Sapporo Group Business Results Presentation
for the Six Months Ended June 30, 2019

August 6, 2019
URL https://www.sapporoholdings.jp./en/

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1. Progress in Structural Reform and Growth Fields・・・p3-6
2. Second-Quarter 2019 Highlights・・・・・・ ・ ・・・・・・ p7-21
3. Reference Materials・・・・・・・・・・・・・・・・・・・・・・p22-43

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Progress of Structural Reform
Steady progress has been made with structural reform of businesses facing issues
We plan to disclose the details by the time of reporting full-year earnings results for 2019
*Republished

SPEED 150
First Medium-Term Management Plan
(2017-2019)

Transformation with unprecedented speed
Towards shift to growth stage

2017 - 2018

<Achievements>- Transformation of the Group management platform- Strengthening of core brands<Issues>- Major environmental changes in the alcoholic
beverage and soft drinks businesses in Japan andoverseas⇒ Has resulted in delayed progress2020 -

2019<Topics>- Structural reform and foundation building
We have positioned 2019 as a year of change inwhich we will clarify and tackle the issues facing
the group- Law revision towards unification of liquor taxes- Tokyo Olympic and Paralympic Games- 130th anniversary of Yebisu beer
Dynamic growth of the Sapporo Group

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Strengthening of Beer Business and Approach to Low Price Category

Steady progress made with strengthening of beer business<YoY change in beer category sales volume>（％）(Monthly cumulative)

110

5

＋

%

3

＋

100
%

90
80

Sales volume ofBlack Label brand (cans)

2018 2Q

2019 2Q

Sales volume of Yebisu
brand (cans)

Jan

Feb

Mar

April

May

June

Total demand for beer2018 2Q

2019 2Q

Relaunch of Mugi to Hop and continued growth of RTD will be
key factors in the low-cost category

Total demand for Sapporo's beer(forecast by Sapporo)(billion yen)

<Sales of new genre and RTD products>

25
4.0

8.0

20
15

20.3

17.2

10
2018 2Q
Mugi to Hop to be relaunched on August 27

New genre
Copyright, 20192019 2Q
RTD

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Promote Global Business Expansion
Rising logistics costs have been weighing on profits in North America
We will build optimal SCM frameworks that enable production near crucial areas and put together a strong brandportfolio to aim for medium- to long-term growth.

＝Crucial
areas

Imports fromSleeman
New
York

BritishColumbia

California

Imports from
Sapporo Vietnam

Alberta

Texas

QuebecOntario

Acquisition of Wild
Rose

FloridaImage of population distribution
by state

We acquired Wild Rose, which, although small in size, has a high market share in Calgary
in Alberta Province, and enabled us to secure a local brand and production base in oneof the four crucial areas of Sleeman.

Imports from
Sapporo Vietnam

Other than Anchor, we don’t have any other local brands or production bases in California or thethree other crucial areas, which together account for 40% of our sales.
We will build a brand portfolio and SCM frameworks like we have in Canada, but this will taketime.
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Accelerate Growth in the Food Field
Procurement of ingredients is one of Yasuma Co., Ltd.’s strengths
We will pursue strengthening of the value chain and build a unique presence in specific categoriesA- Create synergies based on R&D

Ferment Granulate
Extract

Value chain

B- Ingredient procurement strengthened
with acquisition of Yasuma- Began lemon cultivation in Hiroshima
PrefectureC- Completion of soymilk yogurt plant- Cup soup manufacturing facility underconstruction

for refining the brand

Brand
D

E

- Expand food field with emphasis on
delicious taste, health, andconvenience, and focus on fields
where our presence can be felt

- Emphasize spaces where the brandcan be experienced in the food field
as well

Approx. 70%
market share

Approx. 20%
market share

Grind

Sterilize Condense

Developed miso
powder withprocessing
Approx. 90%
technology
Utilizemarket sharestrengths in
the alcoholic
Overwhelming
beverages
market sharebusinessin Okinawa

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Business Results

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Second-Quarter 2019 Highlights
The alcoholic beverages business (Japan) led growth, and revenue increased, but North American
beverages and food & soft drinks facing issues
Give priority to brand reinforcement and structural reform rather than short-term business performance(billions of yen)
YoY change

Revenue

Operating profit

Profit attributable to ownersof parent

YoY change

YoY change002017 2Q

2018 2Q

2019 2Q

While beer and RTD in Japan performed strongly
in the alcoholic beverage business, slowdown of
new genre products and impact of exchange rate
on North American alcoholic beverages resulted ina revenue decline of ¥1.2 billion
Revenue of the food & soft drinks businessincreased ¥2.4 billion, as sales were boosted byconsolidation of Yasuma and the recovery of North
American beverages

2017 2Q

2018 2Q

2019 2Q

Operating profit increased ¥2.9 billion, as cost
control in the alcoholic beverages business(Japan) and improvement in product mix morethan offset the profit decline in the food &beverages business2017 2Q

