Sapporo Group Management Plan 2010–2011

Shifting into a new growth trajectory

February 12, 2010SAPPORO HOLDINGS LTD.
URL http://www.sapporoholdings.jp

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Table of Contents- Overview of 2009
- 2010-2011 Sapporo Group Management Plan
• Relationship to Overarching Plan
• Medium-term Scenarios for the Sapporo Group’s Growth• Basic Policies• Basic Policies and Management Goals• Group-wide Strategies and Shareholder Returns Policy

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Sapporo
SapporoGroup
GroupManagement
ManagementPlan:
Plan:Overview
Overviewofof20092009

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Overview of 2009
Steadily achieved profit targets and advanced strategic alliances
as a platform for future growth• Affected by changes in external environment including the economic downturn, deflationarypressures, and unseasonal summer weather.
• Against this backdrop, the Sapporo Group worked on the following two key themes, theultimate goal being solid achievement of profit targets.
Key objectives

Key areas

Successes

I. Capitalizing on - Carry out cost structure - Achieved consolidated
our strengths reforms in all
ordinary income target,and bolstering businesses
3 consecutive years of
our earnings - Reinforce earnings
profit growthbasebase by focusing
Operating income
resources on theincreased if excluding theGroup’s strengths, such impact of the changes toas core brands
accounting and taxation
systems
II. Laying a- Carry out measures- New entry into growth
platform forbased on the New
areassustained
Management Framework - Strategic capital andgrowth- Forge strategic
business alliances withalliancesinfluential partners- Expand internationally
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Future challenges- Further strengthencore brands to boost
revenues- Ensure low-cost
operations- Execute plans toensure success of new
measures- Further strengthen andexpand alliances

Consolidated Results
Billions of yen, except ratios and percentages
2008 Results2009 Targets

2009 Results

Net sales(incl. liquor taxes)

414.5

408.3

387.5

Operating income

14.6

12.0

12.8*1

Ordinary income

10.5

8.5

10.7

Net income

7.6

3.0

4.5

Operating margin(excl. liquor taxes)

5.2%

4.2%

4.9%

Outstanding
financial liabilities

189.2

188.0

197.5

D/E ratio

1.6

1.6

1.7

ROE

6.3%

2.6%

3.9%*2*1. Changes to accounting and taxation standards meant that operating income for 2009 was ¥2.4 billion lower
than it would have been under the previous standards, reflecting an increase in depreciation expenses aswell as operating expenses and other items associated with the disposal of obsolete inventories.
*2. Under the previous accounting and taxation standards, our consolidated operating margin (excluding liquor
taxes) for 2009 would have been 5.8%.
Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Results by Segment

Operating Income

Net Sales

Billion yen
2008 Results2009 Targets

2009 Results

Alcoholic Beverages(Japan)

299.6

295.6

282.9

Alcoholic Beverages(International)

25.0

22.1

22.5

Soft Drinks and Food

36.8

35.5

30.7

Restaurants

29.5

30.5

28.0

Real Estate

23.4

24.6

23.2

Alcoholic Beverages(Japan)

7.7

5.6

7.4

Alcoholic Beverages(International)

0.9

0.9

0.6

Soft Drinks and Food

0.2

0.3

0.3

Restaurants

0.5

0.7

(0.1)

Real Estate

7.6

7.7

7.5

Eliminations

(2.3)

(3.2)

(2.9)

*Exchange rates used for the 2009 plan: US$=¥90, CAN$=¥75
Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Results: US$=¥93.65, CAN$=¥82.30

Operating Performance

Billion yen

Excluding the impact of accounting and taxation system changes,
operating income grew for a third consecutive year
Consolidated
Consolidated
OperatingOperating
IncomeIncomeOperatingincomeexcluding thedecline (¥2.4
billion) due tochanges inaccounting andtaxation
systems thattook effect in
2009

