Sapporo Group Business Results Presentation for
FY2011February 13, 2012

Sapporo Holdings Ltd.
URL http://www.sapporoholdings.jp/english

Copyright, 2012SAPPORO HOLDINGS LTD. All rights reserved.

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Contents
1. Sapporo Group Management Plan 2012-2013◇Overview of 2011 Results･Overview of 2011 Results･Supplementary Information to 2011 Results◇Sapporo Group Management Plan 2012-2013･Management Targets･Basic Strategies･Business Plans･Returning Profit to Shareholders

2. 2011 Financial Results Supplementary Information and 2012 Forecasts
3. Sapporo Breweries 2012 Business Plan (Accompanying document)
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

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Sapporo Group Management Plan 2012-2013- Start of New Group Management Structure toward Dynamic Growth February 10, 2012

Sapporo Holdings Ltd.
URL http://www.sapporoholdings.jp/english

Copyright, 2012SAPPORO HOLDINGS LTD. All rights reserved.

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Overview
Overview ofof 20112011 Results
Results

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

4/50

Progress of 2011 Basic Strategy
We promoted three basic strategies for the first year in the period for solidifying our growth trajectory

I. Growth in new areas

II. Growth in all businesses

III. Bolster management capabilities that
underpin growth

We will pursue definitive results
and enhance our existencevalue in new areas identified
based on our growth strategy

Harnessing the strengths offeredby our brands and enterprise
resources, we will build uniquecompetitive advantages

We will bolster our group management
framework to meet the challengesof the Group’s expansion anddiversification

I.I.Growth
Growthininnew
newareasareas Pokka Group made into a consolidated subsidiary in March Signed agreement with No.1 Korean foods maker CJ (CheilJedang) Group in
May to sell makgeolli in Japan and launched its sales in JulyII.
II.Growth
Growthininall
allbusinesses
businesses

 Stated in the segment pages under
Supplementary Information to 2011
Results

III.
III.Bolster
Bolstermanagement
managementcapabilities
capabilitiesthatthat Entered into a business alliance with Bacardi Japan, which owns Bacardi Rum underpin growthunderpin
growthand other leading brands, in May to exclusively sell spirits in Japan, andlaunched sales in October.

 Sapporo Holding’s group headquarter
functions were divided and functions
requiring a high degree of specialization
 In November, completed construction of a brewery in Vietnam and have started and functions common to all operating
to make a full-fledged entry there, producing and selling beer locally.
companies were transferred to Sapporo
 In November, announced the establishment of the newly integrated POKKA
Group Management Co., Ltd.
 In July, signed a license agreement with Australian premium beer maker
Coopers Brewery and began brewing and selling Sapporo brand beer in the
Oceania market.

SAPPORO FOOD&BEVERAGE LTD. New company to be established in April
2012 and begin operation in January 2013.

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

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Overview of 2011 Results –ConsolidatedSteady growth in terms of operating
and ordinary income
 Net sales increased:
Consolidated sales rose as positive contributions from theInternational Alcoholic Beverages and Soft Drinks combinedwith the consolidation of the POKKA Group to offset disasterinduced earnings declines at the Japanese Alcoholic Beverages
and Restaurants businesses.
 Operating income rose for the second consecutive year evenafter excluding the contributions from the consolidation of
POKKA Group.
Consolidated operating income on the whole rose significantly
as all segments registered increased profits except International
Alcoholic Beverages, affected by forward investments related toentry in Vietnam, and Soft Drinks, where profits were curtailed
by goodwill amortization.
 Ordinary Income rose for the fifth straight year Net income declined:
Net income declined ¥7.6 bn owing to the absence this year ofthe ¥8.1 bn extraordinary gain on asset sales and the posting ofextraordinary losses of ¥1.0 bn on asset retirement obligationsand ¥5.4bn for disaster-related costs.
*Additional POKKA Corporation shares acquired on March 29, 2011.
Income statement items consolidated from 2Q
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

Y-o-Y changes(Amount/%)

2010 results

2011 results

279.3

268.1

(11.1)-4.0%

International Alcoholic
Beverages

25.3

25.8

0.5

2.0%

Soft Drinks

33.9

36.8

2.9

8.6%

POKKA Group

―

75.8

75.8

―

Restaurants

26.4

24.0

(2.3)

-8.8%

Real Estate

23.5

22.4

(1.0)

-4.5%

0.6

0.7

0.1

20.9%

389.2

454.0

64.8

16.7%

Japanese Alcoholic
Beverages

9.2

9.3

0.0

0.2%

International Alcoholic
Beverages-North America, Other-Vietnam

0.4

0.3

(0.1)

-24.0%

0.8
(0.3)

1.4
(1.0)

0.5
(0.6)

64.0%
―

Soft Drinks
Before amortization

1.2

0.7

（0.5）

-40.9%

1.3

1.5

0.1

12.5%

POKKA Group

―

2.9

2.9

―

Restaurants

0.1

0.2

0.0

47.2%

Real Estate

7.9

8.5

0.5

7.1%

Other

(0.7)

(0.6)

0.1

―

Corporate andintercompany
eliminations

(3.0)

(2.6)

0.4

―

Consolidated operating
income

15.4

18.8

3.4

22.6%

Operating income before GW
amortization

16.5

21.9

5.4

32.7%

Consolidated ordinary
income

14.3

16.8

2.4

17.3%

Consolidated net income

10.7

3.1

(7.6)

-70.6%
6/50(billions of yen)Japanese Alcoholic
Beverages

Other
Consolidated net sales

Overview of 2011 Results - Trends Steady growth in operating income before goodwill amortization and ordinary income.
Profits growth trend intact even after excluding the contributions from the consolidation of POKKA Group
Ordinary income rose for the fifth straight year
billions of yen

25.0 Trends in operating income and ordinary income
before goodwill amortization

21.9

Operating income before
goodwill amortization
20.0

Ordinary income
16.8

16.5
15.5
15.0

13.2
10.5

10.0

8.6

14.3

13.9
10.7

8.1
5.8

5.0

0.0
2006

2007

2008

2009*1※1: ¥2.4 billion increase in cost burden in 2009 owing to accountingchanges from 2009
※2: ¥1.8 billion cost increase from amortization costs for new sales
and logistics system, etc.

