Information Meeting First Half Results for the Six Months Ended June 30, 2014

Transcription

1 Information Meeting First Half Results for the Six Months Ended June 30, 2014 August 12, 2014 SBS Holdings, Inc.

2 Table of Contents FY2014 First Half Results and Full Year Forecasts FY2014 Group Management

3 1 FY2014 First Half Results and Full Year Forecasts SBS Holdings, Inc. Executive Officer, Finance & Accounting Yasuhiro Yamashita

4 Consolidated 1H Performance (YOY Comparison) 2 1st Half of FY2013 1st Half of FY2014 Amount % of Total Amount % of Total YOY Change (amount) (Millions of yen) YOY Change (% ) Net Sales 61, % 65, % 3, % Operating Income Ordinary Income Net Income % 1, % % % 1, % % % 1, % 1,611 More than ten times

5 Consolidated 1H Performance (Actual vs. Planned) 3 1st Half of FY2014 1st Half of FY2014 Planned % of Total Actual % of Total YOY Change (amount) (Millions of yen) YOY Change (%) Net Sales 63, % 65, % 2, % Operating Income Ordinary Income Net Income 1, % 1, % % % 1, % % % 1, % 1, %

6 Performance by Segment (YOY Comparison) 4 FY2014 1H (For the six months ended June 30, 2014) Logistics Property Management Other (Millions of yen) Consolidation/ Total Corporate Net Sales 61,237 1,195 3,344-65,777 YOY Change (% ) 5.9% -11.1% 25.7% - 6.4% Operating Income (Loss) ,480 YOY Change (% ) % 440.1% % Operating Margin 1.0% 51.2% 5.1% - 2.3% Reference: FY2013 1H (For the six months ended June 30, 2013) Logistics Property Management Other Consolidation/ Corporate Total Net Sales 57,801 1,344 2,659-61,805 YOY Change (% ) -1.3% 12.0% -13.3% % Operating Income (Loss) (77) YOY Change (% ) % 29.2% % Operating Margin % 1.2% - 1.1%

7 Trends of Consolidated Balance Sheets 5 As of December 31, 2013 (Billions of yen) As of June 30, 2014 Current Assets 39.6 Current Liabilities 43.9 Current Assets Current Liabilities Non-Current Assets 68.6 Non-Current Liabilities 35.1 Net Assets 29.2 Non-Current Assets Non-Current Liabilities 36.2 Net Assets Total Assets Equity Ratio 26.7% ±0 Equity ratio increased 1.4 points Total Assets Equity Ratio 28.1%

8 Establishing a Sound Financial Base 6 Management of interest-bearing debt and enhancement of shareholders equity (Billions of yen) 50 Net IBD (Long-term debts + Corporate bonds - Cash and deposits) Shareholders Equity Net IBD/Shareholders Equity Times Dec '09 Dec '10 Dec '11 Dec '12 Dec '13 June '

9 Overview of Consolidated Statements of Cash Flows 7 Billions of yen 14 As of December 31, 2013 As of June 30, Cash flows from investing activities 10 8 Cash flows from operating activities -0.3 Cash flows from financing activities Cash and cash equivalents at end of year Cash and cash equivalents at end of Q2

10 FY2014 Forecasts 8 (Millions of yen) FY2013 FY2014 Actual % of Total Forecast* % of Total YOY Change (amount) YOY Change (% ) Net Sales 132, % 137, % 4, % Operating Income Ordinary Income Net Income 4, % 4, % % 3, % 4, % % 1, % 3, % 1, % * Forecast values are as revised July 30, 2014.

11 FY2014 Forecast by Segment 9 FY2014 Forecast* (For the year ended December 31, 2014) Logistics Property Management Other Consolidation/ Corporate Reference: FY2013 (For the year ended December 31, 2013) (Millions of yen) Total Net Sales 125,000 5,300 6, ,000 YOY Change 3.5% -4.6% 14.2% - 3.6% Operating Income 2,050 2, ,800 YOY Change 68.2% -5.9% 73.3% % Operating Margin 1.6% 45.3% 5.2% - 3.5% Logistics * Forecast values are as revised July 30, Property Management Other Consolidation/ Corporate Total Net Sales 120,786 5,554 5, ,205 YOY Change 1.2% 121.8% -3.9% - 3.3% Operating Income 1,219 2, ,141 YOY Change -29.5% 111.3% 351.0% % Operating Margin 1.0% 45.9% 3.4% - 3.1%

12 10 FY2014 Group Management SBS Holdings, Inc. President Masahiko Kamata

13 Review of Operations and Topics Logistics Business Special demand in runup to increase in consumption tax, limited pullback afterward 3PL operations: New operations, new orders received Overseas business: Acquisition of Transpole in India Property Management Business Warehouse completed in Thailand (Building No. 1 in June, Building No. 2 in August) Order placed for construction in Sugita, Yokohama Transfer of remaining 49% of trust beneficiary rights to private placement fund No. 1 (August) Other Business Results in Human Resources Business on firm trend 2nd phase of construction under way in solar power generation business Shipping at logistics center for Takashimaya Co., Ltd. 11 Construction under way at Nagatsuta Logistics Center in Yokohama Generating Station No. 1 Generating Station No. 2 (planned location) Location of phase 2 of construction of Shibayama solar Power Plant

