Sapporo Group Business Results for 2019
Management Plan for 2020

February 13th 2020
URL https://www.sapporoholdings.jp/en/

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１．Group Management Plan 2024

・・・P3~P13

２．Management Plan for 2020

・・・P14~P28

３．Business Results for 2019・・・P29~P43

４．Appendix

・・・P44~P59

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

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Group Management Plan 2024

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

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First Medium-Term Management Plan: Revision

Formulation of Group Management Plan 2024
The Company has been promoting the “First Medium-Term Management Plan (2017-2020)” under theLong-Term Management Vision “SPEED150,” which covers the period up to the year 2026, the 150th
anniversary of the Company’s founding.
However, in light of the recent trends in its business performance, the Company determined that
continuation of current organizational structures and business activities would prove insufficient to
respond to changes in the market environment and customer consumption styles, and the decision was
therefore made to formulate a new medium-term management plan.
Taking into account the issues each business segment is facing and differences in the speed of growth ofeach respective business, the Company has set a formulated a five-year plan starting from the year 2020
and will vigorously push forward toward the achievement of the goals set in the plan for 2024.

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

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First Medium-Term Management Plan: Reflection
While we achieved a certain level of success in transitioning toward a growth stage in line withthe theme “Transform with unprecedented speed,” many issues also remained.
We judged that it would be difficult to sufficiently address these issues by continuing with theexisting plan

ThemesResults

IssuesTransformation of
the Group
management
platform Three-segment management format
based on core businesses
 Withdrew from unprofitable business(North American soft drinks)

 Shifting to compact head office
operations

Continued growth ofexisting business Steady growth of Black Label, RTD
expansion Sustained stable revenue from Real
Estate business Making Japanese alcoholic beverages
and soft drinks businesses more
resilient

Delivering resultswith investment
business

 Turned Vietnam business profitable Rebuilding and expansion of North
American alcoholic beverages
business

Capturing growth
opportunities Started operations of new soup, soybeans, and chilled products facility Acquired Yasuma Co., Ltd.
 Established Sapporo Europe B.V.

 Expansion of food business Nurturing of global human resources
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Group Management Plan 2024: Basic Policy

Focus on core businessand build resilience

Accelerate global
expansion

Establish simple andcompact businessstructure

Promote sustainability
management

 Focus management resources on beer business Scale down/withdraw from low-return business and shift to foodand other growth fields
 Transfer all overseas business to operating companies, and deploy
a consistent global brand strategy
 Strengthen earning capacity with focus on North America and Asia-Pacificand simultaneously accelerate growth Nurture global human resources Restructure to downsized head office operations and easy-to-understandorganizational structure and pursue BPR and DX
 Sapporo Holdings will focus on governance, operating company support,
and management resource allocation functions
 Business promotion functions to be fully transferred to operatingcompanies to increase responsiveness Balance social and economic value, primarily through measures
such as producing our own high quality raw materials
 Promote urban development in locations with connections to theCompany, such as Ebisu, Sapporo, and Ginza Develop levels of management transparency and fairness that meetthe demands of the times
Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

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Management System Organized in Line with Operating Companies
Transferred North American alcoholic beverages operating company to Sapporo
Breweries Ltd., restructured the Food & Soft Drinks segment
Holdingcompany

Business

Operating company

Affiliates under management of operating companies
Domestic subsidiaries

Sapporo Breweries Ltd.

Alcoholic
Beverages
Sapporo Holdings

Food & Soft
DrinksOverseas subsidiaries(Sapporo USA, Sleeman Breweries, Sapporo Vietnam, Sapporo Europe B.V.)
Sapporo Lion Limited

Domestic and overseas subsidiaries

POKKA SAPPORO Food &Beverages Ltd.

Domestic subsidiaries

Sapporo Group Foods
Co., Ltd.
(to be established on July 1)

Overseas subsidiaries(Pokka Corporation (Singapore) Pte. Ltd.)
Domestic subsidiaries(Foremost Blue Seal, Ltd., Pokka Create Co., Ltd, Shinsyu-ichi Miso Co., Ltd. )Real Estate

Sapporo Real Estate Co.,Ltd.

Domestic subsidiaries
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Strengthening Corporate GovernanceTransition to “Company with Audit and Supervisory Committee”
Aim Pursue further enhancements to corporate value by further enhancing corporate governance andenabling responsive decision-making through more efficient management.
 The transition is scheduled to be carried out after obtaining approval for necessary changes toTimingthe Articles of Incorporation at the 96th annual general meeting of shareholders scheduled to beheld on March 27, 2020.

<Current>
Board ofDirectors

Structure
Audit &
Supervisory
Board

Independent outside
directors (third of total)

Independent outside
auditors<Future>Board of Directors

Audit andSupervisory
Committee
Independent outside
directors (half of total)

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Promotion of Sustainability Management
Towards realizing a decarbonized circular economy based on co-existence with nature
1. Decarbonization initiatives- Aim to reduce CO2 emissions at Sapporo Group companies in Japan and overseas

Sustainability Policyby 20% by 2030 (compared to 2013 levels), and achieve net zero CO2 emissions(carbon neutrality) by 2050
- Strive to reduce CO2 emissions in value chain outside of Sapporo Group’s bases

2. Working toward a circular economy<Containers and packaging> Aim to shift entirely to containers and packaging
appropriate to a circular economy

https://www.sapporoholdings.jp/news/items/20191224SUS.pdf<Water resources> Reduce water usage by 10% by 2030 (compared to 2013 levels)<Waste material> 100% waste recycling rate at main plants, 50% reuse rate by

Sustainability materiality and four promises

2024 in the restaurant business, optimization of expiry dates at Sapporo Breweries