14.6
14.6
12.8
12.8

12.3
12.3
10.3
10.3

2005

8.6
8.6

2006

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200７

2008

2009

15.2

Progress with respect to Key Themes
Capitalizing on our strengths and bolstering ourLaying a platform for sustained growthearnings base
Increase profits by strengthening core products, increase earnings from wine and shochu,
and reducing costs- -Implemented
Implementedmarketing
marketingstrategies
strategiesfocused
focusedononcorecoreproducts
productsYebisu
YebisuandandMugi
MugitotoHop.
Hop.
MarketMarketsharessharesincreased
increasedinineacheachcategory
category- -Increased
Increasedearnings
earningsfrom
fromwinewineandandshochu
shochuby
bystrengthening
strengtheningfoundations
foundations- -Lowered
Loweredbreakeven
breakevenpoint
pointthroughthroughcompany-wide
company-widecost
coststructure
structurereforms
reforms
Overalldemand(’09 vs. ’08)

Our
results

Millionyen
900

Yebisu total

Beer
Approx. 93%

97.9%

600

New genretotal

New genre
Approx. 121%

2009

300

127.0%

Operating income from wine,
Western liquor, and Japaneseliquor (shochu) businessEntered theJapanese liquor(shochu) businessin 2006

0
-300
-600
-900

2005

2006

2007

2008

2009

Progress with respect to Key Themes
Capitalizing on our strengths and bolstering ourearnings baseLaying a platform for sustained growth

Sleeman Breweries in Canada achieved sales growth that
outstripped growth in overall market demand
Expansion
Expansionof
ofSleemans’s
Sleemans’sbeer
beerbusinessbusiness- -AAdouble-digit
double-digitgrowth
growthininsales
salesvolume
volumeyear-over-yearyear-over-yearby
byvirtuevirtueofofstrongermarketingstronger marketing
Maintains
Maintainslargest
largestmarket
marketshare
shareamong
amongthethepremium
premiumbeers
beersininCanada
Canada- -Since
Sinceits
itsacquisitionacquisitioninin2006,
2006,Sleeman’s
Sleeman’sgrowth
growthhas
hascontinued
continuedtotooutperformoutperformgrowth
growthininoverall
overallbeer
beerdemand
demandininCanada
CanadaSleeman Breweries’ Sales
Y-o-Y sales volume

2007

2008

2009

Sleeman brands

104%

106%

110%

Overall Canadiandemand

100%

100%

98%

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Progress with respect to Key Themes
Capitalizing on our strengths and bolstering ourearnings baseLaying a platform for sustained growth

Launch of beer business in the promising Vietnamese market
Entry
Entryinto
intobeer
beerbusinessbusinessin
inVietnam
Vietnam

680

Beer production
volume in Vietnam- -Joint
Jointventure
venturewith
withstate-owned
state-ownedVinataba
Vinataba- -Market
influence
and
wide
sales
Market influence and wide salesnetwork
network- -Construction
of
plant
to
manufacture
Construction of plant to manufacturebeer
beer
(Long
(LongAn
Anprovince,
province,Ho
HoChi
ChiMinh
MinhCity
Citysuburbs)
suburbs)- -Construction
to
start
in
2010;
plant
expected
Construction to start in 2010; plant expectedto
tostart
startoperation
operationby
byautumn
autumn2011
2011- -Aiming
Aimingforfor150,000
150,000klklsales
salesbyby20192019(10,000kl)

185
165
146

Establishment of
Sapporo Vietnam Ltd.

78

2000

2005

2006

2007

2025
forecast*2025 forecast by the Vietnamese Ministry for Industry and
Trade
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Progress with respect to Key Themes
Capitalizing on our strengths and bolstering ourearnings baseLaying a platform for sustained growthEnter growth markets and form alliances with influential partners
Entry
Entryintointoyogurt,
yogurt,dessert
dessertand
andchilleddrinksmarkets
chilled drinks markets- -EstablishedAzuminoEstablishedAzuminoFood
Foodjointly
jointlywith
with
Marudai
Food
Marudai
Food
AimingAimingtotoexpand
expandbusinessbusinessiningrowth
growthmarkets
markets• Develop
uniqueproducts
by• Develop
uniqueproducts
bycapitalizing
capitalizingonresearchandotherexpertiseininonresearchandotherexpertisealcoholandsoft
drinksbusinessalcoholand channels
soft drinks
business• Expand
sales
using
the
• Expandsales
channelsusing
themarketingandsales
skillsofmarketingandsales
skillsof
both
bothcompanies
companies