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

2010*2

2011*3※3: POKKA Group income items consolidated from Q2

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Overview of 2011 Results - Strategic Investments Strategic
StrategicInvestments
Investments

CreditCreditRatings
Ratings

Acquisition of shares related to integration of POKKA Corporation
 Acquired additional shares on March 29, making POKKA Group a consolidated
subsidiary (Post-acquisition equity stake: 86.8%)
 Acquisition-related investment = acquisition cost of ¥22.4 bn + ¥8.2 bn inassumed net financial liabilities
Total investment as of end-March: ¥30.7 bn
 Acquisitions since April (total cost of ¥5.2 bn) have raised equity stake to98.6% as of December 31, 2011 Total investment in 2011: ¥35.9 bn (the total excludes earlier investment in
21.4% equity stake)Raising of credit ratings by JCR

Acquisition of shares following Sapporo Beverage Co., Ltd’s CB execution
 Acquired shares on April 28 from Crescent Partners after it converted CB
holdings
 Total investment ¥7.1 bn = acquisition price of ¥10.8 bn - ¥3.8 bn stock
issuance priceNo change in ratings even after announcement of acquisition of 15%
stake in Yebisu Garden Place On Feb 10, 2011, Japan Credit Rating Agency (JCR) raised our ratingby one notch from BBB+ (positive) to A- (stable)
Raising of credit ratings by R&I
 On Mar 16, 2011, Rating & Investment Information (R&I) upgraded ourrating from BBB (stable) to BBB+ (stable)
Low cost financing
 In September 2011, we launched a five-year straight bond issue of¥10.0 bn with a low annual coupon rate In December 2011, both JCR and R&I announced that there will be nochange in our credit ratings

Capital expenditure (cash basis); lease fees ＞ Consolidated total: ¥16.4 bn
 Breakdown: Japanese Alcoholic Beverages ¥2.9 bn, International Alcoholic
Beverages ¥3.4 bn, Soft Drinks ¥0.5 bn POKKA Group ¥4.3 bn, Restaurant ¥0.3
bn Real Estate ¥4.6 bn, etc.

 Cost of shares acquired as of end-December: ¥35.1 bn (including 21.4%
share acquired prior to 2011)

Acquisition of investment securities Consolidated total: ¥2.2

 Assumed net financial liabilities: ¥8.2 bn

Other investments Consolidated total: ¥3.2 bn
 Breakdown: Japanese Alcoholic Beverages, etc.
Total strategic investment in 2011(includes ordinary capex)
 ¥64.8 bn

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

Summary
Summaryof
ofPOKKA-related
POKKA-relatedInvestments
Investments

 Lease obligations: ¥10.4 bn
 Total investment: ¥53.7 bn
 POKKA’s annual EBITDA: about ¥10.0 bn
 EBITDA multiple: about 5.4x

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Overview of 2011 Results -Results vs. TargetsSteady growth in terms of operating
and ordinary income
Net sales: Unachieved
・The Japanese Alcoholic Beverages Business had toconcentrate supply on the three core brands of
Sapporo Draft Beer Black Label, Yebisu, and Mugi to
Hop owing to earthquake damage to two of its fivemain breweries. This meant that while sales of canned
versions of these three brand products exceeded
previous year levels, sales of other brand products
declined and sales fell short of target.
・Sales of the International Alcoholic Beverages
Business fell short of targets despite SLEEMAN and
Sapporo brand products both exceeding previous year
levels in sales volume and on local currency basis due
to yen appreciation among other factors.

Though net sales fell short, operating income,ordinary income and net income exceeded thetargets.

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

billions of yen

2011 revised
target2011 results

Japanese Alcoholic
Beverages

271.7

268.1

(3.5)

-1.3%

International Alcoholic
Beverages

29.2

25.8

(3.3)

-11.3%

Soft Drinks

37.8

36.8

(0.9)

-2.5%

POKKA Group

75.9

75.8

(0.0)

-0.1%

Restaurants

23.7

24.0

0.3

1.7%

Real Estate

22.4

22.4

0.0

0.3%

1.3

0.7

(0.5)

-41.9%

Other

vs. Targets(Amount/%)

462.0

454.0

(7.9)

-1.7%

Japanese Alcoholic
Beverages

9.8

9.3

(0.4)

-5.1%

International Alcoholic
Beverages-North America, Other-Vietnam

0.1

0.3

0.2

278.2%

1.4
(1.3)

1.4
(1.0)

(0.0)
0.2

-0.3%
－%

Soft Drinks
Before amortization

1.0

0.7

(0.2)

-24.3%

1.6

1.5

(0.0)

-5.6%

POKKA Group

2.5

2.9

0.4

17.4%

Restaurants

0.0

0.2

0.2

－%

Real Estate

8.0

8.5

0.5

6.9%

Other

(0.4)

(0.6)

(0.2)

－%

General corporate

(3.0)

(2.6)

0.3

－%

Consolidated operating
income

18.0

18.8

0.8

4.9%

Operating income before GW
amortization

21.0

21.9

0.9

4.7%

Consolidated ordinary
income

15.5

16.8

1.3

8.4%

Consolidated net income

2.7

3.1

0.4

17.2%

Consolidated net sales

9/50

Overview of 2011 Results - Management Indices,
Disclosure of Real Estate Leasing Asset Prices Management Indices vs. Targets and Previous Year
Results vs. Targets
2011 revised
targets

2011 results

Operating margin(excl. liquor taxes, before
goodwill amortization)

6.0％

6.4％

Financial liabilities(billion yen)(excl. lease obligations)

213.0

D/E ratio (times)
ROE(%)(before goodwill amortization)2010 vs. 2011 Results

Change2010 results

2011 results

Change

0.4%

6.1％

6.4%

0.3%

219.1

6.1

181.3

219.1

37.8

1.7

1.8

0.1

1.4

1.8

0.4

2.2%
4.6%

2.5%
5.1%

0.3%
0.5%

8.9%
9.8%

2.5%
5.1%

-6.4%
-4.7%

(as of Dec 31, 2011)

Disclosure of real estate leasing assets
Carrying value on consolidated B/S 173.2
Fair value at end of term

299.8

Difference

126.5(billion yen)

See Earnings Report for further details
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

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Supplementary
Supplementary Information
Information toto 20112011 Results
Results*For information on each business’s profitability, please also
see the Supplementary Information to our Earnings Report

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

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Japanese Alcoholic Beverages (1)Year-over-year changes(billions of yen)

Results
Resultshighlights
highlights
2010

2011

Amount%Net sales*

279.3

268.1

(11.1)-4.0%

Operatingincome

9.2

9.3

0.0

0.2%

“ incl. liquor taxes

Sales down on earthquake impact.
Operating income rose with lower capital
investment and other cost reductions*¥2.2 bn impact due to accounting system changes from 2009
Net sales, operating income *¥1.8 bn cost increase due to amortization associated with
operation of new logistics system from 2010
trend excl. liquor taxesOperating
incomeOperating margin

billions of
yen
12

Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
status6%9

1. Bolster brand strength by focusing management
resources on core products
 Bolstering brand strength by concentrating resources on
Sapporo Draft Beer Black Label, Yebisu Beer, and Mugi to
Hop By holding back on new product launches and focusing on the
3 core brands, as in the previous term, we achieved YoY
volume growth for those 3 brands exceeding general demand
for the year. With two of its five main breweries sufferingdamages, we had to concentrate on these brands andtherefore total shipments of Sapporo beer, happoshu, andnew-genre beer products fell 6.7%, a sharper drop than the
4.1% decline in general demand.