2018 2Q

2019 2Q

Loss narrowed as operating profit improved*All figures are based on IFRS

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Second-Quarter 2019 Highlights(billions of yen)

Balance of net debt

Equity2018-end

2018-end

2019 2Q

2019 2Q

D/E ratio (net)Cash basis investment

2019 planYoY change
times ±0.0 times

Group topics

Transformation of the Group management platform

Sapporo Holdings announces its support of the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD)
https://www.sapporoholdings.jp/news/dit/?id=8186

Lightweight beer can lids received prize at 43rd Kinoshita Awards (See slide 21)

Four beer companies to expand joint beer pallet collection initiative to cover entire
country (See slide 31)
http://www.sapporobeer.jp/news_release/0000022164/index.html

Launched Hottokenaido, a co-creation initiative, to support people taking on new
challenges in Hokkaido (See slide 32)
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2019

Revenue by Segment(billions of yen)

2018
2Q

2019
2Q

YoY changes(amount)

YoY changes(%)

Revenue by Segment

241.7

0.5%

Alcoholic Beverages

151.0(0.8)%

Japan & Asia

114.0

(0.4)

(0.4)%

North America

23.8

(0.5)

(2.0)%

Restaurants

13.2

(0.3)

(2.1)%

Food & Soft Drinks

75.8

Japan & Asia

62.4

1.1

1.7%

North America

13.4

1.3

10.1%

Real Estate
Other

3.2%

12.1
2.9

(0.2)%(0.0)(1.0)%

Factors are explainedin the next slide Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 10/44

Main Factors Contributing to Changes in Revenue
In addition to growth of beer and RTD, consolidation of Yasuma and improvement in North
American soft drinks more than offset decline in happoshu and new genre products
Alcoholic Beverages

Food & Soft Drinks= Increase= Decrease

Real Estate(billions of yen)
FY2019１H

RTD＋4.0
Japanese liquor -2.2
Rebate -1.0
Asian beer ＋0.2
FY20181H

Includingexchange rate -0.5

Including
new consolidation of
Yasuma +1.7

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2019

Operating Profit byOperating
Segment Profit by Segment(billions of yen)

2018
2Q
Operating Profit bySegment
Alcoholic Beverages

(2.7)

-

Food & Soft Drinks(1.7)

Japan & Asia
North America

Real Estate
Other
General corporate andintercompany eliminations

YoY changes(%)-

Restaurants

North America

YoY changes(amount)

(3.0)
(2.2)
0.1
(0.5)

Japan & Asia

2019
2Q

(1.4)
(0.4)

2.6
(0.7)
0.0

-

(0.6)
0.1

-

4.6
0.0

39.4%
-

(3.2)

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Main Factors Contributing to Changes in Operating Profit
Contribution from cost control and product mix improvement through strengthening of beer business
Sale of investment real estate in 1Q, and improvement of operating profit to almost flat year-on-year level(billions of yen)

Alcoholic Beverages

2018
1H

Real Estate

Food & Soft Drinks

2019
1H

Product mix +0.9
Non-alcoholic beer & RTD +1.2
Other +0.1

Including sales
promotion costs +1.4

Proceeds fromsale of Yebisu
Square +1.9

Sales volume -0.5
Production cost -0.3

= Increase= Decrease*Reclassification under IFRS: Other non-operating revenues and expenses as well as extraordinary income and loss.

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Alcoholic Beverages
Future initiatives, etc.

Situation in 2Q
Positive(1)

The beer market continues to decline and there are gaps with theforecast, but the mainstay brands have trended steadily.
We will pursue brand strengthening with focus on the Liquor Tax Act
revision.

(2) RTD sales doubled year on year(2)(3) Strong performance of Sapporo Premium continued in North
America

We will grow 99.99 as the core RTD product. First, we will givepriority to expanding sales and harvest profits from next year
onwards.

(3)

SKU reduction at retail outlets continues to be positive for Sapporo
brand. Incentive measures have been effective and shipment of can
products to CVS chains has been increasing.

(1) Continued to strengthen beer business in Japan
Sales of both Black Label and Yebisu in cans increased(4) New genre products declined year on year(5) Total demand in the Canadian market declined about 3%*
due to low temperatures and flooding, etc.
Revenue at Sleeman increased on a local currency basis due toactive investment of marketing funds, but operating profit declined(6) The beer market in San Francisco continues to stagnate
Anchor is facing a difficult time(4) The biggest problem facing Mugi to Hop is declining popularity amongcustomers in their 40s and 50s.
Based on the results of analysis, we will fully relaunch the product (onAug 27) and move forward with initiatives to curb the impact of theconsumption tax hike.
(5) We will work to maximize the impact of marketing investment.
The ratio of can products has been increasing also in Canada and wewill introduce products and production frameworks reflecting this trend.
(6) While market conditions are expected to remain adverse, we arepushing ahead with rebranding and framework enhancement.

