Medium-Term Management Plan
(2023 to 2026)

Sapporo Holdings Limited
Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

1Medium-Term Management Plan (2023 to 2026)Contents

1. Medium-Term Management Plan (2023 to 2026)Development Background and Outline

P.3

2. Review of Group Management Plan 2024

P.5

3. Medium-Term Management Plan (2023 to 2026)

P.9

・Business Strategies

P.14

・Sustainability

P.26

・Financial Strategies

P.29

・ Management Platform, etc.

P.32

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2

Medium-Term Management Plan (2023 to 2026)Development Background

Since its foundation in 1876, we have constantly innovated and delivered products
and services that have enriched customers’ lives. In 2026, we will mark our 150th
anniversary.
In order to keep demonstrating its exclusive value to society beyond 150 years, wehave developed a new management plan for the four (4) year period from 2023 to
2026.
They key points of this plan are a revision of our business portfolio, realizing groupmanagement aligned with the positioning of each of our businesses, and increasing
our corporate value through higher capital efficiency. We look to reliably meet the
expectations of stakeholders during these four years.

Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

3

Essentials of Mid-Term Plan 2023-26＜Basic Policy＞ Beyond150 ~Transforming the business structure for new growth~

Structural Reforms

Strengthen and Grow

Decisive action based on portfolio
management

Realize growth in overseas and corebusinesses

・Businesses positioned as “Restructuring” and“Divestment“ are drastically managed by 2024

・Accelerate North American Alcoholic Beverage andOverseas Soft Drinks
・Focus on domestic beer and cultivate RTD brands
・Diversification of the profit structure of the Real estatebusiness

Financial Targets
・ROE：
・EBITDA :Non-Financial Targets
8%
approximately 10％

Compound Annual Growth Rate (CAGR)

・Overseas Sales： approximately
Compound Annual Growth Rate (CAGR)

10％・ CO2 reduction
Scope 1, 2 SBT *1 certification level
Scope 3 SBT certification level(4.2% per year reduction)(2.5% per year reduction)※Submitted and accepted commitment letter to SBTi・ Ratio of female directors and female managers:
12% or more*2※1 SBT(Science Based Targets) The greenhouse gas emission reduction target set by a company consistent with the level required by the Paris Agreement.
※2 22-year results: 8.3% for female executives and 5.4% for female managers
Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

Review of Group Management Plan 2024

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5

Review of Business Environment Changes
At the time we were launching Group Management Plan 2024, the COVID-19 pandemic occurred, having a massive impact on
our performance. In this business environment, we proceeded with the partial reorganization of unprofitable businesses andstructural reforms.
Business environment changes projectedin Group Management Plan 2024

Shrinking demandin JapanAchieving asustainable society
Tax reforms

Increased need for
health span
extension

Key business environment changes
that accelerated

・Growth of EC
・Increased household
consumption
・Increased mental and physicalhealth consciousness
・Changes in the procurement
environment(due to logistics and exchange
rates)
・Changing demand for offices

Results and issues

・While we are responding to changes in procurement prices
due to COVID and the changing global situation conditions
through cost controls and price revisions, there is a need tofurther reinforce our response.

・Transferred the cafe business, implementing structuralreforms in the restaurants and on-trade alcoholic beverages
businesses

・Started work on developing the infrastructure for the next
generation, including employee training to develop our digital
human resources

Digitization

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6

Review of Group Management Plan 2024 ①
We worked on structural reforms as well as global expansion, including the acquisition of a production base in the U.S.
However, the issues of resource allocation and speed remain, particularly in the Food & Soft Drinks business (Japan).
Basic Policy

Key Findings

IssuesConcentration on andstrengthening of corebusiness・Seven consecutive years of sales growth for Black Label cans
・Transfer of the Cafe business, partial reorganization of theRestaurants and Vending Machines businesses

・Acceleration of selection and concentration based on the
reorganization of our business portfolio
・Resource allocation with clear priorities Concentration on
and strengthening of core businessAcceleration of global
expansion

・Growth of overseas alcoholic beverages business・Improved profitability of overseas Soft Drinks business・Improving profitability of problem businesses
・Development of global management talent, continuous
reinforcement of our brands

Establishing a simple
and compact
corporate structure

・Clarifying the role of our holdings companies andtransferring business promotion functions to our operatingcompanies
・Starting work on development of DX talent・Supporting business strategies, building a businessfoundation for the creation of new value