7.7

6

7.4

4.5%

3

4%

6.0%

5.8%

6.1
4.7%

2%

3.5%

3.7
2.1%

0

0%

2006

2007

2008

2009

2010

2011

YoY sales volume for Jan-Dec(Yebisu Beer and Black Label - total beer demand: Mugi to Hop – new-genre total demand)
％

101.8

100

101.4

Sapporo Beer
Total demand

99.4

95.6

Relaunched
on Jan 25,2012

9.3

9.2

96.1

95.9

95.6

95

93.3

90
Yebisu Beer

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

Black Label

Mugi to HopBeer, happoshu, and new-genre
total

12/50

Japanese Alcoholic Beverages (2)Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
status

2. Positioning for growth in expanding areas
Non-alcohol beer market initiatives

Low-alcohol beer segment initiatives

 March 16: launched Premium Alcohol Free
• Sales exceeded plan despite self-restraint on
advertising after the earthquake.
Achieved annual sales of 1.12 mn cases,
double the target (large bottle count) Feb: Launched limited-quantity Sapporo Nectar Creamy Peachcocktail-style drink

Relaunchedon Feb 15､2012

3. Strengthening operating base Apr: Released new, improved Sapporo Nectar Sour Sparkling
Peach May: Launched Triangle Ginger Highball Jul: Launched limited-quantity Sapporo Nectar Sour Sparkling
Mango Sep: Launched limited-quantity Sapporo Nectar Sour Sparkling
La France
 Nov: Launched limited-quantity Sapporo Nectar Sour Sparkling
Apple

Cost structure reforms
 Implementing management-driven projects targeted at
reducing costs by ¥3.0 bn from 2011 to 2013
 To cover decline in sales in the earthquake’s aftermath, wehave made efforts to realize cost-cutting targets earlier thanplanned, including curtailing capital investments and fixed
expenses, resulting in much larger cost reductions than in2010.
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

13/50

Japanese Alcoholic Beverages (3)Moves
Movestoward
towardgrowth
growthin
inexpanding
expandingareas
areasduring
during2011
2011

Wine

Spirits

 Both imported and Japanese wines achieved year-on-year volume
growth and increased sales and profits Signed sales agreement with major Korean foods maker CJ Group
Commercial sales of CJ Bonga Makgeolli launched on July 13
 Entered into alliance with Bacardi Japan, supplier of world No.1
rum brand. Started sales of major brands shown below on October
1, 2011.
• Sales of 90 items across 29 brands• Expand western spirits into earnings pillar equal towine/shochu• 2016 western spirit sales target: ¥10.0 bn

 Imported wine: Growth in Californian wine Beringer and low-costwines
 Japanese wine: Growth in large bottle, additive-free wines

BacardiBombay Sapphire

Gray Goose

Martini

Dewar’
Dewar’s

World’s No.1 Italiansparkling wine on
volume/value basis

America’s No.1 rumscotch whisky onvolume/value basis

Shochu Achieved year-on-year volume growth and also increased sales
and profits
 Waramugi shochu: awarded gold prize in the “Singly Distilled
Shochu” category by the Alcohol Appreciation and Evaluation
Committee of the Fukuoka Regional Taxation Bureau
 Kuroumesyu contributed to rise in sales volume

World’s No.1 rumbrand onvolume/value basis

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

World’s No.1 ginbrand on value
basisWorld’s No.1 superpremium vodka onvolume/value basis

14/50

International Alcoholic Beverages (1)billions of yen

Results
Resultshighlights
highlights

Sales rose 2% YoY, as yen appreciation erased
gains in local currency terms, especially in North
America.
Operating income fell as the ¥0.5 bn rise in profits
in North America were offset by ¥1.0 bn forward
investment cost in Vietnam.
Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
statusYear-over-year changes
2010

2011

Amount%Net sales

25.3

25.8

0.5

2.0%

Operatingincome

0.4
0.8
(0.3)

0.3
1.4
(1.0)

(0.1)
0.5
(0.6)

-24.0%
64.0%－

North America, others

Vietnam

1. North American business growth
Sales in local currency (Jan-Dec)

300

278.8

262.4
241.7

250
212.9

SLEEMAN(Canada)

221.7

200
150
2007

2008

2009

2010

2011

SLEEMAN (C$ millions)59.9
55

Sapporo USA
46.9

46.7
45

 Sales expanded on increased
investment in marketing of premium
brands• Sales growth higher than that for
total demand in Canada

42.9

41.9

35
2007

2008

2009
2010
USA（百万USﾄﾞﾙ）

2011

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

 Expanding from JapaneseAmerican market base into wider
US and Asian-American markets• Sales to Asian-American
market up more than 10% YoY

5th straight year of Year-on-Yearvolume growth!
(Jan-Dec)
Unit sales (YoY)

2010

2011

SLEEMAN brand

105%

109%

Canada total
demand100%

99%

Continues to outperform total
demand for imported beers in US!
(Jan-Dec)

Unit sales (YoY)

2010

2011

USA companies

113%

110%

US total importbeer demand

104%

100%

15/50

International Alcoholic Beverages (2)Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
status

2. Expansion in Asian market (incl. Oceania)
Developments in Vietnam
 Completed construction of Vietnam plant on Nov 24,
2011 To start sales of locally produced beer for full-fledged
launch at end of February 2012

Developments in Singapore
 Expanding imported beer sales in local household market
in cooperation with POKKA Corporation(POKKA has top share (70%) in local green tea-based drink market)
 Sales for 2011: 52,000 cases (large bottles) YoY 121.4%
 Sales target for 2014: 100,000 cases (large bottles)
Vietnam brewery inauguration

Developments in South Korea
 Started sales of imported beer to household and commercial
markets with cooperation of partner Maeil Dairies Co., Ltd.
(Maeil has top shares in cheese, low-fat milk, and chilled coffee drinks)
 Sales for 2011: 230,000 cases (1 case = 350ml×24) *Target: 300,000 cases(Though sales were affected for about two and a half months due to the disaster,
we achieved about 2/3 of the target)
 Sales target: 1.5 mn cases in 2015 (1 case = 350ml×24) in an aim to become
the no.1 imported brand