3. Coexisting with nature- Utilize breeding techniques to develop barley and hops with characteristics
enabling them to adapt to climate change- Urban development that enables people to coexist with and feel closer to nature
https://www.sapporoholdings.jp/csr/policy/systems/pdf/subject_materiality.pdf
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Group Management Plan 2024: Basic Strategy[Alcoholic Beverages]
 Increase domestic beer market share Enhance presence in North America
 Turn the changes in Japan’s beer market caused by unification of liquor taxes
into opportunities Redefine the values offered to customers (premium and reasonable)
 Focus management resources on core brands

Action plan

 Business earnings structure reform (wine, RTD, imported spirits)
 Rebuild international alcoholic beverages business management structure Expand share in Canadian market, and acquire manufacturing bases in the U.S.
and expand market share Establish global human resources development scheme

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Group Management Plan 2024: Basic Strategy[Food & Soft Drinks]
 Create next-generation business fields using plantbased materials
 Strengthen soy beans and chilled products, soup,
and lemon businesses Restructure low-return businesses Create new categories of next-generation plant-based materials
 Place the soy beans and chilled products business on a growth track Ensure generation of profits in lemon and soup businesses

Action plan Structural reforms of domestic vending machines and reallocation ofmanagement resources Expand Asia-Pacific business, restructure manufacturing and distribution
bases, and optimize area-specific product portfolios
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Group Management Plan 2024: Basic Strategy[Real Estate] Maintain stable cashflow creation foundation

 Proactive investment in new properties
 Develop into high-return business model Enhance value of Ebisu area centered on Yebisu Garden Place Improve profitability of Sapporo Factory, promote future urban development

Action plan

 Acquire properties for future development, create communities

 Tackle new business fields and schemes

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Group Management Plan 2024: Financial Goals and Policy[Financial goals] Achieve ¥30 billion core operating profit in 2024
(billion yen)
35
350<Core operating profit>
Core operating profit: Revenue - Cost of sales – SG&A expenses

30
300¥30 billion

25
250
20
200
15
150
10
100
5 50
0 0
2016

2017

2018

2019

2020

2021

2022

2023

<Key indicators>
Revenue growth rate

2% or more (annual
average)Core operating profit torevenue ratio

5% or more

Overseas revenue
growth rate

1.6 times(compared to 2019)2024[Financial policy] Place emphasis on profitability versus invested capital, while
maintaining current financial composition and stability
Pursue continuation of stable dividend payment as the policy for shareholder returns
CF from
operatingactivities≒

Investment<Key indicators>
EBITDA interest-bearing
debt ratio
Net D/E ratio* 2019 results

5.9 times
1.2 times

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2020 Management Plan

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Review of 2019
[Results] Continued to strengthen core brands; profitability of the alcoholic
beverages business in Vietnam improved further

29%

＋

3

＋ %

Sales volume increase led by 99.99(Four Nines)

Sales volume of Black Label(cans) increased for the fifth
consecutive year.
Sales volume ofBlack Label (cans)

Sales value of RTDs
2017

2018

2017

2019

Turnedprofitable

The lemon-based food market is
gradually expanding
New product “LEMON MADE”
also contributed to beveragesales volume
2018

2019

2019

200million

＋

8

＋ %

Sales volume oflemon-based foodproducts, drinks 20172018

The export business has beenstrong led by Silver Cup in North
America

Vietnamese alcoholic
beverages
core operating profit

2017

2018

2019

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Review of 2019
[Issues] Consider future actions while closely studying market trends

(

4

( %)

Sales volume of
Mugi to Hop
2017

Though sales volume was strong
following the relaunch in August,full-year performance was down
year on year.
2018

2019

Sales volume ofcoffee drinks
2017

3

2018

2018

2019

( %)
Sleeman brand performed poorly
due to unfavorable weather in
Canada
Revival of Anchor brand continues
to be an issue

2017

The canned coffee market
continues to shrink due to theemergence of convenience store
coffee and coffee beverages soldin PET plastic bottles.

5

( %)

(Overseas beer)
Sales volume ofoverseas brands

11%)

2019

(Overseas beer)
Sales volume of
Sapporo brand

Sapporo Premium continues tobe strong in North America, but
exports to South Korea havestopped, resulting in overall
decline compared with theprevious year.
2017

2018

2019

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Review of 2019
Positioned 2019 as a year of change and promoted business/organizational restructuring<Issues><Measures and results>

Sort out policies for North
American soft drinks
business

 Sale of Country Pure Foods➡ Controlled future risks, shifted resources to North American alcoholic
beverages.

Improve profitability of Withdrawal from unprofitable locations
domestic vending machine➡ Started working on improvement of profitability, structural reformbusiness
continues to be an issue.
 Integrated the International business into the Alcoholic and Food & Soft
Drinks business.
Promote global expansion➡ Each business drafted and promoted global strategies without beingbound to geographical considerations.
 Acquisition of Yasuma➡ Creating synergies with existing businesses.
Accelerate growth of thefood field Establishment of a new soup manufacturing facility and a soymilk yogurt
plant.
➡ Market vitalization and strengthening of competitiveness throughenhancement of manufacturing capacity and product lineup.
Improve profitability of the  Management integration of Sapporo USA and Anchor
North American alcoholic➡ Streamlined administrative functions, drafted strategy covering
beverages
everything from manufacturing to sales
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Key Initiatives in 2020
[Alcoholic Beverages]
 Beer New genre

Establish diverse portfolio
Strengthen touch points

Two-pillar Mugi to Hop and GOLD STAR strategy

 RTD

 North America

Promote in both household and commercial
markets and establish position as drinks to beenjoyed with meals.

