2014
Sapporo Group Business Results Presentation
for the Six Months Ended June 30, 2014

August 6, 2014

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

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

1/23

Contents

1. First-Half 2014 Topics

2. Revision of 2014 Full-Year Earnings Forecasts
Reference
1. Overview of First-Half 2014 Results
2. Supplementary Information to First-Half 2014 Results (Business Summary)
3. Sapporo Group’s Medium-Term Management Plan 2014 - 2016

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

2/23

1. First-Half 2014 Topics

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

3/23

First-Half 2014 Topics (1)Japanese Alcoholic Beverages
 Jan-Jun cumulative: Sales volume of beer and beer-type beverages (beer, happoshu and new genre)
up ５% yoy (total demand down 1% yoy)
Following 1Q, Sapporo's 2Q sales growth again exceeded total demand growth despite the reaction to the lastminute surge in demand before the consumption tax increase of April and the temporary suspension of sales ofGoku Zero* in June
*See the timely disclosure releases of June 4 and June 20 for details<Status of core brands>Beer Total sales of Yebisu brand increased 2% yoy as seasonal and limited-quantity products
contributed along with summer gift sales

New Genre Sales of Mugi to Hop The gold continued to grow steadily even after its renewal in February (up 13% yoy) Sales of Goku Zero* also continued to outperform the plan as of mid-June FY2014 sales:2.9 million cases(large bottle count)*The world’s first new genre beverage with no carbohydrates or purine bodies, launched in June 2013
Re-launched as happoshu on July 15: No change to Goku Zero FY2014 plan of 5.5 million cases (large bottle count )(new genre + happoshu)
Ref: July Sales Volume YoY Comparison (total for
beer, happoshu and new genre)

Jan – Jun Cumulative Sales Volume YoY Comparison (total for beer, happoshu and new genre)
125

121

％

Total demand
Sapporo

110 ％
98

109

105

110
91

95

95

105

99

Total demand
SapporoRe-launch on July15
July plan – 11% growth

105
99

95

80
80
65
65
50

50
Jan-MarApr-JunCopyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

Jan-JunJul

Jan-Jul

4/23

First-Half 2014 Topics (2)International BusinessNorth America
SLEEMAN Net Sales (before elimination of inter-company transactions)in Local Currency (Jan-Jun)
154.2 155.9
147.1
150
135

123.6 127.4
114.7

120
102.8 104.6

105
90

2007

2008

2009

2010

2011

2012

2013

2014

SLEEMAN(Can$ millions)

Sapporo USA Net Sales (before elimination of inter-company transactions)in Local Currency (Jan-Jun)
30
26.9
25

 Despite sales declining amid intensifying
price competition of best-value products,
sales outperformed total demand year
over year Jan-Jun cumulative: Premium – up5%;
Value – down 4%
 Slowdown in sales of best-value products
bottomed out after the price reduction in
April

Sapporo USA (U.S.)


29.3



24.7

23.5
21.7

27.8

29.1

SLEEMAN (Canada)

20.8



20

（Jan-Jun)
Unit sales (YoY)

2013

2014

SLEEMAN*

103%

99%

Canada total
demandApprox.

Approx.

97%

98%*Excluding Sapporo brand（Jan-Jun)

Sales declined by 13% yoy in the firstquarter due to shipment delays causedby the cold waves in January andFebruary
Sales grew 6% yoy as shipment delays
were resolved
Cumulative sales for Jan-Jun recovered
to only a 3% decline

Unit sales (YoY)

2013

2014

Sapporo USA*

105%

97%

US total importbeer demand

Approx.

Approx.