Developments in Oceania
 In October entered the Australian/New Zealand premiumbeer market via licensing agreement with Coopers
Brewery Ltd. in preparation for full-fledged entry in 2012.
(No.3 in Australia’s beer market, No. 2 in premium beer market with a 17.3%
share) Aiming at top share among Japanese beer brands
 Sales targets: 160,000 cases in 2012, 500,000 in 2016 (1 case = 355ml×24）

Vietnam brewery site

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

16/50

Soft Drinks
billions of yen

Results
Resultshighlights
highlights
While overall domestic market struggled to match 2010 volumes
prompted by the hot summer, we achieved strong growth of 4% in
YoY sales on the back of the rise in demand following the earthquake.
Goodwill amortization for the term came to ¥0.7 bn.
Steadygrowth in operating margin before goodwill amortization.
billions of
yen
2

1.5

4%

3.8%

4.1%
1.5

0.5
0

2.8%

0.4

0.8

2008

2009

Amount

%

33.9

36.8

2.9

8.6%

1.3

3%
2%

Operating income
Before GW
amortization

1.2
1.3

0.7
1.5

(0.5)
0.1

-40.9%
12.5%

1%
0%

*From 2011, Food Business moved from Soft Drinks segment to Others

-1%
-2%

2007
-0.5

1.1%

2011

5%

Operating income*Operating margin

1

2010
Net sales*Operating income before goodwill amortization

Trends in net sales, operating margin

Year-over-year changes

2010

2011

-0.8

-1

-3%
-4%
-5%

Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
statusBrand strengthening/cultivation
 Concentrate marketing investment and sales effort
on core brands•Gerolsteiner: 9% YoY growth•Gabunomi: 0% YoY growth•Ribbon: -4% YoY growth Creation of new value proposition

Synergies
Synergieswith
withKyodo
KyodoMilk
MilkIndustry
IndustryCo.,
Co.,Ltd.
Ltd.
 Released the first collaborative product, Chousyoku
Fruits, in April•Joint marketing to large retailers

Synergies
Synergieswith
withPOKKA
POKKACorporation
Corporation
 Synergies led to cost savings of ¥343 mn in Jan-Dec•Synergies from joint procurement and consigned
production•Oishii Tansansui, Sonomama Zukuri
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

17/50

POKKA Group (1) [Consolidated from 2Q]
Year-over-year changes
billions of yen

Results
Resultshighlights
highlights

2010

New consolidation makes YoY comparisons meaningless, but
comparisons based on figures below shows POKKA sales up in all
segments except Overseas Beverages and Foods business, where YoY
decline reflects negative calendar effect on Singapore sales from earlyoccurrence of lunar new year in 2011. Domestic Beverages and Foods
Business made big contribution to increased operating income.

Net sales
OperatingincomeBefore GW
amortization

Ref:
Ref:Apr-Dec
Apr-Decsegment
segmentsales
salesandandYoY
YoYcomparisonscomparisons*Intergroupeliminations for
Apr-Dec 2011 total¥1.5 bn2011

Amount(Apr-Dec)※

―

75.8

75.8

―

―
―

2.9
4.2

2.9
4.2

―
―

*Started consolidating POKKA’s profit/loss items from 2Q.

BeforeBeforeinter-segmentinter-segmenteliminations
eliminations

billions of yen

2010

2011

Year-over-year changes
Amount%Domestic Bev/Foods

58.9

59.0

0.0

0.1%

Overseas Bev/Foods

7.6

7.6

(0.0)

-0.6%

Domestic Restaurants

4.1

4.4

0.3

8.3%

Overseas Restaurants

3.2

3.4

0.1

6.0%

Other Businesses

7.1

7.2

0.1

1.7%

POKKA corporate

(4.3)

(4.4)

(0.1)

－

Sales (total)

76.8

*77.3

0.4

0.6%

Operating income

4.1

3.9

(0.2)

-5.0%

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

%

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POKKA Group (2) [Consolidated from 2Q]
Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
statusBeverages & Food Business (Japan): POKKA Corp. and six group vending machine operators
1. Beverages Business Concentrating investments in core brands
Kireto Lemon‥10th anniversary sales campaign‥ Introduced Kireto Lemon Soukai Sparkling
Canned coffee sales supported by promotional cans
Sales of Gensen Bito version have been strong.
2. Food Business Concentrating investments in TV
commercials for core and growth products‥Jikkuri Kotokoto, Kantanbimi
 Pokka Lemon 100‥ Marketing as a drink to ‘take in’ the morning‥ Introduced “Lemonja” character to raise awareness oflemon’s positive attributes

3. Cost-cutting efforts
 Lowered COGS by using competitive procurement
process, reduced fixed expenses

Synergies
Synergieswith
withSapporo
SapporoBeverage
Beverage

4. New production line
 Added cup soup line at Gunma plant・・Supply capacity enhanced
ahead of peak demand period

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

 Synergies led to cost savings of ¥0.4 bn in Apr-Dec•Synergies from joint procurement andconsigned production

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Pokka Group (3) [consolidated from 2Q]
Key
points
事業計画のポイント：取組状況
Key
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
status
事業計画のポイント：取組状況■Beverages & Foods Business (Overseas): POKKA Singapore
1. Increase production capacity
 Raised in-house production ratio,
boosted efficiency
2. Strengthened SCM
 Lowered distribution
and warehousing costs
 Reduced inventories

New carbonated drink
line started full-scale
operation in
NovemberExporting products to
60 countries

POKKA green tea products
boasting high market share in Singapore

POKKA ACE (M)
SDN. BHD.
(Malaysia)■Restaurants Business (Domestic): POKKA CREATE Co., Ltd.
1. Expand sales via growth at existing stores, chain expansion
 Outlets: 160 (105 in Kanto, 31 in Tokai, 21 in Kansai, 3 in Kyushu; asof January 2012) New outlets opened in 2011: 12 (5 directly run; 7 franchises) Effectively using remodeling plan to strengthen brand image
2. Operating income up on
successful efforts to lift profit
ratio Improved COGS ratio Closed unprofitable stores■Restaurants Business (Overseas): POKKA CORPORATION(Hong Kong) and POKKA Food (Singapore) Pte. Ltd.
・The nuclear power plant accident caused sales to fall, albeit only slightly.
Both new and existing outlets in Hong Kong performing strong

POKKA
CORPORATION（SINGAPORE）
SINGAPORE）PTE LTD(Singapore)■Other businesses
・Ice cream business Outlets: 42 in total (as of the end of December 2011)
Hong Kong 31, Singapore 10, Macao 1
 New outlet opening during Feb.-Oct. 2011
Hong Kong
Mikichi: 2
Pokka Café: 1

Foremost Blueseal brand (Okinawa)
Copyright,
Copyright, 20112012 SAPPOROSAPPORO HOLDINGSHOLDINGS LTD.
LTD. AllAll rights
rights reserved.
reserved.

