2013
Sapporo Group Business Results Presentation
for the Six Months ended June 30, 2013

August 5, 2013

Sapporo Holdings Ltd.
URL http://www.sapporoholdings.jp/english

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Contents

1. First-Half 2013 Overview and Look Towards Second Half
2. Progress of Implementation of 2013 Basic Strategies
3. Overview of First-Half 2013 Results
Reference: Management Targets 2013-2014
Reference: Supplementary information to First-Half 2013 Results

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1. First-Half 2013 Overview and Look
Towards Second Half

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First-Half 2013 Overview and Look Towards Second Half
Overview of First-Half 2013

 Sales increased by ¥8.1 billion; operating income by ¥2.1 billion: Operating income, ordinary income and net
income achieved profitability in the first half
• Japanese Alcoholic Beverages: In addition to strong sales of beer, where sales volume exceeded the levels of the previous year, sales of wine,
western spirits and shochu also rose to offset the decline in new-genre products resulting in increased sales. Operating income also rosesignificantly as a result of increased sales as well as cost reduction, mainly of marketing expenses.
• International Business: Both sales and income increased on the back of growth in North America and Vietnam as well as the addition of Silver
Spring Citrus, whose consolidation started in April 2012, in addition to the impact of yen depreciation.
• Food & Soft Drinks: Sales increased, despite the decrease in domestic soft drinks sales from the beginning of the year through April dueto the impact of integration preparations in 2012 on normal sales activities, as net increase of POKKA ACE Malaysia, whose consolidation
occurred at the start of the year, also contributed. Operating income declined reflecting the significant impact of sales decrease in domestic softdrinks.
• Operating income in the first half increased markedly year on year as the Restaurants and Real Estate businesses also posted increases in
addition to the above to offset the decrease in profits in the Food & Soft Drinks business.
• Profit before taxes increased markedly as a result of factors including the recording of a ¥3.5 billion gain on sales of investment securities as
extraordinary gains.

Look Towards Second Half of 2013

 Progress in Addressing First-Half Issues• Japanese Alcoholic Beverages – Decline in sales of new-genre products:(1) Launched Goku zero, the world’s first beer-type beverage with no carbohydrates or purine bodies, on June 19. Sold more than a million cases
In just over a month from its launch. Annual planned sales was revised upwardly to 3 million cases (large bottle count) from 2.2 million
cases.
(2) Launched new-genre products for limited period of time to steadily secure sales volume. Launched Tokonatsu Kibun in July – 300,000 cases
and to re-launch Mugi to Hop Red in September – 600,000 cases.
• Food & Soft Drinks – Decrease in sales of domestic soft drinks through April: Sales are on a recovery track since May with sales andoperating income for May-June rebounding to the same levels as the previous year. Plan to achieve increased sales and operating income
compared to the previous year by strengthening lemon drinks, coffee and soup in particular in the second-half.
• The sales volume for soft drinks & food in July exceeded the levels of previous year, continuing with the recovery.
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2. Progress of Implementation of2013 Basic Strategies

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Progress of Implementation of 2013 Basic Strategies
Creating new opportunities for growth Restructuring of North American Production Facilities: International Business• Production of Sapporo brand products for the U.S. market from SLEEMAN BREWERIES in Canada outsourced to City Brewing
Company, a major contract beverage manufacturer in the U.S., from July
• Canada: Meet increased domestic demand for the SLEEMAN brand by boosting production capacity.
• U.S.: Meet increased demand for Sapporo brand products.
• Build foundation for further growth in the continuously growing North American beer market
SLEEMAN Net Sales (before elimination of inter-company
transactions) in Local Currency (Jan-Jun)

147.1

150
135

123.6

154.2

SLEEMAN (Canada) Sales growth on increased investment inmarketing of premium brands

127.4

114.7

120
105

Post M&A,

102.8(Jan-Jun) 7th straight year of year-over-year volume growth!

•

104.6

Sales growth higher than total demand
growth in Canada

90
2007

2008

2009

2010

2011

2012

Unit sales (YoY)

2012

2013

SLEEMAN*

109%

103%

Canada total
demandApproxApprox.