99%

96%*Sapporo brand

15
2007

Vietnam

2008

2009

2010

2011

2012

2013

2014

Jan-Jun 2014 yoy sales volume in Vietnam (excluding exports)

USA（US$ millions）

In Vietnam,
Sales in the first quarter declined year over year due to impacts suchas the reaction to the temporary demand in March last year before
the liquor tax increase in April, sales volume grew significantly from
April, with cumulative sales for first half growing 30% yoy
We have started exporting to neighboring countries step-by-stepand we are exporting to 12 countries and regions as of June 30,
2014•Sapporo brand has a presence in 8 of 10 ASEAN countries
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

227
200
130

150
100

90

50
Jan-MarApr-JunJan-Jun5/23

First-Half 2014 Topics (3)Food & Soft Drinks
 POKKA SAPPORO Food & Beverages Ltd., into its second year of operations: Sales have exceeded
the previous year’s level from the beginning of the year
•While domestic soft drinks sales volume stayed more or less at the same level year over year, sales volumes ofdomestic food products’ lemon based products and instant soups increased year over year.
Operating loss narrowed on the back of increased sales and cost control.
Jan – Jun Cumulative Sales Volume YoY
110

％

109

Total demand
POKKA SAPPORO
103

102

104

Food & Soft Drinks* Operating Income YoY

100
100

Apr 14: Green Shower
launched
Sales volume growing
strongly with total salesof 400,000 cases against
annual target of 750,000
cases

98

(billions of yen)

90

80
Domestic soft drinks

Lemon based products (flavorings)

Operatingincome 2014

(1.8)

Operatingincome 2013

(2.4)

Instant soups (incl. soups in a cup)

ChangeTotal demand data: Source – Total for SM CVS formats by Intage SRI(nationwide retailer panel research)
Jan–Jun 2014 yoy comparison of cumulative sales amount for the lemon-based products market (Sapporo’s
definition) and instant soup market
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

Jan-Jun

0.6*Operating income shown is after goodwill
amortization (1.2 billion yen)

6/23

First-Half 2014 Topics (4)Restaurants
 Sapporo’s comparable-store sales in Jan-Jun period were 100.1% while those of overall pub/izakaya dining
format underperformed the previous year’s level
While sales for all restaurants declined due to renovation of buildings thathouse key restaurants in Ginza and Shinbashi, comparable-store sales,
which were affected by heavy snow in February, improved from 98.3% in
the Jan-Mar period
The Thank You Festivals to commemorate the anniversaries at the key restaurants below
were also successful.
•April: Beer Hall LION GINZA 7-chome in Ginza, Japan’s oldest beer hall (no reconstruction) currently in operation,celebrated its 80th anniversary•May: Beer Hall Lion Tanukikoji in Sapporo celebrated the 100th anniversary since the start of its operation

1934 Completion (Ginza)

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

1914 Opening (Sapporo)

7/23

First-Quarter 2014 Topics (5)Real Estate Activities to enhance the value of existing properties• In consideration of the future recovery in rent levels, enhance the value of existing
properties through renovation.
Yebisu Garden Place Efforts to enhance the property’s value in view of its 20th anniversary this year•

Office renovation focused on business continuity, including augmentation of emergency power supply
facilities in times of disaster as well as enhancement of office convenience. Refurbishing commercial
and restaurant facilities to enhance the appeal of the entire Ebisu district• Augmentation of emergency power supply completed in March
Yebisu Garden Place• Renovation of communal space in the second basement restaurant floor also completed in March• Steady progress in leasing agreement with a new tenant, while occupancy rate temporarily declined
due to the end of the lease contract with a large tenant at the end of May.
Redevelopment of the Ginza and Ebisu Areas

 Redevelopment of Seiwa Yebisu Building••••

The new name has been decided as Ebisu First Square
Redevelopment including expansion of total floor space
6 floors above ground, 1 below ⇒12 floors above ground, 1 below(total floor area 10,400㎡⇒15,178㎡)
Making smooth progress, including costs and construction period, towards completionin September 2014. It is expected to start operation almost fully occupied.