14 Business Model Combining Logistics and Finance 12 Logistics innovation + Facilities innovation Proposal sales Construction supervision Acquire land for construction Acquire 3PL Reinvestment customers Logistics Facility Surplus leasing Complete construction of building Start 3PL business Capital recovery Receipt of capital gains Rental income + 3PL operation income Growth strategy combining facilities development and 3PL business Private placement fund scheme, etc. Utilize financial know-how to achieve liquidation and offbalance-sheet financing

15 Progress in 3PL Business (Midterm target for net sales: 70 billion) 13 Achievements for the first half Major meat processor (construction of dedicated center covering the Kanto area) Major department store group in Kansai (operation of a food delivery logistics center) Major department store in Kanto (operation of a food mail-order logistics center) Orders received Manufacturer of eyeglass lenses (move toward joint center for eyeglass lenses) Drugstore chain (operation of logistics center for 140 stores in Kansai) Major supermarket chain (operation of 33,000sqm logistics center) (Billions of yen) 3PL Business FY2012 FY2013 FY2014 Plan Net Sales YOY Change +4.7% +4.1% +4.1%

16 Pipeline for Development of Logistics Facilities 14 Over a 5-year period, planning to invest a total of 50 billion yen in Japan and overseas Sugita (Yokohama) Logistics Center (Artist s conception) Thailand Bldgs. No. 1 & 2 Jun, Aug 2014 Yokohama Nagatsuta Jan 2015 Thailand Bldg. No. 3 Aug 2015 Yokohama Sugita Feb 2016 Saitama Mar 2016 Yokohama Kanazawa A B Planned fiscal year for completion

17 Securitization Through Private Placement Fund 15 Transfer to SBS Logifund No. 1 complete Trust beneficiary right West Japan Logistics Center Kyotanabe City, Kyoto Pref. Dec 2013: Transfer of 51% Transfer price: Approx. 2.9 billion Gain from transfer: Approx. 1.2 billion Aug 2014: Transfer of 49% Transfer price: Approx. 2.8 billion Gain from transfer: Approx. 1.2 billion (Operating income) West Japan Logistics Center 6.14 billion Senior Loan 3.7 billion Mezzanine Loan 1.0 billion Investment in Silent Partnership 1.44 billion SBS SBS Logifund No. No. 1 Major financial institution: Company A Major financial institution: Company B Development Bank of Japan Industrial & Infrastructure Fund Investment Corporation A-MAX ( 0.18 billion), etc. SBS Logifund No. 2 is expected to be formed next fiscal year.

18 Progress on Overseas Strategy 16 (Midterm target for net sales: 30 billion) Completion of first Group-owned logistics center in Thailand Acquisition of partners active in Asia ex-japan Transpole Logistics Acquired July 2014 China Korea Shanghai Japan Bldg. No. 1: Completed June 2014 Atlas Logistics Acquired November 2011 India Bagalore New Delhi Sri Lanka Bangladesh Myanmar Laos Thailand Cambodia Vietnam Brunei Malaysia Hong Kong Taiwan Philippines ASEAN Formation of a presiding company Singapore for the Asia region Indonesia January 2014 Notes: The logo indicates a country or city in which an SBS Group local affiliate is located. 10,000sqm facility, already occupied with Japanese corporate tenants Bldg. No. 2 is scheduled for completion August Drayage shipping launched in Singapore. January 2014: Acquisition of Gim Guan Freight Pte. Ltd.

19 Overview of Transpole Logistics 17 Transpole 10 th anniversary celebration and joint meeting with SBS (New Delhi, Aug 4, 2014) Transpole Logistics Pvt. Ltd. Established: August 2004 Headquarters: New Delhi CEO: Anant Kumar Choudhary Shareholders: SBS 66%, founders group 28%, employee shareholders association 6% Number of locations: 18 cities in India plus 11 countries worldwide including Hong Kong, Singapore and South Korea Business: Air forwarding 54%, marine forwarding 42%, other 4% Major customers: Samsung (electronics), Micromax (communications), Honda, Toyota (automobiles) Number of employees: 744 (as of March 31, 2014)

20 Transpole is an Indian Company Active Throughout Asia 18 Rapid growth: Average growth rate from 2008 to 2013 is over 60%. Sales are generated 60% in India and 40% elsewhere in Asia (and growing rapidly) (Billions of Yen) 20 (Billions of Yen) Transpole Bases in Asia Net Sales Operating Income Mar '10 Mar '11 Mar '12 Mar '13 Mar '14 Mar '15E 0 Transpole Bases in India Indian rupee = 1.72 yen