Strategic
Strategicalliancealliancewith
withPokka
PokkaCorporation
Corporation- -Aiming
Aimingmaximize
maximizeeffects
effectsofofintegration
integrationacrossacrossentire
entiregroup
group• Cost• Costsynergies
synergiesininsoft
softdrinks
drinksandandalcoholic
alcoholicbeverages
businesses
beverages businesses
Collaborate
Collaborateininprocurement,
procurement,distribution,
distribution,production,
production,
andvending
machines,
andexpandand vending machines, and expandeconomies
economiesofof
scale
scalethroughthroughjoint
jointinitiatives
initiatives• Collaborateinmultiple• Collaborate in multiplearenas
arenasCollaborate
Collaborateininthe
theJapaneseJapanesealcoholic
alcoholicbeverages
beverages
market(promote
retailsales,
market (promote retail sales,develop
developnew
newalcoholic
alcoholicbeverages)
beverages)
Collaborate
Collaborateininthe
theinternational
internationalalcoholic
alcoholicbeverages
beverages
market(marketbeer
inSingapore)market (market beer in Singapore)Jointventure49% stake

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21.41% stake2010-2011
2010-2011Sapporo
SapporoGroup
GroupManagement
ManagementPlan
Plan

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Relationship
Relationshipto
toOverarching
OverarchingPlan
Plan

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Long-term Management Policy:
Sapporo Group’s New Management Framework(Announced in October 2007)
Purpose
PurposeofofNew
NewFramework
Framework

Business
Businessdomains
domains

Creation of value
in food

Creation of
comfortablesurroundings

Basic
Basicgrowth
growthstrategies
strategies
Focus
Focusenterpriseenterpriseresources
resourceson
onbuildingbuildingcompetitivecompetitive
advantages
advantagesby
bycreating
creatinghighhighlevels
levelsofofvalue-added
value-added

Fundamental
Fundamentalroadmap
roadmapfor
forboldly
boldlyreallocating
resources,
makingreallocating resources, making
strategic
strategicinvestments,
investments,andand“managing“managingon
onthe
theoffensive”
offensive”toto
enhanceenhancecompetitivenesscompetitivenesswhile
while
maintaining
soundmanagement
maintaining sound management
withwithaaview
viewtotolong-termlong-termgrowth
growthtargets.
targets.
th
Goals
Goals(for(for2016,
2016,140
140thyear
yearsince
sincetheGroup’s
inception)
the Group’s inception)

Consolidated
Consolidatednet
netsales:sales:¥600
Forge¥600bnbn(incl.
(incl.liquor
liquortaxes)
taxes)
Forgestrategic
strategicalliances
alliancesaimed
aimedatatbuildingbuildingcompetitivecompetitiveadvantages
advantages¥450bn(excl.
liquortaxes)
andexpandingbusiness¥450bn(excl.
liquortaxes)and expanding business
Consolidated
Consolidatedoperating
operatingincome:income:
¥40
bn
¥40
bn
Actively
Activelyexpand
expandinternationallyinternationally
OperatingOperatingmargin:
margin:9%9%(excl.
liquor(excl. liquortaxes)
taxes)
Enhance
ROE:
Enhancethe
theGroup’sGroup’sstrategic
strategicand
andoperational
operational
ROE:8%
8%orormoremore
synergies
synergies

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D/E
D/Eratio:
ratio:approx.
approx.1:1
1:1

Positioning of 2010-2011 Sapporo Group Management Plan
Transition from a structural reform phase to a growth phase

Groundwork for future
growth strategy
・Forge strategic allianceswith other companies
・Develop new businesses
Food business
Beer business in Vietnam
Highest priority on executing
structural reforms to build astable earnings base

Structural
Structuralreforms
reformsto
tostrengthen
strengthenfoundations
foundations
2008

2009

Launch of growth strategy- Forge strategic alliances- Expand internationallyÆ Shift into a growth trajectoryStrengthen existing businesses- Expand revenues- Intensify cost structure reformÆ Strengthen adaptability tochange and earnings base2010

