Consumption
per Unit

2,734

2,924

2,909

3,173

2,964

3,116

208

CNG vehicles

19

LPG vehicles

341

Reference: Status of air pollutants released by all Group vehicles
Nox (nitrogen oxides) > down 3.85% compared with the previous year
PM (particulate matter) > down 7.55% compared with the previous year

Tiered Training

Theme-specific Training

Departmental Manager Training

154 Open Seminars

Manager Advanced Training

22

Certification(number of business sites with certification)
SBS Logicom (3), SBS Flec (2), SBS Freight
Service (15), SBS Zentsu (5), SBS Sokuhai
Support (2), SBS Ricoh Logistics (20), SBS San-Ai
Logistics Higashinihon (13), SBS San-Ai Logistics
Kanto (9), SBS San-Ai Logistics Tokyo (6), SBS
San-Ai Logistics Chubu (11), SBS San-Ai Logistics
Kansai (15), SBS San-Ai Logistics Kyushu (9)ISO14001(environmental
management systems)

Green Management
Certification

SBS Logicom (4)GPN Certification

SBS Logicom(Green Purchasing Network)*Certified as a delivery service for the Eco Product Net

Total

Mid-career Employees

90 Correspondence Courses

299

173 e-Learning

62

9 Operation Manager Skill Improvement Training
36
Mid-Career
Hire
Follow-up
Training
32
31
Eco and Safe-driving Training
13 Safe Driving Training Sessions (Truck)
0 Mental Health Training

45 TOEIC Test

20

51 Business Career Certification

16

48 Manager and Supervisor Logistics Training 13 Safe Operation Training Sessions (Forklift)
25 Driver Contests
44 Basic Logistics Training

38

341 Harassment Training (for Managers and Supervisors)

2013

2014

2015

2016

2017

2018

Vehicle-related investments

CNG vehicles, LPG vehicles, hybrid vehicles, vehicles
that meet heavy vehicle fuel efficiency standards, etc.

1,886

2,960

2,830

3,250

3,616

3,791

18 First-aid Classes
SiteManagerDevelopment
Training
S1
35 Courses on Utilizing General Aptitude Diagnosis
19
New Employee Training (OJT)
EnglishSkills
Improvement
Training
22 Health Officer Examination Preparation
Site Leader Enhancement Training 36

46

All 46 Subjects

8

Actual Participants: 5,095

Business Career Certification Exam Preparation 16

Information Security (Group Training)

Follow-up Training for Prospective Employees 35

Information Security (e-Learning)

Certification

Company Name (number of business sites with certification)

Total

ISO9001

SBS Flec (29), SBS Flecnet (7), SBS Freight Service (15),SBS Zentsu (17), SBS San-Ai Logistics Tokyo (4)

72

97

2

2

2

2

1

3

Investments related to improved
energy savings at facilities

Demand monitoring and energy-efficient lighting, etc.

1

141

72

9

35

45

Investments in global
environmental conservation

Solar power generation, etc.

1,248

629

223

0

13

6

SBS Logicom (2), SBS Sokuhai Support (2), SBS Ricoh Logistics (25),
SBS San-Ai Logistics Higashinihon (17), SBS San-Ai Logistics Kanto (9),SBS San-Ai Logistics Tokyo (5), SBS San-Ai Logistics Chubu (13),
SBS San-Ai Logistics Kansai (14), SBS San-Ai Logistics Kyushu (11)
SBS Staff, SBS Freight Service, Marketing Partner,
Nippon Record Center

4

JAS Organic Agricultural
Product Subdivider Certification

SBS Zentsu (2)2Relocation Safety MarkSBS Logicom

1

Environmental management registration andmanagement activities, etc.

2

3

3

8

6

3

Environmental communication

Internal and external awareness-raising, creation ofreporting materials, etc.

3

4

5

5

6

6

3,142

3,739

3,135

3,274

3,677

3,854

ISO27001(Information Security
Management Systems)

Privacy Mark

56
123
2,571

Number of consultations fielded by
the consultation hotline* (as of the end of fiscal 2018)

Status of Quality-Related Certifications Acquired (as of the end of fiscal 2018)(Quality Management Systems)

68

69 OJT Leader Development

Improved fuel efficiency (eco and safe-driving training, etc.)