・Steady progress is being made on priority issues of eachbusiness, such as breeding varieties of ingredients adapted tothe changing climate

・Planning and execution that achieves both social andeconomic value and balances risk with opportunity froma long-term perspective

Promotingsustainability
management
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7

Review of Group Management Plan 2024 ②■Structural Reforms + Reinforcement & Growth/Concrete Measures and Results

・Executing structural reforms
・Executing reinforcement and growthBusinesses

300

Reduced profitability due to thepandemic, including core operating
losses by the Restaurants andCafe business ¥(6.5) billion

Reinforcement of Black Label and othercanned beers
Reinforcement of RTD sales, including theAlcoholic beverages sale and development of Koime no Lemon(Japan)Sour
Beer production stop at Sendai plant(Installation of new RTD production
equipment)

117
Alcoholic beverages(Overseas)

100
81

Restaurants

Food & Soft Drinks(Japan)43

19年
FY2019(Results)（実績）

20年
FY2020(Results)（実績）

21年
FY2021(Results)（実績）

22年
FY2022(Plan)（計画）

Changes in core
operating profit (billions of yen)
事業利益推移（億円）

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24年
FY2024(Plan)（計画）

Measures

Results
10% increase (2019 vs. 2021) *1
31% increase (2019 vs. 2021) *1
Announced in 2021 → Scheduled
operation start in 2023

Reinforcement of SPB*2 in the United States 6% increase (2019 vs. 2021) *1
Acquisition of Stone

Acquisition in 2022 → Contribution to
profit in 2023 and beyond

Closing of unprofitable locations
Opening of locations with high investment
efficiency

Eliminated 34 locations (2019 vs. 2021)
196 → 162 stores

Reinforcement of sales focused on
promoting the health value of lemons andexpanding their uses

26% increase (2019 vs. 2021) *1

Reorganization of vending machine operator Liquidation in 2022 → Contribution to
subsidiaries
profit in 2023 and beyond
Transfer of cafe business(Contribution to profit from 2022)＋¥800 million (approx.) / year (vs. 2020)

Soft Drink(Overseas)

Sale of Indonesian subsidiary
Reorganization of logistics subsidiaries+¥500 million

Real Estate

YGP*3 commercial area renovations

Grand Opening in November 2022

Entire Group

Early retirement benefits system+¥3.0 billion (approx.) / year (vs. 2020)*1 Japan and overseas alcoholic beverages sales results were calculated from sales volume. Food & softdrinks results (Japan) were calculated from revenue.
*2 SPB: SAPPORO PREMIUM BEER *3 YGP: Yebisu Garden Place

8

Medium-Term Management Plan
(2023 to 2026)

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9

Management Philosophy and Value Provided
Management Philosophy

As an intrinsic part of people’s lives, Sapporo will contribute to the evolutionof creative, enriching and rewarding lifestyles.
Utilizing the assets of “Highly Unique Brands” and “Engaging with customers and communities,”
We have created a unique brand experience in 2 domains : "time" and "space."
With the essence of “richness” that changes with the times,
We will contribute to the “richness“ of nature, society, and the spirit that will lead to tomorrow.

【Our Value】
Through the Time and Space where all our businesses is playing ,we contribute to Well-being of People and Local Communities
Alcoholic Beverages

Time
Space

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Food & Soft Drinks
Highly Unique Brands

Real EstateThe “Well-being” Provided by the Sapporo GroupWe contribute to the well-being of people and regional societies by realizing the “three riches” included in our management
principles.
■The Three Riches

Riches of Nature■Main KPIs Being Considered
・Producing products with select ingredients, as
typified by our contracted growing collaborations withproducers
・Regional co-creation through the promotion ofdomestic lemon production

・Regional initiatives that contribute to harmony with the environment

・Certification of properties that contribute to providing health value

・Community development sustainable for both people andthe global environment

Riches of Society

・Continuous development of products that contribute to customer health・Regional vitalization leveraging Group assets such as
Yebisu Garden Place and Sapporo Garden Park・Corporate and product image according to surveys and studies
・Human connections facilitated through the enjoyment of beer

Riches of Spirit

・Promoting the health value of botanical materials such as lemons
・Mental and physical health and job satisfaction of employees