20/50

Restaurants
Results
Resultshighlighthighlight(billions of yen)

Year-over-year changes

Consumer spending dropped sharply after the Great East Japan
Earthquake. Although consumer spending in recovering, thebusiness environment remains highly competitive.
Decline in comparable store sales has been slowing, from -16.1% Net sales
YoY in 1Q to -7.6% in 2Q, -4.1% in 3Q and -1.3% in 4Q, but sales
for full-year 2011 were still down 7.0% YoY. Operating income
Operatingincreased YoY, on closure of unprofitable stores, cost reductions income
and contributions from new stores.

2010

2011

Amount

%

26.4

24.0

(2.3)

-8.8%

0.1

0.2

0.0

47.2%

Key
Keypoint
pointininbusinessbusinessplan:
plan:implementation
implementationstatus
status

1. Positioning for growth

2. Earnings structure reformNew restaurant opening strategy

 Locations closed in 2011: 10

 Synergy with Japanese Alcoholic Beverage Business:
Opening of YEBISU BAR outlets

 Locations operating as of the end of 2011: 191• Opened our 3rd outlet in Osaka’s Umeda district,our 4th in Tokyo Dome City, and our 5th in Tokyo’s
Kagurazaka district
 Ginza Lion chain expansion

ＹＥＢＩＳＵ ＢＡＲ• Mini Brasserie Ginza Lion opened in Sapporo
 3 other outlets opened for total of 7 in 2011
• All outlets are performing as planned
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

21/50

Real Estate (1)(billions of yen)

Year-over-year changes

Results
Resultshighlighthighlight

Maintaining stable revenues despite continued fallin rents in Tokyo office leasing market
Key
Keypoint
pointininbusinessbusinessplan:
plan:implementation
implementationstatus
status

1. Boosting value of existing properties Keeping rents at appropriate levels%

Net sales

23.5

22.4

(1.0)

-4.5%

Operatingincome

7.9

8.5

0.5

7.1%

(As of December 31, 2011)
Floor area(m2)

Occupancy rate(%)

Yebisu Garden Place *1

56,943

298,00793%

40 floors above
ground, 5 below

Negotiating w/ current tenants before
rebuilding the Seiwa Yebisu Building.

Seiwa Yebisu Building

2,617

10,40075%

6 floors above
ground, 1 below(occupancy down to 75% from 2010 average of
99% as tenants begin to vacate property)

Yebisu Square

1,561

9,126

92%

7 floors above
ground, 1 below

Shibuya Sakuragaoka
Square

1,200

9,268

100%

10 floors above
ground, 1 below

Sapporo Ginza Building

530

4,232

96%

10 floors above
ground, 4 below

1,117

11,41199%

13 floors above
ground, 1 below

Occupancy rates as of end-Dec at ourTokyo properties (table at right)
compare favorably with the 91%
average for office buildings in Tokyo’s 5central wards

2. Growth initiatives
Acquire new properties•

AmountSite area(m2)

 Maintaining high occupancy rates•

2011

Major rental properties inTokyo*s 23 wards

 Redeveloping existing properties•

2010

Storia Shirokanedai rental apartment building
acquired in February

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

Strata Ginza *2

No. of floors

Site areas are taken from the land registry. Floor areas are as per building certification.
Occupancy rates are averages for January–December 2011.
*1. Figures are for entire property. Sapporo holds an 85% stake (jointly managed). Numberof floors for office wings/buildings 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)

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Real Estate (2)Overview
Overviewof
ofRealRealEstate
EstateBusinessBusinessMajority of the business’s operating income is from real estate leasing– Property portfolio largely comprises properties in metropolitan Tokyo (5 central wards: seeprevious page) Targeting growth via new acquisitions
 Redeveloping existing properties to boost value: started negotiations with tenants of Seiwa
Ebisu Building
OperatingOperatingIncome
IncomeJan-Dec 2010
Real estate leasing
Tokyo’s 23
wards
Other areas
Real estate leasing
total
Sales
Other operations*
Total

EBITDAEBITDA(billions of yen)

Jan-Dec 2011

Change (value)

6.7

7.6

0.9

0.8

0.8

0.0

7.5

8.5

0.9

0.5
(0.1)
7.9

0.4
(0.3)
8.5

(0.1)
(0.2)
0.5

*”Other operations” includes back-office operations

Real estate leasing
Tokyo’s 23
wards
Other areas
Real estate leasing
total
Sales
Other operations*Total(billions of yen)

Jan-Dec 2010

Jan-Dec 2011

Change (value)

11.4

11.0

(0.4)

1.5

1.5

0.0

12.9

12.6

(0.3)

0.5
0.1
13.6

0.4
(0.0)
12.9

(0.1)
(0.2)
(0.7)

* EBITDA = operating income + depreciation and amortization*“Other operations” includes back-office operations

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

23/50

2.
2. Sapporo
Sapporo Group
Group Management
Management Plan
Plan
2012-20132012-2013

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

24/50

MediumMedium- toto Long-Term
Long-Term Strategy
Strategy

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

25/50

Long-term Management Strategies:
Sapporo Group’s New Management Framework
Basic approach: Working steadily toward long-term goals while also boldly
revising resource allocations, executing strategic investments, and enhancing
competitiveness through aggressive management
Goals (for 2016, 140th anniversary of founding)• Consol. sales ¥600 bn (incl. liquor taxes)¥450 bn (excl. liquor taxes)• Consol. operating income ¥40 bn (before goodwill
amortization)• Operating margin 9% (excl. liquor taxes; before goodwill
amortization)• ROE• D/E ratio

8% or higher (before goodwill amortization)
Around 1:1◆Four basic strategies for growth
1. Concentrate resource on high-value-added products andservices
2. Engage in strategic alliances aimed at building competitive
advantage and expanding business3. Actively expand overseas operation
4. Expand group synergies on the strategic and operational fronts

Food value creation
２００７

Creating comfortablesurroundings(Announced October 2007)

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

26/50

Medium-term Target of New Group Management Structure
Of the two business domains, we position food value creation business as
the core domain driving the group’s future growth and will make active
investments for growth both in Japan and abroad.
Sapporo Group’s Business Domains
International
Restaurants

Food value creation
Japanese Alcoholic
Beverages

Creating
comfortablesurroundings

Food & Soft Drinks

The core domain driving the Group’s
great leap forward

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

Real Estate

The business domain expected tocontribute stable profits backed byprime properties

27/50

Medium-term Target of New Group Management Structure
In addition to alcoholic beverages and real estate, we aim to grow the foods& soft drinks businesses into the Group’s third source of stable profits.

