Sapporo Group Business Results Presentation
for the Six Months Ended June 30, 2017

August 4, 2017
URL http://www.sapporoholdings.jp/english

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Contents
1. 2017 2Q Point

P3

2. 2017 2Q Results

P4~32

Appendix：Collection of Data by business

P33~52

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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First- Half 2017 Results Point Progress in line with initial plan

First-Half 2017
Point No change to full-year forecast
 Promote initiatives for transformation of the Group management
platform and enhancement brand Toward growth in the “Food” field and global business expansion
・Acquisition of entire equity in Anchor Brewing Company
・Transfer production of silver Cans which have been produced by
SLEEMAN, Canada to Vietnam
・Relaunch of soy milk yogurt , etc.

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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(billions of yen)2016 2Q

YoY changes(amount, %)Net sales (incl. liquor tax)

248.9

257.9

9.0

3.6%

Net sales (excl. liquor tax)

195.7

203.6

7.8

4.0%

0.0%

-

Overseas net sales to total(excl. liquor tax)

First-Half2017
Highlight

2017 2Q

21.9 ％

22.0 ％

Operating income

3.0

3.0

(0.0)

(1.0)%

Operating income before
goodwill amortization

4.9

4.9

(0.0)

(0.9)%

Ordinary income

2.6

2.6

0.0

1.3%

Profit attributable to ownersof parent

0.4

0.2

(0.2)

(52.3)%

226.3

221.1

(5.1)

(2.3)%

Balance of Net debt
Ｄ／Ｅratio
EBITDA※Net

1.5 times

1.3 times

(0.2)

-

15.9

16.4

0.5

3.5%

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Progress in line with initial plan; no change to full-year forecast
Sales of all businesses increased y-o-y, operating income
remained unchanged(billions of yen)

Net SalesFirst-Half 2017
Group Executive
Summary

Operating income

YoY Change

 Sales increased at all businesses, top-line
continues to grow

YoY Change Logistics, personnel, sales promotion cost
increased

Profit attributable toowners of parent

YoY Change Net income for the third consecutive termProfit declined due to the impact of the estimatedincome taxes for the organizational restructuring in
the previous fiscal year
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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(billions of yen)2016.2Q
Consolidated
Net sales

YoY changes(amount, %)

248.9

3.6％

125.7

1.4％

International

31.6

6.6%

Food & Soft Drinks

64.9

0.8%

Restaurants

12.6

9.2%

Real Estate

10.9

8.6%

3.0

82.7%

Japanese Alcoholic
Beverages

Net Sales by
Segment

2017.2Q

Other

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Sales growth led by beer in Japan, diversification, food & soft drinks,
and North America
Net increase from Ginza Place, Shinsyu-ichi Miso since September 2016
Japanese Alcoholic
Beverages

International

Food & Soft
DrinksRestaurants

Real Estate

2017
1H

(billions of yen)

Main Factors
Contributing toChangesin Net Sales

Diversification1.4
Subsidiarycompany -0.9

2016
1H

Overseas: -0.3
Café, etc.:+0.3= Increase= Decrease
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

* Name of the company changed from Miyasaka Jozo Co., Ltd. to Shinsyu-ichi Miso Co., Ltd. on July 1, 2017.

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(billions of yen)2016 2Q
Consolidated
operating income
Japanese Alcoholic
Beverages

Operating Income
by Segment2017 2Q

YoY changes

3.0
1.4

International(0.3)

Food & Soft Drinks(0.8)

Restaurants(0.0)

Real Estate

5.1

Other

(0.0)

General corporate andintercompany
eliminations(2.2)

Amortization of goodwill

1.9

0.0

International

0.8

0.0

Food & Soft Drinks

1.0

0.0

Operating income before
goodwill amortization

4.9

(0.0)
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Profit growth from high-performing businesses, while operating income remain unchanged y-o-ydue to investment in brand enhancement and management platform development
Japanese
Alcoholic
Beverages

International

Food & Soft
DrinksReal
Restaurants Estate(billions of yen)

Main Factors
Contributing toChangesin Operating
Income

2017
1H

2016
1H

= Increase= Decrease
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Overview of Each Business

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Strong sales of beer and diversification products boosted
marginal profit ratio; fixed cost increased due to brandinvestment, while operating income remained unchanged y-o-yJapanese Alcoholic
Beverages

Positive(Black Label sales volume(billions of yen)Sales

 Sales of all beer including Black Label, Yebisu and others remained
strongYoYchange% y-o-y, Yebisu% y-o-y, beer total%)

 Product mix improvement progressed(Beer’s component ratio among beer and beer-type beverages increased from 59% in FY2016 1H to
FY2017 1H: improvement in product mix added ¥BeerOperatingincomeHapposhu,
new genre

RTD, wine,
Japanese
liquor, etc.

% inbillion.) Sales of wine, Western spirits, Japanese liquor, and RTD exceeded
the levels a year earlier(Sales of wine businessYoYchange% y-o-y, those of spirits business% y-o-y) Slow sales trend for happoshu, new genre(Mugi to Hop brandB eer s al esv ol um e
i nc r eas e

H ap p oshu, newg enr e s al esv ol um e dec l i ne

Pr oduc t m i x,
I nc r eas e i nnonal c ohol i c
f i x ed c os tb eer , R TD ,i nc l . s al es
m anuf act uring p r om ot ion c os tc os t , et c .

