Sapporo Group Business Results for 2018 - Management Plan for 2019

February 14, 2019
URL http://www.sapporoholdings.jp/english

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Management Plan for 2019-Year of Change- Structural Reform and Foundation Building- Selection and Concentration

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2017
- 2018

Review from 2017 to 2018
Results (strengthening of core brands)

13

＋

5

＋

Turnedprofitable

1.4bln

0.5
%

4 3

%

＋

%

＋

＋¥

0.0
-0.5

%

-1.0
-1.5

Black Label (can)Sales volume

2016

＋

Lemon-based foodproducts and drinks
Sales volume

2016

2017

14

2018

7

＋

Overseas brand total
Sales volume

%

2017

17

＋

%

2017

2016

%

2018

2

＋

-2.0
Alcoholic beverages
in Vietnam
Operating profit

2016

%

2017

9 4

＋

2018

*Overseas brands: SLEEMAN＋ANCHOR＋SAPPORO PREMIUM

YEBISU BAR
Net sales(nationwide)

2016

2017

2018

2018

Ebisu, Sapporo,
Ginza, etc.
Real estate EBITDA(All figures are YoY comparisons)

Copyright, 2019

2016

%

2017

＋

%

2018

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2017
- 2018

Review from 2017 to 2018
Results (transformation of the Group management platform)
Personnel,
human
resources●Research on hops
Won the top award for the third
consecutive time at the 36th
European Brewery Convention→Sapporo is the only Japanesecompany that has won an award at
the convention●Research on lemons-Promoted research on citric acidand lemon polyphenols-Quantified sensations such as thepleasant taste of lemon-based
drinks and applied it in new productdevelopment●Research on SBL88 lactic acidbacteria- Utilized research results of barleyderived SBL88 lactic acid bacteria inthe development of products suchas soymilk and miso
●Environmental technology- Received the 2018 JSBBA Award
for Achievement in TechnologicalResearch●Work style improvement- Revised the teleworking system- Introduced super flexible working hours
system- Introduced hourly paid holiday system- Obtained Platinum Kurumin
certification- Nikkei Smart Work Management rating
improved●Health and productivity management- Drafted the Health Creation Declaration- Certified as “2018 Excellent Enterpriseof Health and Productivity Management”(White 500)
●Human resources development,
recruitment-Newly established management
development program- Expanded cross-border global meetings-Global human resources development
through GPC training, etc.
-In Rakuten Min-Shu survey on bestcompany to work for, Sapporo Breweries
ranking improved from 189th last time to
32nd＋

Finance●Asset efficiency improvement-Reviewed strategic crossshareholdings and shares worth¥8.2 billion in total were sold off●Financial strategy(procurement)-Promoted extension of
procurement terms, stabilization ofinterest rates, standardization ofredemption timing-Issued convertible bonds●Selected as
Competitive IT
Strategy Company-Reform of legacy
system-Integration of coresystem-Utilization of AI,
etc.

●SR/IR- Sapporo Group’s first Integrated
Report issued●Other-Began voluntary application of IFRS
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2017
- 2018

Review from 2017 to 2018

Issues (delay in new-genre category, canned coffee, overseas alcoholic beverages and soft drinks, which were given
lower priority)

6

-

18

-

Mugi to Hop
Sales volume

2016

12

%

2017

-

Coffee drinks
Sales volume

2018

2016

2017

%

2018

The style of coffee consumption haschanged and canned coffee market isstagnant

0
0.0

0

-1.0
-2.0

-¥

-3.0

4.4

0.8

-¥

bln

-4.0
-5.0

18

-

%

Delayed in competition as strengtheningof beer was prioritizedAnchorImpairment loss

%

2018

Our resources were geographically dispersed due to the
pre-acquisition policy of expanding across the U.S.
We switched to a strategy of concentrating on Anchor’s
local area, but the craft beer market in San Francisco
stagnated due to new emerging craft beers and outflow
of demand to wine and spirits → We therefore recorded
an impairment loss.

North American
soft drinks (CPF＋Former SSC)
Operating profit

2016

2017

bln

2018

Health consciousness increased further in the U.S. and demand fororange juice declined
The rise in price of Florida-grown oranges also weighed on businessperformance and results of former SSC worsened*Former SSC has merged with CPF
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2018
2019

Positioning of 2019SPEED150
First Medium-Term Management Plan
(2017-2019)

Transformation with unprecedented speed
Towards shift to growth stage

2017 - 2018

<Achievements>- Transformation of the Groupmanagement platform-Strengthening of core brands<Issues>-Major environmental changes in thealcoholic beverage and soft drinks
businesses in Japan and overseas⇒ Resulting in delayed progress

2019<Themes>-Structural reform and foundation building-Selection and focus
We position 2019 as a year of change in which wewill solve all issues

2020 -Law revision towards unification of
liquor taxes-Tokyo Olympic and Paralympic
Games-The 130th anniversary of Yebisu beer
Dynamic growth of the Sapporo Group
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2019

Structural Reform and Foundation Building
Main initiatives for 2019
A

Research & Development-Research into whiteness of beer foam (see Appendix for reference)⇒Toward relaunch of Black Label-To apply the results of research on hops, lemons, and soy beans
New launches: March: “Papatto Miso Powder” April: Lemon the Rich

A value chain
to further
enhanceproducts

Raw Materials Procurement- Vineyard in Hokuto, Hokkaido (to start planting saplings in 2019, first harvest

B
BrandsC

expected in 2021)- Continue and further develop initiatives to promote lemon production incollaboration with the Hiroshima Prefectural Government.
- Raw materials procurement utilizing Yasuma Co., Ltd.’s knowhow
Production, Distribution- Strengthen production facility for ready-to-drink products- Introduce production facility for secondary in-bottle fermentation sparklingwine- Establish new hybrid plant for cup soup in Sapporo Sendai Brewery- Establish new soy milk yogurt production line
- Consider further joint distribution, open Sapporo Logistics University (humanresources development)-Streamlining of Head Office functions andOveralladministration transformation of business administration

Personnel,
HR, finance(segment changes, etc. ⇒*See the next slide)D-Cross-border human resources development, work
style reform, promotion of diversity-Continue with initiatives to improve balance sheet
qualityE

Sales, Space to Experience Our Brand- Establish a European sales subsidiary- Add spaces for consumers to experience brands, such as Yebisu Bar- Promote Ebisu urban development, refurbish Sapporo Factory- Establish Furusato Nagoya Lemon Orchard to develop lemon-related
communications
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2019

Structural Reform and Foundation Building
BeforeFrom a 5 business domain structure to a 3 business domain structure(Existing segments through 2018)
Holdingcompany

Businessdomains
Japanese
Alcoholic
Beverages

Operating companies

Sapporo Breweries

Sapporo International⇒Absorbed by Sapporo
Breweries

Food & Soft
Drinks

POKKA SAPPORO

Restaurants

Sapporo Lion

⇒Alcoholic Beverages

Real Estate

Sapporo Real Estate

Other

Shinsyu-ichi Miso

Subsidiaries-Subsidiaries inJapanSubsidiaries

Operating companies-Subsidiaries in Japan-Sapporo Vietnam

Sapporo Breweries

Japan, Asia

Sleeman Breweries

CanadaSapporo USA & Anchor

U.S.
Restaurants-Sleeman Breweries-Sapporo USA-Anchor-Sapporo Vietnam- CPF-Subsidiaries inJapan and abroad

Sapporo Lion

-Subsidiaries inJapan andabroad-Subsidiaries inJapan and abroad

POKKA SAPPORO-Subsidiaries inJapan andabroad*Integration of two
companies planned

Business domains

Japan, Asia

-Shinsyu-ichi Miso
Country Pure Foods

Alcoholic
Beverages

Food &
Soft
Drinks

U.S.