21 Transpole s Strengths 19 Top management Mr. Choudhary is a 36-year-old former executive with DHL. In the 10 years since its foundation, Mr. Choudhary has built Transpole into a 10 billion yen company. Transpole attracted investment from Fidelity Growth Partners in 2011 and Everstone Capital in Success in opening markets Since establishment: In India Since 2008: Expanded into ASEAN and East Asia Since 2013: Expanded into South America Customer assets Global companies Micromax, Samsung, LG, Wipro, HCL, etc. Japanese companies Toyota, Honda, Panasonic, Daikin, Casio, Toshiba, etc. Peru Chile Anant Kumar Choudhary, CEO Brazil Argentina India South Korea Qingdao Chengdu Shanghai Shenzhen Thailand Malaysia Hong Kong Singapore Japan

22 Synergies between the SBS Group and Transpole 20 A partner in opening overseas markets Transpole offers powerful sales capability as an advance guard in opening overseas markets. Effective deployment and reorganization of bases in ASEAN and East Asia Aiming for IPO in the Indian market Using Japanese quality to attract a high-caliber clientele Provision of logistics facilities (from construction to operation) Provision of logistics (3PL) Partnership with Atlas Logistics Top level in sales among Indian forwarding companies Atlas chairman H.R. Venkatesh Rao delivers address at meeting with Transpole (August 4, 2014, New Delhi) Transpole s leadership will promote management reform and streamlining.

23 Solar Power Generation Business 21 Energy sales in FY2014 1H (Millions of yen) Kyotanabe Noda Chikuma Kawagoe Shibayama No Generating capacity: 5.3MW Energy sales: Approx. 140 million 25 Noda Yoshiharu (solar panels on roof) 10 0 Jan. Feb. Mar. Apr. May June Planned future investments Shibayama No. 1 (using Group land) 2H: 6 locations including Shibayama No. 2 (increase of 2.1MW) FY2015: Nagatsuta Center (increase of 1.0MW) Shibayama No. 2 under construction

24 Strengthening the Group s Management Base 22 Merging of management and some personnel of two key Group companies Personnel management, general affairs, accounting, transport safety and other duties, as well as some personnel, of SBS Logicom and SBS Flec are to be merged in SBS Holdings. This move will promote improved efficiency, standardization and shared operation of administrative functions. SBS Sokuhai SBS Global Network SBS Transport SBS Flec Nippon Record Center SBS Holdings Personnel operations (payroll, etc.) etc.) General affairs (joint purchasing, etc.) etc.) Accounting (accounts processing, etc.) etc.) Finances (funds management, etc.) etc.) measures, Transport safety (safety training, etc.) etc.) SBS Support Logi SBS Logicom Other Domestic Group Companies SBS Zentsu Overseas Group Companies SBS Freight Service

25 New Organization for SBS Holdings 23 As of September 16, 2014 Audit Div. Auditing and internal control President Functions made separate and independent # Roles and functions changed Senior Director # # # # CSR Div. Corporate Planning Div. Corporate Management Div. Corporate Communication Div. Human Resources Div General Affairs Div. Legal Div. Finance Div. Accounting Div. Logistics Quality Management Div. CSR, risk management, compliance, the environment Management strategy, international business, M&A Fiscal-year planning, budget management, management of subsidiaries IR, advertising, online presence Personnel, labor, payroll calculation under contract, training General affairs Legal affairs Consolidated accounts, finances Accounts handling under contract, streamlining/standardization, internal controls Transport safety, fleet management, safety management, environmental management Nine divisions expanded into 12 Duties and personnel from subsidiaries merged into this department ICT Div. Information infrastructure, system development and operation, information security

26 Aiming for Net Sales of 200 billion yen 24 (Billions of yen) Net Sales Organic Growth Net sales Tokyo Stock Exchange, Second Section Operating income 4.1 Brand unification Tokyo Stock Exchange, First Section Plan Start Midterm Management Plan Midterm Management Plan Target M&A contribution Organic growth Reach target for Midterm Management Plan! Dec '11 Dec '12 Dec '13 Dec '14 Dec '17 10 (Billions of yen) Operating Income

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28 Reference: Midterm Management Plan Name: SBS Growth 2017 Period: 4-year period from 2014 to 2017 Vision As we move toward our 30 th anniversary, form a 3PL Corporate Group which has logistic functions in all directions and become a leading group in the industry. Numerical targets Net Sales Operating Income Operating Margin Equity Ratio 200 billion yen 8 billion yen 4% and more 30% and more Growth driven by 3PL, Asia, facilities development and M&A

29 Reference: Midterm Performance Targets Reach targets through self-sustained growth and M&A Net Sales (Billions of yen) Midterm Management Plan Targets M&A Dec Logistics Property Management Other Operating Income Operating Margin Self-sustained Growth % 4.0% 4.0% 4.0% Breakdown of M&A 190 overseas in Japan (of which 150 3PL) = 450