Negative*Estimate for January-May period

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Food & Soft Drinks
Situation in 2Q

Future initiatives, etc.

Positive(1) Lemon-based food products continue to be strong (up 12%)(2) Consolidation of Yasuma contributed to revenue(3) Performance of overseas soft drinks (Asia) is showing a recovery(4) Signs of improvement in profitability of North American soft drinks(1) Propose commercial-use products and broadening of applications to
expand the market(2) Reduce future ingredient procurement risk.
Create synergies with POKKA SAPPORO Food & Beverage in various
value chains such as product development.
(3) We are working on reconstruction of the overseas soft drinks business(Asia), and Singapore and major export destinations have been steady(excluding UAE).
(4) Food service (FS) grew. Production efficiency also improved.

(5) Sales of soft drinks declining as the number of vending
machines in Japan falls(5) & (6) We will work on product promotion, including promotion of new
products, in the lead up to the peak seasons.

(6) Sales of soup products declined

Negative
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Real Estate
Situation in 2Q

Future initiatives, etc.

Positive(1) Mainstay properties maintained high occupancy rates(1) Aim for stable growth through regular maintenance and repair andmeasures to increase value.

(2) Purchased Meguro Villa Garden, Ebisu Minami Building,
Sreed EBISU, etc. Moved forward with urban renewal andstrategic reshuffling of the property portfolio.

(2) Continue to promote urban development through strategic reshuffling ofproperty portfolio.

-Nothing of note

Negative
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Special factors in the business results
Impact of exchange rates on operating profit is minimal<Special factors in business results (YoY)>
Business segment

Details

Alcoholic
Beverages

Wild Rose Brewery LTD.
Consolidated from 2Q of 2019

Food & Soft
DrinksYasuma Co., Ltd.
Consolidated from 2Q of 2019 * 1Q :Balance sheet only

Impact on
revenue

Impact on
operating profit--

Approx.
1.7 billion-

Impact on
revenue

Impact on
operating profit-: negligible impact<Impact of foreign exchange rates (currency translation)>*Average rates for the quarter

2018
2Q

2019
2Q

$US

¥108.68¥110.06

EUR¥131.55¥124.32$CAN¥85.06¥82.56$SG¥81.94¥80.99Approx.

Alcoholic Beverages-¥0.5 billion

Food & Soft Drinks--

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Changes in Balance Sheets
Total assets decreased ¥ 0.4 billion from year end

Cash and cash equivalents

Trade receivables→Seasonal factors, etc.

Inventories

Other current assets

Total assets(billions of yen)

Total assets

10.0
93.3
37.1
13.1

8.7
82.5
41.8
13.2

164.7

166.1

Current assets

YoY change-7.4

Fixed assets

Investment property

Goodwill

Other non-current assets

215.5

220.2

21.2
84.7

21.9
85.0

End of 2018

End of 2019 2Q

Non-current assets
YoY change＋7.0

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Changes in Balance Sheets
Total liabilities declined ¥1.4 billion from year end, total equity increased ¥1.0 billion

Trade payables

Total liabilities andequity(billions of yen)
Total liabilities andequityShort-term financial liabilities

Other current liabilities→Decrease in liquor tax payable, etc.

Long-term financial liabilities

Net defined benefit liabilities

Other non-current liabilities

Equity attributable to owners ofparentNon-controlling interests

35.3
73.9

36.0
83.7

105.4

99.3

154.5

153.0

11.7
94.2

6.5
95.0

161.5
3.2

End of 2018

Current liabilitiesYoY change＋4.4

Non-current liabilities
YoY change-5.8

Equity163.2

YoY change

＋1.0

2.5

End of 2019 2Q
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Financial Status① <Capital expenditure>

Investment on a cash basis was ¥26.5 billion

about ¥

<Consolidated cash flow (CF) statement>2018 2Q

2019 2Q

ChangeChange(%)

CF from operating
activities

11.1

13.6

2.6

23.1%

CF from investing
activities

-11.5

-14.9

-3.4

-

-0.4

-1.3

-0.8

-

-2.1

0.1

2.2

-

Free CF

CF from financing
activities(billions of yen)

Cash flow from investment activities:

48

50

¥
billionplanned over four-year period(¥50.7 billion planned in 2019)

40
30
20

40.2

10

31

36.5

32.7

② <Investment properties>
about ¥

billion in consolidated total③ <Lease fees> about ¥totalbillion in consolidated*Excluding lease fees for renting restaurant outlets<Changes in amount of investment (cash basis>