Environmental management

169
17(Unit: million yen)

Details

93

44 Presentations to Strengthen Sales Skills 13 Forklift Operator Contests
11 Logistics Quality Seminars
Follow-up Training for New Employees 64 ADS to Strengthen Sales Skills

1

Investment

Support for Self-Improvement

Operation Manager Examination Preparation(Compliance, Security, etc.)

Third-year Employees

New Employee Training (General)

4

Investment in the Environment

Supervisor Step-up Training
Supervisor Basic Training

110

Specialist Theme Training

Training for Mid-Career HiresSupervisor Advanced Training

3,914(Total low pollution vehicles)

Status of Human Resource Development Initiatives: SBS Group Training Results (as of the end of fiscal 2018) (Unit: number of employees)

Manager Basic Training

3,346

Hybrid vehicles

2,500(as of the end of fiscal 2018)

Company Name

G-markcertification rate

Certification rate of nationwide truck transportation business sites: 29.6% (figure as of December 13, 2018 *from the website of the Japan Trucking Association)

Status of Environmental Certifications Acquired
Number of Vehicles

Vehicles complying with new long-term emission regulations

Total

(348)

Number of G-mark-eligible
business sites

58,000(Unit: vehicles)

Vehicle Type

Waste plastics

210

Total number of G-mark-certified
business sites

3.6

Number of Eco-Friendly Vehicles Introduced(as of the end of fiscal 2018)161

Odawara Sales Branch

Number of business sites
with existing certification

Consumption per Unit (per person: sheets)

65,000

4.0■ Consumption per Unit

42,00026,000Takasaki Sales Office

Number of newly
certified business sites

Copy Paper Usage
Consumption per Unit (per person: thousand kWh)

50,000■ Usage

514

Kawagoe Logistics Center Branch

Company NamePower Consumption

46,000Total Processing Volume(SBS Group volume)

Item Name

G-mark Certification Status (as of the end of fiscal 2018)*Emissions per unit of net sales are figures for every 100 million yen in sales

Electricity Usage (thousand kWh)

Generating
Capacity(kW)

Facility Name

2,826

Noda Yoshiharu Logistics Center Branch

6.5

102,000

60

60,000Generating
Capacity(kW)

Facility Name

7.5
■ Usage

80,000Consumption per Unit (per person: m³)

130,000■Emissions per unit of net sales

SBS Sokuhai Support Waste Processing
Logistics Handling Volume (fiscal 2018) (Unit: t)

Quantity of Renewable Energy Delivered (as of the end of fiscal 2018)

Water Resource Usage (t)100■Facilities

43 - 44

SBS GROUP
BUSINESS & CSR REPORT 2019

CSR Data

Details of Consultations
Consultations regarding laws,
regulations and internal rules

Number ofConsultations

45

Consultations regarding interpersonal
relationships in the workplace

25

Others

16

Total

86

*Total consultations fielded by hotlines set up inside and outside thecompany from which employees are able to seek direct consultation

Corporate Profile*As of December 31, 2018

Company Name
Representative Director
FoundedPaid-in Capital
Net Sales

SBS Holdings, Inc.
Masahiko Kamata
December 16, 1987
3,920.75 million yen
203.5 billion yen (consolidated)

Head Office

4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan
Tel: +81-3-3829-2222 (main switchboard)
Fax: +81-3-3829-2822
Logistics business, real estate business, marketingbusiness, human resources business, etc.

*For the year ended December 31, 2018

Lines of Business

Consolidated Subsidiaries*As of January 1, 2019

SBS Ricoh Logistics System Co., Ltd.
SBS San-Ai Logistics Higashinihon Co., Ltd.
SBS San-Ai Logistics Kanto Co., Ltd. SBS San-Ai Logistics Tokyo Co., Ltd.
SBS San-Ai Logistics Chubu Co., Ltd. SBS San-Ai Logistics Kansai Co., Ltd.
SBS San-Ai Logistics Kyushu Co., Ltd. RICOH LOGISTICS CORPORATIONRICOH INTERNATIONAL LOGISTICS (H.K) Ltd.
RICOH INTERNATIONAL FREIGHT FORWARDING (SHENZHEN) CO., LTD.

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

Nippon Record Center Co., Ltd.
SBS Logicom Kanto Co., Ltd.

SBS Flec Co., Ltd.