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2011

Maximize
Maximizegrowth
growthstrategy’s
strategy’seffects
effects

2016

Medium-term
Medium-termScenarios
Scenariosfor
forthetheSapporo
SapporoGroup’sGroup’s
GrowthGrowthCopyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Medium-term Growth Scenario:
Alcoholic Beverages (Japan)
Strengthen the Group’s earnings base by upgrading value-added
across all alcoholic beverage product lines
GrowthGrowthScenarios
Scenarios- Create high-value-added products and markets that enable us to capitalize
on Sapporo Breweries’ strengths- Build a solid earnings base by establishing competitive advantages in valueadded products

Strategic
StrategicChallenges
Challenges- Product development and marketing aimed at creating new markets byoffering new value in the beer category- Expand the shochu, wine and RTD beverage businesses over the medium
term through brand strengthening and strategic alliances to achieve
operating income of around ¥2 billion- Maximize value chain efficiency by tapping into group synergies andforging alliances with other companies
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Medium-term Growth Scenario:
Alcoholic Beverages (International)
Drive Group growth by expanding geographical coverage andbusiness in North America and Asia
GrowthGrowthScenarios
Scenarios- Expand business in the two markets of North America and Asia (Vietnam,
Singapore, etc.)- Drive expansion of not only the beer business but other group operations
including soft drinks, food, and restaurants

Strategic
StrategicChallenges
Challenges- Expand business through Sleeman Breweries and Sapporo USA bystrengthening organizational structures and marketing efforts andundertaking strategic M&As
- Expand business in Asia by putting Vietnam operations into gear andentering new Asian markets, including in ASEAN nations

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Medium-Term Growth Scenario:
Soft Drinks and Food
Expand the business by establishing brands with unique value,
and through strategic alliances and M&As
GrowthGrowthScenarios
Scenarios- Harness group strengths to develop high-value-added products to bolster
market presence- Expand business through strategic business and capital alliances

Strategic
StrategicChallenges
Challenges- Expand business domain to include not only shelf-stable beverages but
chilled beverages and food also and expand overseas also
- In food, undertake alliances that offer technological advantages to develop
products with unique features- Enhance group synergies in procurement, distribution, product development,
marketing, and other areas

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Medium-term Growth Scenario: Restaurants
Strengthen brands and earnings base in the Restaurants busines,
an important interface with consumers
GrowthGrowthScenarios
Scenarios- Open new locations focusing on Greater Tokyo, Sapporo, and Nagoya;develop diverse dining formats at a broad range of price points- As an interface with consumers, restaurants have a key role incommunicating with customers and strengthening brands

Strategic
StrategicChallenges
Challenges- Scrap and build restaurants and establish a low-cost operations framework- Implement and M&A strategy to complement and strengthen our balanced
restaurant portfolio- Expand overseas in tandem with overseas expansion of the Alcoholic
Beverages business

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Medium-term Growth Scenario: Real Estate
Bolster profitability of existing properties and expand byacquiring and developing new properties
GrowthGrowthScenarios
Scenarios- Expand business by improving the value of the assets under the Group,and by acquiring and developing new properties

Strategic
StrategicChallenges
Challenges- Develop Group assets including properties in Ginza, Ebisu, Sapporo, andelsewhere- Expand earnings from Yebisu Garden Place by renovating and enhancing theproperty’s appeal- Designating the Ebisu area as a strategic area, acquire new assets mainly incentral Tokyo and enhance property values by tapping into synergies withexisting properties and other means
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2010-2011
2010-2011Sapporo
SapporoGroup
GroupManagement
ManagementPlan:
Plan:
Business
BusinessPlans
Plans

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Alcoholic Beverages (Japan)
Billion yen

Basic
BasicPolicy
PolicyQuantitative
Targets

2009
Results

2010
Targets

2011
Targets

Net sales

282.9

285.0

290.0

Operatingincome

7.4

7.5

8.5

-Embark on a growth trajectory by building aunique presence in mature markets and pursue
efficiencies by stepping up our select-and-focus
approach to allocating resources.