 Redevelopment of Sapporo Ginza Building situated on Ginza 4-chomeintersection•••

10 floors above ground, 4 below ⇒12 floors above ground, 2 below(total floor area 4,232㎡⇒7,082㎡)
Demolition started in April 2014 towards completion at the end of June 2016
Started discussion on construction works to design a facade befitting the latest Ginza
landmark
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

Ebisu First Square(New name; artist’s rendering)

Sapporo Ginza Building(completed in 1970)

8/23

First-Half 2014 Topics (6)Implementation Status of Strategic Investments(Including Ordinary Capex, on a cash basis)<Capital expenditure and lease fees>
Consolidated total: Approx. ¥11.4 bn
 Property, plant and equipment, intangible assets, lease fees,
etc.
Major items:
 Chiba plant for Goku Zero production (Japanese Alcoholic
Beverages): approx. ¥0.2 billion, upgrade of plant tour facility
at Kyushu Hita plant (Japanese Alcoholic Beverages): approx.
¥0.1 billion, construction of Nagoya plant (Food & Soft Drinks):
approx. ¥0.9 billion, photovoltaic power generation at Gunma
plant (Food & Soft Drinks): approx. ¥0.3 billion, construction of
Malaysian plant (Food & Soft Drinks): approx. ¥1.4 billion,
construction of Ebisu First Square (new name; Real Estate):approx. ¥1.6 billion, value enhancement of Yebisu Garden
Place (Real Estate): approx. ¥0.6 billion, lease fees (Food &Soft Drinks, Other): approx. ¥1.7 billion, etc.
<Other investments> Consolidated total: Approx. ¥3.4 billion
 Long-term prepaid expenses, investment securities,
compensation expenses, etc.
Major items:
 Long-term prepaid expenses (Japanese Alcoholic Beverages,
Food & Soft Drinks) : approx. ¥1.5 billion, investment
securities, etc.: approx. ¥0.4 billion, compensation expenses
for Sapporo Ginza Building : approx. ¥1.5 billion<Jan-Jun 2014 strategic investment total (incl.
ordinary capex, on a cash basis>
 Approx. ¥14.8 billion

Credit Ratings<Credit rating by JCR> As of August 6, 2014: A- (stable)<Credit rating by R&I>
 As of August 6, 2014: 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%
 In December 2013, issued ¥10 bn in seven-year straight bonds
at a low cost of 0.614%
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 isanticipated to be from ¥150 billion to ¥200 billion (inprinciple, funded from accumulated operating cashflow).
– Including ordinary capex (approx. half of strategic
investments)– 2012 strategic investment total: Approx. ¥65.7 bn– 2013 strategic investment total： Approx. ¥ 23.5 bn– 2014 strategic investment plan： Approx. ¥33.9 bn

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

9/23

2. Revision of 2014 Full-Year Earnings Forecasts

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

10/23

Revision of 2014 Full-Year Earnings Forecasts
Consolidated net income target alone
has been revised
 revision limited to recording of
11.6 billion yen extraordinary loss
Sapporo Group revised only its net
income target from the initial figure due toa one-time factor of recording an
extraordinary loss of 11.6 billion yen inliquor tax difference* resulting from thevoluntary filing of revised tax returns for
Goku Zero.
While business performance for 2014 has
been progressing ahead of the plan, therevision reflects only this extraordinary
loss, which has been already finalized.
The Group plans to swiftly revise andannounce its earnings forecasts when it
becomes necessary in the future.
* Regarding the difference in liquor tax amountrecorded as extraordinary loss, the Group intends
to assert its contention in accordance with legal
procedures, by taking into consideration theopinions of external experts.
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

Comparison
with initial
targets(amount, %)2013
results

2014
revisedtargets

2014
initialtargets

Consolidated
net sales

509.8

537.7

537.7

27.8

5.5
%

―

―

Operating income
before goodwill
amortization

19.3

19.0

19.0

(0.3)

(1.7)%――

Consolidated
operating income

15.3

15.0

15.0

(0.3)

(2.2)%――

Consolidated
ordinary income

15.1

13.6

13.6

(1.5)

（10.1)%――

Consolidated
net income

9.4

(2.0)

5.0

(11.4)

―

(7.0)

―

YoY change(amount, %)(billions of yen)

11/23

Reference 1: Overview of First-Half 2014 Results

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

12/23

Overview of First-Half 2014 Results
 Net sales: up YoY
・ Japanese Alcoholic Beverages: sales increased,
as sales volume of beer and beer-type beverages
rose from the beginning of the year compared withthe first half of 2013.
・ Food & Soft Drinks: sales increased, as sales offood increased, while sales volume of soft drinks
remained in line with the previous year’s level.