60

billion in consolidated total(property, plant and equipment, intangible assets)<Major items>
・“Alcoholic Beverages,” “Food,” and “Soft Drinks”-related: about¥6.8 billion
Domestic beer plant system upgrade work: About ¥2.0 billion
Capital investment at Sleeman: About ¥0.5 billion
Pokka plant facilities-related: About ¥2.0 billion and so on
・Group-wide infrastructure optimization, etc.: About ¥1.4 billion④ <Other investments> about ¥consolidated totalbillion in(including long-term prepaid expenses, investment securities,etc.)①+②+③+④ <2019 2Q investment total>(cash basis; including recurring capital expenditure and lease
fees)

about ¥

billion

26.5

0
2015

2016

2017

2018

2019

2020

(full-year)(full-year)(full-year)(full-year)(2Q)(full-year)
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Transformation of the Group Management Platform
R&D

Lightweight beer can caps won prize at 43rd Kinoshita Awards-CO2 emission reduction of as much as 1,200 tons a year by reducing the amount of aluminum used-

On June 18, Sapporo Breweries Ltd. received a prize at the 43rd Kinoshita Awards in the “Kaizen andRationalization Category”1 hosted by the Japan Packaging Institute. The prize was awarded for the “developmentof lightweight aluminum can caps for beer-taste beverages.”
The technology Sapporo has developed makes it possible to reduce the weight of can caps by about 7%.
Replacing all of the can caps of all beer-type products of the company (including beer-taste beverages) with these
newly developed can caps, would result in an annual CO2 emissions reduction of approximately 1,200 tons
(based on figures for 2018).
The characteristic feature of these new caps is that they achieve the same quality levels as conventional caps
despite being thinner. This is achieved by using a newly devised forming technique that employs beading2 on thesurface of the cap.
Moreover, it does not require large-scale capital investments on the part of either can or beer
manufacturers and almost no adjustments to production processes are necessary at beer
manufacturers, which means easy deployment in the industry.
The can caps were designed and manufactured by Daiwa Can Company, and Sapporo Breweries carried out
evaluation for practical use in a joint initiative.
Sapporo Breweries began using the caps it at its Chiba brewery in May 2018 ahead of other breweries and has
shipped more than 200 million cans featuring the new caps so far.
The company plans to gradually start using the caps at other plants in stages and will promote it as a new industry
standard for environment-friendly packaging.
*1 Kinoshita Award: A commendation project established to commemorate the long-standing achievements in the industry of the late Mr. Matasaburo Kinoshita, who was the second chairman of the Japan Packaging Institute. Prizes
are awarded every year to those who achieved remarkable results in packaging research and development as well as improvement and rationalization, and those who made distinguished achievements in the creation of new
packaging fields during the fiscal year.
*2 A groove machined onto the surface of the can caps.
https://www.sapporobeer.jp/news_release/0000011223/

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Appendix

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Appendix: 2018 2Q ( Previous year’s result ) Conversion Table of Revenue, Operating Profit by Segment*( ) denotes new segment

Revenue

Former segments
New segments(5 business domain (3 business domain
structure)
structure)

Difference

241.7

-

113.4

37.6

International (-)

37.8(37.8)

Food & Soft Drinks(Food & Soft Drinks)

59.6

16.1

13.2
12.1
5.7

(13.2)(2.8)(billions of yen)Japanese Alcoholic Beverage(Alcoholic Beverages)

Restaurants
Real Estate (Real Estate)
Other

Former segments
New segments(5 business domain (3 business domain
structure)
structure)

Operating profit
Japanese Alcoholic Beverage(Alcoholic Beverages)

Difference

(3.0)

-

(2.3)

(0.4)

International (-)

(0.2)

0.2

Food & Soft Drinks(Food & Soft Drinks)

(1.3)

(0.5)

Restaurants

(0.5)

0.5

4.6

-

Real Estate (Real Estate)[Corporate] Other

(3.3)

0.1

Remarks

・North American alcoholic beverages and Vietnam
moves to Alcoholic Beverages ¥24.5 billion
・North American soft drinks moves to Food & Soft
Drinks
¥13.4 billion

・To Alcoholic Beverages¥13.2 billion

・Shinshu-ichi Miso moves to Food & Soft Drinks¥2.8 billion

Remarks

・North American alcoholic beverages and Vietnam
moves to Alcoholic Beverages ¥0.2 billion
・North American soft drinks moves to Food & Soft
Drinks ¥-0.4 billion

・To Alcoholic Beverages¥-0.5 billion

・Shinshu-ichi Miso moves to Food & Soft Drinks¥-0.1 billion
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Appendix：Major sales & sale volume

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix：Alcoholic Beverages (Japan)＜Y-o-y change in sales volume of 3 core brands＞ （Cumulative sales）【Beer】（Sales volume）




%

Jan- Jun up ％ y-o-yBlack Label brand total : Unchanged y-o-y110（Sales of the canned version：up