Cost structure reform,
response to RTD needs,
revitalization of Anchor brandCopyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

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Key Initiatives in 2020
[Food & Soft Drinks]
 Soft drinks

 Lemon-based products

Japan: Improve vending machine
profitability
Overseas: Expand export business

Expand general demand for lemon-based
products through promoting their value

 Soup Soy beans and chilled products

Revitalize Jikkuri Kotokoto
Steadily expand presence of cup-based productsin the market

Dramatic expansion of plant-based milk (soymilk
and almond milk)

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Key Initiatives in 2020
[Real Estate][Head Office] Promotion of urban development

 Improve efficiency of back office
operations

Acquire properties in key areas(Ebisu and Sapporo) andsurrounding areas

Sapporo Holdings to be left only withgovernance, operating company support, andmanagement resource allocation functions, whileother back office operations are to betransferred to operating companies to improve
efficiency and further promote workstyle reforms

 Business in new fields
Acquire properties forinvestment, consider
securitization business andnon-asset business etc.

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Change in Handling of Food & Soft Drinks Business in Disclosures
Following changes in disclosures due to the sale of Country Pure Foods<Before><After>Alcoholic Beverages
Japan/Asia

Japan/Asia

North America

North America

Restaurants

Continued
business

Alcoholic Beverages

Continued
business

Food & Soft Drinks

Restaurants
Food & Soft Drinks

Japan, Asia

Real Estate

North America

Other

Real Estate
Other

Abolition of subsegments

Dis-continued
business

Food & Soft Drinks

Only net profit (loss)of discontinued
business disclosed

North America*Details provided in
explanatory notes

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Management Plan（billions of yen）

2019

2020(Plan)YoY changes(amount/%)

Revenue（Including liquor tax）

491.9

504.4

12.5

2.5%

Revenue（Excluding liquor tax）

371.1

384.1

13.0

3.5%

16.3%

16.3%

(0.1%)-EBITDA

36.0

38.1

2.2

6.0%

Core operating profit

11.7

14.0

2.3

19.7%

Core operating profit margin

2.4%

2.8%

0.4%

-

Operating profit

12.2

8.5

(3.7)

(30.3%)

4.4

5.0

0.6

13.9%

5.9

5.7

(0.2)

-

1.2

1.2

0.0

-

Overseas revenue to total（Excluding liquor tax）

Profit attributable to ownersof parent
EBITDA interest-bearing debt
ratio (times) ※Net
D/E ratio (times) ※Net*The balance of net debt excludes the balance of lease obligations.

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Revenue target（billions of yen）

2019

2020(Plan)YoY changes(amount)

YoY changes(%)

Revenue by Segment

491.9

2.5%

Alcoholic Beverages

330.2

2.0%

Japan & Asia

254.7

4.6

1.8%

North America

48.3

2.4

5.1%

Restaurants

27.3

(0.6)

(2.0%)

Food & Soft Drinks
Real Estate
Other

136.9

4.0%

24.7

2.6%

0.2

(0.1)

(90.2%)

Factors are explainedin theCopyright,
next slide
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Main Factors Contributing to Changes in Revenue
We will focus on new genre products in the Alcoholic Beverages business and soy beans
and chilled products, soup, and lemon in the Food & Soft Drinks business and aim toincrease revenue
Alcoholic Beverages

Food & Soft Drinks= Increase= Decrease

Real Estate

2020(Billion yen)
2019

Liquor tax
revision(2.3)

Liquor tax
revision+1.1

Café de Crié ＋1.1
Shinshu-ichi +0.9
Full-year contribution
with consolidation of
Yasuma +1.7

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Core Operating Profit target（billions of yen）

2019

2020(Plan)YoY changes(amount)

YoY changes(%)

Core operating Profit bySegment

11.7

19.7%

Alcoholic Beverages

8.5

7.6%

Japan & Asia

8.0

0.0

0.0%

North America

0.2

0.5

270.2%

Restaurants

0.4

0.0

10.8%

Food & Soft Drinks

(0.5)

-

Real Estate

10.7

3.6%

0.0

0.0%

(7.1)

-

Other
General corporate andintercompany eliminations

Factors are explainedin theCopyright,
next slide
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Main Factors Contributing to Changes in Core Operating Profit
Both the Alcoholic Beverage and Food & Soft Drinks businesses aim to increase
profits by growing revenue.
North American alcoholic beverages will work on cost structure reform and aim to
improve profitability.
Alcoholic Beverages
Food & Soft Drinks Real Estate= Increase= Decrease
2020(Billion yen)

2019

Logistics
expense hike
(0.8)

*Reclassification under IFRS: Other non-operating revenues and expenses as well as extraordinary gains and losses.

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Profit attributable to owners of parent（billions of yen）

2019

Core operating Profit

11.7

gains on sale ofnon-current assets

1.6

Impairment losses

(1.3)

Other

12.2

Profit before tax

11.6

Income taxes

4.3

Loss attributable tonon-controlling interest
Profit attributable toowners of parent

3.8

2020(Plan) （Details）

Proceeds from sale ofYebisu Square +2.0

Early Retirement Incentive
Program & Others

0.2

Operating Profit

Profit（Details）

Loss from discontinued
operations(3.5)

(0.5)

4.4
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Special factors for 2020 plan
Yasuma’s revenue contributes year-round＜Special factors in business results (YoY)＞
Business segment

Details

Impact on
revenue

Impact on
operating profit

Alcoholic
Beverages

Wild Rose Brewery LTD.
Consolidated from 2Q of 2019 *Contribution throughout the 2020--

Food & Soft
DrinksYasuma Co., Ltd.
Consolidated from 2Q of 2019 *Contribution throughout the 2020

Approx.
1.7 billion-

Impact on
revenue

Impact on
operating profit

Alcoholic Beverages--

Food & Soft Drinks---: negligible impact＜ Impact of foreign exchange rates (currency translation)＞
2019
US＄