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・Work engagement

11

Group synergy that promotes the realization of well-being
Centered around the Group’s shared assets, namely our brands and our connection to customers and the regional
communities, we will create synergy that deepens coordination between our businesses and contributes to well-being.
Alcoholic Beverages × Restaurants

Alcoholic Beverages × Food & Soft Drinks
・Joint research and development
・Collaboration in the value chain

Alcoholic Beverages × Real Estate・Marketing strategy based on customer contact points
・Collaboration between communities and brands

・Cross-Group success of our human assets
・Sharing of data, offices, and utilities

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Ebisu x YEBISU Sapporo x SAPPORO

12

Mid-Term Management Plan（2023～26）＜ Basic Policy ＞
Beyond150～Transforming the business structure for new growth～

Economic Value■Business Strategy
・Revision of business portfolio
・Accelerate Growth of Overseas Businesses
・Strengthen Profitability in core Businesses■ Financial Strategy
・ Focus on sustainable growth and capital efficiency
・ Returns exceed Cost of capital・ Strengthen Cash generation
・ Cash Allocation to Support Growth

Our Value

Management
Philosophy

Through the Time andSpace where all ourbusinesses is playing , wecontribute to
Well-being of Peopleand Local Communities

As an intrinsic part ofpeople’s lives,
Sapporo willcontribute to
the evolution ofcreative,
enriching and rewarding

Social Valuelifestyles.

■ Sustainability
・Creating a decarbonized society
・Harmonizing with local communities
・Active participation of diverse human resources【 Management Foundation（ HR・DX・R&D ） 】
2023-2026
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【2026】
150th Anniversary

Business Strategies

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14

Business Portfolio Management
Businesses positioned as “Disinvestment" are promptly reorganized.
In other businesses, the Company will assess the direction of ROIC and achievement of operating income each fiscal year
as its main criteria.

Approach to Portfolio Consolidation
MarketEnvironment【Profitability】

・Growth potential
・Competitive environment

ROIC, OP margin, etc.

Strengths
・Highly Unique Brands

Structural Reforms

Strengthen and Grow

Restructuring

Growth・Japan Food andSoft Drinks

・ Overseas Alcoholic
Beverages

・Restaurants

・ Overseas Beverage【Synergy】
Synergy with other group businesses

Divestment
・Some of Alcoholic
Beverages

Sustainability
・Relationships with
Customers and Local
Communities

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【Resource allocation】
Priority for investment of resources

・Some of Food andSoft Drinks

Strengthen
Profitability
・ Japan Alcoholic
Beverages
・ Real EstateStructural reform

Reorganization (Food & Soft Drinks: Japan)

We will decisively implement drastic structural reforms by 2024 to focus on the lemon business and break away from low
profitability.
FY2021 ResultsCore(%)
operatingprofit margin-

FY2026 Plan

3.8%

Major
issues*Negative value, therefore "-"Topic・2021 saw major product brands Pokka Lemon
100 and Kireto Lemon hit new shipment records
for the third year running.
・Structural reforms such as the reorganization ofvending machine operator subsidiaries, transfer of
the Cafe business

Action plan

・Decisive and drastic structural reforms of our low-profitability
businesses other than the lemon business・Concentrated investment of resources into the further expansion of thelemon business, which is expected to grow・Sale of / withdrawal from unprofitable businesses and non-core businesses
・Solving of structural issues through business partnerships
・Further structural reform of the Vending Machine business・Significant reduction soft drinks, soups, and other SKUs
・Reorganization of multiple production centers
・Promotion of growth strategy by shifting resources to the lemon businessChanges in Lemon business (Net sales)

Resources
Beverages, soups, etc.
shift(billions of yen)
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Lemon business (Food & Soft Drink), etc.

Plan

16

Structural reform

Reorganization (Restaurants)

We will further strengthen the revenue base and focus on synergy with the Japan Alcoholic Beverages business to realize
stable profit and increase brand communication. We will aim to achieve profitability in 2023 and increase the speed of therehabilitation.
FY2021ResultsCore operating-

FY2026 Plan

5.0%

Major
issues・Building a robust management system with an eye on a post-COVID world・Creating synergy with the Japan Alcoholic Beverages business throughshared brand contact points and sales channels