100

Yebisu brand total : down

％ y-o-y）90％ y-o-y80（Sales volume）【Happoshu and new genre】

Jan- Jun down

Mugi to Hop brand total : down

70

Jan

％
％ y-o-y

Feb

Mar

Apr

May

Total beer demand

Sapporo total

Black Label

YebisuJun%【Wine, Spirits and other】（Sales revenue）


Wine：down％ y-o-y

RTD：up％ y-o-y

Spirits：up％ y-o-yJapanese liquor : down

120
100
80
60

％ y-o-y

Jan

Feb

Mar

Apr

Total new genre demand
Copyright, 2019

may

Jun

Mugi to Hop
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Appendix：Alcoholic Beverages (Japan)(10,000 cases)＜3 Core brand Jan- Jun Sales volume change＞＜Beer lineup (Jan- Jun break down)＞

900
800

16%

700
600

26%

500
400

58%

300
200
100
Black label

0
2013

2014

2015

Black label brand total

2016

2017

Yebisu brand total

2018

Yebisu

Other

2019

Mugi to Hop
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Appendix：Alcoholic Beverages (Japan)＜Jan- Jun sales breakdown by category＞＜Jan- Jun sales revenue＞(Billions of yen)

120.0

※Incl. liquor tax

100.0

80.0

33.4

38.4

33.3

31.8

5%

28.9
25.2

9%

21.0

Beer

8%

Happoshu & New genre
60.0
Wine & Spirits
40.0

69.2

68.0

67.8

72.1

76.3

71.5

Japanese liquor

74.4

17%

20.0

61%
*before subsidiary companies sales, elimination ofinter- company transactions and rebate deduction

0.0
2013

2014
Beer

2015

2016

2017

2018

2019

Happoshu & New genre

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Appendix：Alcoholic Beverages (Japan)＜Jan- Jun sales revenue＞(Billions of yen)

7
6
5
4

3.3

3.5

3.4

3.7

3.6

3.5

3.6

3
2
1

2.3

2.7

2.5

2.4

2.4

2.3

2.1

2013

2014

2015

2016

2017

2018

2019

0
Japanese wine

5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0

2.5

2.6

2.6

2013

2014

2015

9
8
7
6
5
4
3
2
1
0

7.9
1.2

2.3

2

2.4

2013

2014

2015

2016

3

2016

Spirits

3.4

2017

2018

3.9

2017

2018

7.6

7.8

7.9

2016

2017

2019

ＲＴＤ

Imported wine

3.9

3.1

4.5

2019

9
8
7
6
5
4
3
2
1
0

6.2

6.8

6.9

2013

2014

2015

5.7

2018

2019

Japanese liquor
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28/44

Appendix：Major New Alcoholic Beverages (Japan) Product Launches in Apr, May, and Jun*incl. improved products (*1)

Limited version of
Sapporo Classic
Sapporo Draft Beer Black Label
Extra Brew

９９.９９＜Four Nines＞
Clear ice

Limited version of Yebisu

Lemon The Rich series

Limited version of
Sapporo Classic

Plum cocktail Umekaku
Gold kiwi

Sapporo Draft One (*1)

Limited version of
Mugi to HopLimited version of
Mugi to Hop

Ai no Skal White Sour series

Hokkaido Draft Beer

Kireto Lemon Sour Boost

Copyright, 2019

Nectar sour

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Appendix：Alcoholic Beverages (Japan)
The Sapporo Draft Beer Black Label THE BAR opens first year-round antenna shop
Offering the “perfect draft beer” to customers at “the moment beer is most delicious”

Sapporo Breweries Ltd. opened the Sapporo Draft Beer Black Label THE BAR inbasement level 1 of GINZA PLACE on July 5. The idea of the bar is to be exceedingly
particular about the quality of the perfectly served draft beer it provides.
Based on the concept that the “moment when beer is most delicious is when it is one’s
first glass of the day,” the shop is a year-round beer bar that is particular about offering
the perfect draft beer as the first drink of the day for the customers, who can enjoy Black
Label poured in three different ways.
We have positioned the Black Label brand as a pillar to underpin the strengthening of
the beer business, and consider the high quality worldview and drinking experienceembodied by “the perfect draft beer” as an important customer contact opportunity. We
have been holding limited-time events around the country with an “experience theperfect draft beer” theme, with the aim of encouraging as many customers as possible tosavor a perfect Black Label experience. This time around, we opened our first yearround antenna shop in Ginza, where the company launched beer hall culture in Japan
120 years ago, and will continue to create further opportunities for contacts withcustomers.

https://www.sapporobeer.jp/news_release/0000011221/

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Appendix：Alcoholic Beverages (Japan)
Nation-wide implementation of joint collection of beer pallets by four beer companies