2020(Plan)¥109.03¥110

EUR¥122.03

¥121

CAN＄

¥82.19¥82SG$¥79.93¥78*Average rates for the year

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2019 Business Results

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Results Highlight（billions of yen）

2018

YoY changes(amount/%)

2019

Revenue（Including liquor tax）

493.9

491.9

(2.0)

(0.4%)

Revenue（Excluding liquor tax）

370.8

371.1

0.3

0.1%

16.9%

16.3%

(0.6%)-EBITDA

39.8

36.0

(3.8)

(9.5%)

Core operating profit

15.2

11.7

(3.4)

(22.7%)

Core operating profit margin

3.1%

2.4%

(0.7%)-

Operating profit

11.6

12.2

0.6

5.3%

8.5

4.4

(4.2)

(48.9%)

5.5

5.9

0.4

-

1.3

1.2

(0.1)

-

Overseas revenue to total（Excluding liquor tax）

Profit attributable to ownersof parent
EBITDA interest-bearing debt
ratio (times) ※Net
D/E ratio (times) ※Net*The balance of net debt excludes the balance of lease obligations.

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Results Highlights
Profit down due to loss on the sale of Country Pure Foods.
(Billion yen)

Revenue

YoY change

OperatingprofitYoY change

Profit attributable toowners of parent
YoY change

493.9
2018

491.9
2019

 Revenue of Japanese alcoholic
beverages declined, as sales volume of
new genre products declined while beer
and RTDs performed strongly.
 Revenue in North American alcoholic
beverages declined reflecting inclement
weather and the impact of the strongeryen.
 Sales of Japanese soft drinks (vending
machines) and food (soup) weresluggish due to the poor weather.
 Overall revenue declined despite ¥5.0
billion revenue added by consolidationof Yasuma.

11.6
2018

12.2
2019

 Operating profit at Japanese alcoholic
beverages rose due to cost reductions.

 Operating profit at North American
alcoholic beverages and Japanesefood and soft drinks declined due todeclines in sales volumes

8.5
2018

44
2019

 Profit declined due to the impact ofloss recorded on the sale of Country
Pure Foods.

 Operating profit increased overall dueto the impairment loss for Anchor
recorded in 2018 and gains on the saleof real estate in the current fiscal year.
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Results Highlights
Balance of net
debt(Billion yen)

2018

2018
2019

Cash basis
investment

Equity218.4 212.1

2019

164.7 174.5

2019 plan

41.8
D/E ratio (net)YoY change

times(0.1) times

Dividend per share

Transformation of the Groupmanagement platform<October - December> Jointly facilitated workstyle improvements for regional trunk line
logistics personnel and truck drivers
https://www.sapporoholdings.jp/news/dit/?id=8550

YoY changeyen±0 yenGroup Topics<October - December> Formulated Sapporo Group Environmental Vision 2050
https://www.sapporoholdings.jp/news/dit/?id=8549

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Revenue by Segment（billions of yen）

2018

2019

YoY changes(amount)

YoY changes(%)

Revenue by Segment

493.9(0.4%)

Alcoholic Beverages

330.0(1.7%)

Japan & Asia

252.1

(3.2)

(1.3%)

North America

50.3

(2.1)

(4.1%)

Restaurants

27.6

(0.3)

(1.1%)

Food & Soft Drinks
Real Estate
Other

133.4

2.6%

24.5

0.8%

6.0

(0.1)

(2.3%)

Factors are explainedin theCopyright,
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Main Factors Contributing to Changes in Revenue
Though consolidation of Yasuma contributed, revenue declined due to a decline insales volume of new genre products and the impact of the stronger yen.
Alcoholic Beverages

Food & Soft Drinks= Increase= Decrease

Real Estate(Billion yen)
2018

RTD＋3.4
Japanese
liquor (2.1)

2019
Includingexchange rate
impact of (1.7)

Including new
consolidation of
Yasuma +5.0

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Operating Profit by Segment（billions of yen）

Operating Profit bySegment

2018

2019

YoY changes(amount)

YoY changes
(%)

11.6

5.3%

Alcoholic Beverages

3.9

104.3%

Japan & Asia

6.9

0.9

13.2%

North America

(2.8)

2.9

-

Restaurants

(0.2)

0.2

-

Food & Soft Drinks

1.9

-

12.0

5.5%

0.2

-

(6.4)

-

Real Estate
Other

General corporate andintercompany eliminations

Factors are explainedin theCopyright,
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Main Factors Contributing to Changes in Operating Profit
Operating profit increased on back of impairment loss recorded in 2018 for Anchor
and gains on sale of real estate in 2019.
Alcoholic Beverages(2018)
Impairment for
Anchor +4.4

Food & Soft Drinks

Product mix ＋0.5
Non-alcoholicbeer, RTD +0.5
COGS, etc. +0.4

= Decrease

Real Estate(2018) Unrealized
holding loss due torenewal of
production facilities
in Malaysia (0.7)(Billion yen)

= Increase(2019)
Gain of sale ofproperty +1.9
(2018)
Gain of sale ofproperty (1.1)

2019

2018
Sales volume (1.2)
Logistic expenses (0.6)
Sales promotion
costs ＋1.4
Personnel costs(0.7)*Reclassification under IFRS: Other non-operating revenues and expenses as well as extraordinary gains and losses.