Action plan

・Further profitability improvements through a shift to key business categories
Development of “Medium, Small, and Suburban” business models
・Strengthening coordination with Japan Alcoholic Beverages business as a hub
for brand communication
・Increased productivity through DX and work style reforms, further lowering of
the break even point through management and indirect cost reductions
・Increased profitability through reorganization of businesses in the Hokkaido area

profit margin*Negative value, therefore "-"Topic・Execute structural reforms in response to
declining demand for the restaurant market(Closing of unprofitable locations, opening oflocations with high investment efficiency)

Resources
shift

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Enhancing more

YEBISU BAR, GINZA LION

17

Reinforcement & Growth

Growth of Overseas Business (Alcoholic Beverages)

We will aim for further growth of the Sapporo brand, especially SAPPORO PREMIUM BEER (SPB), in the United States, agrowth driver, by creating synergy with Stone, which became a subsidiary in August.
FY2021ResultsCore operating・Well received for its well-balanced taste and high Japanese quality, it
has been the No. 1 selling Asian beer in the United States for 36
consecutive years.
・In 2021, we reinforced sales of canned products in the United States,
where demand was on the rise, achieving best-ever sales of SPB.

FY2026 Plan

3.2%

6.2%

Topic

profit margin
Startedexporting
No. ofcountries sold*

1964

Key Issues of theNorth American
Alcoholic
Beverages
Business

33

・Further increasing of our American presence・Insufficient production capacity, low-efficiency logistics network*Countries where the Sapporo brand is sold

Overseas Alcoholic Beverages Revenue andCore Operating Profit Trends

Additionalamountfrom Stone

Action plan

✔ Early realization of synergy with Stone
・Establishing an SPB production and logistics system leveraging Stone facilities
・Effective marketing・Building a sales system
During FY2023

Current situation*North America market SPB
products only②①
(billions of yen)
Total revenue (excluding Stone)

Revenues from Stone

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(billions of yen)
Plancore operating profit
Total① Increased ocean freight costs② Increased logistics costs inNorth America Production
capacity pressure

Logistics cost
reductions and stablesupplynew① Synergies with Stone through 2026
② Effect of SPB growth①② Total: ¥4 billion

18Growth of overseas business (Soft drinks)

Reinforcement & Growth

We aim to turn our overseas businesses into a growth driver for the Group by expanding sales in countries and regions withgrowth potential, such as Malaysia and the Middle East, starting from Singapore.

FY2021 Results(%)

Core operating

FY2026 Plan

4.7%

Topic

・No. 1 share in tea beverages in Singapore
・Growing presence of the POKKA brand in Malaysia and otherneighboring countries
・No. 1 share in energy drinks in the UAE

Major
issues・Maintaining the high market share established in Singapore andexpanding into the surrounding areas
・Reinforcing our sales system in Malaysia
・Marketing in the Middle East, where we have a strong presence inenergy drinks
・Streamlining of operations by consolidating dispersed warehouses
and offices

Actionplan✔Singapore
・Stimulating demand through new value propositions centered on healthand wellness✔Malaysia
・Expanding brand recognition and distribution✔Middle East, etc.
・Establishing a new marketing hub to expand exports✔Footing
・Consolidation of logistics, office, and R&D functions through establishinga new Pokka Logistics Hub (Singapore)*2

5.0%

profit margin

1977

FoundedNo. ofcountries sold

60 or
more

We completed structural reforms in 2018-2019 and returned to a growth trajectory thanks tocontributions by our existing brand strength and various business initiatives.

PK*1 Revenue and Core Operating Profit Trend(billions of yen)

*1 Pokka Pte. Ltd

Revenue

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PlanCore operating profit(billions of yen)

*2 Scheduled completion in Q1 2024

19

Revenue growth for Overseas Business
2022

2026

Overseas Alcohol￥70 billion¥107 billion

Overseas beverage¥22 billion¥33 billion

Overseas Alcohol（APAC-Europe）
2022
¥4Bn

2026
¥7Bn

Overseas Beverage

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2022

2026

¥22Bn

¥33Bn

CAGR Target

approximately 10％

Overseas Alcohol（North-America）
2022

2026

¥66Bn

¥100BnReinforcing Profitability of Core Businesses (Japan Alcoholic Beverages ①)

Reinforcement& Growth

These four years will be a period in which we structurally shift away from low profitability by, among other things,
reorganizing our product categories, and put the Company on a growth trajectory by continuing the strong trend in categories
such as Beer and RTDs.
FY2021 ResultsCore operating

FY2026 Plan

3.5%

Major
issues・Structural shift away from low profitability
・Focus on areas where we can leverage our strengths towards growth