(CPF)

*No change

Holdingcompany

Sapporo Holdings

Sapporo HoldingsInternational

After(Revised segments from 2019)

Sapporo Real Estate

Real Estate

RealEstateOther⇒Food & Soft Drinks

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2019

Selection and Concentration

Priority

2019: Particularly important categories and their positions
2018
Results

High(Good results)

Non-Focus(Controlled investment, reduced scale, etc.)

Maintenance(Maintenance of status quo or stable growth)

Focus(Proactive investment, growth)

Low priority but favorable
performance

Favorable performance with stable
growth targeted

Favorable performance with strong
growth targeted-Real Estate business- Standard beer in Japan- Ready-to-drink products- Lemon-based food, softdrinks- Soy beans and chilled
products, miso

-Not applicable
Medium(Results in line with theprevious year)

Low priority, poor performance-North American softdrinksLow(Poor results)

Poor performance but strong
growth targeted-New genre

Poor performance but strong
growth targeted-Japanese premium beer-American alcoholic
beverages-Japanese soft drinks
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2019

Select-and-Focus Approach
2019: Concrete initiatives in the particularly important categories

 Relaunch of Black Label- Utilize research results regarding white foam

 Advance our urban development
projects in Ebisu and Sapporo

 Expand the scale of ready-to-drink
category with 99.99 at the center Securitize some real estate Further expand the lemon market-Strategically reshuffle property portfolio-Diversify fund procurement methods and expand business
functions- Introduce new products and aim to expand volume- Showcase the value of lemon-based products andproactively develop commercial applications

 Launch unique soy bean/chilled
products-Explore brand new categories and introduce largecontainer products

 Strengthen Yebisu brand Clarify the future direction of North  Curb sales decline of new genre
American soft drinks
products- Owns important resources- On the other hand, the market environment is worsening
and the business is posting losses- A clear future direction to be set forth- Though it is not a field with the highest priority, a certain
level of presence is necessary- Relaunch Mugi to Hop- Launch “Honkaku Karakuchi”- Launch Yebisu Premium Ale- Shore up commercial-use products (new beer mugs, etc.)- Special edition Yebisu beer campaign, etc.

 Integrate Sapporo USA and Anchor- Accelerate development of system towards generation ofsynergies

 Specialize in beverages
differentiated from others throughthe use of rare ingredients- Implement structural reform such as SKU reduction
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2019

Management Plan for 2019(billions of yen)

2019
（IFRS）

2018（IFRS）

YoY changes(amount, %)Consolidated Revenue（incl. liquor tax)

521.9

548.8

26.9

5.2%

Revenue(excl. liquor tax)

398.7

425.8

27.0

6.8%

1.2%

-

Overseas revenue to total(excl. liquor tax)

22.7％

23.9％

EBITDA

40.4

42.0

1.6

4.0%

Consolidated Operating profit

10.8

12.6

1.8

16.4%

Profit attributable to owners of parent

8.5

8.7

0.2

2.1%

218.4

238.9

20.5

9.4%

-

-

Balance of Net debt
Ｄ／Ｅratio

※Net

※Net

1.3 times

1.3 times
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2019

Special Factors in the Business Results One consolidated subsidiary to be added; the impact of exchange rates on
operating profit is expected to be negligible<Special factors in the 2019 plan (YoY)>
Impact on revenue

Business segment

Details

Food & Soft
DrinksYasuma Co., Ltd.
April 2019: Consolidation of income statement to commence

Approx.

5.0 billion+¥<Estimates of foreign exchange rates>
2018

Impact on
revenue2019 plan

Approx.

US＄¥110.45¥110.00

Alcoholic
Beverages

EUR¥130.35¥128.00

Food & Soft
Drinks

-CAN＄¥85.23¥88.00Real Estate-

2.2 billion+¥-: negligible impact
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2019

Revenue by Segment(billions of yen)

2018
IFRS

2019
IFRS

YoY changes(amount)

YoY changes(%)

Revenue by Segment

521.9

5.2%

Alcoholic Beverages

330.0

4.8%

Japan & Asia

252.1

12.0

4.8%

North America

50.3

4.2

8.3%

Restaurants

27.6

(0.2)

(0.6)%

Food & Soft Drinks

161.3

Japan & Asia

133.4

9.3

7.0%

North America

27.9

1.6

5.6%

Real Estate
Other

6.7%

24.5
6.0

0.5%
0.0

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2019

Main Factors Contributing to Changes in Revenue: We will focus on core brands in Japan and abroad and aim toincrease revenue
Alcoholic Beverages

Food & Soft Drinks= Increase= Decrease

Real Estate
2019(billions of yen)Wine＋1.7
Spirits ＋5.9
Exports＋1.1
Other＋0.6

2018
Incl. exchange
rate＋2.2

Incl. ＋5.0 of net sales
increase due to the newconsolidation of Yasuma

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2019

Operating Profit by Segment(billions of yen)

2018
IFRS

2019
IFRS

YoY changes(amount)

YoY changes(%)

Operating Profit by Segment

10.8

16.4%

Alcoholic Beverages

3.9

151.5%

Japan & Asia

6.9

0.4

5.7%

North America

(2.8)

5.1

-

Restaurants

(0.2)

0.3

-

Food & Soft Drinks

1.1Japan & Asia

1.9

0.2

10.0%

North America

(0.8)

0.4

-

Other

12.0
0.2

General corporate andintercompany eliminations(6.4)

Real Estate

47.8%

0.4%
(43.4)%
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2019

Main Factors Contributing to Changes in Operating Profit: We expect profits to increase by growing core brands despite
plans for structural reform-related investment and temporary loss
as part of corporate expenses
Food & Soft Drinks

Alcoholic Beverages= Increase= Decrease

Real Estate

Anchor’s impairment loss
in 2018 ＋4.4

(billions of yen)

Product mix ＋1.3
RTD＋2.6
Manufacturing cost, etc.
-0.5

2019

2018

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

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(Reference) Conversion Table of Revenue, Operating Profit bySegment*( ) denotes new segment

Former segments(5 business domain(billions of yen)
structure)

Revenue
Japanese Alcoholic Beverage(Alcoholic Beverages)

548.8

New segments(3 business domain
structure)

Difference

81.9

International (-)

84.0(84.0)

Food & Soft Drinks (Food &Soft Drinks)
Restaurants

136.0
27.4
24.6
12.7

36.2
(27.4)
(6.7)

Other

Former segments(5 business domain
structure)

Operating profit
Japanese Alcoholic Beverage(Alcoholic Beverages)

New segments(3 business domain
structure)

Difference

12.6

-

7.3

2.4

International (-)

1.9

(1.9)

Food & Soft Drinks (Food &Soft Drinks)

2.1

(0.4)

Restaurants

0.1

(0.1)

Real Estate (Real Estate)

12.1

-

(10.9)-[Corporate] Other

Remarks-

264.1

Real Estate (Real Estate)

2019

・North American alcoholic beverages and Vietnam moves
to Alcoholic Beverages ¥54.5 billion
・North American soft drinks moves to Food & Soft Drinks¥29.5 billion

・To Alcoholic Beverages¥27.4 billion

・Shinshu-ichi Miso moves to Food & Soft Drinks¥6.7 billion

Remarks

・North American alcoholic beverages and Vietnam moves
to Alcoholic Beverages ¥2.3 billion
・North American soft drinks moves to Food & Soft Drinks-¥0.4 billion

・To Alcoholic Beverages¥0.1 billion

・Shinshu-ichi Miso moves to Food & Soft Drinks¥0.0 billion
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Sapporo Group Business Results for 2018

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2018

2018 Results Highlight

While the slowness in the first half was offset by the recovery in thesecond half to the revised plan’s level, operating profit declined due to theimpairment loss on Anchor(billions of yen)

