2013
Sapporo Group Business Results Presentation
for the Nine Months ended September 30, 2013

October 31 2013SAPPORO HOLDINGS LIMITEDURL http://www.sapporoholdings.jp/english

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Contents

1. Overview of the First Nine Months of 2013
2. Progress of Implementation of 2013 Basic Strategies
3. Overview of Results for the First Nine Months of 2013
Reference: Management Targets 2013-2014
Reference: Supplementary Information to Results for theFirst Nine Months of 2013

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1. Overview of the First Nine Months of 2013

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Overview of the First Nine Months of 2013
Overview of the First Nine Months of 2013

¾ Sales increased by ¥14.7 billion, operating income by ¥3.8 billion, and net income by ¥4.8 billion•Japanese Alcoholic Beverages: Sales increased by ¥3.1 billion, operating income by ¥4.6 billion：
Sales volume of beer grew strongly, exceeding the level of the previous year, as Yebisu Beer sales continued to
expand.
In addition to increased sales for beer and beer-type beverages compared to the previous year, with sales of newgenre product Goku zero increased, and sales of wine, western spirits and shochu also rose, resulting in increased
sales for the entire segment.
Operating income also rose significantly as a result of increased sales as well as tighter cost controls beginning withmarketing expenses.
¾ Launched Goku zero, the world’s first beer-type beverage with no carbohydrates orpurine bodies, on June 19.
¾ Initial sales plan of 2.2 million cases was upwardly revised to 3 million cases (large
bottle count)¾ About 2.1 million cases sold as of the end of September, exceeding the plan.
104 ％

104 ％

Jan.-Sep. Cumulative Sales Volume YoY Comparison(Beer, Happoshu New Genre)

103

SapporoJan.-Sep. Cumulative Sales Volume YoY
Comparison (Beer)103

Sapporo102

Total demand102

Total demand

102

102
100

100
98

100

100
99

100
98

97

96

96

94

94
Apr.- Jun.

Jul.-Sep.

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99

99

98

Jan.- Mar.

100

Jan.-Sep.

98

98

Jul.-Sep.

Jan.-Sep.

97

Jan.- Mar.

Apr.- Jun.

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Overview of the First Nine Months of 2013
Overview of the First Nine Months of 2013
•International Business: Sales increased by ¥9.9 billion, operating income by ¥0.8 billion
Both sales and profits increased on the back of local currency-based growth in North America and Vietnam as well as the additionof Silver Spring Citrus, whose consolidation started in April 2012, in addition to the impact of yen depreciation.
•Food & Soft Drinks: Sales increased by ¥2.5 billion, operating income declined by ¥1.3 billion
Sales increased, despite the decrease in domestic soft drinks sales from the beginning of the year due to the impact ofintegration preparations in the previous year on normal sales activities, and also of the decrease in product items, as net increase of
POKKA ACE Malaysia, whose consolidation began at the start of the year, contributed.
Decline in operating income is due to the impact of the decrease in profits in domestic soft drinks through the 2nd quarter

Jan.-Sep. Cumulative Sales Volume YoY Comparison(Domestic soft drinks)
％

103

101

95

102

SapporoTotal demand

93

Food & Soft Drinks Operating incomebefore goodwill
amortization by each quarter YoY

Jan-MarApr-Jun

Jul-Sep

Jan-Sep

Operatingincome 2013

(1.1)

0.1

1.6

0.5

Operatingincome 2012

(0.6)

0.7

1.7

1.8

Change

(0.5)

(0.6)

(0.1)

(1.3)

94

89

80

65

50
Jan-MarJan-JunJan-Sep•Income before income taxes and minority interests: increased by ¥9.1 billion
Increased as a result of factors including the recording of a ¥3.5 billion gain on sales of investment securities as extraordinary gains.
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2. Progress of Implementation of2013 Basic Strategies

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Progress of Implementation of 2013 Basic Strategies
Creating new opportunities for growth¾ Restructuring of North American Production Facilities: International Business• Production of Sapporo brand products for the U.S. market was outsourced from SLEEMAN Breweries in Canada to City Brewing
Company, a major contract beverage manufacturer in the U.S., from July, as the SLEEMAN facility was operating at full capacity.
• Canada: Tackled the increased domestic demand for the Sleeman brand by boosting production capacity• U.S.: Met increased demand for Sapporo brand products.
• Built a foundation for further growth in the growing North American beer market
Post M&A,

SLEEMAN Net Sales (before elimination of intercompany transactions) in Local Currency (Jan-Sep)
245.8
234.6
240
210

198.3

7th straight year of year-over-year volume growth!