101%

97%

2013

*Excluding Sapporo brand

SLEEMAN(Can$ millions)

Sapporo USA Net Sales (before elimination of inter-company
transactions) in Local Currency (Jan-Jun)

30
26.9
25

29.1

Sapporo USA (U.S.)

24.7

23.5
21.7

27.8

(Jan-Jun)



20.8

20

Expanding from the JapaneseAmerican market into wider U.S. andAsian-American markets
•

15
2007

2008

2009

2010

2011

2012

USA（US$ millions）

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2013

Performance better than U.S. total
import beer demand for theprevious year

4th straight year of year-over-year volume growth!
Impact of collapse of Lehman Brothers in 2009

Unit sales (YoY)

2012

2013

Sapporo USA*

101%

105%

US total importbeer demand

Approx.

Approx.

100%

99%*Sapporo brand

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Progress of Implementation of 2013 Basic Strategies
Creating new opportunities for growth Reorganization of restaurant business in Singapore: Restaurants•Transfer of the restaurant business in Singapore from POKKA Corporation (Singapore) Pte. Ltd. to Sapporo
Lion Limited in January•Decided to bring forward by one year the opening of the 1st Ginza Lion in Singapore to October•Spreading the beer hall culture around the world – start of overseas operations•Initial plan: Aim to operate 10 beer halls in Singapore and elsewhere in Southeast Asia within five years
 Singapore outlets: total of 10(as of June 2013)-Tonkichi (pork cutlets): 4 outlets-Domani (Italian): 1 outlet-Rive Gauche (pastry): 5 outlets
Singapore Ginza Lion Beer Hall
(artist’s rendering)Singapore Tonkichi

Challenges toward growth in all businesses See the segment pages in Reference: Supplementary Information to First-Half 2013 Results.

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Progress of Implementation of 2013 Basic Strategies
Carrying out growth measures

 Activities to enhance the value of existing properties: Real Estate•In consideration of resolution of excess supply due to a spate of office building construction and recovery in rent levels in the real estate rental market
in the second half of 2013 and beyond, enhance the value of existing properties through renewal.
•Implementation of measures to enhance the value of Yebisu Garden Place in preparation for its 20th anniversary in 2014
Office renewal focused on business continuity, including augmentation of emergency power supply facilities in times of disaster, as well as
enhancement of office convenience
Refurbish commercial and restaurant facilities to enhance the appeal of the entire Ebisu area
•Redevelopment works at Seiwa Yebisu Building (including expansion of total floor area) has been progressing strongly
in preparation for completion in the autumn of 2014
•Engaged in consultations with concerned parties regarding redevelopment of Sapporo Ginza Building, located in
Ginza 4-chome (including expansion of total floor area)

 Enhance lemon products’ (foods) production capability: Food & Soft Drinks• Domestic Foods: Added lemon products (foods) production line in Kitanagoya City, strengthened

Yebisu Garden Place

production capacity
Constructed new building and set up cutting-edge manufacturing line in response to the growthstrategy for the core business of Pokka Lemon 100. Production capacity to go up by a maximum of 70%
compared to present capacity. Start of operations scheduled for December 2013

Seiwa Yebisu Building Strengthening of the soft drinks business in Southeast Asia: Food & Soft Drinks•Overseas Soft Drinks: POKKA Singapore to construct a new plantin Malaysia and augment production capacity

Nagoya plant new building

Malaysia plant ground-breaking
ceremony

Malaysia plant

Planned start of construction in Johor State at the end of June, planned full-scale
operation in the spring of 2014
Resolution of chronic supply shortages in Singapore and export markets
Strengthening of the business in Malaysia, the most important market in Southeast Asia,and surrounding countries
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Progress of Implementation of 2013 Basic Strategies

Carrying out growth measures State of progress in Alcoholic Beverages
Business in Vietnam: International Business•Steady progress with sales volume in Vietnam, where full-scale
marketing began in April 2012, and exports to neighboring countries have been also progressing well•Substantial growth in sales volumes in Vietnam during the first Tet (New Year’s Holiday) sales season after
full-scale market entry•Supply of beer kegs to expand beer culture in Vietnam. Plans to expand sales activities to Hanoi•In Vietnam at the end of June, we delivered to approx. 1,750 outlets in the commercial market, mainly in Ho Chi Minh City, and to approx. 2,300
outlets in the retail market, including convenience stores and large supermarkets.
•Sequential start of export to neighboring countries in 2013: export to Malaysia, Singapore, Thailand, Australia, New Zealand, South Korea, Indonesia,
Hong Kong, the Philippines, Myanmar, Cambodia, and Guam as of June 30
Third largest market in Asia after China and Japan•Sapporo brand has a presence in eight of ten ASEAN countries