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Alcoholic Beverages
Sapporo Premium in North America and domestic beer performed strongly, weak elsewhere<Quarterly operating profit (vs. previous year)>(Billion yen)

Positive Black Label and Yebisu brand canned products up YoY(0.3) bn yen

60

6RTD revenue continued to grow+2.2 bn yen

40

4＋1.4 bn yen
5.4

Sapporo Premium in North America was strong

5.1

20

2
＋0.7 bn yen

Dewar’s ranked No. 2 in scotch sales volume in Japan

3.4

2.5
1.2

1.2

00
▲ 20
-2

-4
▲ 40

Beer (kegs) in Japan and new genre struggled
(3.9)

(3.1)

Jan- Mar
1-3月

Sleeman was slow affected by poor weather

Anchorimpairment(4.4) bn yen
Apr-Jun
4-6月
2018年
2018

Jul-Sep
7-9月
2019
2019年

Anchor remains to be an issue

Oct-Dec
10-12月Negative

Exports to South Korea stopped<YoY changes in beer category sales volume>
Strengthening of beer business continues to110
be satisfactory（％）(Cumulative sales of each month)

100

Up 3%
YoY

Up 1%
YoY

Up 9%
YoY

Up 10%YoY

Yebisu brandBlack Label brandcanned product sales canned productsales volume
volumeSapporo Lagersales volume

Sapporo Classic
sales volume

90
Jan

Feb

Mar

Apr

May

Total beer demand

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total demand for Sapporo beer

(Sapporo forecast)

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

37/59

Food & Soft Drinks
Lemon-based products were strong in Japan, but food and soft drinks both
struggled due to unfavorable weather
 Lemon-based products remain strong(Billion yen)30
3

Positive(1.8) bn yen

 New product “LEMON MADE” performing strongly,
helping to drive forward other lemon-based drinks

110(0.7) bn yen

2.5 Consolidation of Yasuma Co., Ltd. boosted revenue＋0.7 bn yen(1.3) bn yen
0.4

0.7

0.8

0.1

 Profitability in Asia is on a recovery trend

(0.4)

-1

▲ 10

(1.0)

Valuation difference
associated with renewalof production facilities
in Malaysia +0.7 bn yen(2.3)

 The vending machine market continues to shrink
 Soup slumped due to mild winter※Excluding discontinued operations
▲ 30

-3

Jan-1-3月
Mar

Apr-Jun
4-6月
2018
2018年

Jul-Sep
7-9月
2019
2019年

Oct-Dec
10-12月Negative

Lemon-based products were strong

 Soft drink sales volume declined due to cool summer<Topics>
 -Facilitating new work styles and developing lemon businessSatellite office opened in Osakikamijima-cho, Hiroshima Prefecture
https://www.pokkasapporo-fb.jp/company/news/release/191002_01.html

YoY

YoY

up 8%

up 7%

Lemon-based drink
sales volume

 Top lemon sour beverages chosen in eight areas in Japan!
Results of Lemon Sour Grand Prix 2019 announced
https://www.pokkasapporo-fb.jp/company/news/release/20191030_01.html

Lemon-based food productsales volume

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

38/59

Real Estate

Corporate, Other

Existing properties performing solidly(Billion（億円）
yen)
4
40

Property sale
+1.9 bn yen

Property sale+1.1 bn yen(0.1) bn yen(0.2) bn yen

Cost rose due to expenditure formanagement platform development（億円）(Billionyen)(0.9) bn yen＋1.9 bn yen
▲ -1
10

2
20
3.0

3.5

3.3

3.6

3.4

(1.3) (1.6)(1.5) (1.7)(1.6)(0.2) bn yen(0.3) bn yen

(2.0)

(1.8)

(2.0)

3.9

3.0

(0.3) bn yen(0.2) bn yen

1.1
▲ -3
30

00
Jan-1-3月
Mar

Apr-Jun
4-6月

2018
2018年

Jul-Sep
7-9月

Oct-Dec
10-12月20192019年<Key points>
 Stable occupancy rates maintained at core properties<Topics>
 EBISU CROSSOVER FACTORY, where people and ideas meet
-Platform for future-oriented creation of goods and services-

1-3月
JanMar

4-6月
Apr-Jun

2018
2018年

7-9月
Jul-Sep

10-12月Oct-Dec

2019
2019年

<Key points>
 Progress with improvement of work area environments
including office space refurbishment and diversificationof work style by reforms such as telework
 Promoted BPR including RPA and expanded R & D

https://www.sapporo-re.jp/pdf/sapporore/store/storage/cname_20191015114715.pdf
Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

39/59

Special Factors
Yasuma’s consolidation contributed; impact of foreign exchange on
operating profit was negligible<Special factors in business results (YoY)>
Business segment
Alcoholic
Beverages

Details

Impact on
revenue

Impact on
operatingprofit--Approx.

Approx.

WILD ROSE BREWERY LTD.
Consolidated from 2nd quarter of 2019

Food & Soft Drinks

Yasuma Co., Ltd.
Consolidation of P/L from 2nd quarter of 2019+

5.0 billion+-: negligible
impact

0.6 billion<Impact of foreign exchange (currency translation)>

US$
EUR
CAN$
SG$

2018

2019

¥110.45¥109.03¥130.35¥122.03¥85.23¥82.19¥81.86¥79.93*Average rates for the year

Alcoholic
Beverages
Food & Soft Drinks

Impact on
revenue

Impact on
operatingprofitApprox.