W ine, s p i r it s

(Reference) *Estimates
Beer
down 1%
Total: Happoshu down 2%
demandNew genre unchanged

Negative% y-o-y, Goku Zero brand% y-o-y) Demand for beer-type beverages have weakened due to store priceincrease→The impact is gradually showing in the high price range also andwe need to stimulate demand going into the second half.
*See Appendix in slides 34 to 40.
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Japanese Alcoholic Beverages（(billions of yen)

Net Sales

YoYchange（Reference)

Beer

OperatingincomeHapposhu, new genre

RTD, wine, Japanese liquor,
etc.

*Estimates

Beer
down
Total
Happoshudown
demand :New genre unchanged

YoYchange*EstimatesTotal
demandProduct mix,
Beer sales volume
Happoshu, newincreasegenre sales volume nonalcoholic beer,
RTD, manufacturing
declinecost, etc.

Increase in fixed
cost incl. sales
promotion costWine, spirits

Total
demandCopyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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◎Implement strategy that focuses further on the
2 major brands

Going Forward

Black Label’s sales channels for young people have been expanding markedly and thenumber of outlets offering the product also has been expandingAlmost 90% of those who purchased Yebisu’s Hanamiyabi are users of brands
other than Yebisu brandThere is great potential for the two major brands to grow further and we will
expand brand contacts going to the peak phase(See Appendix in page 40)
As for Mugi to Hop and Goku Zero, we will shore up the declining trend within the limited
resources◎Measures to strengthen wine business andgrow it into the second pillar

 Introduced AI (artificial intelligence) at Azuminoikeda Vineyard for systemized cultivation
technology utilizing various data
Aim for further improvement in grape quality and speedy handing down of cultivation
technology by establishing the technology(http://www.sapporobeer.jp/news_release/0000021664/index.html)

 Continue to strengthen Luxury 4, whose sales have been strong.

(*Luxury 4: The four wine brands we are especially focusing on., Taittinger, Penfolds, Marques de Riscal, Grande Polaire）◎Go on the offensive with strong RTD

 Ai no Skal White Sour, which has been sold only in Western Japan,
achieved annual sales target (136,000 cases) in three months from launch.
 Nation-wide launch on September 5, 2017
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.
(http://www.sapporobeer.jp/news_release/0000021650/index.html)

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North America continues to be strong;pursuing reforms in Vietnam
International(billions of yen)

Sales

Positive Despite stagnation in the North American beer market, bothSleeman and Sapporo grew
(Sales volume at Sleeman

YoYchange%, Sapporo brand at Sapporo USA%)

 At CPF, food service and co-packing continue to be strong
 Exports to South Korea and Taiwan also grew, contributing toearnings
Operatingincome Like 1Q, sales in Vietnam declined due to the impact of controlled
sales promotion cost

YoYchange⇒ Currently promoting various structural reforms and aim to improve operating rate
and profitability by transferring production of Silver cans for North America andEurope to Vietnam (See slide 17 for details)
Sales volume
Increase in
Vietnami nScarl ee as s veo, l u m ef i x e d
I n cc roes at sien i nVietnamp r o d ui nc ct r m
i
x
,
N
o
r
t
h
A
m
e
r
i
c
a
,
ease,
fixed cost ine t c .p ri n
N
o
r
t
h
e
t
c
.
oduct mix, North America,A m ee rt icc. a i, n e N
t co. r t hetc.
America, etc.

(Reference) *Estimates
Canadian beer
down about 2%
Total :
U.S.
beer
demanddown about 2%

Negative

 Operating results of SSC slowed down as it was affected by thedifficult business environment such as the decline in orange juice
consumption in the U.S. and the reduction in orange yield in Florida*CPF: Country Pure Foods
SSC: Silver Springs Citrus*See Appendix in slides 41 and 42.
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International（(billions of yen)

Net Sales

YoYchange0.3

0.0（Reference)*Estimates

1.1

Canadian beerTotal
down about
demand :U.S. beer

down about

1.2

NORTH AMERICANNORTH AMERICAN SOFT
ALCOHOLIC BEVERAGESDRINKS

OperatingincomeVIETNAMEXPORTS, OTHER

YoYchange*EstimatesTotal
demandSales volume increase, productmix, etc. in North America, etc.

Increase in fixed cost in North
America, etc.

VietnamTotal
demandCopyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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◎SLEEMAN expanding partner businessGoing Forward

 SLEEMAN adopts the expansion of partner business as part of its growth strategy
 It has been building a relationship of trust with DIAGEO over the years. SLEEMAN has been
operating for more than 15 years in Quebec, continuing with the partner agreement in
logistics, contributing to earnings(Sales volume has increased 30% in the most recent two years)
 In April 2017, SLEEMAN signed partner agreement with Carlsberg Canada.
Began handling its products (Quebec)◎To generate synergies between the 2 soft drink
companies in North America

Various synergies can be generated suchas in production and purchasing
Aim to integrate SSC and CPF in 2018

◎CPF started to produce SideKicks internally Sales of Ridgefield’s SideKicks (sherbet), which it purchased in 2016, have been expandingsmoothly taking advantage of CPF’s sales network
 Though CPF had been outsourcing SideKicks production and did not have its own sherbet
factory, it began making the product at its own factory
given the strong earnings*CPF: Country Pure Foods
SSC: Silver Springs Citrus

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◎Promoting optimization of global supply chain