Sapporo Breweries Ltd. (President: Hideya Takashima), Suntory Beer Ltd. (President: Kenji Yamada), Asahi Breweries, Ltd. (President:
Kenichi Shiozawa) and Kirin Brewery Company, Ltd. (President: Takayuki Fuse) have agreed to incrementally expand the joint beer pallet
collection initiative, implemented in the Tohoku area since November 2018, to also cover the greater Tokyo area, Tokai, and Kyushu areas.
Further, the collection is scheduled to be expanded to other areas from November 2019 so as to cover the entire nation.
Following the area expansion in July, CO2 emission reduction accelerated further thanks to improvement in loading rates of the vehicles
and reduction in the distances covered for collection, and annual CO2 emission is calculated to go down by about 4,778t (down about 47%)compared to existing levels for the four beer manufacturers together.
P-Pallets, standardized pallets for the alcoholic beverages industry, have been in use since 1992. The standardization of P-Pallet
management operations (standardization of receipts and introduction of a common transaction system) has been making progress since theincorporation of the P-Pallet Common Users Association in 2013, but pallet collection from customers was being handled individually byeach company.
Customers with a total of 10,000 or more pallets of P-Pallet Common Users Association members collected from their premises per annum
are eligible for joint pallet collection, and the four companies will share the burden of P-Pallet collection (by selecting the collecting agent foreach customer) and the collecting agent will collect the pallets for the four companies*¹ from each customer.
<Pallet collection><Product shipment>*Collecting agent
chosen from one of
the four companies
below

Customer*1 P-Pallets of four beverage companies belonging to the group of the four beer companies are also included in the joint collection
https://www.sapporobeer.jp/news_release/0000009290/

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix：Alcoholic Beverages (Japan)
Launch of “Hottokenaido,” a co-creation initiative that supports new endeavors in Hokkaido-First initiative of its kind in the world!? Support the project by having a drink!-

Hottokenaido

Kampai ☆ Funding

Support!

Sapporo Breweries, Ltd., under the slogan “What can we do for our hometown?” hasbeen cooperating with the government of Hokkaido, where the company wasestablished, and carrying out initiatives aimed at contributing to the revitalization of theregion. We thus started a co-creation initiative “Hottokenaido” on June 6, 2019 aimed atdeveloping a community that brings together “challengers” who want to take on new
projects and “supporters” who want to support their activities.

Challenge!

Drink charge

DrinksHalf of the cost of drinks
consumed by all at “Hottokenai
Bar” or eligible events goes toproject funding!

Project
funding

Half of drink
chargeSecretariat

At the center of the campaign is the “Hottokenai Awards (presentation event),” where“Kampai ☆ Funding,” which offers funding for projects announced by challengers, will beheld.
“Kampai ☆ Funding” is an initiative, maybe the first such initiative in the world, where
half the amount paid for a drink at the “Hottokenai Bar*¹” is used to fund the project you
wish to support.
Sapporo Breweries, through this initiative, will continue to support further revitalization of
Hokkaido.

Pitch event “Hottokenai Awards”“I hereby declare that would like to take on the challenge of
XXX in Hokkaido!)

Walk onstage

Funding

Post
information

Interaction*1 Permanent store in Sapporo, Hokkaido. Limited-time-only store in Tokyo. See website below for details.
Initiative name: Hottokenaido
Launched on: June 6, 2019
Site: https://hottokenaido.com/

Kampai ☆ Funding

Challenger

Disseminated through website(https://hottokenaido.com) and social media suchas Facebook

Participate

Payment
Supporter

View

Interaction
Social space “Hottokenai BAR”

Registering, etc. with “Do! Min” community
Activity
promotion
Participate

Activity
promotion

Talk event “Hottokenai Show”

Copyright, 2019

Participate

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Appendix：Alcoholic Beverages (Overseas)【Overseas brand】
Jan- Jun down

（Products of Sleeman and Anchor)％＜Overseas sales volume (Jan-Jun)＞（10,000 cases）
700【Sapporo brand】
Jan- Jun up

600

％

500

【Vietnam】
Jan- Jun up％（including export）＜Y-o-y change in domestic sales volume in Vietnam>

400
300

598

593

604

606

615

662

645

200

120%
100%

100

223

235

265

2013

2014

2015

272

292

305

319

2016

2017

2018

2019

80%
0

60%
40%

Sapporo brand20%

Sleeman brandSleeman+ Anchor

0%17.2Q 17.3Q 17.4Q 18.1Q 18.2Q 18.3Q 18.4Q 19.1Q 19.2Q

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix：Alcoholic Beverages (Overseas)＜Sleeman：Sales revenue in local currency (Jan- Jun）＞*before elimination of inter- company transactions

300＜Sapporo U.S.A.& Anchor：Sales revenue in local currency (Jan- Jun）＞*before elimination of inter- company transactions

50
J GAAP（Excluded liquor
tax）

IFRS
（Included liquor
tax）

250

Acquired Anchor

45
40
35

200

30
150

25

236 244 246
100

50

105

115 124 127

147

154 156 163 164

43

20
15
10

24

21

25

27

28

29

29

30

29

42

32

5
0

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20192008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019SLEEMAN(Can$ million)

