■Company Overview

1. Company history

SBS Holdings ＜2384＞ was established in 1987 by Mr. Kamata Masahiko (Kamata Masahiko), the current president and representative director, as a unique company providing a delivery system called “same-day delivery” that did not exist at the time in the Tokyo metropolitan area. Shares were registered in stores with the Japan Securities Dealers Association in 2003, and after strengthening the financial base, they aggressively developed an M&A strategy and expanded their business. Starting with making Snow Brand Logistics Co., Ltd. (now SBS Flex Co., Ltd.) a subsidiary in 2004, they were successively grouped around logistics subsidiaries of major domestic companies such as Tokyu Logistics Co., Ltd. (currently SBS Logicom Co., Ltd.) in 2005, Zentsu Co., Ltd. (currently SBS Zentsu Co., Ltd.) in 2006, Ricoh Logistics (currently SBS Ricoh Logistics) in 2018, and Toshiba Logistics (currently SBS Toshiba Logistics) in 2020 Then, it became the driving force behind the expansion of the business scale.

Also, along with the expansion of the logistics business, development of logistics facilities to strengthen the 3PL business* began in 2004. In addition to actively promoting the company's unique business model of early recovery of investment funds through securitization schemes and turning them into investments for new logistics facility development, the operating area of logistics bases rapidly expanded by about 2 times in 3 and a half years from about 0.53 million square meters at the end of 2020 to 1.05 million square meters at the end of 2024/6 by grouping major logistics companies. Going forward, we are aiming for further business expansion by promoting these growth strategies.

* The definition of the company's 3PL business indicates a project that is directly entrusted by the shipper and collectively undertakes a series of (multiple) operations over 3 years or more.

2. Business content

The company's business segment consists of three segments: logistics business, real estate business, and other businesses. The logistics business is the main business that accounts for over 90% of sales and the majority in operating profit. As for the real estate business, sales profits due to the securitization of owned logistics facilities account for the majority, so profits also tend to fluctuate depending on the timing and scale of facility sales, but operating income is carried out at the level of 60 to 7 billion yen over time. An overview by business segment is as follows.

(1) Logistics business

In the logistics business, we mainly develop comprehensive logistics services in the field of inter-company logistics. Specifically, in addition to the 3PL business, which undertakes logistics operations for customer companies that are shippers, food logistics, general logistics, and instant delivery services that deliver small cargo on the same day in the three temperature zones (freeze/refrigerated/room temperature) with a nationwide network, international logistics businesses, etc. are being developed by group companies. Looking at the sales structure ratio (company-wide sales ratio) by major company for the 2023/12 fiscal year, the SBS Toshiba Logistics Group is 26.7%, and the SBS Ricoh Logistics Group, which handles logistics and 3PL such as Ricoh ＜7752＞ products and “tanomer” (office supplies mail order) of Otsuka Corporation ＜4768＞, is 23.5%, and these account for about 50% of sales. Next, SBS Logicom Group, which has strengths in 3PL, which handles high-mix small lots such as EC logistics and retail businesses, is 16.4%, SBS Fleck, which mainly focuses on food logistics/low-temperature logistics, is 10.4%, SBS Instant Delivery Support Co., Ltd., which performs same-day delivery between individuals and companies and individuals, is 8.5%, and SBS Zentsu, which performs personal home delivery (co-op) and agricultural product logistics, etc., is 4.8%, etc., which became a subsidiary of SBS Furukawa Logistics Co., Ltd. It's there. As for the business area, SBS Toshiba Logistics, SBS Ricoh Logistics, SBS Flex, and SBS Furukawa Logistics are expanding nationwide, and SBS immediate delivery support is being developed in the Tokyo metropolitan area, and other group companies are developing in major metropolitan areas centered around Kanto, Kansai, and Chubu. Also, with regard to international logistics, it is mainly developed under 2 systems: SBS Toshiba Logistics Group and SBS Ricoh Logistics Group.

The company has set out a policy to strengthen the three businesses of 3PL, EC logistics, and international logistics as a growth strategy in the medium-term management plan that began in the 2023/12 fiscal year. Looking at the sales composition ratio of these 3 businesses, 3PL is 58% *, EC logistics is 14%, and international logistics is 13% in the 2023/12 fiscal year.

* Since 3PL is the sales structure ratio for each contract type, there are cases where EC logistics and international logistics are included.

(2) Real estate business

The real estate business consists of a development business where profits are acquired by developing and securitizing logistics facilities to develop the 3PL business within the company group, and a rental business consisting of rent income from office buildings, condominiums, etc. that have been owned conventionally, and income from logistics facilities that have not been operated by the company and only receive rent.

The company's real estate securitization business model is characterized by low risk and high profit. When developing new logistics facilities, we have achieved price-competitive rents by utilizing licenses specific to logistics operators and suppressing development costs through the existence of asset management teams with expertise, purchasing land utilizing licenses held by logistics operators, and constructing buildings without waste from a logistics perspective. Therefore, even if cargo volume decreases due to economic downturn, etc., transfer demand from neighboring other companies' warehouses where rents are relatively high is expected, so operation can be continued without lowering the occupancy rate. Also, as a general rule, construction starts after about 50% of tenant companies have been decided, and by carrying out the remaining tenant business during construction, a high occupancy rate can be achieved from the time of completion. Furthermore, the occupancy rate is almost 100% as the company's 3PL base, and since it is sold after increasing value as commercial real estate, and continues to be used through sale and leaseback, the buyer side is also building a win-win relationship where stable profitability can be ensured.

(3) Other businesses

As for other businesses, the human resources service business centered on light work dispatch in warehouses accounts for about 50% of sales, followed by marketing business (pet food mail-order site operation, EC support services, etc.) about 20%, and the rest is occupied by the solar power generation business, recycling/environmental business (which collects and intermediate treatment of general and industrial waste), insurance business, etc. Regarding the solar power generation business, solar panels are installed on the company's distribution centers and rooftops of business sites, etc., and the total power generation capacity as of the end of the 2023/12 fiscal year is approximately 13 MW.

(Author: FISCO Visiting Analyst Joe Sato)