 Transfer production of so-called Silver cans which have been produced by Guelph Plant of SLEEMAN
to Vietnam
 As the transfer will create redundant capacity at SLEEMAN, the company will make those products
which it had been outsourcing to City Brewing at its own facility (some product will continue to bemade at City Brewing) Even though logistics cost increases, we will improve profitability of the overall International businessby improving the operating rate in Vietnam and switching to internal production of some products at
SLEEMAN

今後に向けてGoing Forward

SLEEMAN
Guelph Brewery
SAPPORO VIETNAMLong An Brewery

City
Brewery

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◎Acquisition of entire equity in Anchor Brewing
Company

Going Forward Anchor is a U.S. beer manufacturer which owns the prominent Anchor Steam Beer brand We signed an equity transfer agreement with Anchor Brewers & Distillers, LLC (hereinafter,“ABD”) and made Anchor Brewing a group company by acquiring the entire equity from ABD.
 In the Long-Term Management Vision SPEED150, we call for promotion of global businessexpansion and had been considering expansion of the beer business in the U.S., where weare the No. 1 beer brand among Asian beers for more than 30 years, through the acquisitionof a new brand in addition to further extension of Sapporo brand.
 We will increase the speed of business growth in the U.S by combining the strong brand andnetwork of Anchor with the foundation of our U.S. beer businessCompany nameAnchor Brewing Company, LLC (beer manufacturing and sales)

Location

1705 Mariposa Street, San Francisco, California, USA

Year founded

1896

RepresentativeCEO

Num. of
Employees
Production
plant

Matt Davenport160 (as of December 2016)
1 (San Francisco, California)

Sales volume

Approx. 1.75 million cases (equivalent to 355ml×24 bottles in 2016)

Annual Sales

Approx. 33 million USD (about ¥3.7 billion in fiscal 12/2016)* As Anchor is a limited liability company, it is an acquisition of equity instead of shares.
Copyright, 2017SAPPORO HOLDINGS LTD. All rights reserved.

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18/52

Areas in which we focus have been performing strongly, butconcerns over changes in overseas business environment
Food & Soft
Drinks Lemon-based products registered high growth rate
Positive(Lemon-based soft drinks sales volume% y-o-y, lemon-based food products%) Brand strength of Tabicha retto series improved, tea drinks maderapid progress(billions of yen)

(Tea drink sales volume% y-o-y) Shored up canned cold soup for summer; soup products performed
well(Soup sales volume% y-o-y) Cost improvement of aseptic bottling lines generated almost
billion yen (annual impact is expected to bebillion yen)
 Sales of coffee drinks continued to decline y-o-y as canned coffee
market shrinks
 Sales of mineral water in the non-focus areas declined→To offset it with the growth of focus areas (lemon-based, tea drinks, etc.)

 Market condition in Singapore worsened (decline in foreign workers→ demand for daily supplies fell) We are closely watching the Singaporean economy
Negative*Total demand data:
Source– Inryou-souken and Intage SRI Lemon-based products market (Sapporo’s definition)
Total for SM CVS formats in the instant soup market:
Jan-Jun 2017 y-o-y comparison of cumulative sales amount*See Appendix in slides 43 to 47.
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Food & Soft Drinks（(billions of yen)

Net Sales

YoYchange0.0（Reference)*Estimates

Domestic soft drinks

Total
up
demand : Lemon-based products

0.5

Instant soups
JAPANESE FOOD & SOFT DRINKS

Operatingincomeupup

OVERSEAS SOFT DRINKS, CAFÉ,ETC.

YoYchange*EstimatesTotal
demandSales increase, productmix, etc. at Japanesefood and soft drinks

Increase in sales
promotion cost

Increase in other fixed
cost

Overseas, Cafe, etc.

Total
demandCopyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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◎Focused investment in high-performing
lemon-based products, tea drinks, soups

Going Forward

 Leveraging canned cold soups, in which we have the top share, we will stimulate demand in
the summer and expand the market
 Further expand the tea drink business with the Tabicha retto series, which uses rareingredients grown in Japan Signed a partnership agreement with Hiroshima Prefecture regarding Setouchi Hiroshima
Lemon in 2013 and another agreement with the town of Osakikamijima-cho, Toyota-gun,
Hiroshima Prefecture regarding Ocho Lemon in 2016.
In April 2017, we signed an agreement aimed at promotion of Kure Lemon and vitalization of
the region with the city of Kure, Hiroshima Prefecture.
⇒Strengthened the partnerships with lemon farmers and the region with the aim of
becoming a comprehensive lemon-product company(https://www.pokkasapporo-fb.jp/company/news/release/170412_01.html)◎Relaunch of Tōnyū de Tsukutta Yogurt

 While we have a 70% share in the soymilk yogurt market, its size is still small and there isroom for significant growth We will relaunch the yogurt certified as food for specified health uses, which is marking the20th year of its introduction, and take the initiative as the leader in building the market(https://www.pokkasapporo-fb.jp/company/news/release/170615_01.html)◎Start commercial production in Indonesia,
Myanmar Strengthen our competitiveness with the local production model in the growing soft drink
market in Southeast Asia
(See Appendix in slide 47 for details)
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Continuing with the sales growth trend,
but at a rate slightly weaker than the plan
Restaurants

Positive

 Nonconsolidated sales of Sapporo Lion continued to be strong(Comparable-store sales% y-o-y)(billions of yen)

Sales

Marushinkawamura

Operatingincome Marushinkawamura contributed to sales

YoYchange(Total sales for Jan-Jun period were about ¥January - May were net increase)billion → As consolidation started in June 2016, sales from Yebisu Bar Hiroshima, Shin Yokohama outlets opened in 1Q are
thriving

Other COGS ratio was in line with the plan in 1H reflecting; it is uncertain
about the factor for concerncontrol over menu

YoYchange Difficulty in hiring persists and personnel expenses are increasing
 LION GINZA 7-Chome and Haneda Airport outlets were closed forrefurbishment


Existing restaurants, newopenings, refurbishment, etc.