Jan-Jun 2013 sales volume, taking Jan-Jun 2012 volume(excluding exports) as 100

Expected to reach size of theJapanese market by 2020

Beer market in Vietnam*
ＵＳ$ million

410

450

8,000.0
6,000.0

2,303

300

2,595

2,853

3,079

3,297

100

2,000.0

0
2012

2013

4,304

4,850

5,392

5,917

2010

2011

2012

2013

6,365

6,829

7,298

Ｌ million

4,000.0

2,000.0
1,000.0
0.0

0.0*

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

3,701

3,000.0

4,000.0

150

3,505

Euromonitor

$ mn

2014

2015

2016

Litter mn

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Progress of Implementation of 2013 Basic Strategies
Implementation Status of Strategic Investments

Credit Ratings(Including Ordinary Capex)<Capital expenditure (cash basis) and lease fees>
Consolidated total: Approx. ¥9.0 bn
 Property, plant and equipment, intangible assets, lease fees, etc.
Major items:
 Nagoya plant (Food & Soft Drinks): approx. ¥0.6 billion, Malaysianplant (Food & Soft Drinks): approx. ¥0.4 billion, integration system(general corporate): approx. ¥0.5 billion, lease fees (Food & Soft
Drinks, other): approx. ¥2.3 billion, etc.

<Other investments> Consolidated total: Approx. ¥3.5 bn
Long-term prepaid expenses, investment securities, etc.
Major items:
 Long-term prepaid expenses (Japanese Alcoholic Beverages, Food
& Soft Drinks) : approx. ¥1.9 billion, acquisition of treasury stock(general corporate): approx. ¥0.9 billion, etc.

<Credit rating by JCR> As of August 5, 2013: A- (stable)<Credit rating by R&I>
 As of August 5, 2013: BBB+ (stable)<Achievement of low-cost financing> In March 2013, issued ¥10 bn in five-year straight bonds at a low
cost of 0.39%<Jan-Jun 2013 strategic investment total (incl. ordinary
capex)>
 Approx. ¥12.5 bn
Direction of Long-Term Strategic Investments
 We will continue to actively carry out strategic investments for growth.
 The scale of strategic investment from 2012 to 2016 is anticipated to be from ¥150 to ¥200 billion (in principle,
funded from accumulated operating cash flow).
– Including ordinary capex (approx. half of strategic investments)– 2012 strategic investment total: Approx. ¥65.7 bn– 2013 strategic investment plan： Approx. ¥ 28.0 bn
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3. Overview of First-Half 2013 Results

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Overview of First-Half 2013 Results: Special Factors
Breakdown of special factors that prevent meaningful year-on-year comparisons between first half net
sales and operating income in 2012 and 2013 are shown below. See the Supplementary Information to
the Earnings Report for factors behind changes resulting from other business activities.
Net Sales

Operating Income<International Business> April 2012 consolidation of profit and loss account ofSilver Springs Citrus
Jan-Mar 2013 net increase ⇒approx. +¥2.7 bn<International Business> April 2012 consolidation of profit and loss account of Silver
Springs Citrus
Jan-Mar 2013 net increase ⇒ approx. +¥0.1 bn<Food & Soft Drinks>
 January consolidation of profit and loss account of
POKKA ACE Malaysia (change from equity method
affiliate to consolidated subsidiary)⇒approx. +¥2.7 bn<Food & Soft Drinks>
 January consolidation of profit and loss account of POKKAACE Malaysia (change from equity method affiliate toconsolidated subsidiary)⇒ approx. +¥0.0 bn<Real Estate> March 2012 inclusion of 15% of trust beneficiary rights
for Yebisu Garden Place in the profit and loss accountJan-Feb 2013 net increase ⇒ approx. +¥0.4 bn<Real Estate> March 2012 inclusion of 15% of trust beneficiary rights for
Yebisu Garden Place in the profit and loss accountJan-Feb 2013 net increase ⇒ approx. +¥0.2 bn<Consolidated Total> Approx. +¥5.8 bn<Consolidated Total> Approx. +¥0.3 bn