Key
KeyPoints
Pointsforfor2010-2011
2010-2011BusinessBusinessPlans
Plans
1. Bolster marketing of alcoholic beverages
1) Focusing resources on core products to enhance brand strength- Black Label: Step up trial testing and position this brand as a refined adult beveragethrough a new communication strategy.
- Yebisu: Mark its 120th anniversary through more proactive communication based on thebrand’s unique value to achieve growth for the Yebisu brand as a whole.
- Mugi to Hop: Maintain growth rate above the entire new genre market through marketingthat promotes the product’s unique characteristics

MarketingMarketingtheme:
theme:Taste
Tastethatthatinspires!
inspires!
Communication
message:
Bringing
more
cheer
Communication message: Bringing more cheerto
toyouryour“Cheers!”“Cheers!”
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Alcoholic Beverages (Japan)
Key
KeyPoints
Pointsforfor2010-2011
2010-2011BusinessBusinessPlans
Plans(continued)(continued)
2) Create and develop new growth brands- We will initiate product develop projects based on a new development
framework, accumulate in-house knowledge from multiple sources,and develop uniquely differentiated products in the true Sapporo mold.
3) Branching out into new areas- Expand the wine business’s earnings by enhancing the brand value of our core
imported wines and stepping up efforts in the solidly growing additive-free wine market.
- Lay the groundwork for sustained growth in the shochu business by bolstering highvalue-added products and fostering brands from a medium-term perspective.
- Plan new RTD products based on new value propositions to enhance our market
presence.
2. Cost structure reforms- Improve cost efficiency by cutting ingredient and material costs, efficiently allocating
marketing expense, enhancing flexible cost controls- Holistically boost production and distribution efficiency. Look at consolidating beer
production lines and other means of improving production efficiency.

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Alcoholic Beverages (International)
Billion yen

Basic
BasicPolicy
PolicyQuantitative
Targets

2009
Results

2010
Targets

2011
Targets

Net sales

22.5

26.0

27.5

Operatingincome

0.6

1.0

1.5

- Grow the business into a pillar that supports theGroup’s future growth.
In the key North American market, expand businessby focusing investment on brands and areas where
Group strengths can be harnessed.
In the developing Asian market, put our business inVietnam into full swing.

Key
KeyPoints
Pointsforfor2010-2011
2010-2011BusinessBusinessPlans
Plans
1. Business growth in North America
1) Marketing strategies- Sleeman Breweries will strive for sales growth above the overall market growth by further
stepping up investment in marketing of its strongly performing premium brands.
- Sapporo USA will lay the groundwork for further growth by expanding beyond theAmerican-Japanese market segment to encompass the wider US and ethnic Asian market
segments.
2) Bolster production capabilities- Bolster production capabilities through faciliites expansions, consignment production,and M&As to cover capacity shortfalls arising as Sleeman Breweries expands its
operations.
3) Cost structure reforms- Further improve product quality and cost efficiency through quality control, process
stabilization, and production cost reductions, and so on.
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Alcoholic Beverages (International)
Key
KeyPoints
Pointsforfor2010-2011
2010-2011BusinessBusinessPlans
Plans(continued)(continued)
2. Expanding into the Asian Market
1) Building our presence in Vietnam- In Vietnam, launch Vietnam beer operations in earnest through alliance with Vinataba.
- Begin export sales of beer in the first half of 2010; develop marketing strategies and a
distribution network to develop the business further.
- Consider further expansion of production
bases with an eye on expanding businessthroughout Vietnam.
- Local production facilities scheduled to becompleted in 2010 in the aim of going into
operation in autumn 2011.
2) Expanding our operations in Singapore- Collaborate with Pokka to utilize its strong
sales network and boost sales in the Singapore
household market while seeking to penetrate
markets in adjacent nations.

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Soft Drinks
Billion yen

Basic
BasicPolicy
PolicyQuantitative
Targets

2009
Results

2010
Targets

2011
Targets

Net sales

30.7

32.0

34.0

Operatingincome

0.3

0.7

1.5

- Focus resources on core brands, strengthenbrand power, and shift into a growth trajectory.
Also aim to ramp up the impact of alreadysuccessful structural reforms by utilizing groupsynergies and strategic alliances.