Negative(Sales decline caused by the closure from January 10 to February 28 for Ginza 7-Chome outlet and from
April 1 to July 2 for Haneda Airport outlet.) Sales are sluggish in Singapore*See Appendix in slide 44.
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◎Maintain sales with the mainstay outlets and thesuccessful Yebisu Bar format
Going Forward◎Measures to reduce cost

 In a market environment where the pressure of cost increase is mounting, we will implement
maximum measures such as COGS control and reduction of various expenses to reduce theimpact◎Disseminate brand through Yebisu Bar andGrande Polaire Winebar
 Having opened during February and March, 2017, sales at Yebisu Bar Hiroshima and ShinYokohama outlets have been significantly exceeding the plan As showrooms of the Sapporo Group, they serve as a forum for experiencing the Sapporo
Group brands

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Stable operation of mainstay properties
contributed to sales and profits
Real Estate

Positive(billions of yen)（Jan-Jun total occupancy rate

YoYchangeSales

 Yebisu Garden Place (YGP) maintained stable occupancy rate%) Ginza Place, opened in September 2016, contributed to sales andprofits
 Profit increased also at properties in Sapporo led by Sapporo Factory

Yebisu Garden

Ginza Place, etc.

Place

OperatingincomeYebisu Garden Place

YoYchange Nothing to mention in particular

Ginza Place, etc.

Negative*See Appendix in slides 45 to 47.
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Going Forward◎Stable operation of mainstay properties Yebisu Garden Place (YGP), Ginza Place and other mainstay properties maintained stable
occupancy Renovation work of the YGP Tower Restaurant Street on the 39th floor is progressing forAugust opening◎Completion of TDY Sapporo Collaboration
Showroom work
 Developed in property adjacent to Sapporo Factory located in Chuo ward, Sapporo
 Completed construction in May, Opening in July 2017 (See Appendix in slide 50)

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Difference in consolidated period of 2 group companies
Impact of exchange rates negligible(- = negligible)<Special factors in business results> (YoY)
Impact on
sales

Impact on
operatingincomeMarushinkawamura Inc.: consolidation began
in June 2016

Approx.
¥0.8 billion-

Shinsyu-ichi Miso Co., Ltd.: consolidation began in
October 2016

Approx.
¥2.7 billion-

Business segment

Restaurants

Special Factors
in the BusinessResults

Other

Details(- = negligible)<Impact of foreign exchange rates>
FY2016 2Q

Impact on
sales

Impact on
operatingincomeJapanese
Alcoholic
Beverages--

International--

Food & Soft
Drinks--

FY2017 2Q

US＄¥111.74¥112.34

EUR¥124.58¥121.66CAN＄¥83.90¥84.24

SG$¥80.89¥80.01

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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No significant factors affecting
Other Income and Expenses
2016 2Q

2017 2Q

Change

3.0

3.0

(0.0)

Financial account balance

(0.2)

(0.1)

0.1

Other non-operating
expenses

(0.2)

(0.2)

(0.0)

Ordinary income

2.6

2.6

0.0

Gain on sales of property,
plant and equipment

0.0

0.2

0.1

Other extra ordinary gains

0.0

0.0

0.0

-

Loss on sales/ disposal ofproperty, plant andequipment

(0.6)

(0.4)

0.2

-

Impairment loss

(0.1)

(0.2)

(0.1)

Other extra ordinary losses

(0.2)

(0.3)

（0.1)

Profit before income
taxes

1.7

1.9

0.2

-

(1.2)

(1.7)

(0.4)

2016：Special factor resulting fromorganization restructuring

0.4

0.2

(0.2)

(billions of yen)

Operating income

Changes in
Other Income
and Expenses

Corporate tax, noncontrolling interests

Profit attributable toowners of parent

Primary Reasons---

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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20.3 billion yen decline y-o-y in total assets<Comparison with the end of FY2016>

Cash and cash
equivalent

Total assets(billions of yen)

10.5

Changes in
Balance Sheets

Trade receivables

12.1

12.4

13.2

→Impact of seasonal factors,bank holidays, etc.

64.3

74.8

71.2

Inventory

41.2
17.0

41.1
16.7

40.6
15.5

346.2

344.2

29.2

96.8

9.4

10.5

68.4

78.9

37.9
18.7

40.7
19.5

42.0
19.0

346.4

356.0

352.7

352.2

28.8

27.6

27.4

26.2

25.3

79.3

76.5

77.4

78.7

73.6

77.9

2016 1Q

2016 2Q

2016 3Q

End of FY2016

2017 1Q

2017 2Q

Current
assetsCurrent assets, etc.

Fixed assets

Goodwill

Investments, etc.