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Overview of First-Half 2013 Results –Consolidated–(billions of yen)

YoY change

2013 2Q

2012 2Q

Amount%Consolidated net
sales

223.0

231.2

8.1

3.7%

Consolidated
operating income

(1.7)

0.4

2.1

―

0.1

2.4

2.3

1,301.7%

Consolidated
ordinary income

(2.4)

0.3

2.7

―

Consolidated net
income

(2.9)

0.1

3.0

―

Consolidated operating
income before goodwill
amortization

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Overview of First-Half 2013 Results by Segment
Operating Income(billions of yen)2013 2Q

2012 2Q*

YoY change%

AmountJapanese Alcoholic
Beverages

(2.6)

0.1

2.8

―

International

(0.3)
0.5
(0.8)

0.3
1.2
(0.9)

0.6
0.7
(0.0)

―
148.6%―

Food & Soft Drinks

(1.1)

(2.4)

(1.2)

―

Restaurants

(0.3)

(0.2)

0.0

―

Real Estate

4.4

4.4

0.0

0.2%

Other

(0.1)

0.0

0.2

―

General corporate

(1.4)

(1.8)

(0.3)

―

Consolidated operating income

(1.7)

0.4

2.1

―

Consolidated operating income
before goodwill amortization

0.1

2.4

2.3

1,301.7%

North America, other
Vietnam*Effective the three months ended March 31, 2013, Sapporo Logistics Systems Co., Ltd., which was previously included in the Japanese Alcoholic
Beverages segment, and Pokka Logistics Co., Ltd., which was previously included in the Food & Soft Drinks segment, were reclassified to the Other
segment. Additionally, effective the three months ended March 31, 2013, Pokka Food (Singapore) Pte. Ltd. which was previously included in the Food
& Soft Drinks segment was reclassified to the Restaurants segmentt. These changes have been retroactively applied to the above figures for 2012.
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Reference: 2013-2014 Management Targets*2013-2014 management targets are unchanged from thefigures announced on February 8, 2013.

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2013-2014 Management Targets
Consolidated targets
2006 results2012 results2013 targets

2014 targets

2016 targets

Consolidated net sales*incl. liquor taxes¥435.0 bn¥492.4 bn¥512.0 bn¥533.0 bn¥600.0 bn(excl. liquor taxes)¥294.0 bn¥379.7 bn¥397.3 bn¥416.0 bn¥450.0 bn

Consolidated operating
income(before goodwill
amortization)
Consolidated ordinary
incomeConsolidated net
incomeConsolidated operating
margin*excl. liquor taxes(before goodwill
amortization)¥8.6 bn¥14.4 bn

¥15.3 bn

¥17.8 bn

¥8.6 bn¥18.2 bn

¥19.2 bn

¥21.6 bn

¥5.8 bn¥13.6 bn¥14.0 bn

¥16.5 bn–

¥2.3 bn¥5.3 bn¥5.5 bn¥7.0 bn

–

2.9%

3.8%

3.9%

4.3%

2.9%

4.8%

4.4%

5.2%

D/E ratio

2.1 times

1.9 times

1.8 times

1.7 times

ROE

2.1%

4.2%

4.1%

5.1%

(before goodwill
amortization)

2.1%

7.3%

7.1%

8.0%

¥40.0 bn

9.0%
Around 1:1
8% or higher*Assumed exchange rates: 2013-2014: US$ = ¥85.00, CAN$ = ¥83.00*Since the government's consumption tax policy remains uncertain, the above 2014 targets do not take into account the impact of a consumption tax increase.
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2013-2014 Management Targets by Segment
Targets

Net sales
Operating income

Japanese Alcoholic Beverages
International Business
Food & Soft Drinks
Restaurants
Real Estate
Other Businesses
Corporate and intercompany
transactions
Consolidated total
Japanese Alcoholic Beverages
International Business
Food & Soft Drinks
Restaurants
Real Estate
Other
Corporate and intercompany
transactions
Consolidated total
Consolidated total(before goodwill amortization)2012 results*