Key
KeyPoints
Pointsforfor2010-2011
2010-2011BusinessBusinessPlans
Plans
1. Bolster marketing
1) Strengthen and cultivate brands- Focus marketing investment and sales efforts on core brand products to strengthenbrand power.
- Bolster product development framework to enable creation of high-value-added products.
2) Strengthen alliances- Form strategic alliances to enhance our lineup of highly distinctive products and gain
greater access to customers.

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Soft Drinks
Key
KeyPoints
Pointsforfor2010-2011
2010-2011BusinessBusinessPlans
Plans(continued)(continued)
2. Cost structure reforms
1) Implement a cost structure reform program- Use our select-and-focus approach to fully implement a cost structure reform program
throughout the entire value chain.
2) Generate synergies from strategic alliances- Unleash synergies from alliance with Pokka as rapidly as possible by working groupwide to strengthen the vending machine business, jointly develop products, collaborate
in marketing and sales, optimize production lines, reduce procurement costs, andestablish a joint distribution system.
3. Food products business
1) Confectionary business (Sapporo Fine Foods Co., Ltd.)- In Greater Tokyo, introduce news products in the Sapporo Potekaru range of non-oilfried potato chips, drawing on the tripling of production capacity from capital
investment in 2009. Expand the product line-up and geographic coverage in light of
future sales trends.
2) Yogurt, dessert and chilled beverages business (Azumino Food Co., Ltd.)- Expand sales channels primarily for core products with tapioca to popularize the brandand grow sales.
- Strive to utilize group synergies; e.g., through active use of Sapporo Breweries’
technologies.
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Restaurants
Billion yen

Basic
BasicPolicy
PolicyQuantitative
Targets

2009
Results

2010
Targets

2011
Targets

Net sales

28.0

27.0

28.0

Operatingincome

(0.1)

0.2

0.5

- Amid the heavy impact of the economic
downturn, further cut costs, reform our cost
structure, and develop dining formats and build
an operational structure able to withstandeconomic change over the medium term.

Key
KeyPoints
Pointsforfor2010-2011
2010-2011BusinessBusinessPlans
Plans
1. Business structure reform
1) Cost reductions- Personnel costs to be made less sensitive to sales revenue through a hiring freeze andmore efficient shift and rostering arrangements.
- Reduce unit input costs by using common ingredients, furniture and fixtures, andconsumables.
Make efforts to lower rents for restaurants to reduce cost.
- Close unprofitable restaurants (around 10 locations), mainly in the first half, to improveearnings as early as possible.
- Reduce food and labor costs as part of a medium-term cost structure reforms
2. Measures to ensure growth1) Launching new restaurants- Open new Yebisu Bar establishments, a new format that harnesses synergies with
Sapporo Breweries.
- To curb new capacity additions in 2010 versus past years, limit new restaurants to agross floor area of 400 tsubo (1,320 m2) .
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Real EstateBillion yen

Basic
BasicPolicy
PolicyQuantitative
Targets

2009
Results

2010
Targets

2011
Targets

Net sales

23.2

24.5

26.5

Operatingincome

7.5

8.0

10.0

- Given a harsh market outlook, a main priority is
maintaining occupancy rates. We will also strive tomaintain and limit declines in rents.
We will continue to acquire new properties, focusing
on prime assets.

Key
KeyPoints
Pointsforfor2010-2011
2010-2011BusinessBusinessPlans
Plans
1. Boost value of existing properties
1) Yebisu Garden Place- Boost tenant satisfaction through measures to boost value and ensure fair market rents.
Proactive and flexible approach to leasing to maintain high occupancy rates.
2) Sapporo Factory- Renovate the facility to expand office space and improve earnings power of the facility as
a whole through timely leasing to appropriate tenants.
2. Positioning for growth
1) Real estate development- Complete ongoing development projects as quickly as possible.
2) Acquiring new properties- Designating Ebisu as a strategic area, acquire new assets that meet our investment
criteria mainly in central Tokyo.
- Maximize income from property to be acquired in Shibuya in the first half of 2010.

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

2010-2011
2010-2011 Sapporo
Sapporo Group
Group Management
Management Plan
Plan
Basic
Basic Policies
Policies andand Management
Management Goals
Goals

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Basic Policies
Shift into a growth trajectory by initiating growth strategies andstrengthening existing businesses
We will use the plan’s two-year term to transition from a phase of earnings-basestrengthening with priority on structural reform to a growth phase aimed at realizing out
medium-term growth scenarios.