YoY change

Revenue2017（IFRS）

2017（IFRS）

2018（IFRS）

2018（IFRS）*See p.6, 7 for details*See p.8, 9 for details

 Sales decline in Japanese Alcoholic
Beverages(new genre, etc.)
 Sales decline in Food & Soft Drinks(canned coffee, etc.)
 Impact of -¥2.1 billion due to earthquakeand other natural disasters

Profit attributable toowners of parent

Operating profit
YoY change

YoYchange2017（IFRS）
2018（IFRS）

 Profit declined due to revenue decline Recorded ¥4.4 billion in impairment loss
on Anchor in the U.S.
 Impact of -¥1.0 billion due to earthquakeand other natural disasters

Income taxes declined due to businessreorganization including termination of
Sapporo International*Sapporo Holdings’ own calculation*Sapporo Holdings’ own calculation
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2018

2018 Results Highlight(billions of yen)

Balance of net debt

Equity2017（IFRS）

2017（IFRS）

2018（IFRS）

2018（IFRS）

D/E ratiotimes

YoY change±0.0 times

Dividend per share

Transformation of the Groupmanagement platform<Oct. to Dec.>
 Disseminated contents of research into bone health and lemons-PR video on bone health and lemons (https://news-tv.jp/_ct/16958903)-*See slide 5 and Appendix for the annual highlights*See p.34, 35
for detailed BS

Cash basis
investment*See p.36 fordetails

2018 planYoY change＋¥2.0Group topics<Oct. to Dec.>
 Chiba Brewery received the Kanto Bureau of Economy, Trade andIndustry Director-General’s Factory Greening Award-Commended for 30 years of continued greening promotion activities and local
community contribution activities since the brewery’s construction - Held a business contest for jointly creating new businesses withstart-up companies-Members selected from the general public aim to create next generation
businesses in the fields of alcoholic beverages, food and soft drinks-*See Appendix for the annual highlights
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2018

Revenue by Segment(billions of yen)①：2017(Japanese GAAP)

Consolidated
revenue
Japanese Alcoholic
Beverages*
International*
Food & Soft Drinks

551.5
281.2
67.3
137.9

②：2017（IFRS）

Change <difference
due to accounting
standards>(②-①)③：2018（IFRS）

YoY change(③-②)

YoY change(rate)（③-②）(15.0)(2.7)％(19.8)(4.1)%

11.3

1.1%

(5.8)

(3.7)%(Rebate subtracted from revenue -19.9)(Change in price to include liquor tax ＋11.5)(Rebate subtracted from revenue -5.2)

Restaurants

29.1

(0.5)

(3.7)%(Rebate subtracted from revenue -0.5)

Real Estate

24.1

(0.2)

2.5%

Other

11.8

0.0

3.0%

*The export business of Sapporo International Inc. has been transferred to Sapporo Breweries Ltd. effective January 1, 2018.
The consolidated financial statements for fiscal 2017 have been adjusted retroactively to reflect these changes.

Factors are explainedin the next slide（単位：億円） Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 21/61

2018

Main Factors Contributing to Changes in Revenue: Overall revenues fell as domestic beer and beer-type beverages and softdrinks remained slow although revenues increased in ready-to-drink
category, Japanese
Sleeman, etc.
(billions of yen)

Alcoholic
Beverages

Food & Soft
DrinksInternational

Restaurants= Increase= Decrease

RealEstate2017
Diversified productofferings & nonalcoholic beer +4.0
Exports, etc. ＋0.1

Sleeman, etc. +1.6
Anchor +1.9 (see p.31)

Decline in sales in canned coffee in
1H and revenue decreased ¥2.2
billion due to business transfer of
NH Beans (Dec 2017) (see p.32)

2018*In 2018, the export business of Sapporo International Inc. was transferred to Sapporo Breweries Ltd.

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2018

Operating Profit by Segment① 2017(Japanese GAAP)

Consolidated operating
profit17.0

Japanese Alcoholic
Beverages*

12.2

International*(1.7)

Food and Soft Drinks

0.6

Restaurants

0.3

Real Estate
Other
Corporate

11.3
0.1
(5.7)

② 2017(IFRS)

Change <difference
due to accounting
standards>(②-①)(billions of yen)

③ 2018（IFRS）

YoY change
(③-②)

(4.2)

(Depreciation and amortization -3.4,
retirement benefit expenses -1.3, etc.)(2.2)(Depreciation and amortization -1.1,
retirement benefit expenses -0.6, etc.)(1.1)(Non-amortization of goodwill +1.7,
depreciation and amortization -0.1, etc.)

1.9(Non-amortization of goodwill +2.1,
reclassification -0.4)(0.8)(Depreciation and amortization -0.1,
reclassification -0.7)(1.0)(Depreciation and amortization -0.5,
reclassification -0.4)(0.2)(Reclassification -0.2)(0.8)(Retirement benefit expenses -0.7,
reclassification -0.1)

Factors are explainedin the next slide*The export business of Sapporo International Inc. has been transferred to Sapporo Breweries Ltd. effective January 1, 2018.
The consolidated financial statements for fiscal 2017 have been adjusted retroactively to reflect these changes.

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2018

Main Factors Contributing to Changes in Operating Profit: Vietnam turned profitable and Real Estate saw increased profits, but profit
declined due to lower sales of domestic beer and beer-type beverages andimpact of impairment
loss at Anchor
Japanese Alcoholic
Food & Soft(billions of yen)

Beverages

International

DrinksRestaurants= Increase= Decrease

Real Estate2017
Product mix＋1.5
Non-alcohol beer, RTD＋2.5
Manufacturing cost, etc.
-1.2

North American alcoholic
beverages -0.6
North American softdrinks +0.3

Valuation difference
resulting from renewal of
production facility in
Malaysia ＋0.7

Gain onproperty sales,
etc.

2018

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Sales volume -2.1
Manufacturing cost +0.4

Anchor impairment loss -4.4
Vietnam impairment loss ＋2.7

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

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Japanese Alcoholic Revenue
Beverages

YoY Change

IFRS

Operatingprofit2018

YoY Change*YoY change is on an IFRS basis<YoY changes in Black Label brand sales volume>

Positive115
 Black Label brand (can) was up % year on year
maintaining momentum significantly exceeding the 110
total demand growth rate for beer
105

*Cumulative100 Ready-to-drink beverages were up% year on
year
making it a year in which their presence wasenhanced within a rapidly growing market

95

 Sales volume of new genre products was down
year on year

%110

90

Oct

Nov

Dec

Jan
2018

Feb
2018

Mar
2018

Apr
2018

May
2018

Jun
2018

Jul
2018

Total demand for beer

Aug
2018

Sep
2018

Oct
2018

Nov
2018

Dec
2018

Black Label*Black Label is based on sales volume and RTD on sales value

 Mugi to Hop relaunch
Shored up sales by launching Honkaku Karakuchi<YoY changes in Mugi to Hop brand sales volume>*Cumulative

100
90
80

 Products in the high price range beer market were
down
Negative% year on year Launched Yebisu Premium Ale
Refreshed communications with new focus on “Japan”

70
60

Oct

Nov

Dec

Jan
2018

Feb
2018

Mar
2018

Apr
2018

May
2018

Jun
2018

Total demand for new genre
Copyright, 2019

Jul
2018

Aug
2018

Sep
2018

Oct
2018

Nov
2018

Dec
2018

Mugi to Hop

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International

Revenue

YoY
ChangeIFRS
Operatingprofit2018

YoY Change*YoY change is on an IFRS basis

Positive Sales at Sleeman in Canada continued toincrease Vietnam turned profitable for the first time Performance of former SSC* of North American
soft drinks improved ¥billion<Changes in overseas brand sales volume (cumulative from Jan.
to Dec.>(unit: 10,000 cases, calculated on large bottle bas