2013 targets

2014 targets¥269.9 bn¥36.1 bn
¥129.0 bn¥26.6 bn
¥23.2 bn
¥7.5 bn¥275.2 bn¥43.3 bn
¥136.5 bn¥26.8 bn
¥23.6 bn
¥6.6 bn¥283.5 bn¥46.4 bn
¥145.5 bn¥28.2 bn
¥22.4 bn¥7.0 bn–––¥492.4 billion¥7.5 bn(¥0.0 bn)¥0.3 bn¥0.5 bn¥9.3 bn(¥0.4 bn)

¥512.0 billion¥9.0 bn¥0.0 bn¥1.0 bn¥0.8 bn¥8.3 bn(¥0.1 bn)

¥533.0 billion¥9.0 bn¥1.1 bn¥2.7 bn¥1.0 bn¥7.3 bn¥0.0 bn(¥2.9 bn)(¥3.7 bn)(¥3.3 bn)

¥14.4 bn

¥15.3 bn

¥17.8 bn

¥18.2 billion¥19.2 billion¥21.6 billion*Assumed exchange rates: 2013-2014: US$ = ¥85.00, CAN$ = ¥83.00*Effective the three months ended March 31, 2013, Sapporo Logistics Systems Co., Ltd., which was previously included in the Japanese Alcoholic Beverages segment, and Pokka Logistics Co., Ltd.,
which was previously included in the Food & Soft Drinks segment, were reclassified to the Other segment. Additionally, effective the three months ended March 31, 2013, Pokka Food (Singapore) Pte.
Ltd. which was previously included in the Food & Soft Drinks segment was reclassified to the Restaurants segment. These changes have been retroactively applied to the above figures for 2012.
*Since the government's consumption tax policy remains uncertain, the above 2014 targets do not take into account the impact of a consumption tax increase.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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Reference: Supplementary Information toFirst-Half 2013 Results

For information on the profitability of each business, see the Supplementary
Information to our Earnings Report.

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Japanese Alcoholic Beverages (1)(billions of yen)

Results highlights

YoY change*Incl. liquor taxes

2012 2Q

2013 2Q

AmountNet sales*

120.3

120.5

0.1

0.2%

Operatingincome

(2.6)

0.1

2.8

－

Net sales increased year over year: a year-over-year decline intotal sales volumes for beer and beer-type beverages as sales
volume of beer exceeded the previous year while that of
new-genre products declined; sales of wine, western spirits andshochu rose year over year.
Operating income significantly rose as a result of higher sales
as well as cost control over items including marketing expenses.

Key points in business plan: implementation status%

Jan.-Jun. Cumulative Sales Volume YoY Comparison (Beer, Happoshu, New Genre)

％
100

100

100

SapporoTotal demand99

1. Bolstering of brand strength of core products
 Bolstering of brand strength by concentrating resources on thethree core brands, Sapporo Draft Beer Black Label, Yebisu Beer,and Mugi to Hop, as well as on Premium Alcohol Free, a nonalcohol beer-taste beverage.
 Jan-Jun cumulative beer and beer-type beverage sales volume declined
year over year, as Apr-Jun sales volume, which was unchanged from theprevious year and at the same level as total demand, was not enough tomake up for the decline in the Jan-Mar period, which was affected bytiming differences in the original plan While year-over-year beer sales volume was strong at 102% comparedwith 98% for total demand, it was affected by new genre beer-likebeverages not meeting the previous year’s level or the plan.