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

Fixed
assets28/53

Total liabilities down by 19.5 billion yen,
total net assets down by 0.7 billion yen<Comparison with the end of FY2016>

Accounts payable
Short-term bank liabilities

Total(billions of yen)

34.6

38.5
37.8

38.8

35.8

36.2

73.4
Deposits received

101.4

94.8

10.2

8.5

71.8

80.9

66.2

8.2

7.5

Changes in
Balance Sheets(billions of yen)

Balance of net
debt(comparison withend of FY2016)(comparison with
2016 2Q)

Current liabilities, etc.
→Reduction in liquor taxes payable

91.9

162.2

154.2

152.8

8.9

8.6

8.3

74.1

70.4

71.6

140.1

134.9

137.4

19.1

22.8

164.7

143.9

Long-term liabilities, etc.

7.2

6.9

6.8

71.2

70.4

72.5

Shareholders' equity→Dividend payment

128.6

131.0

135.8

20.4

15.0

20.5
5.6
5.1
2016 3Q End of FY2016

Current
liabilities

8.4
84.0

138.2

Net defined benefit liability

8.8

78.8

74.0

82.2

Long-term bank liabilities→Transfer of current portion of bonds

79.0

Long-term
liabilities

Net assets

Accumulated other
D/E ratio*Net

comprehensive income
Non-controlling interests

5.5
2016 1Q

5.1
2016 2Q

14.7

5.5
2017 1Q

5.2
2017 2Q

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Cash basis investment totaled 11.9 billion yen(billions of yen)

Financial Status<Consolidated cash flow statements>
2016 2Q

2017 2Q

ChangeCash flow fromoperating activities

14.8

16.4

1.6

11.2%

Cash flow frominvestment activities

-14.0

-6.0

8.0

-

Free cash flow

0.7

10.4

9.7

1269.8%Cash flow fromfinancing activities

1.3

-10.5

-11.8

-

(billions of yen)

Cash flow from investment
activities:

40.0
35.0
30.0

billion yen

25.0

23.2

40.2

20.0

29.5

31.0

planned in four years（35.1 billion yen plannedin 2017 full-year)

10.0

2017
(2Q)

<Major items>- “Liquor,” “Food,” “Drinks” –related: about ¥5.3 billion(Nasu Plant one-way bottle-related work, etc.)- Real Estate-related: about ¥2.0 billion(Boosting value of YGP, etc.)- SGM Group infrastructure streamlining, etc.: about ¥1.1 billion*SGM: Sapporo Group Management Co., Ltd.

billionbillion in consolidated③<Other investment> about ¥total(Long-term prepaid expense, subsidiaries’ shares, investment
securities, etc.)<Major items>-Long-term prepaid expense (Japanese Alcoholic
Beverages/Food & Beverages) about ¥1.2 billion(Incl. cash basis, current capital expenditure, lease fees)

0.0
2014
2015
2016
(full‐year) (full‐year) (full‐year)

billion in①+②+③<FY2017 2Q investment total>

11.9

5.0

①<Capital expenditure, lease fees> about ¥consolidated total（tangibles, intangibles, lease fees, etc.)②<Lease fees> about ¥<Trend in investment (cash basis)>

45.0

15.0

%

2018

2019

2020

about ¥

billionCopyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

30/53

Promote initiatives for transformation of
the Group management platform
R&D

Transformationof the GroupManagement
Platform

Personnel,
human
resources- Established Delicious Taste Technology Research Centerin first quarter- Pursue measures for creating values in food
- Started health survey research related to lemon in
Osakikamijima-cho in Hiroshima Prefecture- Started trial run of new system for work style improvement((1) Interval system, (2) Team (pair) system, (3) Telework, (4) Hourly paid leave, (5) Super flex)- Promote hiring and nurturing of diverse human resources
including global human resources(Global training for managers, language, learning support one-of-a-kind hiring, volunteer dispatch to JICA, etc.)

Finance- Concrete measures for reviewing the strategic crossshareholding formulated in the first quarter- Started implementation according to the contents of thedrawn up measures from the second quarter

Others- Promote Group-wide operational efficiency using AI(artificial intelligence) technology→In the demonstration experiment, internal inquiry handlingwas reduced by 45%(http://www.sapporoholdings.jp/news_release/0000020382/index.html)
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Sapporo Breweries wins the top prize at the 36th European
Brewery Convention for the third consecutive time, a first in Japan The Group presented its research on the aroma of SORACHI ACE, a hop variety developed inJapan, at the 36th European Brewery Convention (EBC) held in Slovenia from May 14 to 18,
2017, and won the Best Poster award.
http://www.sapporobeer.jp/news_release/0000021634/index.html

Transformation  The convention is held once every two years and is one of the authoritative conferences in theworld related to beer brewing technology.
of the Group  The event attracts researchers in beer manufacturing from not only Europe but also from aroundthe world including Japan. Some 52 presentations were made in the oral section and 102 in theManagement
poster section, and the best one from each section was presented with the Best Paper award
Platformand Best Poster award respectively.
 Sapporo breweries is the only Japanese brewery tohave won this award and the award this time is the third
consecutive time the company has won the top
prize
Winning the 2017 Best Poster award
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Major sales & sales volume

Appendix-

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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（sales volume）【Beer】

Jan-Jun up％ y-o-y （total demand down 1％）

 Black Label Brand total up ％ y-o-y（Sales of the canned version：up

 Yebisu Brand total up

Appendix

Japanese Alcoholic
Beverages％ y-o-y）％ y-o-y＜Y-o-y change in sales volume of
3 core brands>
115
110
105
100