1,400
1,300
1,200
1,100
1,000

1,153

1,202

1,246 1,237

1,300
1,262 1,291

2013

2015

1,368

1,067
2010

2011

2012

*Former SSC: Silver Spring Citrus; integrated with CPF in 2018

2014

2016

2017

2018

Overseas brands(SLEEMAN＋ANCHOR) Rising logistics expenses placed pressure on profits in North America

 Impairment loss of ¥Negativebillion recorded for Anchor→Since resources became geographically dispersed due to our pre-acquisition policy of expanding
across the U.S., we began to focus on brand strengthening centered on Anchor’s local area.
However, the craft beer market in San Francisco stagnated because of the rise of microbreweries
and outflow of demand to wine and spirits, resulting in the recording of an impairment loss.
We merged Anchor with Sapporo USA and reshuffled management and will work on restrengthening the brand. We will also work on creating a framework, incorporating Sleeman in
Canada, for generating synergies across North America .
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Food & Soft Drinks

RevenueIFRS

YoY Change

Operatingprofit2018

YoY Change*YoY change is on an IFRS basis<YoY change in sales volume of lemon-based products>

Positive Sales volume of lemon-based products was up

115% year on year
Lemon-based drinks also grew by*Cumulative

120

110

%

105

 Maintained high share in Singapore with sales
also staying strong

 Sales volume of coffee drinks was downon year

100
95
2017

2017

2017

2017

2018

2018

2018

2018

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

110

% yearPursue structural reforms to increase the share of lemonbased drinks, etc.

<YoY change in sales volume of coffee drinks>*Cumulative

100
90
80

 Export sales were stagnant in the Middle East, etc. 70
Negative

Review of portfolios in countries in which we have apresence
Reduce the share of Middle East through new expansion

60
2017

2017

1Q

2Q

2017

2017

2018

2018

2018

2018

3Q

4Q

1Q

2Q

3Q

4Q

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Restaurants

Revenue

YoY
ChangeIFRS

Operatingprofit2018

YoY Change*YoY change is on an IFRS basis

Positive Strong performance by Yebisu Bar format, up
year on year% Though raw material prices rose and difficulties inacquiring human resources continued,
cost increases were kept in check by improving
store operations and menu control
 Improved profitability in Singapore on the back ofstructural reforms
Topic Existing store sales were down

% year on year

 2019 Sapporo Lion 120th anniversary→Struggled mainly in the Japanese restaurant format(reservations in large groups declined)
Implement restaurant format change in line with changing
times
Negative
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Real Estate

Revenue

YoY Change

IFRS

Operatingprofit2018

YoY Change*YoY change is on an IFRS basis

Positive All mainstay properties maintained stable
occupancy rates
 Improved profitability to end above initial plan at
the beginning of the year Recorded a gain on property sales throughreshuffling of property portfolio(Sold two properties for about ¥1.1 billion)

Occupancy
rate

100

Occupancy
rate

100

%

%

*Contract basis, rounded off at first decimal placeTopic 2019 Yebisu Garden Place 25th Anniversary

 No significant factors

Sapporo Factory 25th Anniversary

Negative
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

29/61

2018

Special Factors in the Business Results Impact of exchange rates on operating profit is negligible<Special factors in business results (YoY)>
Business segment

Impact on revenue

Details
ANCHOR BREWING COMPANY, LLC
Consolidated subsidiary from October 2017

International

Approx.
+¥

1.9 billion
Approx.

Food & SoftNH Beans *Former Nihon BeansBusiness transfer in December 2017
Drinks<Impact of foreign exchange rates>-¥2.2 billion

2017

2018

US＄

¥112.17¥110.45

EUR¥126.70¥130.35

Japanese Alcoholic
Beverages

CAN＄¥86.47¥85.23

InternationalSG$¥81.26¥81.86

Food & Soft Drinks

Impact on
revenue

Approx.

-¥1.2 billion
Copyright, 2019

- : negligible
impactSAPPORO HOLDINGS LTD. All rights reserved.

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2018

Changes in Balance Sheets: Total assets declined ¥25.0 billion compared with the end of the(billions of yen)previous year
Total assets

Cash and cash equivalents

12.5
98.3

Total assets

Inventories

37.9
16.0

10.0
93.3
37.1
13.1

Other current assets

164.7

164.7

Trade receivables

 Decrease in accounts receivable

Current assets

Fixed assets

Investment property

Goodwill Impairment loss of Anchor

Other non-current assets

 Decrease in investment securities

Non-current assets

219.7

215.5

24.9
90.7

21.2
84.7

End of 2017 (IFRS)End of 2018 (IFRS)
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2018

Changes in Balance Sheets: Total liabilities down by ¥14.1 billion, total equity down by ¥11.0 billion
compared with the end of the previous year
Trade payables

Short-term financial liabilities

 Decrease in current portion of longterm debt
Other current liabilities
 Decrease in accrued liquor tax
payables and income tax payable
Long-term financial liabilities

Net defined benefit liability

Other non-current liabilities

Total equity attributable toowners of parent
 Decrease in valuation difference on marketable securities

Non-controlling interests

Total liabilities andequity(billions of yen)

Total liabilities andequity

36.5
80.7

35.3
73.9

111.6

105.4

153.2

154.5

6.3
100.7

11.7
94.2

172.1
3.7

End of 2017 (IFRS)Current liabilities

Non-current liabilities

Equity161.5
3.2

End of 2018 (IFRS)
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2018

Financial Status Investment on a cash basis was ¥32.7 billion<Consolidated cash flow statements>(billions of yen)

2017

2018

33.8

30.8

(3.0)

(8.8)%Cash flow from investment
activities(17.9)(18.7)

(0.9)

-

15.9

12.1

(3.8)

(24.0)%(13.9)(14.5)(0.6)

Cash flow from financing
activities

3.1

30.0

29.5

40.2

31.0

36.5

32.7

<Major items>- Relating to “Alcoholic Beverages,” “Food,” and “SoftDrinks”:
about ¥13.3 billion
Mini brewery-related work, filter introduction-related work, etc. :about ¥4.8 billion
Capital investment in Sleeman, etc. : about ¥1.7 billion
Soy milk-related work: about ¥2.5 billion, etc.

- SGM Group infrastructure streamlining, etc.:
about ¥1.9 billion② <Investment properties> about ¥billion in consolidated total

Cash flow from investment
activities:

40.0(tangibles, intangibles)*SGM: Sapporo Group Management Ltd.

＜Changes in cash basis investment＞

50.0

10.0

%

Cash flow from operating
activities

Free cash flow

20.0

Change① <Capital expenditure>billion in consolidated total
about ¥

billion¥planned over four years (¥35.8
billion planned in 2018 fullyear)③ <Lease fees> about ¥consolidated totalbillion in*Except lease fees for restaurant rent

④ <Other investment> about ¥consolidated totalbillion in(Long-term prepaid expenses, investment securities,etc.)①＋②＋③＋④ <2018 investment total>(Cash basis; including current capital expenditure, lease
fees)

0.0
2014

2015

2016

2017

2018

(full-year)(full-year)(full-year)(full-year)(full-year)

2019

2020

approx. ¥billionCopyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

33/61

(Reference) Conversion Table of Revenue, Operating Profit bySegment*( ) denotes new segment

Revenue(billions of yen)Japanese Alcoholic Beverage(Alcoholic Beverages)

Former segments(5 business domain
structure)

New segments(3 business domain
structure)

Difference

521.9

-

250.9

79.1

International (-)

79.5(79.5)

Food & Soft Drinks (Food & Soft
Drinks)

127.2

34.1

27.6
24.5
12.2

(27.6)(6.2)

Restaurants
Real Estate (Real Estate)
Other

Former segments(5 business domain
structure)