5.7%

profit margin■Structural shift away from low profitability
・Seven consecutive years of sales growth forBlack Label cans・Establishing core brands such as Koime no
Lemon Sour and Otoko Ume Sour in the RTD and
RTS*1 business・Beer production stop at Sendai plant, shifting to
RTD production facility

Topic

Canned Black Label Sales Trend- Sales up for seven consecutive years -

2014

2015

2016

2017

2018

* Growth trend measured with 2014 as 100
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2019

2020

2021

2026
Plan

✔ Reorganization of product categories
・Increase revenue by reinforcement of high-unit-price, high-profit products
・Scaling back of happoshu and "new genre" beer-type beverages, domestic
table wines

Action plan

✔ Cost reductions and recomposition
・Cost reductions through the expansion of RTD production center(Sendai plant) and construction of flexible production system
・Review sales expenses and promote strategic resource allocation basedon sales data (Brands, Channels, Areas)・Continuous reduction of fixed and variable costs, including a review of ourpersonnel structure and facilities*1 RTS: Ready to serve
Liqueur that only needs to be mixed with ice, soda, etc. before serving.

21

Reinforcing Profitability of Core Businesses (Japan Alcoholic Beverages ②)

Reinforcement& Growth

We will turn our core businesses into the Group’s growth drivers by improving revenue and creating a market throughmarketing leverages our strengths to the maximum in clear areas of focus.
■ Focus on areas where we can leverage our strengths towards growth

Beer✔ We will further increase the appeal, premium status, and profitability of the Black Label and Yebisu brands, which
we have been reinforcing ahead of the alcohol tax revisions.
・Communications that facilitate the penetration of the Black Label world view we have spent so long fostering
・Development of a unique Yebisu brand product line that colors the times customers spend enjoying beer
✔ Reinforcing our relationships with customers
・Expanding customer contact points through the effective utilization of the real, e.g. restaurants, and the digital・Creating more fans of the Black Label brand by linking our on-trade and off-trade products

RTD

・Sale and concentrated marketing of the new market-creating products that will become mainstay brands
・Reinforcement of Koime no Lemon Sour and Otoko Ume Sour

Creation of
new value・Accelerated development of appealing RTS products that broaden the scope of enjoyment
・Proposal of diverse products and services to meet changing lifestyles

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22

Reinforcement & Growth

Reinforcing Profitability of Core Businesses (Real Estate ①)

We will improve profitability and asset efficiency over a long-term time horizon by transforming from a business entity
focused on rentals to one that comprehensively enhances asset value.
FY2021 Results

FY2022 Plan *2

FY2026 Plan

5.7%

4.9%

5.7%

ROA*1

Action Plan For Beyond 2026 (2037)
・Enhancing our competitiveness by increasing the value of YGP and promoting community building
・Improving the value of Sapporo area assets ahead of the extension of the Hokkaido
Shinkansen line to Sapporo

ROA (EBITDA basis) *3

2022
Plan
Real estate business(Total)Topic・Responding to changes in the revenue structure of the leasing business, especially YGP・Further reinforcement of our relationship with the region through community building

Core property value enhancement and community building*1 EBITDA basis

2021

Major
issues

2026
Plan

2035
Plan

*2 Expected to temporarily
decline due to reasons such as
the YGP renovations and HVAC
updates.

Building an asset turnover business model (Diversification of revenue structure
and improvement of asset efficiency)*3 Expected to recovery andgrow ahead of 2037 due YGP
facilities environmental
improvements, etc.

・Promote real estate equity investment and value-added real estate securitization
businesses *Investing with asset ratios of up to 30%
・Aim to build an asset turnover business model by establishing an investment boutique in
2023 and preparing to form private placement funds and/or private placement REITs by 2025

2037
Plan

Yebisu Garden Place・Increasing the property value of Yebisu Garden Place (YPG)(Introduction of renewable energy, HVAC updates, etc.)
・Grand opening of YGP Center Plaza in November 2022
・Expand efforts in asset turnover businesses

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*Private placement funds and private placement REIT will cover properties other than YPG and other core properties.