USA（US$ million）
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix: Alcoholic Beverages (Overseas)
Acquired Wild Rose Brewery, Canada (hereinafter referred to as “WR”)<Company profile>-Location:-Established:-Annual sales:-Production capacity:-Sales breakdown:-Sales by province:-Sales by container:-Sales:Calgary, Alberta, Canada
1996
2018: 20,928HL (about 165,000 cases of large bottles)
33,300HL/year (about 261,000 cases of large bottles)
100% premium brand
Alberta 100％ (of which 74% in Calgary City)
Kegs 60%, bottles (one-way) 28%, can 12%2018 – approx. 8 million $CA<Background to acquisition>-The province of Alberta (AB) was the last of the four strategic markets that Sleeman enteredand it is currently an area with the highest growth rate in sales and high contribution levels(grew close to 10% last year).
-As Sleeman did not own any regional brand or production base in the Prairie Provinces(Alberta, Saskatchewan, and Manitoba), it had been considering carrying out M&A activities
there for some time.
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix：Alcoholic Beverages (Restaurants)＜Sales revenue and number of Sapporo Lion Outlets>(Billions of yen)

※before rebate deduction

14
12
10

189
12.1

220
200

183

8
6

＜Sapporo Lion outlets＞ As of June 30, 2019

11.8

174
11.8

173
11.5

174
11.9

170
11.3

180

159
11.3

4

160
140

4

14

7 10
Tokyo Metroporitan
Kanto (excl. Tokyo)

20

Hokkaido

159 Outlets

120

TohokuNagoya

100
2013

2014

2015

2016

Sales revenue

2017

2018

2019

Number of outlets＜Total number of outlets＞

76

24

KansaiOther

24＜Brands＞

159

Sapporo Lion

8

186 Outlets

New Sanko
Marushinkawamura

18
1Singapore（1~6月累計）

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Appendix：Food & Soft Drinks【Lemon based-drinks】
Jan-Jun up％ y-o-y【Lemon-based food products】
（Sales volume)

Jan-Jun up＜ Japanese soft drinks
POKKA SAPPORO Food & Beverage
Sales composition by sales channel (Jan- Jun)

％ y-o-y45%（Sales volume)

19.54 million【Unsweetened tea drinks】
Jan-Jun Unchanged y-o-y（Sales volume)【Soups】
Jan-Jun down

％ y-o-y55%※Vending machines (end of Jun.)
own brand machines : about 79,000+ Multi-brand machines＜Japanese soft drinks
Sales composition by genre (Jan- Jun)>【Coffee drinks】
Jan-Jun down

（Sales volume)【Soy milk, chilled products】％ y-o-y

Jan-Jun up

Jan-Jun up％ y-o-y（Sales volume)【U.S. Soft drinks 】
Relailercases（Sales volume)

Vending machines％ y-o-y（Sales revenue after elimination of inter-company transactions）

17%
4%
17%

18% Coffee drinks
Lemon-based drinks

19.54 million

Tea drinks
Carbonated drinks

cases

Water
Other

27%
Copyright, 201917%
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Appendix：Food & Soft Drinks＜ ＜ Food & Soft Drinks segment
Revenue break down by geographic area ＞【Pokka Create Co., Ltd.】Jan- Jun Sales revenueup

83%

billion％ y-o-y＜ Number of outlets as of Jun 30, 2019>

113

17%

East Japan

57
Japan

3%

West Japan
Decreased 4 outlets compared with2018 4Q（East±0、Central-1、West＋5）

36＜ Overseas soft drinks
POKKA Corporation (Singapore)
Sales composition (Jan- Jun) ）

115
32%

¥36.4
billion

102

Food

91

SG＄ million

Soy and Chilled product206 outlets

68%

72%
Soft drinks

Central Japan

Overseas＜Japanese soft drinks
POKKA SAPPORO Food & Beverage
Sales composition (Jan- Jun)25%

206 outlets

Singapore

ExportDirectory operated
FC
Decreased 4 outlets compared with2018 4Q（Directory operated +7、FC-3）

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix: Major New Food & Soft Drinks (Japan) Product Launches in Apr, May, and Jun

Unsweetened tea(Hokkaido Yasashii Umacha)