 Operating income: up YoY・Operating income significantly exceeded theplan throughout the group
・ Japanese Alcoholic Beverages: profit increased
significantly as sales rose
・International: profit decreased due to the decline insales volume in North America
・ Food & Soft Drinks: the amount of loss decreased,
as sales increased and cost-control measurescontributed

 Net income: down YoY
Extraordinary income: negative factor includes
reduction in the 3.5 billion yen of gain on sales ofinvestment securities recorded in the previous year.
Extraordinary loss: negative factors include therecording of 2.3 billion yen as cost for demolition,
removal, etc. in the Sapporo Ginza Building
redevelopment project this year, and recording of
11.6 billion yen as a difference in liquor tax amountdue to voluntary filing of revised tax liquor return for
Goku Zero this year.
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

YoY changes(amount, %)2013 2Q

2014 2Q

120.5

127.1

6.6

5.5%

International

23.0

23.7

0.6

2.8%

Food & Soft Drinks

60.7

62.7

2.0

3.3%

Restaurants

12.6

12.3

(0.2)

(1.9)%

Real Estate

11.0

10.9

(0.0)

（0.8)%

3.1

2.8

(0.2)

(9.4)%

231.2

239.8

8.6

3.7%

Operating income before goodwill
amortization

2.4

2.8

0.4

16.1％

Japanese Alcoholic
Beverages

0.1

1.3

1.1

559.7%

International

0.3

(0.5)

(0.9)

―

1.2
(0.9)

0.6
(1.1)

(0.6)
(0.2)

(53.0)%―

Food & Soft Drinks

(2.4)

(1.8)

0.6

―

Restaurants

(0.2)

(0.3)

(0.1)

―

Real Estate

4.4

4.3

(0.1)

-3.0%

Other

0.0

0.1

0.0

298％

(1.8)

(1.9)

(0.1)

―

Consolidated operating income

0.4

1.0

0.5

114.2％

Consolidated ordinary income

0.3

0.2

(0.0)

(18.8)％

Consolidated net income

0.1(10.9)(11.1)―(billions of yen)Japanese Alcoholic
Beverages

Other
Consolidated net sales

North America, other
VietnamGeneral corporate

13/23

Reference 2: Supplementary Information toFirst-Half 2014 Results (Business Summary)

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

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

14/23

Japanese Alcoholic Beverages(billions of yen)

*Incl. liquor taxes

Results highlights
Net sales increased year over year, as total sales volumes for beer andbeer-type beverages rose 5% and sales of wine, western spirits andshochu also exceeded the previous year’s level.
Operating income rose as sales grew.

Key points in business plan: implementation status

YoY change

2013 2Q

2014 2Q

Amount%Net sales*

120.5

127.1

6.6

5.5%

Operatingincome

0.1

1.3

1.1

559.7％

Wine Total net sales of imported and domestic wine rose 9% year overyear
RTD
 Imported wines: strong performance from Yellow Tail, Garcia
 Sales volume exceeded the plan and increased significantly by 94% thanks to Carrion and Santa Rita
success of collaborative products offered for each price range and contribution
 Domestic wines: sales of Grande Polaire have been strong.
from Sapporo Otoko Ume Sour, which has been available full year since
Sales of new product Sangria Rico also have been strong; its sales
September 2013 .
target has been revised upward Bacardi grew strongly, exceeding the previous year’s level significantly.
Western spirits• Offered canned products, with focus on Bacardi Mojito, at ¥189
Conclusion of an operating alliance agreement with Bacardi Japan,• Offered bottled products, with focus on Bacardi Mojito Bottle, at ¥230
supplier of the world’s No.1 rum brand.
 The sales target of Sapporo Otoko Ume Sour was revised upward.
• Net sales grew 4% year over year
• 350ml cans are offered at ¥160, and we have decided to offer 500ml• Promoting continued active business development
cans at ¥217.
in both the household and commercial markets.
 Group collaborative product Kireto Lemon Sour is offered at ¥160.
 Net sales of RTS* Bacardi are also significantly*All prices are reference retail prices (excl. tax).
higher than the pervious year’s level<Initiatives other than beer and beer-type beverages>*Ready to serve. Liqueur which can be madeinto cocktail just by adding soda, etc.