Full-Time Audit &Yasuhiro Yamashita
Supervisory Board
MemberAudit & Supervisory Masato Matsumoto
Board Member
Audit & Supervisory Masahito Takeda
Board Member
Director

Senior Director Kenichi Iriyama
Director

Masato Taiji

Director

Yoshitsugu Sato

Director

Katsuhisa Wakamatsu

Director

Tetsuya Sekimoto

Director

Jiro Iwasaki

Director

Shuichi Hoshi*As of March 25, 2019

SBS Zentsu Co., Ltd.

SBS Asset Management Co., Ltd.
LMAX Co., Ltd.

SBS Logistics Singapore Pte. Ltd.
*As of July 1, 2019, Nippon Record Center was absorbed into SBS Logicom by merger.

*As of December 31, 2018

Unit stock system

Yes (100 shares)

Number of shareholders

2,921

Promotion of Corporate Governance

Ensuring Safety

SBS Finance Co., Ltd.

Number of shares authorized 154,705,200 shares
39,718,200 shares

We will engage in fair and transparent corporate activities in accordance with laws,
regulations and the common sense of society.
We will take a resolute stance against antisocial activities and forces.

SBS Staff Co., Ltd.

Stock Information
Number of shares issued

Fair and Transparent Corporate Activities

SBS Sokuhai Support Co., Ltd.

Marketing Partner, Inc.

*Three of the directors, Tetsuya Sekimoto, Jiro Iwasaki
and Shuichi Hoshi are outside directors.
*Two of the Audit & Supervisory Board members,
Masato Matsumoto and Masahito Takeda are outside
Audit & Supervisory Board members.

45 - 46

We will actively disclose information to shareholders and society, and enhance management transparency.
We will respond seriously to proposals regarding management improvements and similar matters, andstrive to achieve open management with respect to shareholders and society.

SBS Flecnet Co., Ltd.

Representative Masahiko Kamata
Director

SBS GROUP
BUSINESS & CSR REPORT 2019

Code of Behavior

Corporate Profile and Stock Information

We regard being safe with zero accidents as our most important mission, and will make every effort to ensure
safety with an awareness of our social responsibility and role.
We will observe rules, remain faithful to basic requirements, enhance knowledge, techniques and skills, andstrive to cultivate a culture that requires safety as essential.

Social Contribution and Consideration of the Environment
With an awareness of our responsibilities as a good corporate citizen, we will actively contribute to society
through our corporate activities.
As a citizen of the Earth, we will pay attention to environmental issues and pass on a healthy global
environment to those who come after us.

including 914 fractional shares

Major Shareholders
Masahiko Kamata

14,888,400

37.48

Japan Trustee Services Bank, Ltd. (trust account)

5,446,900

13.71

SBS Holdings Employee Share Ownership Association

1,424,400

3.58

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

1,238,700

3.11

SMBC TRUST BANK Designated Securities Trust

1,200,000

3.02

TOBU Properties Co., Ltd.

954,800

2.40

NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON LENDING

896,700

2.25

Junichi Ouchi

875,000

2.20

Government of Norway

814,700

2.05

Hiroshi Date

740,200

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

■ Individuals and others

22,731,678 (57.23%)■ Financial institutions

9,788,300 (24.64%)

Distribution of Shares by Shareholder Type■ Non-Japanese corporations

5,092,639 (12.82%)(number of shares issued: 39,718,200 shares)■Japanese corporations

1,874,800(4.72%)■ Securities firms

230,271(0.58%)

Treasury stock

512(0.00%)

Customer-First Principle
We will adopt a customer-first perspective and always act in good faith by considering the customer’s viewpoint.
We will take on the challenge of unremitting innovation in our thoughts and actions, and provide customers withservices that meet their expectations.

Compliance with Laws and Regulations
We will observe all laws, and act in good faith so as not to warrant criticism from customers in light of social norms.
We will responsibly fulfill our duties as members of a corporation, and properly observe the regulations, rules andmanners to be followed in executing operations.

Development of a Fulfilling Workplace
We will cultivate a civil, free and open corporate culture with mutual respect for creativity and independence.
We will place importance on mutual cooperation and workplace communication to ensure a safe and pleasant
workplace environment.

Contact for Inquiries
CSR Promotion Department, SBS Holdings, Inc.
4-1-3 Taihei, Sumida-ku, Tokyo 130-0012, Japan
TEL: 03-3829-2367

FAX: 03-3829-2822

https://www.sbs-group.co.jp