1.7) billion

(

-

-

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

40/59

Changes in Balance sheets
Total assets decreased ¥1.0 billion from year end
Cash and cash equivalents

Total assets

Total assets(billions of yen)

10.0
93.3

Inventories

37.1
13.1

15.2
92.5
36.5
11.5

Other current assets

164.7

155.9

Trade receivables

Current assets
YoY change+ 2.2

Fixed assets
Non-current assets

215.5

219.6

21.2
84.7

18.4
89.2

End of 2018

End of 2019

Investment property

Goodwill

Other non-current assets

YoY change(3.2)

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

41/59

Changes in Balance sheets
Total liabilities declined ¥10.8 billion from year end, total equity increased ¥9.8 billion
Trade payables(billions of yen)
Total liabilities andequityTotal liabilities andequity

35.3
73.9

34.5
72.1

105.4

103.9

Net defined benefit liabilities

154.5

155.2

Other non-current liabilities

11.7
94.2

5.0
93.5

161.5

174.1

Short-term financial liabilities

Other current liabilities

Long-term financial liabilities

Equity attributable to owers ofparentNon-controlling interests

3.2

End of 2018

0.5

Current liabilities
YoY change(4.1)

Non-current liabilities
YoY change(6.6)

EquityYoY change＋9.8

End of 2019
Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

42/59

Financial Status① <Capital expenditure>

Investment on a cash basis was ¥41.8 billion

Consolidated total of approx. ¥<Consolidated cash flow (CF) statement>
2018(Billion yen)

2019

Change Change (%)

CF from operating activities

30.8

36.1

5.2

17.0%

CF from investing activities(18.7)(24.9)

(6.2)

-

12.1

11.1

(1.0)

(8.0%)(14.5)

(6.0)

8.5

-

Free CF

CF from financing activities

billion(Property, plant and equipment, intangible assets)<Major items>
・“Alcoholic Beverages,” “Food,” and “Soft Drinks”related: Approx. ¥14.9 billion
POKKA SAPPORO plant facilities-related: Approx.
¥5.4 billion etc.
System update work at domestic beer plants, etc.:
Approx. ¥3.7 billion
Capital expenditure etc. at Sleeman: Approx. ¥1.7
billion etc.
・Group-wide infrastructure optimization, etc.: Approx.
¥3.0 billion② <Investment properties>(Billion yen)

<Changes in amount of investment (cash basis)>50050

Consolidated total of approx. ¥billionbillion*Excluding lease fees for renting restaurant premises

40040④ <Other investments> Consolidated total of

30030
20020

Consolidated total of approx. ¥③ <Lease fees>

approx. ¥
40.2
31.0

36.5

41.8
32.7

billion(including long-term prepaid expenses, investment
securities, etc.)①+②+③+④ <2019 investment total>

10010(cash basis; including recurring capital expenditure andlease fees)

00
2015

2016

2017

2018

2019

Approx. ¥billionCopyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

43/59

Appendix

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

44/59

Appendix: 2018 4Q ( Previous year’s result ) Conversion Table of Revenue, Operating Profit by Segment*( ) denotes new segment

Revenue

Former segments(5 business domain
structure)

New segments(3 business domain
structure)

Difference

493.9

-

Japanese Alcoholic Beverage(Alcoholic Beverages)

250.9

79.1

International (-)

51.6(51.6)

Food & Soft Drinks(Food & Soft Drinks)

127.2

6.2

Real Estate (Real Estate)

27.6
24.5

(27.6)
-

Other

12.2

(6.2)

Restaurants※Excluding discontinued operations*( ) denotes new segment

Operating profit

Former segments(5 business domain
structure)

New segments(3 business domain
structure)

-

6.7

(2.9)

(2.6)

2.6

2.0

(0.1)

Real Estate (Real Estate)

(0.2)
12.0

0.2
-

[Corporate] Other

(6.4)

0.2

International (-)
Food & Soft Drinks(Food & Soft Drinks)
Restaurants※Excluding discontinued operations

・North American alcoholic beverages and Vietnam moves
to Alcoholic Beverages ¥50.3 billion

・To Alcoholic Beverages¥27.6 billion

・Shinshu-ichi Miso moves to Food & Soft Drinks
billionDifference

11.6

Japanese Alcoholic Beverage(Alcoholic Beverages)

Remarks¥6.2

Remarks

・North American alcoholic beverages and Vietnam moves
to Alcoholic Beverages (¥2.8) billion

・To Alcoholic Beverages(¥0.2) billion

・Shinshu-ichi Miso moves to Food & Soft Drinks
billion(¥0.1)

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

45/59

Appendix：Major sales & sale volume
Alcoholic Beverages (Japan)

Sapporo Draft Beer Black Label (total)
YEBISU (total)
1 Beer (total)
2 Happoshu (total)(10,000 cases)
Full-year
estimate forfiscal 2020

Fiscal 2018

Fiscal 2019

4,370

4,242

Fiscal 2018

Fiscal 2019

1,687

1,667

99%

1,690

101%

Soft Drinks（*1）

857

832

97%

790

95%

*1：Excludes sales other than Japan and soy milk drinks sales in Japan

2,991

3,007

101%

3,030

101%

257

210

82%

160

76%

YoY

YoY

3 New genre beer products (total)

1,217

1,131

93%

1,260

111%

Beer, happoshu, and new genre （total 1+2+3）

4,466

4,347

97%

4,450

102%

93

71

76%

63

89%

Non-alcoholic beer taste beverage

Soft Drinks (POKKA SAPPORO FOOD & BEVERAGE)(billions of yen)
Full-year
estimate forfiscal 2020

YoY

YoY

YoY

(10,000 cases)
Full-year
estimate for
YoY
fiscal 2020

97%

4,089

Sales (including liquor tax)

(billions of yen)
Year ended
December 31,
2018
IFRS

Year ended
December 31,
2019
IFRS

ChangeChange (%)

Beer
Happoshu
New genre
Subtotal

165.8
9.9
40.2
215.9

167.4
8.1
37.4
212.9

1.6
(1.9)
(2.8)
(3.0)

0.9%
(18.7%)(6.9%)(1.4%)(1.3%)

Fiscal 2018

Fiscal 2019

Domestic wines

4.7

4.3

91%

4.4

102%

Rebate subtracted from sales(12.3)(12.0)

0.4

Imported wines

8.2

8.4

102%

7.9

94%

Total

203.6

200.9

(2.7)

Wine (total)

12.9

12.7

98%

12.3

97%

RTD, Spirits and Shochu (total)

35.3

37.8

107%

40.0

106%

Subtotal

48.3

50.5

105%

52.3

104%

Rebate subtracted from sales

(8.5)

(9.9)

－

－

－

Total

39.8

40.7

102%

－

－

*Full year estimate for rebate subtracted from sales is not disclosed.