Operating profit
Japanese Alcoholic Beverage(Alcoholic Beverages)
International (-)

New segments(3 business domain
structure)

Remarks

・North American alcoholic beverages and Vietnam moves to
Alcoholic Beverages ¥51.5 billion
・North American soft drinks moves to Food & Soft Drinks¥28.0 billion

・To Alcoholic Beverages¥27.6 billion

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

10.8

-

6.7

(2.8)

(3.4)

3.4

2.0

(0.9)

Restaurants

(0.2)

0.2

Real Estate (Real Estate)

12.0

-

[Corporate] Other

(6.4)

0.1

Food & Soft Drinks (Food & Soft
Drinks)

2018

¥6.7

Remarks

・North American alcoholic beverages and Vietnam moves to
Alcoholic Beverages -¥2.6 billion
・North American soft drinks moves to Food & Soft Drinks-¥0.8 billion

・To Alcoholic Beverages-¥0.2 billion

・Shinshu-ichi Miso moves to Food & Soft Drinks -¥0.1
Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 34/61
billionAppendix: Reference Materials (FY2018)

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Major sales & sales volume

Appendix-

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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【Beer】（sales volume）
Jan-Dec down

＜Y-o-y change in sales volume of
3 core brands>％ y-o-y （total demand down 6％） % Black Label Brand total down
（Sales of the canned version:up

 Yebisu Brand total down

110

％ y-o-y％ y-o-y）％ y-o-y100
9080

Appendix

Japanese Alcoholic
Beverages（sales volume）【Happoshu and new genre】

 Jan- Dec down
％ y-o-y(total demand up 1%)
 Mugi to Hop Brand total down

％ y-o-y【Wine, Spirits and other】（revenue）
 Wine: down
 RTD : up
 Spirits:up％ y-o-y

Jan

Feb

%
110

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Total beer demand

Sapporo total

Black label

Yebisu

Nov

Dec

Nov

Dec

100
90
80
70

％ y-o-y60％ y-o-y Japanese liquor: down

70

Jan

Feb

Mar

Apr

May

Jun

Jul

Total new genre demand％ y-o-yCopyright, 2019

Aug

Sep

Oct

Mugi to Hop

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＜3 core brand Jan- Dec Sales volume change＞(10,000 cases)
6,000
5,000
4,000
3,000

＜Beer lineup (Jan– Dec breakdown＞

2,000

Appendix

Japanese Alcoholic
Beverages

15%

1,000
0

2012

2013

2014

Beer, Happoshu and new genre

2015

2016

2017

2018

Beer

Happoshu and new genre

2,000

56%

29%

1,500
Black label

Yebisu

Other

1,000

500

0

2012

2013

Black label brand total

2014

2015

Yebisu brand total

2016

2017

2018

Mugi to Hop brand total

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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＜Jan- Dec Net Sales＞

Billions of yen※incl. liquor tax

250
200

75.6

75.3

79.3

70.6

59.5

65.0

50.1

Japanese Alcoholic
Beverages

10

7.1 7.7 8.3 8.2 8.5 8.5 8.2

5

4.8 5.1 5.6 5.3

5

5.1 4.7

2012 2013 2014 2015 2016 2017 2018

158.0

159.7

157.6

159.3

170.9

167.2

165.8

50

Appendix

Billions of yen

0

150
100

15

10
5

0
2012

2013

2014
Beer

2015

2016

2017

2018

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

5%7%Imported wine

6.9 7.7 8.7
5.9
5.7
5.7
4.8

0
2012 2013 2014 2015 2016 2017 2018

Happoshu, New genre＜Jan- Dec sales breakdown by category＞

Japanese wine

Spirits

20
15
10
5

11.4 13.3 14.7 14.6

15.8 16.4 14.7

08%2012 2013 2014 2015 2016 2017 2018

Beer
Happoshu& New-genre
Wine& Spirit
Japanese Liquor

19%

RTD& Non-alcoholic beer

Japanese liquor

15
10
5
0

3.2 3.2 4.5 4.3 5.1 7.0

11.8

61%

2012 2013 2014 2015 2016 2017 2018

*All Figures are before rebate deduction

Copyright, 2019

ＲＴＤ
SAPPORO HOLDINGS LTD. All rights reserved.

39/61

Sapporo Draft Beer Black Label 2018
Create real experiences

Convey brand’s world view
The “Otona ★ Nama”
Worldview

Perfect Black Label
About 250,000 glasses

Strategic target
Youth in their 20s and
30sCreate new opportunity for home use

Appendix

Stores selling Perfect Black LabelBlack Label Day“Long autumn nights”

April 1 is
“Black LabelDay”

Increased by 646 stores to
1,288

Quantitative increase in key brand visuals
and spread of high quality brand worldview &experiences have achieved penetration andyouth demographic trials have been
expanded

Black Label saw
4 consecutive years of sales growth

Rank rose in all age groups

Black Label total (can, bottle, keg)
YoY change since 2014

Sales value ranking by brand in “beer taste”
category by age group
Source: True Data supermarket panel

17.0

16.0
15.5
15.0

108%

97% 100%

103%

2016 to 2018; October single month; single can purchase amount

113%

102% 100%

Shipment volume

16.5

Black Label cans
shipment volume
117%
97%

20s

108%
7th

6th

7th

7th

5th

2018

2016 2017

2018

5th

6th
9th

10th 10th
2016 20172016 2017

Copyright, 2019

60s

50s

40s

30s

2nd

2018

8th

2016 2017

10th 10th20182016 2017SAPPORO HOLDINGS LTD. All rights reserved.

9th
2018

40/61

Sapporo Draft Beer Black Label 2019
Reviewed manufacturing process to realize beautiful white foam. Relaunch of Black Label
Freshness Retention Manufacturing
Process

What is meant by whiter andmore beautiful foam?

Foam quality improvement

2015: Won the JSBBA Award for Achievement inTechnological Research³

リニューアル後
After relaunch

97.0
97.5
98.0
98.5
Relative comparison,with the level before
relaunch set as 100

99.0
99.5

100.0

Black Label – becoming the perfect draft beer with further
advancements to its beautiful, white foamFirst in the world1! Method to measure color of beer foam developed!

２

Discovered that the fresher the beer, the whiter the foam, and presented findings at the global Brewing Summit.
Study of consumer impressions of beer foam
Crystal malt enhances the color of foam

Change in whiteness of foam whenamber colored beer is stored3(Sapporo study 2018 Online survey responses)

White

Storage temperature

Immediately
after shipping*Whiteness of foam:
Lower the value whiter the foamBlack malt

74%
69%

I ビールの泡は、美味しさに関係すると思う
think beer foam is linked to its taste

Crystal malt

Color difference

Whiteness of foam (color difference)

Appendix

1 Sapporo’s proprietary process management system that significantly helps to maintainthe freshness of the aroma and taste of beer by controlling the contact with oxygen
across the entire manufacturing process and by transferring into beer ingredientderived reducing agents that eliminate reactions that compromise the freshness ofbeer.
2 Malt that is created from barley that does not contain substances that cause
deterioration in the beer’s flavor
3 Comprehensive initiatives to improve foam quality from manufacturing to retail stages
through development of barley with superior foam retention, brewing process measures,development of draft beer dispensers and taps

the whiter the foam)

Foam whiteness index

Malt with enduring taste

2015: Won the Japanese Society of Breeding Award²（the smaller the value,

リニューアル前
Before relaunch

2000: Won the JSBBA Award for Achievement inTechnological Research¹ for 2000

Yellow

65%
63%

If the foam looks beautiful, it tastes better
見た目が美しい泡だと、味も美味しく感じる
too

Green

Red

45%
43%

見た目が美しい泡だと、気分が上がる
If thefoam looks beautiful, you feelbetterBlue

One month

Two months

見た目が悪い泡だと、美味しさが落ちる
If thefoam looks bad, the taste falls

Three months

Person who pours in glass even at home
家でもグラスに注いで飲む人

Duration of storageBlack

1,3: Based on research by Sapporo
2: The color spectrum as seen by human eyes can be reproduced by utilizing a special filter developed by Prof. Shimodaira of
Shizuoka University (currently a specially appointed professor) in collaboration with PaPaLab Co., Ltd. Further, through twodimensional colorimetry, it is possible to accurately reproduce and measure color as seen by human eyes and compare not only
color but also texture and pattern.