Change in profit margin ratio■YGP■Value-Added
Real Estate Securitization■Equity ■Other Properties

FY2021

FY2026

FY203723

Reinforcement & Growth

Reinforcing Profitability of Core Businesses (Real Estate ②)

We will leverage our strengths as the owner of the historic brands and assets that bear the names of the cities of Sapporo andEbisu to promote integrated community development through co-creation with local governments and partners to enhancevalue.
-Community Building With Beer and People- Ebisu, Sapporo
OpenedEbisu 1-4
Daytime population *▼Entrance of YGP
Gateway of Ebis City
Birthplace of YEBISU Beer

Ebisu Station(People) 1990

YEBISU BEER HOLIDAY
Held in September 2022

1876
Our
Connection
to theRegions

1995

2000

2005

2010

2015

We created a brand experience throughout the entire The opening of YGP increased thedaytime population and contributed to theEbisu area.
presence and value of Ebisu.

1889

Hokkaido Development Commission Yebisu Beer Brewery Completed
Beer Brewery Opens in Sapporo(now Yebisu Garden Place)(now SAPPORO FACTORY)

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1899
Yebisu Beer Hall Opens in Ginza

1928

1994

The neighborhood’s
Opened Yebisu Garden Placename changes to Ebisu

We will redevelop Sapporo Garden Park,
the origin of the brand, to attract
customers and reinforce our brandcommunication ability.

2022
Yebisu Garden Place
Sapporo Garden Park
Commercial Building Renovation Renovation(scheduled)*Source: "Daytime Population of Tokyo (by Workplace and Commuting Area) According to the Population
Census,” Tokyo Metropolitan Government, General Affairs Bureau, Statistics Department

24

Structural reform

Summary of Business Strategies

Reinforcement & Growth

By making decisive structural reforms, we will accelerate growth, strengthen our profitability, and realize an ROE of 8%.

Increase in ROE

ROE
3.1%
EBITDA
316億円¥31.6
billionCore
operating profit
10.0

ROE
8.0%

Businesses

EBITDA¥50.0
billion
500億円

Alcoholicbeverages(Japan)Reinforcement & Growth

Structural reformCore
operating profit
25.0

+15.0

FY2022(Plan)

Structural Reforms, Reinforcement & Growth / Specific Measures
Amount*Reinforcement of Beer / Improving Profitability of Beer-type Bev.

+5.0

RTD Business Growth and Production Streamlining, Etc.

+4.0

Alcoholicbeverages(Overseas)

Stone Acquisition Synergy / SPB Growth+4.0

Food & Soft
Drinks (Japan)

Cost Structure Reforms+2.0

Businesses

Other Major Measures+2.0

Real Estate

Revenue Structure Diversification

Soft Drink(Overseas)

Expanding Sales and Increasing Logistics Efficiency

Entire Group

Drastic Reorganization of Unprofitable Businesses, Etc.

FY2026(Plan)
Changes in core operating profit

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*Net amount reflecting the impact of cost increases, etc. shown25

Sustainability

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26

Sustainability Strategy（Key Issue）＜ Value Provided ＞

Through the Time and Space where all our businesses is playing ,we contribute to Well-being of People and Local Communities

Harmony with the Co-prosperity with Success of Humansocietyenvironment
Resources①Realization of adecarbonized society②Creating a Recycling
Society④Mutual Prosperity with
⑦Active participation of
Local Communities
diverse humanresources⑤Building a sustainablesupply chain③Realization of a society ⑥Providing health value
in harmony with nature⑧Promote Responsible Drinking⑨Providing safe products and facilities

Corporate Governance
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Sustainability (most important issue)
Facilitate improvements in corporate value by addressing global and regional issues and working in collaboration withstakeholders,.
Most important
issue

Specific Initiatives

Major KPI

Realization ofadecarbonizedsociety・Reducing CO2
emissions in In-housebases, Supply Chains

・CO2 reduction
Scope 1,2 SBT certification(4.2%/year reduction)
Scope 3 SBT authorization-level(2.5%/year reduction)※Submitted and accepted commitment letter to SBTi

MutualProsperity
with Local
Communities

・Enhancing Regional
Value・By utilizing our own
resources Solving
Regional Issues

・Enhancing the value of owned properties
and creating livelihood
・Promoting Regional Revitalization
Projects
・Supporting lemon production in Japan

Activeparticipationof diversehuman
resources

・Promoting D&I
・Improving
productivity of
Human capital
investments

・Ratio of female executives andmanagers: 12% or more*1
・Work engagement: Over 54*2