◆ Share of Foods & Soft Drinks business in the Group’s targets
2010 results2016 targets

ChangeGrowth
rate

133.0

170.0

37.0

128%

Operating income

5.2

8.5

3.3

163%

Operating margin

3.91%

5.00%

1.09%

Net sales

Foods & Soft Drinks¥170.0 bn

2016 sales
breakdown(incl. liquor taxes)
Others¥430.0 bn

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

About 30% of
the Group target

28/50

Sapporo Group’s International Expansion
Promote unique international strategy through organic growth and local partnerships
Premium
Premiumbeer
beerstrategy
strategy
centeredon
Sapporocentered on Sapporobrandbrand
products
products

Area
Areastrategy
strategyfocused
focusedon
onthe
theAsia-Pacificrim
Asia-Pacific rim
 An area strategy organized around two pillar
domains, North America and Asia/Oceania
 Establishment of the Asian business basewith the Vietnam plant starting operations.
Manufacturing bases in Japan, Canada andVietnam Use high brand recognition and sales channel
in Singapore to expand sales of Sapporo
products
Asia/Oceania

 Orient international expansion towards
specialized, premium products
 Enhance Sapporo brand production
bases in alliances with trustworthy
partners (Taiwan and Australia)

South Korea: Took astake in the alcoholic
beverage business ofMaeil Diaries Co., Ltd.
Driving forward sales
expansion efforts

North America
Canada：Grow sales
by strengthening
investment inpremium brands

GrowthGrowthinto
intoInternational
International
BusinessfromBusiness fromInternational
International
AlcoholicAlcoholicBeverage
BeverageBusinessBusiness
 The scope of expansion was broadened
as the alliance with POKKA added softdrinks to alcoholic beverages-POKKA brand has a 70% share ingreen tea market and its share is over
50% in the overall tea drink market.
-Added carbonated drink line to theSingapore plant. Aim for further growth.
 Acquired majority stake in Silver
Springs Citrus (SSC), the largest U.S.
maker of private-brand chilled drinks at
the end of January 2012

Hong Kong: HK POKKA’s restaurants
business has been strong
Vietnam：The plant was completed
on Nov. 24, 2011. Start full-scale
marketing

USA: Establish
Sapporo as No. 1
Japanese/Asian beer
brand

Singapore: Build on
POKKA’s high brandawareness and market
share

USA: Acquired
majority stake in SSC,
the largest U.S. makerof private-brandchilled drinks
Green tea products by POKKA
Singapore

Australia: Start local
production and sales
by Coopers

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

We started production of Sapporo Premium at theVietnam plant

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2012-2013
2012-2013 Management
Management Targets
Targets

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

30/50

Position of Sapporo Group Management Plan 2012-2013
Solidify the growth trajectory to move up to the dynamic growth stage.
Solidifying the growth trajectory

Launch the new groupmanagement structure
for dynamic growth!

Dynamic growthIII. Creating new opportunities for growth

II. Carrying out growth measures

I. Challenge toward growth in all businesses

2012

2013

2014

2015

2016
140th anniversary of Group’s
founding
Achievement of the New
Management Framework’s targets

Copyright, 2012SAPPORO HOLDINGS LTD. All rights reserved.

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2012-2013 Management Targets
Consolidated
Consolidatedtargets
targets
2006 results

2011 results2012 targets

2013 targets

2016 targets

Consolidated net sales*incl. liquor taxes¥435.0 bn¥454.0 bn¥510.0 bn¥535.0 bn¥600.0 bn(excl. liquor taxes)¥294.0 bn¥341.4 bn¥396.0 bn¥420.0 bn¥450.0 bn

Consolidated operating
income(before goodwill
amortization)
Consolidated ordinary
incomeConsolidated net
incomeConsolidated operating
margin*excl. liquor taxes(before goodwill
amortization)¥8.6 bn¥18.8 bn

¥20.0 bn¥21.0 bn

2.9%

6.4%

6.0%

5.9%

D/E ratio

2.1 times

1.8 times

1.9 times

1.9 times

ROE

2.1%

2.5%

5.0%

5.7%

(before goodwill
amortization)

2.1%

5.1%

8.2%

8.7%

¥40.0 bn
¥8.6 bn¥21.9 bn

¥23.9 bn

¥24.8 bn

¥5.8 bn¥16.8 bn¥17.0 bn

¥18.0 bn-

¥2.3 bn¥3.1 bn¥6.3 bn¥7.4 bn

-

2.9%

5.5%

5.1%

5.0%
9.0%
Around 1:1
8% or higher*Assumed exchange rates: 2012-2013: US$ = ¥81, CAN$ = ¥80

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

32/50

2012-2013 Management Targets by Segment
Targets
Targets
Japanese Alcoholic Beverages

Net salesInternational Business
Food & Soft Drinks
Restaurants
Real Estate
Other Businesses
Corporate & intercompany
eliminations
Consolidated total
Japanese Alcoholic Beverages

Operating income

International Business
Food & Soft Drinks
Restaurants
Real Estate
Other
Corporate & intercompany
eliminations
Consolidated total*Assumed exchange
rates: 2012-2013:
Consolidated
total US$ = ¥XX, CAN$ = ¥XX(before goodwill amortization)
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

2011 results2012 targets

2013 targets¥268.1 bn¥25.8 bn¥112.7 bn¥24.0 bn
¥22.4 bn¥0.7 bn¥288.0 bn¥37.3 bn
¥134.6 bn¥24.9 bn
¥24.4 bn¥0.8 bn¥300.0 bn¥44.0 bn
¥140.0 bn¥26.0 bn¥24.0 bn¥1.0 bn－－－¥454. bn¥9.3 bn¥0.3 bn¥3.6 bn¥0.2 bn¥8.5 bn(¥0.6 bn)

¥510.0 bn¥10.5 bn¥0.0 bn¥3.0 bn¥0.6 bn¥9.3 bn(¥0.4 bn)¥535.0 bn¥12.0 bn¥0.2 bn¥3.1 bn¥0.8 bn¥8.6 bn(¥0.4 bn)(¥2.6 bn)(¥3.0 bn)(¥3.3 bn)