21%
19%Overall
全体

Beer foam impacts its taste
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Yebisu 2018 – Despite shrinking of the overall high-price-range beer market, Yebisu Beer
performing strongly!
Sales of high price range beer Y-o-Y

Sales Y-o-Y comparison

million ltr

2017

Appendix

2018

High price range beerHigh price beer

Yebisu brand total Yebisu Beer

Source: SRI (total for all business formats) estimated sales size
2017: From week of Jan 2, 2017 to week of Dec 11, 20172018: From week of Jan 1, 2018 to week of Dec 10, 2018

Yebisu 2019 – Further scaling up of the brand towards the 130th anniversary
Special edition Yebisu“The 7th year”

A full-fledged ale blessed with Yebisu technologies forcreating deep aromas, flavors and aftertastes

Gift campaign

To be ready in 2020
after seven longyears!

The unique aspects that Yebisu pays special attention toLong-term aging
requiring extra timeand effort

Choice hop“Cascade”

ヱビスプレミアムエール
YebisuPremium Ale
To2019年2月26日発売
be launched on Feb 26, 2019

Selected
Europeanmalts

Aged slowly taking 1.5 times more time than usual
Perfected with a rounded, full flavor and premiumaroma
Hop acclaimed for its citrus-like aroma

Yebisu’s new commercial「ここに、ニッポンの幸せ。ヱビス」

Luxurious flavoring with Cascade
Malts that create the foundation for beer taste
As with the malt used in Yebisu Beer, Yebisu has been
particular about sourcing malts from Europe, the homeof beer

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Beer Brand with a Distinct Personality
Sapporo Lager Beer
- The beer brand with thelongest history among existing
brands in Japan- Nicknamed Akaboshi- The Akaboshi★Tanteidan
website and retro-chic store
sales promotion tools

Appendix

7 consecutive years of growth!
3.00(bottle)

2.50
2.00

Sapporo Classic

18 consecutive years ofsales growth!
Sapporo Classic brand only

- Limited to Hokkaido area
- Pioneer in regional beer
- Along with launch of
seasonal cans, strengthened
PR activities promoting various
regions of Hokkaido

1.50
1.00
0.50
0.00
2011 2012年
2012 2013年2013 2014年
2014 2015年
2015 2016年
2016 2017年
2017 2018年
2018
2011年

Sales figures for 2011 set as 1.0

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Ready-to-Drink beverage
results(％)(10,000 cases)

200

600

150

400

100

200

50
0
2016
Cases sold

2017

450

(Total demand comparison)(Cases sold)

800

0Appendix

99.99 (Four Nine) plan and results

400
350

20% higher
than planned

300
250
200
150

2018
YoY change

4 million cases
up 67％ YoY

Total demand2018 plan

2018
results2019
plan2019 Ready-to-Drink businessstrategy
Concentrated investment to be made in “99.99” and “Lemon The
Rich”

To be launched on
March 5, 2019

To be launched on April 2, 2019
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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＜Major new products (Beer, Happoshu and New genre)> *incl. improved products (※I)

Yebisu Kaoru Rouge

Sapporo Fuyumonogatari(Winter Limited Edition)

Fuku Yebisu(New Year Edition)

Appendix

Japanese Alcoholic
Beverages

Yebisu Wa No Houjun(Special Edition)

Black LabelSpecial edition(Tohoku malt 100%)

Sapporo Classic 2018
Furano VINTAGE(Hokkaido Special Edition)

Fumisoukai Nishite(Special Edition)

Sapporo Lager Beer
(Limited Edition)

Innovative Brewer SECRET TAP
Brew#001,002,003(Craft beer)

Shizuoka Bakushu(Shizuoka Edition)

Ginza Lion
Beer Hall Special Edition

Mugi To Hop(※I）

Mugi To Hop＜Red＞

Mugi To Hop
Fuyukomugi Special
Edition

Sapporo Draft Beer Black Label(Special Edition)

Copyright, 2019Black Label(New Year Edition)

SAPPORO HOLDINGS LTD. All rights reserved.

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＜Major new products (RTD, Wine and Japanese liquor)>

Otoko Ume sour
(Honey Flavor Plum RTD)

Limecello(Italian Lime RTD)

Rirakusu(Peach vinegar Flavor RTD)

Coto Coto(Fruit flavor RTD)

Appendix

Japanese Alcoholic
Beverages

Beaujolais Nouveau
2018 series
Beaujolais Villages Nouveau
Ai no Skal ichigo sour
（Strawberry Flavor RTD)

サッポロチューハイ99.99
SAPPORO CHU-HI 99.99
クリアグレープフルーツ
Clear
Grape Fruit ALC.9%

Ai no Skal mikan sour
Umekaku（Mandarin Flavor(Darjeeling Flavor RTD)
Umekaku
RTD）
Momo sugoi nectar sour
(Red
Apple
Flavor RTD)
（Peach Flavor RTD）

Honkaku Imo Shochu
Sapporo red wine 1.8L
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Taittinger Chosen as the Official Champagne
for the 31st Tokyo International Film Festival!
- Chosen for the second consecutive year!-

Appendix
Champagne Taittinger, which is imported and sold by Sapporo Breweries Ltd., has been chosen as
the official champagne for the 31st Tokyo International Film Festival to be held from October 25 toNovember 3, 2019.
Taittinger is a rare major champagne maison, still owned and managed by the Taittinger family,
which is also the company’s name. The estate is headed by Pierre-Emmanuel Taittinger, the fourthfamily member since Pierre Taittinger to do so, carrying forward the spirit of the Taittinger family,
cultivated over many long years. The company owns vast vineyards totaling 288ha in area in theChampagne region, and delivers consistently high quality taste in a unique delicate and elegant
style based primarily on Chardonnay grapes.
Taittinger has been actively involved in the field of gastronomy and art, raising the cultural value ofChampagne. As part of that initiative, Taittinger will be served to guests for the opening and closing
parties of the film festival.
Taittinger, through this endeavor, will strive to broadly communicate the brand’s worldview while
also enhancing the cultural value of champagne.
http://www.sapporobeer.jp/news_release/0000022045/index.html
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Launched HOPPIN’ GARAGE, a next-generation service
aimed at creating value through full-fledged user
innovation-Business tie-up with a start-up operating a C-to-C community-

In October 22, 2018, Sapporo Breweries Ltd. launched HOPPIN’GARAGE, a next generation service aimed at creating value through fullfledged user innovation by leveraging a C-to-C community.