(Jan-Sep) 1.5 times compared to 2006!

SLEEMAN (Canada)¾ Sales growth on increased investment
in marketing of premium brands

204.9

182.6
180

163.3

•

Sales growth higher than total demand
growth in Canada

165.2

150
2007

2008

2009

2010

2011

2012

2013

Unit sales (YoY)

2012

2013

SLEEMAN*

107%

104%

Canada total
demandApprox.
103%

Approx.

97%*Excluding Sapporo brand

SLEEMAN(Can$ millions)

Sapporo USA Net Sales (before elimination of inter-company
transactions) in Local Currency (Jan-Sep)
40

37.0

36.1
33.0

39.1

40.9

(Jan-Sep) 4th straight year of year-over-year volume growth!

43.3

Sapporo USA (U.S.)
¾

32.6

30

Expanding from the JapaneseAmerican market into wider U.S. andAsian-American markets
•

20
2007

2008

2009

2010

2011

2012

USA（US$ millions）

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

2013

Performance better than U.S. total
import beer demand for theprevious year

Impact of collapse of Lehman Brothers in 2009

Unit sales (YoY)

2012

2013

Sapporo USA*

103%

107%

US total importbeer demand

Approx.

Approx.

98%

99%*Sapporo brand

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Progress of Implementation of 2013 Basic Strategies
Creating new opportunities for growth¾ Reorganization of restaurant business in Singapore: Restaurants

Singapore Tonkichi•Transfer of the restaurant business in Singapore from POKKA Corporation (Singapore) Pte.
Ltd. to Sapporo Lion Limited in January•Brought forward the opening by one year of the 1st Ginza Lion in Singapore to October•Spreading the beer hall culture around the world – start of overseas operations•Initial plan: Aim to operate 10 beer halls in Singapore and elsewhere in Southeast Asia within five years
Singapore Ginza Lion Beer Hall

¾ Singapore outlets: total of 11(as of September 30, 2013)-Tonkichi (pork cutlets): 4 outlets-Domani (Italian): 1 outlet-Rive Gauche (pastry): 6 outlets

Challenges toward growth in all businesses¾ See the segment pages in Reference: Supplementary Information to Results for the First Nine Months of 2013.

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Progress of Implementation of 2013 Basic Strategies
Carrying out growth measures¾ Activities to enhance the value of existing properties: Real Estate•In consideration of the resolution of excess supply due to a spate of office building construction and recovery in rent levels in the realestate rental market from now on, enhance the value of existing properties through renewal.
•Implementation of measures to enhance the value of Yebisu Garden Place in preparation for its 20th anniversary in 2014
Office renewal focused on business continuity, including augmentation of emergency power supply facilities in times ofdisaster, as well as enhancement of office convenience
Refurbishing commercial and restaurant facilities to enhance the appeal of the entire Ebisu area
•Redevelopment works at Seiwa Yebisu Building (tentative name: SapporoEbisu Building) including expansion of total floor Yebisu Garden Placearea has been progressing favorably for completion in the autumn of 2014
•Continuing consultations with concerned parties regarding redevelopment of Sapporo Ginza Building, located in
Ginza 4-chome (including expansion of total floor area)¾ Enhance lemon products’ (foods) production capability: Food & Soft Drinks• Domestic Foods: Added lemon products (foods) production line inKitanagoya City, enhanced
production capacity
Constructed a new building and set up cutting-edge production line in response to the growthstrategy for the core business of Pokka Lemon 100. Production capacity can be increased
by a maximum of 70% compared to present capacity. Start of operations scheduled for December 2013.

Seiwa Yebisu Building (artist’s rendering)(Tentative name: Sapporo Ebisu Bldg.)¾ Strengthening of the soft drinks business in Southeast Asia: Food & Soft Drinks
Nagoya plant new building•Overseas Soft Drinks: POKKA Singapore to construct a new plant(artist’s rendering)in Malaysia and double production capacity
Planned start of construction in Johor State at the end of June,with full-scale operation planned for April 2014
Resolution of chronic supply shortages in Singapore and export markets
Strengthening the business in Malaysia, the most important market in Southeast Asia,and surrounding countries

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Malaysia plant ground-breaking
ceremony

Malaysia plant (artist’s rendering)

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Progress of Implementation of 2013 Basic Strategies