Beer (International)
Fiscal 2018
Overseas brand (SLEEMAN, Anchor, etc.)
Sapporo brandFiscal 2019

YoY

(10,000 cases)
Full-year
estimate for
YoY
fiscal 2020

1,368

1,323

97%

1,353

102%

628

596

95%

629

105%

96%

Sales (excluding liquor tax)

(billions of yen)
Year ended
December 31,
2018
IFRS

Year ended
December 31,
2019
IFRS

ChangeChange (%)

Beer
Happoshu
New genre

82.5
5.5
27.8

83.6
4.5
25.9

1.1
(1.0)
(1.9)

1.3%
(18.7%)(6.7%)

Subtotal

115.9

114.1

(1.8)

(1.6%)

Rebate subtracted from sales(12.3)(12.0)

0.4

-

Total

103.6

102.1

(1.5)

(1.4%)

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

46/59

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

Jan- Dec upBlack Label brand total : down

％ y-o-y

110（Sales of the canned version：up

Yebisu brand total : down

％ y-o-y％ y-o-y）％ y-o-y（Sales of the canned version：up％ y-o-y）

100

90
80
70
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

【Happoshu and new genre】（Sales volume）

Total beer demand

Sapporo totalJan- Dec downBlack Label

YebisuMugi to Hop brand total : down

％ y-o-y％ y-o-y

Oct

Nov

Dec

%

120

【Wine, Spirits and other】（Sales revenue）
100



Wine： down

RTD：up

Spirits：up

Japanese liquor : down

％ y-o-y80％ y-o-y60％ y-o-yJan％ y-o-y

Feb

Mar

Apr

may

Jun

Jul

Total new genre demand(Jan.1-Dec.31)

Aug

Sep

Oct

Nov

Dec

Mugi to Hop

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

47/59

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

1,800
1,600

17%
1,400
1,200
1,000

28%

800

55%

600
400
200
Black label

Yebisu

Other

0
2013

2014

2015

Black label brand total

2016

2017

Yebisu brand total

2018

2019

Mugi to Hop

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

48/59

Appendix：Alcoholic Beverages (Japan)※Incl. liquor tax＜Jan- Dec sales revenue＞(Billions of yen)

250.0

200.0

＜Jan- Dec sales breakdown by category＞

75.3

79.3

70.6

65.0

59.5

50.1

5%

45.5

8%

Beer
Happoshu & New genre

8%

150.0

Wine & Spirits
Japanese liquor
100.0

159.7

157.6

159.3

167.2

171.0

165.8

167.4

RTD & Non-alcoholic beer

17%

50.0

62%
*before subsidiary companies sales, elimination ofinter- company transactions and rebate deduction

0.0
2013

2014
Beer

2015

2016

2017

2018

2019

Happoshu & New genre

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

49/59

Appendix：Alcoholic Beverages (Japan)＜Jan- Dec sales revenue＞
16
14
12
10
8
6
4
2
0

7.7

8.3

8.2

8.5

8.5

(Billions of yen)

8.2

8.4

5.1

5.6

5.3

5.0

5.1

4.7

4.3

2013

2014

2015

2016

2017

2018

2019

Japanese wine

8
6

2

5.7

5.9

2013

2014

2015

11.8
3.2
2013

4.5

4.3

5.1

2014

2015

2016

6.9

7.7

2016

2017

8.7

10.0

0
Spirits

2018

7.0
2017

2018

2019

ＲＴＤ

10

5.7

15.2

Imported wine

12

4

16
14
12
10
8
6
4
2
0

2019

18
16
14
12
10
8
6
4
2
0

13.3

2013

14.7

14.6

15.8

16.4

2014

2015

2016

2017

14.7

2018

12.6

2019

Japanese liquor
Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

50/59

Appendix：Major New Alcoholic Beverages (Japan) Product Launches in Oct, Nov, and Dec*incl. improved products (*1)

YebisuYebisu Wa No Houjun
Shizuku(Special Edition)
Yebisu with Joel Robuchon
French Pils

Sapporo Draft Beer
Mugi to Hop雫Black Label
Sapporo Classic
SapporoKronenbourg<Red>
Mugi to Hop Hakone Ekiden can Sapporo Draft LAGER BEER
2018
Innovative Brewer
Seven Premium
1664 Blanc
Fuyukomugi Special
Furano VINTAGE
Beer Black Label
GOURMET BEER
Aomori Takkomachi
EditionBlack
Tanumasan no hopbatake kara

９９.９９＜Four Nines＞
９９.９９＜Four Nines＞
Clear kiwi
Clear yuzu
９９.９９＜Four Nines＞
Clear Sparkring
Chardonnay

Lemon The Rich series

Kireto Lemon Sour
citric acid+

Ai no Skal White Sour series

Nectar sour

SapporoLemon sour

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

51/59

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

（Products of Sleeman and Anchor)（Sales volume）％ y-o-y＜Overseas sales volume (Jan-Dec)＞（10,000 cases）
1,600

Acquired
WILD ROSE

Acquired Anchor【Sapporo brand】
1,400



Jan- Dec down

％ y-o-y
1,200【Vietnam】


1,000

Jan- Dec up％ y-o-y（including export）＜Y-o-y change in domestic sales volume in Vietnam>
120%