（sales volume）【Happoshu+new genre】

95
Jan Jan- Jun down ％(total demand unchanged y-o-y) Mugi to Hop Brand total down

％ y-o-y115

 Goku Zero Brand total down

％ y-o-y110【Wine , Spirits and other】（sales value）
 Wine：up％ y-o-y RTD : up

％ y-o-y Spirits：up

Mar

Apr

May

Total beer demand

Sapporo total

Black label

Yebisu

Jun

105
100
95
Jan

Feb

Mar

Total new genre demand％ y-o-y Japanese liquor：upFeb％ y-o-y

Apr

May

Jun

Mugi to Hop

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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＜Beer and beer-type beverages category
Jan- Jun sales volume Y-o-y Change (Shipment base)(10,000 cases)

3,000
2,500
2,000
1,500
1,000

＜Beer lineup (Jan – Jun breakdown＞

500

Appendix

14%

0
2011

Japanese Alcoholic
Beverages(10,000 cases)

2012

2013

2014

2015

2016

2017

Beer, happoshu, new genre

Beer

Happoshu, new genre＜3 core brand Jan- Jun Sales volume change＞

900
800
700
600
500
400
300
200
100
0

56%
30%
Black label

2011

2012

Black Label brand total

2013

2014

Yebisu brand total

2015

2016

Yebisu

Other

2017

Mugi to Hop brand total
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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6

※incl. liquor tax

120.0

3.5 3.4 3.6 3.7
2.8 3.1 3.3

4
2

100.0
80.0

(billions of yen)

8

＜Jan- Jun Net Sales＞ (billions of yen)

34.6

33.4

35.4

38.4

33.3

31.8

28.9

2.3 2.3 2.3 2.7 2.5 2.4 2.4

02011 2012 2013 2014 2015 2016 2017

60.0
40.0

Appendix

Japanese Alcoholic
Beverages

Japanese wine

68.0

69.2

68.0

68.0

67.8

72.1

76.2

4
3

20.0

2

0.0

1
2011

2012

2013
Beer

2014

2015

2016

2017

Imported wine

3.4
2.5 2.6 2.6 3.0
2.1
0.7

0

2011 2012 2013 2014 2015 2016 2017

Happoshu, New genre
10

Spirits＜Jan- Mar sales breakdown by category＞
5

4%

6%

Beer

7%

0
2011 2012 2013 2014 2015 2016 2017

Happoshu, new genre

127.5

Japanese liquor

4.0Wine, spirits

billions of yen
JapaneseLiqupr

23%

6.2 6.8 6.9 7.6 7.8
4.2 5.1

60%

RTD, Non‐alcoholicbeer, etc.

3.0
2.0
1.0
0.0

1.0 1.8 1.2

2.3 2.0 2.4

3.1

2011 2012 2013 2014 2015 2016 2017
ＲＴＤ
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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＜Jan-Jun Major New Products>

Black label extra brew
(Limited amount)

Black LabelSpecial edition can

Sapporo lager beer
(Limited amount)

Appendix

Japanese Alcoholic
Beverages

YEBISUSpecial edition can

Mugi to Hop brand(Limited amount)

Sapporo Classic
Natsuno soukai

Shizuoka bakushu(Regionally product)

Napolin Sour (RTD)

GokuzeroSpecial edition can

Umekaku soda (RTD)

Kireto Lemon sour
improved

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Awards in 2017Grande Polaire Hokkaido dry bacchus 2016*1 became the only Japanese wine to

win Gold at the International Wine & Spirits Competition 2017 (IWSC)
http://www.sapporobeer.jp/news_release/0000021618/index.html*1 Sales limited to Hokkaido area (excluding directly run outlets and Internet shop; to be shipped in August.)

Appendix

Won the Superior Taste Award 3 stars, the highest rank, for the fourthconsecutive year at the International Taste& Quality Institute with Sapporo WHITE BELG
http://www.sapporobeer.jp/news_release/0000021640/index.html



Honkaku Mugi Shochu Waramugi won bronze at the International Spirits Challenge*1
http://www.sapporobeer.jp/news_release/0000021645/index.html*1 International Spirits Challenge (ISC)
It is a spirits competition held every year by Drinks International, a British publisher specialized in the drinks industry.
Brand tasting is done by more than 50 specialists in the spirits industry over seven days and it awards gold, silver and bronze
in different categories including shochu, whiskey, brandy, gin and vodka.

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Sapporo Draft Beer Black Label
Expand brand contacts
THE PERFECT BEER GARDEN
2017 OSAKA

THE PERFECT DAYS2017

THE PERFECT BEER GARDEN
2017 TOKYO

Appendix

http://www.sapporobeer.jp/news_release/search/index.php?pageID=3#results

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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【U.S. soft drinks business】【SLEEMAN】
 Jan- Jun up ％ y-o-y *sales volume（total demand down 2%)

 Jan- Jun up

％

y-o-y

*sales revenue＜Ｕ.S. soft drinks business Net Sales in Local Currency(Jan-Jun)＞【Sapporo U.S.A.】* before elimination of inter- company transactions

 Jan- Jun up％ y-o-y *sales volume（total demand down 2%)