Shochu Net sales increased 11% year over year Net sales of blended Imo Shochu Kokuimo and Mugi Shochu
Koimugi grew
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

15/23

International
YoY change(billions of yen)

Results highlights
Net sales slightly increased thanks to the impact of weaker yen,though they declined on a local currency basis due to intensifying
competition in Canada and the impact of the cold wave in the U.S.
in January and February.
Operating income decreased due to the impact of the sales
volume decline in North America .

2013 2Q

2014 2Q

AmountNet sales

23.0

23.7

0.6

2.8%

Operatingincome

0.3
1.2
(0.9)

(0.5)
0.6
(1.1)

(0.9)
(0.6)
(0.2)

－
(53.0)％－

North America,
othersVietnam%

Key points in business plan: implementation status

North American (excl. SLEEMAN, Sapporo USA)

Singapore

Silver Springs Citrus (U.S.) Household market sales channel expansion in collaboration withPOKKA for beer produced in Vietnamthe largest U.S. maker of private-brand chilled drinks (a 51% stake)•

The beverage business has been performing strongly in the North
American market

Asian and Oceania Market (excl. Vietnam)
South Korea
 Strengthened Sapporo brand value and sales structure in South Korea
by entering into an alliance with Maeil Dairies Co., Ltd. (market shareleader 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

 2014 sales target: Approx. 150,000 cases (1 case = 355 ml×24 bottles）
 Striving to be the No. 1 Japanese beer brand.
 2014: In line with the previous fiscal year’s level

Oceania Entered the Australian/New Zealand premium beer market via a licensing
agreement with Coopers Brewery Ltd. (No.3 in Australia’s beer 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 380,000 cases (1 case = 350 ml×24 bottles):
420,000 cases sold and target achieved

 2012 sales target of 160,000 cases (1 case = 355 ml×24 bottles）:
160,000 cases sold and target achieved

 2015 sales target of 1.5 million cases (1 case = 350 ml×24 bottles)

 2016 sales target of 500,000 cases(1 case = 355 ml×24 bottles ） Aiming to be the No. 1 imported brand.
 2014: Double digit growth year over year
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

 2014 results: Sales have been exceeding the previous year’s level

16/23

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

Results highlights
Net sales of the domestic food and soft drinks business andthe overseas soft drinks business, which entered the second
year after the integration, increased year over year.

Net sales

Operating loss narrowed, as sales increased and costs were
controlled.

OperatingincomeKey points in business plan: implementation status

Before GW
amortization2013 2Q

2014 2Q

Amount

%

60.7

62.7

2.0

3.3%

(2.4)
(1.0)

(1.8)
(0.4)

0.6
0.6

－
－

■ Food and Soft Drinks (Domestic): POKKA SAPPORO Food & Beverages Ltd., vending machine operators

Develop unique soft drinks and work on new categories



Expand the scale of the core brands with focus on lemon and soup products

Lemon,
natural foods

Beverages

Soup, foods

OverseasbrandsVending machine
channel: 100,000
machine network

Commercial
marketFurther strengtheningof marketing tocorporate customers

Pokka Lemon 100
Major renewal

Kireto Lemon
Sales of Sparkling
have been strong

Green Shower

Jikkuri Kotokoto

Vittel, Contrex

Otoko Ume Syrup

Developing a newmarket with a new
brand

Revitalizing withspring andsummer flavors

Launched in

Sequentially increasing
the number ofrestaurants using the
product

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

January 2014

17/23

Food & Soft Drinks (2)Key points in business plan: implementation status■ Soft Drinks (International):■ Restaurants (Domestic): POKKA CREATE Co., Ltd.