SOYBIO Soymilk yogurt
Almond Breeze series

Jikkuri kotokoto Soup

Lemonade Stand Promotion Association: Child cancer donation
LEMON MADE

Purune jelly
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix：Food & Soft Drinks
Start of lemon cultivation in Osakikamijima Town (Hiroshima)
POKKA SAPPORO Food & Beverages Ltd. started cultivation of lemon in Osakikamijima Town, Toyoda-gun, Hiroshima Prefecture, in April 2019 with theaim of revitalizing lemon production in Japan.
Ever since starting the lemon business in 1957, we have been proposing a lifestyle with lemons to our customers through the development of lemonbased products and research related to the fruit. Of late, with the demand for lemon increasing, the market for lemons produced in Japan is also
expanding.¹
At the same time, there is a shortage in production and supply of lemon due to the aging and lack of successors of lemon farmers in Japan, and it has
become difficult to sufficiently cater to the rising demand. Based on the recognition that stable production is necessary to achieve sustainable expansionin lemon demand in the country, we aim to contribute to the further revitalization of the domestic lemon market by engaging ourselves in the cultivation oflemon, gaining an understanding of the challenges involved, and promoting lemon production together with the farmers. Lemon cultivation is being
carried out at the town of Osakikamijima in Hiroshima Prefecture, with which we have been cooperating based on an agreement signed with the town
regarding the promotion of lemon, and we will continue to engage in the development of agricultural environments working together with the local
community.

1 Source: Ministry of Agriculture, Forestry and Fisheries: Survey on specialty fruit tree production and shipment trends - cumulative statistics
on cultivation conditions by type of tree
2 A partnership agreement was signed in February 2013 between parent Sapporo Holdings and Hiroshima Prefecture for the improvement of lemon
production in Hiroshima, and in April 2016 we entered into a business alliance with JA Hiroshima Yutaka agricultural cooperative and a comprehensive
agreement with Osakikamijima Town, Toyoda-gun, Hiroshima Prefecture, as well as an alliance agreement in April 2017 with Kure City, Hiroshima
Prefecture, aimed at revitalizing the lemon industry and the region.

https://www.pokkasapporo-fb.jp/company/news/release/190410_01.html

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix：Food & Soft Drinks
Acquired Yasuma Co., Ltd., a company with strengths inspices and seasonings<Company profile>-Established:-Capitalization:-Employees:-Locations:1947
90 million yen
Approx. 200
Tokyo Head Office, Osaka Office,Yokohama Plant, Shizuoka Plant, Shizuoka R&D Center<Background toacquisition>
Yasuma’s strengths(1) Strong procurement network for diverse raw materials and products led by high-quality spices and herbs fromcountries around the world(2) Technological capabilities, quality control, and R&D capabilities(3) Ability to develop applications that can respond swiftly to customer demands
 The acquisition was carried out in order to strengthen raw material procurement capabilities as we aim to expand
our activities in the food field.
It is also expected to create synergies with POKKA SAPPORO Food & Beverage in product development, etc.
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix：Real Estate＜ Information about
Investment property ＞＜ Major rental properties & occupancy rates：（Averages for 2019 2Q )>＞Occupancy
rate（%）

Site area（㎡）

Floor area（㎡）

Yebisu Garden Place（1）56,943

298,00799

40 floors above
ground, 5 below

Ebisu First Square

2,596

16,012100

12 floors above
ground, 1 below

645

7,350

98

11 floors above
ground, 2 below

100

13 floors above
ground, 1 below

Ginza Place
Strata Ginza（2）1,117

11,411

No. of floors

500.0
400.0
300.0
200.0
100.0
0.0

*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)(billions of yen)

397.6
200.0

386.0
215.5

As of

As of

December 31, December 31,
2017

2018

Carrying value on the consolidated
statement of financial position
Fair value(billions of yen)(billions of yen)

＜Operating profit＞

2018 2Q

2019 2Q

Change＜EBITDA＞

2018 1Q

2019 1Q

ChangeYebisu Garden Place, etc.

3.5

3.4

(0.0)

Yebisu Garden Place, etc.

5.0

4.9

(0.1)

Hokkaido

0.4

0.5

0.0

Hokkaido

0.5

0.5

0.0

Other area & otheroperations

1.3

3.1

1.8

Other area & otheroperations

1.8

1.7

(0.2)

General corporate

(0.6)

(0.6)

(0.0)

General corporate

(0.1)

(0.1)

0.0

Total

4.6

6.3

1.8

Total

7.2

7.0

(0.2)
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Appendix: Real Estate
A new composite workplace offering new lifestyles to open in Yebisu Garden Place-Scheduled to open in fall 2019-

Yebisu Garden Place (location: Ebisu 4-chome, Shibuya-ku, Tokyo), operated by Sapporo Real Estate Co., Ltd. (Head Office: Shibuya-ku, Tokyo;
President: Hiroshi Tokimatsu) is marking its 25th anniversary in October 2019.
In this landmark year, we will renovate a portion of basement level 1 of the Glass Square of the facility to present a space that offers a lifestyle thatcombines work and life and open it for business in the fall of 2019.

A portion ofBasement level 1of Glass Square(approx. 1520m2)(Image of the facility after refurbishment)
https://sapporo-re.jp/pdf/sapporore/store/storage/cname_20190606111757.pdf

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

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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