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※1 22-year results: Female officers 8.3%, Female managers 5.4%
※2 Employee Awareness through Advantage Risk Management Co.,Ltd.
Work Engagement Deviation Value of the Survey
22-year results... 53.6 Reference. Average of enterprises surveyed:
50.2

Creating Economic Value
・Reduction in energy consumption byenergy conservation, etc.
・Control of cost increases whencarbon tax is introduced
・Enhancing area brand value andRobust profitability from owned
property

・New Sales Opportunities by Regional
Co-Creation initiatives
・Enhancing work engagement,
Productivity improvement

Financial Strategies

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29

Financial Strategies (Big Picture)
Financial Strategy Focused on Sustainable Growth and Capital Efficiency- Strengthening cash generation capabilities and improving capital efficiency to ensure increased corporate value Generation of cash flow

Cash Allocation Policy- Maximizing Cash Generation Capability -- Clarifying allocation policy and setting priorities -■ Reinforcement of the cash flow generation ability of each business・Reinforcing profitability through business growth and cost structure reforms■ Effective utilization of capital・Investment in overseas businesses with growth potential
・Investment in domestic business to reinforce the revenue base・Revision of the business portfolio

Corporate value improvement

Financial targets and indicators

・Sustainability investments aimed at solving social issues *1■ Appropriate balance sheet management
・Optimize asset efficiency *Cross-shareholdings: Less than 20% of capital
・Reconfigure the business portfolio and real estate holdings
・Support growth investments within our debt capacity

Core operating profit*1 Sustainability-related facilities investment, etc.

Improved cash generation with growth and■ Policy on shareholder returns

returns in excess of capital costs

・Emphasize stable dividends and increase their level

ROE : 8%

(Consolidated dividend payout ratio of at least 30% as a basic policy*2)*2 Excludes temporary special factors such as the reorganization of thebusiness portfolio and the sale of real estate holdings

Operating cash flow
Reinvestment

Improvement of asset efficiency and sale of inefficient assets
Improvement of capital efficiency within the Group(Reinforcement of cash management)Interest-bearing debt financing

Shareholder returns

Maintenanceinvestment
GrowthInvestment

Sustainability
Investment*1

CAGR of EBITDA: Around 10%(compound annual growth rate)(CAGR)CAGR of Overseas Net Sales: Around 10％(compound annual growth rate)(CAGR)

Dividends

Fundraising policy
Control the balance of interest-bearing debt to ensure the maintenance of our rating by using the D/E ratio and EBITDA to interest-bearing debt ratio as monitoring indicators
Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

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Financial Strategies (Cash Allocation Policy)
We will maintain financial soundness by balancing operating and investment cash flows.
We will respond flexibly to growth investment opportunities such as M&A by utilizing financial leveraging to the extent that
our current rating can be maintained.
■ Cash allocation during the four-year period (2023-2026 plan)
Cash-inCash-out

Policy on investment
・Actively promote growth investment to accelerate the speed of businessgrowth・Priority targets for growth investments are the overseas Alcoholic
Beverages and overseas Soft Drinks businesses

CF from operating
activities
150.0

Maintenance/Growthinvestment - Asset sale

130.0
(About 50% is growth investment)

Shareholder returns

Fundraising as needed

Utilizing leveraging to the extent
our rating can be maintained
Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

Agile growth investment

・Sustainability-related investment will be promoted while considering thereturn on investment from a long-term perspective

・Agile growth investment(e.g., M&A)
→ Respond flexibly to profitable growth investment opportunities

Asset reduction policy
・Real Estate
Promote securitization through the advancement of the Value-Added Real Estate
Securitization business and reconfiguration of the property portfolio
・Cross-shareholdings
Achieve a ratio of less than 20% of capital to capital ratio and continuously
improve the ratio

Policy on shareholder returns
・We will aim to increase the dividend level in line with profit growth over the
medium to long term while maintaining stable dividend with the current dividendlevel as the lower limit.
(Consolidated dividend payout ratio of at least 30% as a basic policy*)*Excludes temporary special factors such as the reorganization of the business portfolio and the sale of real estate holdings

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Management Platform, etc.