98

98

98

97
96

94
Jan-MarApr-JunSep. 18
Limitedrelaunch

Jan-Jun Jan-Jun cumulative results for Premium Alcohol Free showed a 1% yearover-year increase.
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Japanese Alcoholic Beverages (2)Key points in business plan: implementation statusWine
1. Bolstering of brand strength of core products
 Goku zero, the world’s first beer-type beverage with nocarbohydrates or purine bodies, launched on June 19. Sales
have been exceeding the plan
The initial planned sales volume of 2.2 million cases wasrevised up to 3.3 million cases (large bottle count)

2. Growth as a comprehensive alcoholic
beverage enterprise
RTD Although Bacardi performed favorably, sales volume declined year overyear. The decrease is partly attributable to lower-than-expected sales of
Nectar RTD and TEA’S HI.
 Renewals and line extensions of existing products were implemented,
and consumption opportunities and brand awareness were enhanced
through increased product trials and greater efforts to attain a market
presence.
 RTD Bacardi Mojito bottle launched in April
 Sales of Sapporo Otokoume Sour launched in April
for a limited period have been strong and full-year launch(in September) has been decided

 Total net sales rose year over year on growth from imported wines in
addition to higher sales of domestic wines.
 Imported wines: Strong performance from Yellow Tail andGarcia Carrion Domestic wines: Strong performance from Grande Polaire

Western Spirits
 Conclusion of an operating alliance agreement with Bacardi Japan,
supplier of the world’s No.1 rum brand.
Start of sales in Oct 2011
•Year-over-year increase in net sales•Active business development in both the household andcommercial markets
 Net sales significantly exceeded the same period a year earlier
 Sales of RTS* product “Bacardi Classic Cocktails Mojito” havebeen progressing at a rate significantly exceeding the plan
*Ready to serve. Liqueur which can be made into cocktail justby adding soda, etc.

Shochu Significant year-over-year increase in net sales
 Solid performance from Imo Shochu Kokuimo
blended shochu
 Contribution to the sales increase from Kuroumesyu

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20/27

International Business(billions of yen)2012 2Q

2013 2Q

AmountNet sales

16.0

23.0

7.0

44.2%

Operatingincome

(0.3)
0.5
(0.8)

0.3
1.2
(0.9)

0.6
0.7
(0.0)

－
148.6%－

Results highlights
Net sales increased 44.2% year over year as a result of growth
on local currency basis, mainly in North America, the impact ofyen depreciation, and the addition of the Jan-March results ofSilver Springs Citrus (SSC).
Operating income rose as increases in income from the North
American business as well as SSC significantly exceeded
growth in expenses for market development in Vietnam.

Key points in business plan: implementation status

1. North American business growth (excl. SLEEMAN,
Sapporo USA)
Silver Springs Citrus (U.S.)

Acquired a 51% stake in Silver Springs Citrus, the largest U.S.
maker of private-brand chilled drinks•••

Full-scale entry into the beverage business in the North American
marketConsolidation of the profit and loss account from April 2012
Contributing to sales and profits

2. Asian and Oceania Market (excl. Vietnam)
Developments in Singapore
 Household market sales channel expansion in collaboration with POKKA for
beer produced in Vietnam
 2014 sales target: Approx. 150,000 cases (1 case = 355 ml×24 bottles）
 Aim to be the No. 1 Japanese beer brand.

YoY change

North America,
othersVietnam%Developments in South Korea
 Strengthened Sapporo brand value and sales structure in South Korea by entering
into an alliance with Maeil Dairies Co., Ltd. (market share leader in cheese, low-fat milk,
and chilled coffee drinks) in January 2012 and acquiring a 15% stake in M’s
Beverage Co., Ltd., a wholly owned liquor sales subsidiary of Maeil Non-equity
method affiliate
 2012 sales target of 380,000 cases (1 case = 350 ml×24 bottles): 420,000 cases sold andtarget achieved
 2015 sales target of 1.5 million cases (1 case = 350 ml×24 bottles)
 Aim to be the No. 1 imported brand.
 2013 2Q: Outperforming the plan. Double digit growth year over year

Developments in Oceania October 2011 entry into the Australian/New Zealand premium beer market
via a licensing agreement with Coopers Brewery Ltd. (No.3 in Australia’sbeer market, No. 2 in premium beer market with a 17.3% share) Full-scale start-up in 2012

Aim to be the No. 1 Japanese beer brand.