140

160

127

134

120
100
80

Appendix
International【Vietnam】
 Jan- Jun down

60
40
％

y-o-y *sales volume＜Y-o-y change in domestic sales volume
in Vietnam

20
0
2016

2017

Silver Springs Citrus （US$ millions）
Country Pure Foods （US$ millions）

140%
120%
100%
80%
60%
40%
20%
0%
16.1Q

16.2Q

16.3Q

16.4Q

17.1Q

17.2Q
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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＜SLEEMAN：Net Sales in Local Currency (Jan- Jun))*before elimination of inter- company transactions

200
180
160
140
120
100
80
60
40
20
0

Sapporo brand sales volume
breakdown by geographic area
34%

6%

2.92
17%

105 115124 127

147 154 156 163 164

174

1.81

millionmillion

cases

cases
2012
２Q

2017
２Q

77%

58%

North America

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Asia

Oceania, etc.

North America：Canada, U.S.

SLEEMAN(Can$ millions)

Asia：Vietnam, Singapore, South Korea, etc.
Oceania, etc.：Australia, Europe, etc.

＜Sapporo U.S.A.：Net Sales in Local Currency (Jan- Jun)

＜Trend of overseas sales volume of
Sapporo brand products (Jan- Jun)>

Appendix
International8%*before elimination of inter- company transactions

35

700

30

600

25

500

20

400

15
10

24

21

25

27

28

29

29

30

29

32

300
200
100

5

0

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
USA（US$ millions）（10,000 cases）

555

579

598

593

604

606

615

235

272

292

137

223

265

120

181

2010

2011

2012

2013

2014

2015

2016

2017

527

Sapporo brand

SLEEMANCopyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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【Lemon-based drinks】【Lemon-based food products】

 Jan-Jun up％ y-o-y【Unsweetened tea drinks】【Soups】

 Jan- Jun up

 Jan- Jun up％ y-o-yFood & Soft Drinks

 Jan- Jun down

％ y-o-y＜Japanese soft drinks
POKKA SAPPORO Food & Beverage
Sales composition by sales channel(Jan- Jun)＞

21.29
million52%％ y-o-y％ y-o-y【Soy milk, chilled products】【Coffee drinks】

AppendixJan- Jun up

 Jan –Jun Net Sales approx.
＜Japanese soft drinks
Sales composition by genre(Jan- Jun)＞

20%

48%
Vending machines
Retailer

cases

23%
21.29

Coffee drinks
Lemon‐based
drinksTea drinks

5%

millionCarbonated
Water

14%

cases

Other

※Vending machines (end of Jun.)
own brand machines : about 86,000+ Multi-brand machines

billion24%

14%

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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＜Food & Soft Drinks segment Net sales>(Jan- Jun)
70.0

※April 2011 Consolidation of

60.0

POKKA CORPORATION＜Food & Soft Drinks segment
Net sales break down by geographic area＞

84%

50.0
40.0

59.5 60.7 62.7 63.9 64.9 65.4

30.0
20.0

Appendix

Food & Soft Drinks

10.0

16%

39.4
24.1 18.1

14.8 14.5

0.02007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Japan

Overseas

Net sales＜Japanese soft drinks
POKKA SAPPORO Food & Beverage
Sales composition (Jan- Jun)＞＜Overseas soft drinks
POKKA Corporation (Singapore)
Sales composition (Jan- Jun)＞

2%
23%
105

¥41.9
billion

43%
75%

Soft drinks

Food

Soy milk

SG＄ million

57%
WithinSingapore
Exports
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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【Pokka Create CO., Ltd.】 Jan- Jun Net salesupbillion％ y-o-y<Number of outlets as of June 30, 2017 : 192>

＜New & refurbish outlets ＞

105

Appendix

50

East Japan192

Food & Soft Drinks

Central JapanWest Japan

37

107
85

192

Directory operatedFC

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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＜Jan- Jun Major new products＞

Kireto lemon sparkling
Lemon no genki
improved(Functional food label)

Appendix

Spice lemonade

Ribbon yuubari Ribbon yuubari
melon soda
melon gelly

Ribbon Napolinclassic

Tabicharetto series

Food & Soft Drinks

Yakitoukibicha

Jikkuri kotokoto
kongari
pan soup series

Nippon mugicha

Furano Lavender tea

Soya farm yogurt improved
Gabunomi series

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Soft drinks production plant in Indonesia
PT. POKKA DIMA INTERNATIONAL began operation
 One PET bottle filling line to fill green tea, black tea and fruit juice drinks in 350 to 500 ml
PET bottles was introduced in the new plant
 It mainly produces tea drinks such as Jasmine Green Tea 450 ml and 350 ml Lemon
Black Tea

Appendix[Profile of the new plant]
・Name: PT.POKKA DIMA INTERNATIONAL
・Location: Kampung Jabong I Dusun III RT.41/RW.06,
Desa Curugrendeng Kec. Jalancagak, Subang, Indonesia
・Plant Manager: Tatsuhiro Obayashi (director in charge of production)
・Employees: 74
・Site area: 64,000m2
Built-up area: 3,400 m2 (production), 3,400 m2 (warehouse)
・Products: Green tea, black tea, fruit juice drinks, etc.
・Production capacity: 350ml to 500ml PET bottles: 400 bottles/minute, 5 million cases/year
・Total construction cost: 200 billion Rp. (approx. 1.8 billion yen when 1 Rp. = 0.009 yen)https://www.pokkasapporo-fb.jp/company/news/release/170501_01.html