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32

Initiatives for Management Platform
We will strengthen the management foundation that supports business and financial strategies and sustainability in order toachieve business structure transformation and new growth.
We will identify priority activities and allocate resources in the areas of Human Assets, DX, and R&D.
Important measures

Human
assetsSpecific policies (-2026)① Aggressive investment for speedy growth② Promoting diversity③ Increasing engagement and promoting health④ Development of management talent

Target: Holdings Companies and Major Group Companies① Active investment in development/securing of and strategic allocation of human resources based on a global human asset
development system② Creating an environment conducive to D&I, achieving a female executive/management ratio of at least 12%*
③ Improving work engagement by reinforcing supportive management skills and supporting mental toughness④ Growth support and placement based on Group-wide Succession Plan
* Results as of the end of September 2022: Female executives 8.3％, Female managers 5.4％

DX

➀ Building a system for the promotion of DX/IT
strategies➁ Improvement of organizational and humanasset management③ Success of developed human assets,
development/operation of environment① Creation of multifaceted operational synergies through the organizational and functional integration of DX and IT② Increasing the level of human resources of the entire Group through systematic development, hiring, and utilization③ Facilitation of a new environment for creating business process reform and the development of new business realms

Goal Image

R&D

Important measures

・Converting our strengths into valuethat the world demands and providing it
on an ongoing basis

Alcoholic
Beverages

・Creation of new categories andmarkets

Food & Soft
DrinksCopyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

・Developing technologies for sustainable raw material procurement … Climate change-ready barley and hops
・Pursuit of the taste and function of alcoholic beverages … Scientific clarification and business application of"Intoxication and Health”
・Pursuit of new drinking experiences … Fostering empathy through the use of the digital, providing entertainment, etc.

・Research on the health functions and improving the quality of lemons … Expanding the uses for lemon juice
・Creating new value from untapped resources … Utilization of whole lemons as ingredients33

Toward Creating New Value
We will aim to create value as an opportunity for new growth through efforts including collaboration with external parties.

Major Initiatives
Uchi-repi(An app that allows intra-family communicate through cooking)・Our goal is to provide consumers with a convenient and comfortable smart lifestyle byestablishing an ecosystem for family meals that encompasses everything from shopping tocooking.
・We will build a cross-industry platform in collaboration with companies in different fields
and monetize the platform through promotions such as sending customers to stores.
■Future service developments① Linkage

Choosing
recipes

Communication
with your family

Cooking &Storageof shopping
information

Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

■Map
2030
Hokkaido Shinkansen
Extension (planned)

SapporoGardenPark

Planning
zone

Kita 5-jo DoriKita 4-jo Dori

③ Linkage of refrigerator
inventory data

Kita 3-jo Dori

Ishikari-kaido

・We will create new value in the form ofcontributing to the resolution of ongoing
local issues through a business that
undertakes municipal proposals.

■ Sapporo Factory Parking Lot
No. 4 Redevelopment Project

Sosei River

Regional Development Projects

・Through co-creation with local governments and partners in the area, and with thecollaboration with the Sapporo Factory and Sapporo Garden Park, we aim to create acreative community where the "work, live, and play" of the people who live there are allwithin walking distance.

Ekimae-dori

Shopping

・We have started a project to redevelop Sapporo Factory Parking Lot No. 4 into a new hubconnecting the Sosei East Area*.

JR Sapporo
Station④ Linkageof recipes② Linkage ofpurchasesuggestions

Our Community Building Efforts in Sapporo's Sosei East Area

SapporoFactory Hall

TDY Sapporo
Collaboration
Showroom

SapporoFactory

Hotel
ClubbySapporoKITAGASARENASAPPORO46

Nagayama
Memorial
Park

Kita 2-jo Dori■Examples

Local governments
Project application/
Commissioning

Public offering of business

Sapporo Beer

SapporoFactory
Fitness
Club

Clock
Tower

Odori ParkSAPPOROTV Tower

Bus Center Ekimae

Food service
companies andrestaurants
introduced by
Sapporo Beer

Conducting businessmeetings / Matching
Propose foodstuff

Purchase Ingredients

Local foodsuppliers
selected by local
governments* The Sosei East Area is attracting attention as an area with a concentration of cafes and restaurants thatmake use of historical buildings, theaters and galleries where the art scene gathers, and offices with astrong creative flavor.

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We will contribute to the well-being of people andregional societies though the times and spaces provided
by all of our businesses.

Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

35

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

The performance forecasts and forward-looking statements contained in this document were determined by theCompany in light of currently available information, and are subject to potential risks and uncertainties.
As such, please be aware that changes in various factors may cause actual results to differ significantly from theforward-looking statements included in this document.
Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved.

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