 2012 sales target of 160,000 cases (1 case = 355 ml×24 bottles）: 160,000 cases
sold and target achieved
 2016 sales target of 500,000 cases (1 case = 355 ml×24 bottles ） 2013 2Q: Progressing in line with the plan. Double digit growth year over year

 2013 2Q: outperforming the plan. Double digit growth year over year

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Food & Soft Drinks (1)(billions of yen)

Results highlights
While domestic beverages sales declined due to the impact ofintegration preparations in 2012, overall sales increased with a
Net sales
net increase from the consolidation of Pokka Ace (M) SDN. BHD.
Operating income declined, reflecting the significant sales decline
Operatingin domestic beverages.
incomeKey points in business plan: implementation status

Before GW
amortization

YoY change

2012 2Q

2013 2Q

Amount

59.5

60.7

1.2

2.1%

(1.1)
0.1

(2.4)
(1.0)

(1.2)
(1.2)

－
－

%

■ Soft Drinks and Food (Domestic): POKKA SAPPORO Food & Beverages Ltd. , vending machine operators
Organization of products in five business categories toleverage the strengths of both companies
Lemon,
natural foods

Beverages

Soup, foods

OverseasbrandsCommercial
marketVending machine
channel: 100,000
machine network

Further strengtheningof marketing tocorporate customers

Spring/Summer 2013
Key Products

Kireto Lemon

Aromax Fantasista

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Focus on investment insales promotion insegments in which thecompany can compete
and win

Gerolsteiner

22/27

Food & Soft Drinks (2)Key points in business plan: implementation status■ Soft Drinks (International):
POKKA Corporation (Singapore) Pte Ltd■ Restaurants (Domestic): POKKA CREATE Co., Ltd.
1. Expand into countries neighboring Singapore Market activation and production capacity expansion measures

1. Accelerate opening of highly profitable outlets: newmarkets, new collaborations
2. Ensure growth potential of existing outlets: effective
renovation

2. Bolster sales in existing export
markets
 Strengthening of alliances withagencies in the Middle East andEuropePOKKA brand green tea-based
drinks have high market sharein Singapore.

3. Improve speed and quality of
product development
4. Improve, strengthen capability of
FC head officeOutlets: 170 (as of June 30, 2013)
Kanto 97, Tokai 36
Kansai 29, Kyushu 6, Shikoku 2■ Restaurants (International):
POKKA CORPORATION (Hong Kong) Ltd.
 Outlet: 34 in total (as of June 30, 2013)
・Hong Kong 33, Macau 1
 New opening in Jan-Jun 2013 period
・3 in total: 1 each of Tonkichi
MomijiTei, Mikichi, Cooper Luwak Art
Coffee23/27

Restaurants
Results highlights(billions of yen)

YoY change

Net sales increased as cumulative sales at existing outlets exceeded theprevious year’s level, at 101%, and thanks to the contribution from newoutlets opened last year. Operating loss narrowed due to the sales
increase and closing of unprofitable locations.

2012 2Q

2013 2Q

AmountNet sales

12.2

12.6

0.3

2.9%

Operatingincome

(0.3)

(0.2)

0.0

－

%

Key points in business plan: implementation status

1. Strengthening of brand appeal and new outlet
opening (Japan)
New restaurant opening strategy
 Synergy with Japanese Alcoholic Beverages: Opening of
YEBISU BAR outlets•

New outlet opened in Kyoto, Kobe Sannomiya and Ochanomizu, bringing
the number of outlets to 12 as of June 30, 2013

 Opening of beer garden•

In the first long-term event at Hisaya Odori Koen Park in Nagoya (as apartner of Nagoya municipality parks)“Sakae Fountain Beer Festa 2013” (from May 23 to Sept 23）

YEBISU BAR Kyoto
Yodobashi

YEBISU BAR Kobe
Sannomiya

YEBISU BAR
Ochanomizu

 Locations opened Jan-Jan 2013: 9•

All outlets are performing as planned

2. Earnings structure reform Locations closed Jan-Jun 2013: 13
 Locations operating as of June 30, 2013: 189 in Japan
10 in Singapore
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

24/27

Real Estate (1)(billions of yen)

YoY change

Results highlights
A stable revenue structure was maintained amid weakeningof rent levels in the Tokyo metropolitan area office leasing
market.
Key points in business plan: implementation status2012 2Q

2013 2Q

AmountNet sales

11.2

11.0

(0.2)

(2.5%)

Operatingincome

4.4

4.4

0.0

0.2%

%

(As of June 30, 2013)

Boosting the value of existing properties
Yebisu Garden Place Maintenance and improvement of the occupancy rate andachievement of appropriate rent levels••

Maintained high occupancy rates and rent levels of June single
month at major Tokyo properties (table at right) compared to the
92% average for office buildings in Tokyo’s 5 central wards
Undertaking of value enhancement measures, including
augmentation of emergency power supply facilities for completion inspring 2014, has been progressing according to the plan, renewalof cafeteria has been completed.