¥18.8 bn

¥20.0 bn¥21.0 bn

¥21.9 bn

¥23.9 bn

¥24.8 bn
33/50

2012-2013
2012-2013 Basic
Basic Strategies
Strategies

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

34/50

Basic Strategies for Promoting Robust Growth
I.I.Challenge
Challengetoward
towardgrowth
growthininall
allbusinesses
businesses★ While leveraging the strengths of our various business’s brands andtheir other management resources, we will accept new challenges tobeat the competition in all of our businesses.
II.
II.Carrying
Carryingout
outgrowth
growthmeasures
measures★ To realize the fruits of the many initiatives undertaken by the Groupin recent times, we will continue to make forward investments andtake other steps to strengthen our foundations.
III.
III.Create
Createnew
newopportunities
opportunitiesfor
forgrowth
growth★ We will continue to aggressively pursue attractive M&A deals andalliances, both in Japan and overseas.
*Details of each strategy will be discussed
under business-based strategies.
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

35/50

Strategic Investment
Basic
Basicconcept
conceptof
ofstrategic
strategicinvestment
investment◇We◇Wewill
willcontinue
continueto
tomakemakeactive
activestrategic
strategicinvestment
investmentaimed
aimedatatfurtherfurtherdevelopingthe
SapporoGroup.
developing the Sapporo Group.
◇We◇Weenvisionenvisionstrategic
strategicinvestments
investmentsworth
worth¥150¥150billion
billionto
to200
200billion
billionfrom
from2012
2012
through
2016
and
it
will
generallybemadewithinthescopeofoperatingcash
through 2016 and it will generally be made within the scope of operating cash
flows.
flows.
◇Forof¥64 billion.
◇ForFY2012,
FY2012,weweplanplantotomakemakestrategic
strategicinvestment
investment*Strategic
ofapproximately
approximately
billion.
investment includes¥64
ordinary
capex.
<FY2012 strategic investment> *Projects that have been decided as of now- Raise the Group’s stake of the complex known as Yebisu Garden Place to 100%.
- Acquisition of majority stake in Silver Springs Citrus, the largest U.S. maker of private-brandchilled drinks-Capital investment in the Japanese alcoholic beverage as well as foods & soft drinks
businesses aimed at further improving efficiency- New openings of restaurants, etc.

YEBISU BAR

Yebisu Garden Place
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

Silver Springs Citrus (the U.S.)CAFÉ de CRIE

36/50

OverallOverall Group
Group Strategy
Strategy

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

37/50

Overall Group Strategy
1.
1.Further
Furtherpromotion
promotionof
ofefficiency
efficiencyininGroup
Groupmanagement
management
Holding company/Group headquarters

Sapporo Holdings Ltd.
Functional company

As the size of the Group expands, we will further
concentrate common operations on SGM, a functional
support company.
To additionally handle
Sapporo Group Management Co.,Ltd.
Co.,Ltd.

purchasing and logistics
for the Group

Sapporo Breweries Ltd.
Sapporo International Inc.
Operating companies

POKKA SAPPORO FOOD&BEVERAGE LTD.

To be established in April 2012
Operations to start in January 2013

Sapporo Lion Limited
Sapporo Real Estate Co., Ltd

Changed namein January 20122.
2.Initiatives
Initiativesfor
forenhancing
enhancingGroup
Groupbrandbrand
We will implement Group-wide initiatives for increasing the no. of Sapporo Group fans primarily inthe areas where we can leverage the Group’s strengths.

3.
3.Strengthening
Strengtheningdevelopment
developmentof
ofGroup
Grouphuman
humanresources
resources

We will develop human resources to strengthen abilities to implement growth strategy andrespond to changes.

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

38/50

Business
Business Plans
Plans

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

39/50

Japanese Alcoholic Beverages(billions of yen)

We aim to display to the markets the qualities
unique to the Sapporo brand while further
enhancing profitability, raising corporate value
and brand value. By doing so, we will create
deeper bonds with our customers, in whom wehope to inspire excitement and joy through our
products.

Quantitative
targets

2011 results2012 targets

2013 targets

Net sales

268.1

288.0

300.0

Operating income

9.3

10.5

12.0

Key
KeyPoints
Pointsin
inManagement
ManagementPlan
Plan2012-2013
2012-2013
1.
1.Bolster
Bolsterbrand
brandstrength
strengthby
byfocusing
focusingmanagement
managementresources
resourceson
oncorecoreproducts
products
The beer business will focus resources on Sapporo Draft Beer Black Label, Yebisu,
and Mugi to Hop, which account for about 70% of beer case sales, and Sapporo
Premium Alcohol Free in the nonalcoholic beer beverage market, which we expect
will continue to grow in 2012, to further raise brand value.

“Kampai!” toasts taste even better!’

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

40/50

Japanese Alcoholic Beverages
Key
KeyPoints
Pointsin
inManagement
ManagementPlan
Plan2012-2013
2012-2013(Cont.)(Cont.)
2.
2.Laying
Layingthethegroundwork
groundworkfor
forgrowth
growthininexpanding
expandingareas
areas
We set 2012 as the first year for Sapporo to take on thechallenge of promoting RTD products, which would offer
customers a sense of discovery, excitement and a surprising
taste, and aim to triple segment sales. In addition to the relaunch and product line extension of Sapporo Nectar Sour
Sparkling Peach and Ginger Highball, we plan to introduce CJ
Oishii Makgeolli and RTD products based on Bacardi, theworld’s top rum brand.

＋

3.
3.ExpandExpandsales
salesofofwine,wine,western
westernspirits
spiritsand
andshochu
shochuSales of both wine/western spirits and shochu businesses
increased in 2011.
From 2012 onwards, we will expand sales, especially of
Bacardi brand western spirits, to grow them into a new stablesource of profits on par with wine and shochu.
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

41/50

International Business(billions of yen)

Quantitative
In North America, we will further grow thetargetsbusiness by capitalizing on its strengths in thepremium beer category and aim to boost sales
Net salesby actively engaging in growth markets in Asiaand elsewhere. We also will promote
expansion of businesses other than alcoholic Operating income
beverages.