POKKA Corporation (Singapore) Pte Ltd Further improve FC support system

Boost production capacity by bringing the new plant in Malaysia online
Maintain and expand the lead in the market share for tea drinks in
Singapore
Accelerate POKKA brand recognition in countries, other thanSingapore, where its products are available
POKKA brand green tea-based
drinks have high market share in
Singapore.

 Expand and enhance high-quality outlets
 Nurture human resources for FC business, enhance
education and training system
Outlets: 176 (as of June 30, 2014)(Directly operated: 90 outlets; FC: 86 outlets)
Hokkaido 1, Kanto 100, Tokai 37
Kansai 28, Kyushu 7, Shikoku 3

The Malaysianplant completed
in July, currently
in trial run

First outlet in
Hokkaido opened
on April 25■ Restaurants (overseas):
POKKA CORPORATION (Hong Kong) Outlet: 34 in total (as of June 30, 2014)

POKKA brand was No. 1
in non-carbonated beverage category of
INFLUENTIAL BRANDS AWARDS 2013
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

・Hong Kong 33, Macau 1

18/23

Restaurants(billions of yen)

Results highlights
Net sales declined, although comparable-store sales showed signsof recovery at 100.1% in the six months through June. This is mainly
attributable to the fact that key restaurants in Ginza and Shinbashi
suspended operations for long periods as the buildings housing
them are being renovated.
Operating income slightly decreased reflecting the sales decline.

Key points in business plan: implementation status

YoY change
2013 2Q

2014 2Q

Amount%Net sales

12.6

12.3

(0.2)

(1.9)%

Operatingincome

(0.2)

(0.3)

(0.1)

－

Restaurant expansion

 Locations newly opened Jan-Jun 2014: 10 outlets (Japan)
 Synergy with Japanese Alcoholic Beverages: Opening of
YEBISU BAR outlets•

New outlets opened in Nishi-shinjuku in Jan, in Ueno in Apr:
Increased to 14 outlets as of June 30

 Opening of a new format restaurant•

Apr: Opened Wine House PICNIC CLUB, a restaurant offering
wine and oven fresh rotisserie chicken, in Osaki

 Locations closed Jan-Jun 2014: 17 (Japan)

YEBISU BAR Uenonomori Sakura
Terrace outlet

 Restaurant business in Singapore Locations operating as of June 30, 2014: 183 in Japan Locations operating as of Jun 30, 2014
in Singapore: 13 outlets
・Ginza Lion (beer hall): 1 outlet
・Tonkichi (pork cutlet): 4 outlets
・Domani (Italian): 1 outlet
Singapore
Ginza Lion Beer Hall

・ Rive Gauche (patisserie): 7 outlets

Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

Wine House PICNIC CLUB Osaki New City outlet•Transfer of the restaurant business in Singapore from POKKA
Corporation (Singapore) Pte. Ltd. to Sapporo Lion Limited in 2013
•Opened the 1st Ginza Lion in Singapore in October 2013
•Spreading the beer hall culture around the world – start of overseas
operations•Aim to expand the number of restaurants in Southeast Asia including
Singapore and started selecting candidate locations for opening
restaurants

19/23

Real Estate(billions of yen)

Results highlights

YoY change The majority of operating income from the Real Estate business is from real estate leasing.
– The property portfolio largely comprises the following properties in Tokyo (5 central
2013 2Q
wards).
Occupancy rates are averages for Jan–Jun 2014 (contract basis).
Net sales
11.0
Occupancy
Floor area
Major rental properties inTokyo’s 23 wards

Site area (m2)(m2)

rate (%)

Amount

10.9

(0.0)

(0.8)%

4.3(0.1)(3.0)%

No. of floors

Operatingincome40 floors above
ground, 5 below

Yebisu Garden Place *1

56,943

298,007

87%

Yebisu First Square*

2,617

―

*0%

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

―

*29%

1,117

11,411100%

Strata Ginza *2

2014 2Q

4.4%―

Unrealized gain on real estate for lease was ¥127.7 billion asof Dec. 31, 2013.
Balance sheet value at December 31, 2013 : approx. 210.0 billion ye―