Appendix

This service produces beer in very small lots based on novel ideas
collected from general consumers, and has the ultimate aim of actuallycommercializing the products, taking into account user evaluation within
the community and commercial feasibility, delivering it to the world as abeer brand born from user innovation.
The service will be operated in collaboration with KitchHike, Inc.,1 arapidly growing startup managing a food community, taking into accountcontemporary consumer behavior trends such as C-to-C, sharing, andreal experiences. Based on a jointly created beer-lovers C-to-C
community, we will develop a next-generation service that offers the
yet-to-be-experienced value of “creating a one-of-a-kind beer that one
wants to drink, and sharing it with fellow members in person.” We wantto obtain out-of-the-box ideas from beer-lovers and use Sapporo’s
monozukuri skills to deliver the enjoyment of beer to more customers. In
that spirit, we will work to carve out a new era of beer making.
We at Sapporo Breweries would like to take advantage of this service to enhance our corporate value by
using it to get closer to our customers and strengthen our product development and communication
strengths.
http://www.sapporobeer.jp/news_release/0000022043/index.html
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【Overseas brand】【U.S. soft drinks business】(Products of Sleeman and Anchor) Jan- Dec up％

 Jan- Dec down

y-o-y *sales volume＜Ｕ.S. soft drinks business Sales Revenue
in Local Currency (Jan- Dec)＞(included export sales volume from Japan)％＊sales revenue after elimination of inter- company transactions(※)SSC and CPF integrated in Apr 2018

y-o-y *sales volume

300【Vietnam】

Appendix
International

 Jan- Dec down

250％

y-o-y *domestic sales volume

Total sales volume (included export) up

140%
120%

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

y-o-y＊sales revenue after eliminationof inter- company transactions【Sapporo brand】
 Jan- Dec down％

％ y-o-y

262

260

254

（※）

200
150
100
50
0
2016

2017

2018

100%

Silver Springs Citrus （US$ million）

80%

Country Pure Foods （US$ million）

60%
40%
20%
0%

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＜SLEEMAN:Sales Revenue in Local Currency (Jan- Dec)
600

*before elimination of inter- company transactions
J GAAP（Excluded liquor tax）

500

Sapporo brand sales volume
breakdown by geographic area

9%

IFRS
（Included liquor tax）

8%

34%

400

27%

300

496 515

200
100

279
222 242 262

309 325 328 345 359

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

International

million cases

SLEEMAN(Can$ million)

60＜Trend of overseas sales volume of
Sapporo brand products (Jan- Dec)>（10,000 cases）

1,400
1,200

50

1,000

40
30
20

2018

1,600

IFRS

57%

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

*before elimination of inter- company transactions
J GAAPmillion cases

North America:Canada, U.S.

＜Sapporo U.S.A.: Sales Revenue in Local Currency (Jan- Dec)
70

65%

2013

0

Appendix

6.28

4.47

47

42

47

52

53

55

56

58

59

61

62

800
600
400
200

10

0

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
USA（US$ million）

1067 1153 1202

1246 1237 1262 1291 1300 1,368

643 628488 550 580
447
382
237 3242010 2011 2012 2013 2014 2015 2016 2017 2018
Sapporo brand

SLEEMAN

Overseas brand（SLEEMAN＋ANCHOR）
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【Lemon-based drinks】【Lemon-based food products】

 Jan- Dec up

％ y-o-y *sales volume【Soups】

 Jan- Dec up

 Jan- Dec down

％ y-o-y *sales volume％ y-o-y *sales volume【Soy milk, chilled products】

 Jan- Dec down
Food & Soft Drinks％ y-o-y *sales volume【Unsweetened tea drinks】【Coffee drinks】

AppendixJan- Dec up％ y-o-y *sales volume

 Jan- Dec up＜Japanese soft drinks
POKKA SAPPORO Food & Beverage
Sales composition by sales channel(Jan- Dec)＞％ y-o-y *sales volume＜Japanese soft drinks
Sales composition by genre(Jan- Dec)＞

18%

21%
53%

43.70million

47%

Coffee drinks

Vending
machines
Retailer

cases

4%

43.70million

16%

cases

※Vending machines (end of Dec.)
own brand machines : about 82,000+ Multi-brand machines

15%

Lemon-based
drinksTea drinks
Carbonated
Water

26%
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＜Food & Soft Drinks segment Revenue>(Jan- Dec)

(billions of Yen)

160

※April 2011 Consolidation of140

POKKA CORPORATIONJ GAAP＜Food & Soft Drinks segment
Revenue break down by geographic area＞

IFRS

120

85%

100
80
60

108

129 130.6 133.4 135.6 137.9 132.1 127.2

15%

40

Appendix

Food & Soft Drinks

20

36.8 30.7 33.9

0

Japan

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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

3%

23%

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

32%
¥81.8

Overseas199
SG＄ million

billion

68%

74%
Soft drinks

Food

Soy and Chilled productWithin Singapore
Copyright, 2019

ExportSAPPORO HOLDINGS LTD. All rights reserved.

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【Pokka Create CO., Ltd.】 Jan- Dec Revenue

unchanged y-o-ybillion＜New & refurbish outlets ＞<Number of outlets as of Dec. 31, 2018 : 202>52
202

Appendix

Food & Soft Drinks

outlets

Central JapanWest Japan

Increased 6 outlets compared with2017 4Q（East +6, Central+1,West-1）

37

94

113

East Japan202
outlets108

Directory operated
FC

Increased 10FC outlets compared with2017 4Q(Directory operated +4, FC +2)

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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＜Major New products (Drink and instant soup) >Left: Chocolate drink
Rght: Milk shake

JELEETS Pudding ShakeJELEETS coffee jelly

Café de Crie
Black coffee

Yuzu
Kagabo hojicha

Appendix

Hibiscus tea

Food & Soft Drinks

Jikkuri kotokoto instant soup

Jikkuri kotokoto
Bottle can soup
Kireto lemon
Calcium drink

Karao
spice cup soupPear juice
Jikkuri kotokoto cup
soup

Risorante
Cup-based risotto

Lemon vinegar“Lemon no su”
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Did you know that lemons are good for bone health?
Started broadcasting PR video on “bone health andlemons” from mid-October 2018

Appendix
Sustained consumption of lemons promotes bone health!
POKKA SAPPORO Food & Beverages Ltd. has been carrying out various functional studies into lemons.
Given the growing interest in extending healthy life expectancy against the backdrop of a super-aging society,the company has been focusing on the increasing awareness of the importance of preventing issues such as
osteoporosis and reduced physical mobility, both of which can cause people to become confined to theirbeds. In 2016, it was confirmed that sustained consumption of calcium together with lemon can curb
decreases in bone density¹. Further, the citric acid in lemon was found to help in making calcium more easily
absorbable by the body (the chelate effect)² and in a study on daily lemon consumption and health condition
conducted in 2017 on 120 residents of Osakikamijima-cho in Hiroshima Prefecture, it was found that women
who consumed more lemons tended to have higher bone density³.
Continued consumption of lemons contributes to bone health!
*1… Confirmed impact of long-term consumption of lemon juice on bone health*2… Boosting of calcium absorption from small intestine by citric acid and analysis of its mechanism*3… Full-sale launch of the long-term observational/interventional lemon study in Osakikamijima-cho, Hiroshima Prefecture
https://www.pokkasapporo-fb.jp/company/news/release/181004_01.html★See https://news-tv.jp/_ct/16958903 for PR video of Bone Health and Lemons.
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Rated highly as a “vinegar beverage that is easy to drink and tasty”
Strong sales of “Lemon kaju o hakko sasete tsukutta lemon no su” series
Sales of “Lemon kaju o hakko sasete tsukutta
lemon no su”
Supplement: Relative value when 2016 sales are defined as“1.0”; Based on sales volume (number of bottles); products
before relaunch for 2016 and 2017

3.9

2.0

Appendix

1.0[Left] Lemon kaju o hakko sasete tsukutta lemon no su (6-fold dilution type)
Lemon kaju o hakko sasete tsukutta lemon no su Diet Straight

