2009

Sapporo Group First Half 2009
Results Presentation- Further profit growth in a tough environment August 4, 2009

Sapporo Holdings Ltd.
URL http://www.sapporoholdings.jp/Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

AgendaOverview of First Half 2009 Business Results and 2009 Earnings Forecasts
I. Overview of First Half 2009 Business Results◆ Sapporo Group as a whole

II. Operating Results by Segment and 2009 Earnings Forecasts◆ By segment◆ Sapporo Group as a whole*These materials contain forward-looking statements that are based on information available when the materials
were prepared and subject to risks and uncertainties. Actual performance may differ materially from the future
outlook described for various reasons.
Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

1

I.

Overview of First Half 2009 Business Results

Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

2

Overview of First Half 2009 Business Results
Net sales, operating income,ordinary income, and net income

Financial liabilities, capital investment,and depreciation and amortization

Business Results over
the Last Four Years

billions of yen2006

2007

2008

2009

12.0
9.5
211.4
10.0
200.1
193.4
182.4
8.0
6.04.01.1
1.30.5
2.0
0.0
-0.7
-2.0
-1.2
-0.7
-1.7
-2.8
-4.0 -3.0
-3.9
-6.0
-5.5
-8.0
Operating income

Ordinary income

Net income

2006

250.0
200.0
150.0

16.0
14.0

2007

billions of yen
2009

2008

250.0

229.7

221.2

184.0

200.0

12.0

188.7150.0

10.0
8.0

100.0
50.0

100.0

6.0
4.0

50.0

2.0
0.0

0.0

0.0

Net sales

Capital investment
Financial liabilities

Depreciation and amortization

1H 2009: Key points

Laying the groundwork for a new growthtrajectoryManagement resources to be focused on mainstay brands and services

Steady progress with cost structurereforms
Tightening of cost controls

Further profit growth in anadverse climate

Sluggish consumer spending
Lower sales revenue
Changes to accounting standards

Stable earnings despite a rapidly changing environment
Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

3

II.

Operating Results by Segment and 2009 Earnings Forecasts

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4

Alcoholic Beverages (Japan)
Financial highlights andfull-year forecast

Would have returned to profit in 1H if not for one-time
factors due to accounting standard changes
Billions of yen

1H 2006

1H 2007

1H 2008

1H 20092009
forecast

YoY (%)Net sales

147.1

148.3

137.1

132.7

295.6

(1.4)

Operating income

(3.2)

(2.9)

(1.0)

(0.0)

5.6

(27.4)

Decisively focus andreallocate resources

Beer marketing strategies(1) Management resources focused on theYebisu brandTowards a new growth stage!

Yebisu trial users*Source: Sapporo Holdings brand perception survey (N=601–604, May 2008–February 2009)

YM

Ratio

MaleFemale

20s

30s

40s

50s

2/2009

6.1%

5.4%

7.5%

7.3%

5.3%

6.6%

5.3%

11/2008

3.6%

3.3%

4.2%

5.3%

3.3%

2.6%

3.3%

8/2008

6.0%

6.9%

4.2%

4.0%

8.0%

7.9%

4.0%

5/2008

2.3%

2.3%

2.4%

2.0%

4.0%

1.3%

2.0%

(2) Strengthening of our new genre portfoliowith an eye to future growth

Mugi to Hop sales volume

1200
1000
800
600
400
1,000 cases 200(large bottles)

06/2008

Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

9123/2009

65Alcoholic Beverages (International)
Financial highlights and full-year forecast

Billions of yen1H 2006

1H 2007

1H 2008

1H 20092009
forecast

YoY(%)Net sales

2.5

13.5

12.4

10.4

21.3

(11.7)

Operatingincome

0.1

0.8

0.0(0.1)

0.9(0.1)

Unit sales

Cumulative 2007–2009 growth in unit sales outpaced total demand growth (Canada, US)

YoY growth in unit sales

'07

'08

'09

'09 vs. '07

YoY growth in unit sales

'07

'08

'09

'09 vs. '07

Sleeman brand+6%+4%+11%+15.8%

Sapporo USA

+8%

+8%

–14%

–6.5%

Total Canadian demand

–1%0%

–2%

–0.9%

Total US imported beer demand

+7%

–3%

–11%

–13.8%

Local-currency sales

Sleeman Breweries
Yen-translated sales have fallen, but sales
have continued to rise on a local-currency
basis.
'09 vs. '07: +11.5%
Sapporo USA
2009 sales were down due to products
being marketed at a super-premium
price point and increase in commercialuse market's share of sales.
'09 vs. '07: –4.0%

Local-currency sales ('07 - '09)
120

90

Exchange rates used ('07 - '09)

60'07

'08

'09

'09 vs. '07

CAN$1¥116.23¥ 104.15¥ 79.42–31.7%

US$1¥ 123.27¥ 104.90¥ 95.60–22.4%

30
Sleeman
0'07

Sapporo USA'08'09

Sapporo USA's sales are in millions of US$
Sleeman's sales are in millions of CAN$

Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

6

Soft Drinks
Financial highlights and full-year forecast
millions of yen

1H 2006

1H 2007

1H 2008

1H 20092009
forecast

YoY (%)Net sales

26,77024,194

18,112

14,85430,800(16.4)

Operating income(815)(1,135)

(370)

(72)

300

36.0

Restructuring based on a select-and-focus approach
Strategies

Action plan

Cost savings (million yen)

2008
Plan Results

2009
Plan2010
Results

1. Improvement of existing
operations-Review of unprofitable accounts and a profit-oriented approach to sales-Geographical selection and focus based around our best corporate customers-Review of operator policy aimed at strengthening our vending machine business

200

250300200

2. Organizational
consolidation to achievenecessary downsizing-Personnel reductions through the consolidation of head officemanagement divisions-Restructuring and downsizing of sales organization through arenewed focus on sales

200300400－

3. Cost minimization
throughout every value
chain-Supply chain management: optimization of production and distribution bases
and product inventory levels-Minimization of raw materials procurement costs and losses from productand raw material wastage-Minimization of marketing and vending machine costs (subject to necessaryconstraints)

300

450

400

300

700 1,000 1,000

500

Fiscal-year total

Costs to be cut by at least ¥1.5 billion over next two years
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7

Restaurants
Financial highlights and full-year forecast
Millions of yen

1H 2006

1H 2007

1H 2008

1H 2009

2009forecastYoY (%)

Net sales

12,564

13,471

14,043

13,28228,500(3.5)

Operating income

(79)

(106)

(42)

(443)

200(63.6)

Key items on the agenda this year
Market environment

Strategy(1) Bolster sales at existing restaurants

Econ. slowdown
Demand forrestaurant
meals down
H1N1 influenza

Action plan
• Boost customer-draw with 110th
anniversary sales campaign• Boost quality by, e.g., revising menus,
enhancing service(2) Match new restaurant opening
Focus on opening small-medium newstrategy to the economic environment • format
restaurants(3) Cost controls and streamlining

Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

• Introduce new system to streamline
timecard management• Curb personnel expenses by, e.g.,suspending mid-career hiring• Curb overheads by, e.g., putting store
renovation plans on hold8

Real Estate
Financial highlights and full-year forecast
Billions of yen

1H 2006

1H 2007

1H 2008

1H 20092009
forecast

YoY (%)Net sales

10.9

11.8

11.7

11.1

23.8

1.5

Operating income

3.1

3.3

3.7

3.5

7.5

(1.5)

Key points for this year

Strategy(1) Boost value of existing properties
Boost value of Yebisu Garden Place(2) Develop properties in portfolio
Develop properties, focusing on Tokyometro area

(3) Acquire new assets
Acquire new properties, focusing onTokyo-metro area

Action plan
• Maintain/increase occupancy and rents, focusing
on office areas• Invest in energy-saving technologies, mainly forYebisu Garden Place• MLB cafe Tokyo commercial facility (Ebisu, opens in Sep.)• Commercial/office building(Shinjuku 6-chome, to be completed in 2010)• Chikusa Garden Terrace condominium(Nagoya city)• Seek/acquire new properties in our strategic area of Ebisu;
aim to boost value through synergies with properties wealready hold (we plan to acquire the Ebisu Square officebuilding in August)• Office buildings: Seek/acquire properties in central Tokyoalso, not just Ebisu

Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

9II-2.

2009 Full-year Earnings Forecasts

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10

２００８年度通期業績見込み
2009 Full-year Earnings Forecasts- Earnings ForecastsNet sales, operating income,ordinary income, and net incomeFinancial liabilities, capital investment,and depreciation and amortization

billions of yen

billions of yen

2006
2006

20.0
15.0
10.0
5.00.02007

2008

400.0 500.0
435.0 449.0
400.0
14.6 414.5
12.3
12.0
300.0
10.5
8.6
8.5
7.6
8.1
200.0
5.8
5.5
3.0 100.0
2.3
0.0
Operating income
Net income

2007

2008

2009

300.0

30.0

2009

236.0
212.4
20.0

189.2

200.0
188.0
100.0

10.0

Ordinary income
Net sales

0.00.0Capital investment
Financial liabilities

Depreciation and amortization

Earningsforecasts:
forecasts:key
keypoints
pointsEarnings
Negativefactors
factors
Negative

Measuresto
toensure
ensureMeasuressustainablegrowth
growthsustainable

Buildononcompetitivecompetitive
Buildstrength
strength

Strengthen
Strengthen
earningsbase
baseearnings

Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.

・Weakeningeconomy
economy・Weakening
・Fallingoverall
overalldemand
demand・Falling
・Risingraw
rawmaterialmaterialandand・Rising
ingredients
costs
ingredients costs
・Changesininaccounting
accounting
・Changesstandards
standards
・Impactofofforeignforeign・Impact
exchangerates
exchange rates
112009

Sapporo Group First Half2009 Results Presentation

Thank you for your attention.

Copyright 2009 SAPPORO HOLDINGS LTD. All rights reserved.