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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(billionsof yen)15.0

Trends of net sales and number of
Sapporo Lion Outlets

19.6

19.6

18.9

18.3
17.4

10.0

5.0

Appendix

10.6

11.8

12.1

11.8

11.8

17.3

11.5

17.4

11.9

0.0
2011

Restaurants

2012

2013

Net sales

2014

2015

2016

20.0
19.0
18.0
17.0
16.0
15.0
14.0
13.0
12.0
11.0
10.0

2017

Number of outlets＜Restaurants segment total number of outlets＞

174

9＜Sapporo Lion outlets ＞
As of June 30, 2017

6

14

9 8
Tokyo Metropolis
Kanto (excl.Tokyo)
Hokkaido

174

TohokuNagoyaKansai

26

89

Other

22
<Brands＞

Sapporo Lion
New Sanko
Marushinkawamura

199

Singapore

15

16
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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＜Major rental properties & occupancy rates：（Averages for 2017 2Q )Yebisu Garden Place（1）Ebisu First Square

Appendix
Real Estate

Site area（㎡）

Floor area（㎡）

Occupancyrate（%）

No. of floors

450.0

56,943

298,00798

40 floors above
ground, 5 below

350.0

100

12 floors above
ground, 1 below

2,596

16,012Ebisu Square

1,561

8,644

100

7 floors above
ground, 1 below

Ginza Place

645

7,350

98

11 floors above
ground, 2 below

100

13 floors above
ground, 1 below

Strata Ginza（2）＜Information about
Real Estate for lease＞

1,117

11,411(billions of yen)

400.0
300.0
250.0
200.0
100.0

197.7

(billions of yen)

0.0
As of December As of December
31, 2015
31, 2016
Balance sheet value

Fair value(billions of yen)

＜EBITDA＞

2016 2Q

2017 2Q

Yebisu Garden Place, etc.

5.5

5.6

0.1

0.1

Hokkaido

0.7

0.9

0.1

1.4

0.5

Other area & otheroperations

1.2

1.9

0.6

(0.3)

(0.4)

(0.1)

General corporate

(0.3)

(0.4)

(0.1)

5.1

5.8

0.6

7.2

7.9

0.7

＜Operating income＞

2016 2Q

2017 2Q

Yebisu Garden Place, etc.

4.0

4.2

0.1

Hokkaido

0.5

0.6

Other area & otheroperations

0.9

General corporate
Total

201.8

50.0

*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 the building(joint management)

389.1

357.4

150.0

ChangeTotal

ChangeEBITDA= Operating income + depreciation and amortization)
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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New commercial facility in the plot adjacent to Sapporo Factory
TDY Sapporo Collaboration Showroom completed
Redevelopment of the former parking lot 3 site adjacent to Sapporo Factory
Inaugurated in July 2017
The surrounding area is a key area in the Sapporo City Development Strategy
promoted by the city. We aim to improve the convenience of the residents tofurther revitalize the city through a synergistic effect with Sapporo Factory

Appendix

The facility is operated by three companies which have an alliance in the
refurbishment field – TOTO LTD., DAIKEN CORPORATION and YKK AP Inc. It
is the eighth outlet in the country and the first in Hokkaido.

http://www.sapporo-re.jp/news_release/pdf/20170515/20170515.pdf

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Shibuya Ward’s first company-led in-office nursery
Poppins Nursery School Ebisu Hop Kids opened on
April 1 at Yebisu Garden Place

A consortium-type (for multiple companies) in-office nursery utilizing thecompany-led childcare project*1, a childcare support system of the Cabinet
Office Established and operated by Poppins Corporation

Appendix

 Implementing original dietary education in the educare program at thenursery using POKKA’s lemon and Shinsyu Ichi Miso (soy beans) We hope that the development of an environment that enables both workand child care will improve Yebisu Garden Place’s brand value, while
contributing to the community and be of some help in reducing children on
the waiting list by allotting seats to Shibuya Ward residents.
*1 Company-led childcare project
A new system introduced by the Cabinet Office in April 2016. It provides
aid for development and operation of childcare facility for employees,
established in a company-led effort.

http://www.sapporo-re.jp/news_release/pdf/20170317/20170317.pdf

Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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Various Initiatives by the Sapporo Group

Selected as a member of the SNAM Sustainability Index again in 2017
-Sapporo Group’s ESG-related initiatives have been highly rated*The index is used for the SNAM sustainable fund management. The SNAM sustainable fund management began by
SNAM in August 2012 is a responsible investment product for pension funds and corporate investors invested incompanies with high ratings in ESG (environment, society, governance)
http://www.sapporoholdings.jp/news_release/0000020378/index.html

Appendix Managing public pensions, Government Pension Investment Fund (GPIF) selected issues for three stock indices for
ESG investment. Sapporo Group was selected for two of them.
 FTSE Blossom Japan Index
 MCSI Japan ESG Select Leaders Index

 Comprehensive collaboration agreement signed between
Kokugakuin University and Sapporo Holdings-To implement collaborative projects including community-linked
cooperation starting at Shibuya, next-generation human resources development and new value creation
http://www.sapporoholdings.jp/news_release/0000020375/index.html

 Nagano Prefecture and Sapporo Breweries signed the Biodiversity Protection Partnership
Agreement

http://www.sapporobeer.jp/news_release/0000021628/index.html
Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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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, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

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