Major rental properties inTokyo*s 23 wards

Site area(m2)

Floor area(m2)

Occupancy rate(%)

Yebisu Garden Place *1

56,943

298,00791%

40 floors above
ground, 5 below

Seiwa Yebisu Building*

2,617

―

*0%

6 floors above
ground, 1 below

Yebisu Square

1,561

9,126

100%

7 floors above
ground, 1 below

Shibuya Sakuragaoka
Square

1,200

9,268

100%

10 floors above
ground, 1 below

Sapporo Ginza Building*

530

4,232

*87%

10 floors above
ground, 4 below

No. of floors

13 floors above
Strata Ginza *2
1,117
11,411100%
ground, 1 below
Site areas are taken from the land registry. Floor areas are as per building certification.
Occupancy rates are averages for Jan–Jun 2013.
*1. Figures are for entire property. Number of floors for office wings/buildings only. Occupancy
Redevelopment of Seiwa Yebisu Building*
rates are for office areas only.
• Start of redevelopment to include total floor area expansion, with the aim *2: Figures are for entire property. Sapporo owns 922m2 of the site (sectional ownership) and89.72% of the building (joint management)of completion in the autumn of 2014

Redevelopment of the Ginza and Ebisu Areas•

Departure of all tenants completed in October 2012 in line with theconstruction plan Redevelopment Sapporo Ginza Building*•Start of consideration through repeated discussions with involved partiesof redevelopment to include total floor area expansion in preparation for
redevelopment of the Ginza 4-chome area
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Sapporo Ginza
Building(completed 1970)

25/27

Real Estate (2)Overview of Real Estate Business The majority of operating income from the Real Estate business is from real estate leasing.
– The property portfolio largely comprises properties in Tokyo (5 central wards: see previous page).
– Unrealized gain on real estate for lease was ¥125.7 billion as of Dec. 31, 2012.
Balance sheet value at Dec. 31, 2012: 209 .9billion yen
Fair value at Dec. 31, 2012: 335.6 billion yen

Operating
IncomeChange(value)FY2012

Change(value)Jan-Jun 2012

Jan-Jun 2013

4.1

4.0

(0.0)

8.6

7.8

(0.8)

Other areas
Real estate leasing
total

0.4

0.5

0.1

1.0

0.9

(0.0)

4.6

4.6

0.0

9.6

8.8

(0.8)

Real estate total

－
(0.1)
4.4

－
(0.1)
4.4

－
(0.0)
0.0

－
(0.2)
9.3

－
(0.5)
8.3

－
(0.2)
(1.0)

Real estate leasing
Tokyo’s 23
wards

Other operations*
Total

EBITDA

Real estate leasing
Tokyo’s 23
wards
Other areas
Real estate leasing
total*”Other operations” includes back-office operations.
EBITDA = operating income + depreciation and amortization

FY2012Jan-Jun 2013

5.8

5.7

(0.1)

12.1

11.2

(0.9)

0.8

0.9

0.0

1.7

1.6

(0.0)

6.7

6.6

(0.0)

13.8

12.9

(1.0)

－
(0.0)
6.6

－
(0.0)
(0.0)

－
0.1
14.0

－
(0.1)
12.7

－
(0.2)
(1.3)

FY2013 est.

(billions of yen)

Change(value)Jan-Jun 2012－
Other operations*
0.0
Total
6.7
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.
Real estate total

Change(value)FY2013 est.

26/27

To make people’s lives richer
and more enjoyable.

The earnings forecasts and forward-looking statements appearing in this document were prepared by the
SAPPORO Group based on currently available information and its best assessment of potential risks anduncertainties. Actual outcomes may differ materially from forecasts due to changes in various underlying
factors.

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

27/27