2016

2017

2018

POKKA SAPPORO Food & Beverages Ltd. has been offering products using lemon vinegar madeby fermenting lemon juice since 2004 and these products have been cherished primarily by highly
health/beauty-conscious female consumers. With the drinking vinegar market expanding over the
past several years, last year the company improved the flavor to make it easier to drink and switched
to convenient paper-based containers. As a result, sales of Lemon kaju o hakko sasete tsukutta
lemon no su and Lemon kaju o hakko sasete tsukutta lemon no su Diet Straight together increased
96%*1 compared with a year earlier.
*1… The Company’s sales figures: Total sales of the two products from the Lemon kaju o hakko sasete tsukutta lemon no su series fromJanuary to December 2018 compared with a year earlier (on a sales volume basis [number of bottles])We will strive to further expand demand to spread the benefit of lemons to as many customers as
possible through Lemon kaju o hakko sasete tsukutta lemon no su.
https://www.pokkasapporo-fb.jp/company/news/release/190117_01.html

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(billionsof yen) <Trends of Sales revenue and number of

30.0
25.0

191 193 190
185

20.0
15.0
10.0

Appendix＜Sapporo Lion outlets ＞
As of Dec 31, 2018

Sapporo Lion Outlets> *before rebate deduction
220
200

170 175 170 169

24.1 25.6 25.8 25.1 24.8 24.8 25.1 24.0

180
160

14
4

7 10
Tokyo Metroporitan
Kanto(excl.Tokyo)
Hokkaido

169
173

140

5.0

120

0.0

100

25

TohokuNagoyaoutlets

85

2011 2012 2013 2014 2015 2016 2017 2018

Restaurants

Sales revenue

Number of outlets＜Restaurants segment total number of outlets＞

169

KansaiOther

24<Brands＞

Sapporo Lion196

New Sanko

8outlets

Marushinkawamura
Singapore

18
1
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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＜Major rental properties & occupancy rates:（Averages for 2018 )>Site area（㎡）

Real Estate

Occupancyrate（%）

No. of floors

350

56,943

298,007100

Ebisu First Square

2,596

16,01299

12 floors above
ground, 1 below

Ebisu Square

1,561

8,644

100

7 floors above
ground, 1 below

150

Ginza Place

645

7,350

100

11 floors above
ground, 2 below

50

1,117

11,411100

13 floors above
ground, 1 below

Strata Ginza（2）

300
250

2017

2018

ChangeYebisu Garden Place, etc.

-

8.1

-

Hokkaido-

1.1

Other area & otheroperations-

General corporate
Total(billions of yen)

397.6

200

386.0
215.5

200.0

100

*1: The number of floors is for the office block only. Occupancy rates are for office areas only.
*2: Figures are for entire property. Sapporo owns 922m2 of the site (sectional ownership) and 89.72% of the building(joint management)＜Operating profit＞(billions of yen)400

40 floors above
ground, 5 below

Yebisu Garden Place（1）Appendix

Floor area（㎡）

＜Information about
Investment property＞

0
As of December As of December
31, 2017
31, 2018
Carrying value on the consolidated
statement of financing position
Fair value＜EBITDA＞

2017

2018

ChangeYebisu Garden Place, etc.

-

11.3

-

-

Hokkaido

-

1.2

-

3.8

-

Other area & otheroperations

-

4.9

-

-

(1.0)

-

General corporate

-

(1.1)

-

-

12.0

-

Total

-

16.3

-

※There s no disclosure of operating income for 2017(billions of yen)

※Under IFRS,EBITDA = Profit from operations before non - recurring items + Depreciation and amortization
Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Various Initiatives by the Sapporo Group (2018)<Alliances>-Start of joint modal shift in Kansai – Chugoku/Kyushu-Estimated CO2 emission reduction of about 1,500t (about 74%
compared to existing figures)http://www.sapporobeer.jp/news_release/0000021883/index.html-Advance start in 6 prefectures in Tohoku of joint collection ofbeer pallets
http://www.sapporobeer.jp/news_release/0000022035/index.html<Awards, certifications>-Chiba Plant received the Kanto Bureau of Economy, Trade andIndustry Director-General’s Award for factory greening-Commended for 30 years of continued greening promotion andlocal community contribution activities since the plant’s
establishment http://www.sapporobeer.jp/news_release/0000022052/index.html

Appendix-Certified as “2018 Excellent Enterprise of Health andProductivity Management-White 500”
-Ranked in the top 20% and won five-star ratinghttp://www.sapporoholdings.jp/news_release/00000204
22/index.html-Selected as a member of the SNAM Sustainability Index again in
2018-Sapporo Group’s ESG-related initiatives have been highly
ratedhttp://www.sapporoholdings.jp/news_release/0000020442/index.html-Agriculture, Forestry and Fisheries Minister’s Award at the 27th
Global Environment Awards -In recognition of biomass energy
technology development applying brewing technologieshttp://www.sapporoholdings.jp/news_release/0000020423/index.html- Tokyo Energy Service Co., Ltd.
Received Kanto Bureau of Economy, Trade and Industry DirectorGeneral’s Award -In recognition of promotion of energy-saving
initiatives--Selected as a 2018 Competitive IT Strategy Company
http://www.sapporoholdings.jp/news_release/00
00020438/index.html-Selected as for the FTSE4Good Index Series and FTSE
Blossom Japan Index (both leading ESG investment indexes).
http://www.sapporoholdings.jp/news_release/0000020447/index.html

https://www.sapporo-re.jp/pdf/sapporore/store/storage/20180207kantokeizaisangyokyoku.pdf-Won Gold at the first “gan-ally-bu” Awards-Strengthening the company with dialogue and systems that allow
employees with cancer to work more comfortablyhttp://www.sapporobeer.jp/news_release/0000022032/index.html

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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Various Initiatives by the Sapporo Group (2018)<Assistance, donations, etc. (partial selection)>-Donated amount equivalent to the beer sales at Sapporo Beer
Festival –Supporting home turf of Hokkaido through support for
promotion of Ainu culturehttp://www.sapporoholdings.jp/news_release/0000020417/index.html

Donated earnings from charity sales at Hakone Ekiden relay race
to town of Hakone -Sapporo Breweries supports town of
Hakonehttp://www.sapporobeer.jp/news_release/0000021831/index.html

Appendix-Tohoku restoration support activities through shareholder
benefit plan in FY2017-Supporting a new project in which overseas high school
students disseminate safety information about food grown inFukushima--“Keppare! Hokkaido”-Sapporo Beer Garden supports Hokkaido with a special
limited-time-only plan! Donated part of sales as relief funds for2018 Hokkaido
Eastern Iburi earthquakehttp://www.sapporobeer.jp/news_release/0000022040/index.html-Donated part of sales to the Chiba Prefecture Traffic Safety
Association
http://www.sapporobeer.jp/news_release/0000022061/index.html-Donated support funds for 2018 Hokkaido Eastern Iburi
earthquake to the Hokkaido Government-“What can we do for our hometown?”-

http://www.sapporobeer.jp/news_release/0000022053/index.html

http://www.sapporoholdings.jp/news_release/0000020425/index.html-Donations to the afflicted areas of 2018 Hokkaido Eastern Iburi-Two years from Kumamoto Earthquake: Support to Mashiki-machi
earthquake
Next Generation Nurturing Project
http://www.sapporoholdings.jp/news_release/0000020452/index.html-Held Live Comedy Show in Mashikimachi for Adults and Children
as the first initiative for the year-Tohoku restoration support with shareholder special benefit plan
http://www.sapporoholdings.jp/news_release/0000020431/index.html-Utilized to support education for children who will play major roles
in restoration of Tohoku-Donation of part of sales to Chiba Environment Restoration Fund http://www.sapporoholdings.jp/news_release/0000020443/index.html
http://www.sapporobeer.jp/news_release/0000021987/index.html<Other>-Held a business contest for jointly creating new
businesses with start-up companies-Members selected from general public aim to create next
generation businesses in the fields of alcoholic beverages, food,and soft drinkshttp://www.sapporoholdings.jp/news_release/0000020455/index.html

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

Copyright, 2019SAPPORO HOLDINGS LTD. All rights reserved.

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