Fair value at December 31, 2013 : approx. 337.7 billion yen

13 floors above
ground, 1 below

Site areas are taken from the land registry. Floor areas are as per building certification.”*”s are redevelopment projects.
*1. The number of floors is for the office block only. Occupancy rates are for office areas only.
*2: Figures are for entire property. Sapporo owns 922m2 of the site (sectional ownership) and 89.72% of thebuilding (joint management)

EBITDA

Operating income

Real estate leasing
Tokyo’s 23
wards

Jan-Jun 2014

Change

4.0

3.9

(0.0)

Other areas
Real estate leasing
total

0.5

0.5

(0.0)

4.6

4.5

(0.0)

Real estate total

－
(0.1)
4.4

－
(0.2)
4.3

－
(0.0)
(0.1)

Other operations*Total(billions of yen)(billions of yen)

Jan-Jun 2013*”Other operations” includes back-office operations.
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

EBITDA =operating income + depreciation and amortization

Real estate leasing
Tokyo’s 23
wards
Other areas
Real estate leasing
total
Real estate total
Other operations*
Total

Jan-Jun 2013

Jan-Jun 2014

Change

5.7

5.5

(0.1)

0.9

0.9

(0.0)

6.6

6.4

(0.1)

－
(0.0)
6.6

－
(0.0)
6.3

－
(0.0)
(0.2)

*”Other operations” includes back-office operations.

20/23

Reference 3: Sapporo Group’s Medium-Term Management Plan
2014-2016*2014 targets have been revised among the figures announced on February
12, 2014.
(Revision of 2014 targets: only net income and figures that are affected by
the change to net income)Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

21/23

2014-2016 Targets Based on Current Businesses
With revised 2014 targets
2006 results

Consolidated
net sales*incl. liquor tax

Medium-Term Management Plan

2013 results

2014 targets(revised)2015 targets

2016 targets

2016 NewManagement
Framework¥435.0 bn¥509.8 bn¥537.7 bn¥563.0 bn¥595.0 bn¥600.0 bn(excl. liquor tax)
Consolidated
operating income(before goodwill
amortization)
Consolidated
ordinary income
Consolidated
net income
Consolidated
operating margin*excl. liquor tax(before goodwill
amortization)¥294.0 bn¥395.3 bn¥430.1 bn¥454.3 bn¥484.4 bn¥450.0 bn¥8.6 bn¥15.3 bn

¥15.0 bn

¥19.5 bn

¥27.5 bn

¥8.6 bn¥19.3 bn

¥19.0 bn

¥23.4 bn

¥31.2 bn

¥5.8 bn¥15.1 bn

¥13.6 bn

¥17.8 bn

¥25.7 bn-

¥2.3 bn¥9.4 bn(¥2.0 bn)

¥8.6 bn¥13.4 bn

-

2.9%

3.9%

3.5%

4.2%

5.2%

2.9%

4.9%

4.4%

5.2%

6.4%

D/E ratio

2.1 times

1.6 times

1.7 times

1.5 times

1.3 times

ROE(before goodwill
amortization)

2.1%

6.7%

-

5.5%

8.1%

2.1%

9.5%

1.3%

8.0%

10.4%

¥40.0 bn

9.0%

around 1:1
8% or higher*Assumed exchange rates: 2014-2016: US$ = ¥105.00, CAN$ = ¥101.00*We aim to achieve the goals of the 2016 New Management Framework through further cost reduction, creation of group synergies and M&A s in addition toachievement of targets based on the performance of current businesses under the Medium-Term management Plan 2014-2016.
Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

22/23

As an intrinsic part of people's lives, Sapporo will contribute to
the evolution of creative, enriching and rewarding lifestyles.

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, 2014 SAPPORO HOLDINGS LTD. All rights reserved.

23/23