800
600

1,246

1,262

1,291

1,300

1,368

1,237

1,323

580

628

596

447

550

643

488

2013

2014

2015

2016

2017

2018

2019

400

100%
200
80%
0

60%
40%

Sapporo brand20%

Sleeman brand0%
17.4Q 18.1Q 18.2Q 18.3Q 18.4Q 19.1Q 19.2Q 19.3Q 19.4Q

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

52/59

Appendix：Alcoholic Beverages (Overseas)＜Sleeman：Sales revenue in local currency (Jan- Dec）＞＜Sapporo U.S.A.& Anchor：Sales revenue in local currency (Jan- Dec）＞*before elimination of inter- company transactions*before elimination of inter- company transactions

600

100
J GAAP（Excluded liquor
tax）

IFRS
（Included liquor
tax）

500

Acquired Anchor

90
80
70

400

60
50

300

496 515 513
200

100

262
222 242279

345
309 325 328

359

87 84

40
30
20

47

42

47

58 59 61
56
55
52 53

10

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, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

53/59

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

25

190

20

※before rebate deduction

185
170

175

25.1

24.8

24.8

200
180

170

169

15

25.8

＜Sapporo Lion outlets＞ As of Dec 31, 2019

25.1

10

23.9

161
23.9

160

120

0

100
2014

2015

2016

Sales revenue

2017

2018

Tokyo Metroporitan

14

140

5
2013

10 11
Kanto (excl. Tokyo)
Hokkaido

4

161 Outlets

Nagoya2019

Number of outlets＜Total number of outlets＞

Tohoku76
25

KansaiOther

21＜Brands＞

Sapporo Lion

161

8
196 Outlets

New Sanko
Marushinkawamura

19

Hanei
Singapore

1

7(Jan.1-Dec.31)

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

54/59

Appendix：Food & Soft Drinks＜ Japanese soft drinks
POKKA SAPPORO Food & Beverage ＞
Sales composition by sales channel (Jan- Dec)

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



Jan-Dec up％ y-o-yJan-Dec up

43%％ y-o-y（Sales volume)（Sales volume)

44.06 million

Vending machines
Retailercases【Unsweetened tea drinks】【Soups】



Jan-Dec down

％ y-o-y（Sales volume)

Jan-Dec down

57%

※Vending machines (end of Dec.)
own brand machines : about 76,000+ Multi-brand machines％ y-o-y（Sales volume)＜Japanese soft drinks
Sales composition by genre (Jan- Dec)>

22%【Soy milk, chilled products】【Coffee drinks】


Jan-Dec down
（Sales volume)％ y-o-y

Jan-Dec up％ y-o-y（Sales volume)

16%

Coffee drinks
Lemon-based drinks

4%44.06 million

Tea drinks
Carbonated drinks

cases

16%

Water
Other

18%
25%
Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

55/59

Appendix：Food & Soft Drinks＜ Food & Soft Drinks segment
Revenue break down by geographic area ＞【Pokka Create Co., Ltd.】

85%

Jan- Dec Sales revenue
upbillion％ y-o-y＜ Number of outlets as of Dec 31, 2019>

113

15%

East Japan58

208 outlets

Central JapanWest Japan

Japan

Overseas＜Japanese soft drinks
POKKA SAPPORO Food & Beverage＞
Sales composition (Jan- Dec)

3%

Increased 6 outlets compared with2018 4Q（East ±0、Central ±0、West＋6）

37＜ Overseas soft drinks
POKKA Corporation (Singapore)＞
Sales composition (Jan- Dec)

24%

120
33%

¥79.5
billion206
88

SG＄ million

67%
73%
Soft drinks

Food

Soy and Chilled productSingapore

Export208 outlets

Directory operated
FC
Increased 6 outlets compared with2018 4Q（Directory operated +12、FC-6）

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

56/59

Appendix: Major New Food & Soft Drinks (Japan) Product Launches in Oct, Nov, and Dec

Gabunomi
Shigekikkusu lemon sparkring

Gabunomi
Aofuyu cokehttps://www.pokkasapporo-fb.jp/company/news/release/20191004_01.html

https://www.pokkasapporo-fb.jp/company/news/release/191114_01.html

Jikkuri kotokoto cup soup
Crab bisque with tomato
https://www.pokkasapporo-fb.jp/company/news/release/191105_01.html

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

57/59

Appendix：Real Estate＜ Information about
Investment property ＞＜ Major rental properties & occupancy rates：（Averages for 2019 4Q )>＞Site area（㎡）

Floor area（㎡）

Occupancyrate（%）

No. of floors

300.0

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

99

11 floors above
ground, 2 below

100.0

1,117

11,411100

13 floors above
ground, 1 below

0.0

Ginza Place
Strata Ginza（2）(billions of yen)

400.0

200.0

402.4

386.0
215.5

219.6

As of December 31,

As of December 31,

2018

2019

*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 922m 2 of the site (sectional ownership) and 89.72% of the building

Carrying value on the consolidated(joint management)

statement of financial position

Fair value(billions of yen)(billions of yen)

＜Operating profit＞

2018

2019

Change＜EBITDA＞

2018

2019

ChangeYebisu Garden Place, etc.

8.1

8.1

(0.0)

Yebisu Garden Place, etc.

11.3

11.2

(0.1)

Hokkaido

1.1

1.3

0.1

Hokkaido

1.8

1.8

0.0

Other area & otheroperations

3.8

4.4

0.6

Other area & otheroperations

4.4

4.1

(0.3)

General corporate

(1.1)

(1.1)

0.0

General corporate

(1.1)

(1.1)

0.0

Total

12.0

12.7

0.7

Total

16.3

15.9

(0.4)
Copyright, 2020 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.

Copyright, 2020 SAPPORO HOLDINGS LTD. All rights reserved.

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