Initiate growth strategies

Strengthen existing
businesses

Take action based on growth scenariosand medium-term challenges for eachbusiness to add value of the mediumto long-term.

In each of our businesses, build
competitive advantages by focusing
resources on strong brands to improveadaptability to changes in environment.

We plan to invest 65 billion yen over two years to support
strategic initiatives in pursuit of growthFund with cash flow from existing operations. Also use monetizable Group assets togenerate additional cash flow
Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Management Goals
Consolidated
Consolidated
Targets
Targets

Billions of yen, except ratios and percentages

2010 Targets

2011 Targets

Net sales(incl. liquor taxes)

394.5

406.0

Operating income

13.5

17.0

Ordinary income

11.0

13.5

Net income

4.8

6.0

Operating margin(excl. liquor taxes)

5.0%

6.0%

Financial liabilities

210.0

217.0

D/E ratio

1.7

1.7

ROE

4.0%

5.0%

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Management Goals
Billion yen

Operating income

Net sales

Targets
Targetsby
bysegment
segment

2010 Targets

2011 Targets

Alcoholic Beverages (Japan)

285.0

290.0

Alcoholic Beverages (Intl.)

26.0

27.5

Soft Drinks and Food

32.0

34.0

Restaurants

27.0

28.0

Real Estate

24.5

26.5

Alcoholic Beverages (Japan)

7.5

8.5

Alcoholic Beverages (Intl.)

1.0

1.5

Soft Drinks and Food

0.7

1.5

Restaurants

0.2

0.5

Real Estate

8.0

10.0

Eliminations*1

(3.9)

(5.0)

*Exchange rates for 2010 and 2011: US$=¥90, CAN$=¥82*1. “Eliminations” includes marketing costs and other up-front investment in relation to our operations in Vietnam.
Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

2010-2011
2010-2011Sapporo
SapporoGroup
GroupManagement
ManagementPlan:
Plan:
Group-wideGroup-wideStrategies
Strategiesand
andShareholder
ShareholderReturns
Returns
PolicyPolicyCopyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Overall Strategy
Enhancing
Enhancinggroup
groupsynergies
synergies- Integrate IT infrastructure to encourage greater information sharing and cooperation within
the Group.
Further consolidate support infrastructure to reinforce the Group’s low-cost operations
structure.
- Cultivate human resources through personnel exchanges and career development to build
a dynamic organization where employees thrive.
- To further boost the value of the Sapporo and Yebisu brands as key Group assets,continue to collaborate Group-wide on staging local beer festivals in Sapporo, andthroughout the rest of Hokkaido, and the Yebisu Beer Festival in Ebisu, Tokyo.

Commitment
Commitmentto
tocorporate
corporatesocialsocialresponsibility
responsibility(CSR)(CSR)- Based on our CSR policies, we will continue to focus on food safety and security, alcoholrelated problems, and environmental issues such as global warming.
- Provide in-house training aimed at promoting employee awareness and appropriate
conduct in relation to CSR and compliance.

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

Shareholder Returns Policy
Basic Policy- Sapporo Holdings Limited is committed to providing fair returns to our shareholders asa key management policy. Our basic policy is to pay stable dividends to the extent
permitted by our operating performance and financial condition.
We also aim to maximize corporate value by internally retaining funds to strengthen
our financial base and strategically invest in growth businesses in accord with our new
Management Plan.
Dividends for 2009 and 2010
- For 2009, we intend to pay annual dividends of ¥7 per share.
For 2010, we intend to again pay annual dividends of ¥7 per share by steadily carryingout our Management Plan while also making strategic investments and strengthening
our financial foundation.

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.

To make people’s lives richer
and more enjoyable.

These materials contain forward-looking statements regarding but not limited to future earnings and future
actions, circumstances, and occurrences. These statements are based on information available whenthese materials were prepared and are subject to risks and uncertainties.
Actual results and financial performance may therefore differ materially from the future outlook describedby forward-looking statements presented in these materials.

Copyright,2008 SAPPORO ＨＯＬＤＩＮＧＳ LTD. All rights reserved.