2011 results2012 targets

2013 targets

25.8

37.3

44.0

0.3

0.0

0.2

Key
KeyPoints
Pointsin
inManagement
Management Plan
Plan2012-2013
2012-2013
1.
1.BusinessBusinessstrategy
strategyininNorth
NorthAmerica
America・SLEEMAN BREWERIES, which has been growing at a paceexceeding the total demand growth for the past five years, willcontinue its investments in marketing the thriving premiumbeer brands as it seeks to further increase sales.
・Sapporo USA achieved 3 million beer case sales (24 12oz
cans per case) in 2011 and aim for further sales expansion by
boosting the growth rate of Sapporo brand, which has been
the No. 1 Asian beer brand since 1986.
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

42/50

International Business
Key
KeyPoints
Pointsin
inManagement
Management Plan:
Plan:2012-2013
2012-2013(Cont.)(Cont.)
2.
2.Expansion
ExpansionininAsia
AsiaandandOceania
Oceania- Following the completion of the Long An plant, we will implement fullfledged marketing in Vietnam in 2012. Going forward, we position
Vietnam as the bridgehead for deploying our Southeast Asian strategies
and make optimal use of the location to expand into neighboring countries.
- We entered into tie-ups with Maeil Dairies in South Korea and with
Coopers Brewery in Australia. We will actively carry out promotions andseek further sales expansion.
- In the Singaporean market, we will continue to expand sales channels in
the local household market in collaboration with the POKKA Group.

3.
3.Expansion
Expansionof
ofbusinessbusinessdomain
domainIn addition to alcoholic beverages, we will pursue M&A and allianceopportunities in new businesses where we can demonstrate Groupsynergies in soft drinks and foods.
At the end of January 2012, we acquired a majority equity stake in Silver
Springs Citrus, the largest maker of private-brand chilled drinks in the
United States.
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

Silver Springs Citrus (the U.S.)

43/50

Food & Soft Drinks(billions of yen)

We will accomplish integration towards thestart of the new company, POKKASAPPORO FOOD & BEVERAGE LTD in
January 2013 and pursue synergies to growthe business into the third stable source ofprofits for the Group management.

Quantitative
targets

2011 results2012 targets

2013 targets

Net sales

112.7

134.6

140.0

Operating income

3.6

3.0

3.1

Key
KeyPoints
Pointsin
inManagement
ManagementPlan
Plan2012-2013
2012-2013- We will cultivate competitive brands through product differentiation and concentration of investment in core
categories and brands ultimately to expand both of the food and soft drinks businesses.
- In the food business, we aim to strengthen the POKKA Lemon brand and expand the lemon-based foodproduct category and enhance the product lineup in the soup category.
- In the soft drinks business, we aim to strengthen coffee drinks, Kireto Lemon and Ribbon brand. We will also
aim to introduce high value-added products by leveraging processing technologies and materials.
- On the sales side, we will focus on strengthening the vending machine channel and sales expansion in thecommercial-use channel where we can demonstrate Group synergies. We will study business schemes andorganizations, in addition to promoting further streamlining of production and procurement structure as well as a
joint distribution structure to achieve concrete results at an early date, so as to build a new company structurethat can efficiently generate results.

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

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Foods & Soft Drinks (Supplementary)◆ Establish a new company, Pokka Sapporo Food &Beverage Ltd in April 2012 as an entity to drive
forward integration.
◆ Set up necessary organizations, including
management strategy divisions that play a central
role in business strategy, one after another.
2011
Sapporo Beverage

POKKA Corporation◆ Demonstrate synergies◆ Start efforts towards
integration

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

Scheduled for

Scheduled to start in

April 2012

January 2013

New
operatingcompany
POKKA
SAPPOROFOOD &
BEVERAGE

POKKA SAPPORO
FOOD &
BEVERAGE

2016¥170.0 bn
in net sales◆ Expand efforts towards maximizing synergies◆ Study business strategies◆ Start necessary divisions

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Restaurants(billions of yen)

Under the key phrase of further evolution, we
will strengthen area-based restaurant
management structure, open new outlets ofsuccessful formats, and drive forward profit
structure improvement.

Quantitative
targets

2011 results2012 targets

2013 targets

Net sales

24.0

24.9

26.0

Operating income

0.2

0.6

0.8

Key
KeyPoints
Pointsin
inManagement
ManagementPlan
Plan2012-2013
2012-2013
1.
1.Growth
Growthinitiatives
initiatives
・To increase customers at existing restaurants, we will continue withvarious promotional campaigns, step up marketing to corporate customers and shifting some outlets
into successful formats.
・We plan to open new medium-sized restaurants totaling around 500 tsubo (approx. 1,653 square
meters) in size primarily of successful YEBISU BAR and brasserie formats. We plan to increase thenumber of YEBISU BAR outlets from the current five to nine within 2012.

2.
2.Profit
Profitstructure
structurereformreform
・We will continue with efforts to reform our profit structure, including reducing costs bycreating a distribution system with a single center for serving our Tokyo metropolitan
logistics network and lowering fixed costs by seeking lower rents.
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

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Real Estate(billions of yen)

We will raise Sapporo brand’s value andstrengthen Group synergies while boostingvalue of our prime properties so as to further
improve profitability for the future.

Quantitative
targets

2011 results2012 targets

2013 targets

Net sales

22.4

24.4

24.0

Operating income

8.5

9.3

8.6
Yebisu Garden Place

Key
KeyPoints
Pointsin
inManagement
ManagementPlan
Plan2012-2013
2012-2013

Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

(Ginzachome crossing)
Sapporo Ginza Building- In 2012, we changed the name of our consolidated real estatesubsidiary Yebisu Garden Place Co., Ltd., to Sapporo Real
Estate Co., Ltd., as part of our plan to raise the Sapporo brandvalue and strengthen Group synergies.
- We plan to implement at an early date a value enhancement
measure for Yebisu Garden Place, which will become wholly
owned by Sapporo Group to maintain and improve occupancy
rate and achieve appropriate rent levels.
- We will begin redevelopment of the Seiwa Yebisu Building, anoffice building in the Ebisu area, targeting completion in 2014.
We will also review the redevelopment plan for Sapporo Ginza
Building.

4

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Returning
Returning Profits
Profits toto Shareholders
Shareholders

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Returning Profits to Shareholders
Basic
Basic Policy
PolicyProviding fair returns to our shareholders is a key management policy of
our Group. Our basic policy is to pay stable dividends to the extent
permitted by our operating performance and financial condition.
We also aim to maximize corporate value by internally retaining funds tostrengthen our financial base and strategically invest in growthbusinesses in accord with our Management Plan.
Dividend
Dividend Policy
PolicyWe will pay a dividend of ¥7 per share from retained earnings for the year
ended December 31, 2011. For 2012, we plan to pay annual dividends of¥7 per share once again by enhancing earnings through steady
implementation of our Management Plan while taking into accountreturning profits to shareholders and internal reserve for strengthening
our financial base and making future strategic investments.
Copyright, 2012 SAPPORO HOLDINGS LTD. All rights reserved.

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To make people’s lives richer
and more enjoyable.

The earnings forecasts and forward-looking statements appearing in this document were prepared by the
SAPPORO Group based on currently available information and its best assessment of potential risks anduncertainties. Actual outcomes may differ materially from forecasts due to changes in various underlying
factors.

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