Carrying out growth measures¾ State of progress in Alcoholic Beverages
Business in Vietnam: International Business•Steady progress with sales volume in Vietnam, where full -scale
marketing began in April 2012, and exports to neighboring countries have also been progressing well•Substantial growth in sales volumes in Vietnam during the first Tet (New Year’s Holiday) sales season after
full-scale market entry•Supply of beer kegs to expand beer culture in Vietnam. Plans to expand sales activities to Hanoi•In Vietnam at the end of September, we delivered to approx. 2,000 outlets in the commercial market, mainly in Ho Chi Minh City, and to approx.
2,500 outlets in the retail market, including convenience stores and large supermarkets.
•Sequential start of export to neighboring countries in 2013: export to Malaysia, Singapore, Thailand, Australia, New Zealand, South Korea, Indonesia,
Hong Kong, the Philippines, Myanmar, Cambodia, and Guam as of September 30
Third largest market in Asia after China and Japan•Sapporo brand has a presence in eight of ten ASEAN countries

Jan-Sep 2013 sales volume, taking Jan-Sep 2012 volume (excluding
exports) as 100

Beer market in Vietnam*
US$ million

281

300

8,000.0
6,000.0

2,303

200
100

2,853

3,079

3,000.0

4,000.0100

2,000.0

0
2012

2,595

Expected to reach size of theJapanese market by 2020
Million liters
3,701
4,000.0
3,505
3,297

2013

5,392

2010

2011

2012

2013

6,829

7,298

2,000.0
1,000.0

0.0

0.0
*

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

4,850

5,917

4,304

6,365

Euromonitor

$ mn

2014

2015

2016

LitterMillionmn
liters10/27

Progress of Implementation of 2013 Basic Strategies
Implementation Status of Strategic Investments

Credit Ratings(Including Ordinary Capex)<Capital expenditure (cash basis) and lease fees>
Consolidated total: Approx. ¥13.4bn¾ Property, plant and equipment, intangible assets, lease fees, etc.
Major items:¾ Nagoya plant (Food & Soft Drinks): approx. ¥0.6 billion, Malaysian plant(Food & Soft Drinks): approx. ¥0.5 billion, demolition of Seiwa Yebisu
Building : approx. ¥0.3 billion, integration system (general corporate):approx. ¥0.7 billion, lease fees (Food & Soft Drinks, other): approx. ¥3.3
billion, etc.

<Other investments> Consolidated total: Approx. ¥4.2bn<Credit rating by JCR>
¾ As of October 31, 2013: A- (stable)<Credit rating by R&I>
¾ As of October 31, 2013: BBB+ (stable)<Achievement of low-cost financing>¾ In March 2013, issued ¥10 bn in five-year straight bonds at a low
cost of 0.39%

Long-term prepaid expenses, investment securities, etc.
Major items:¾ Long-term prepaid expenses (Japanese Alcoholic Beverages, Food & Soft
Drinks) : approx. ¥2.7 billion, acquisition of treasury stock (general
corporate): approx. ¥0.9 billion, investments in securities: ¥0.6 billion<Jan-Sep 2013 strategic investment total(incl. ordinary capex)>¾ Approx. ¥17.6 bn
Direction of Long-Term Strategic Investments¾ We will continue to actively carry out strategic investments for growth.
¾ The scale of strategic investment from 2012 to 2016 is anticipated to be from ¥150 to ¥200 billion (in principle,
funded from accumulated operating cash flow).
– Including ordinary capex (approx. half of strategic investments)– 2012 strategic investment total: Approx. ¥65.7 bn– 2013 strategic investment plan： Approx. ¥ 28.0 bn
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3. Overview of Results for
the First Nine Months of 2013

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Overview of Results for the First Nine Months of 2013:
Special Factors
Breakdown of special factors (net increase, etc.) that prevent meaningful year -on-year comparisons
between net sales and operating income in 2012 and 2013 are shown below. See the Supplementary
Information to the Earnings Report for factors behind changes resulting from other business activities.
Net Sales

Operating Income<International Business>¾ April 2012 consolidation of profit and loss account ofSilver Springs Citrus
Jan-Mar 2013 net increase ⇒approx. +¥2.7 bn<International Business>¾ April 2012 consolidation of profit and loss account of Silver
Springs Citrus
Jan-Mar 2013 net increase ⇒ approx. +¥0.1 bn<Food & Soft Drinks>¾ January consolidation of profit and loss account of
POKKA ACE Malaysia (change from equity method
affiliate to consolidated subsidiary)⇒approx. +¥3.9 bn<Food & Soft Drinks>¾ January consolidation of profit and loss account of POKKAACE Malaysia (change from equity method affiliate toconsolidated subsidiary)⇒ approx. +¥0.0 bn<Real Estate>¾ March 2012 inclusion of 15% of trust beneficiary rights
for Yebisu Garden Place in the profit and loss accountJan-Feb 2013 net increase ⇒ approx. +¥0.4 bn<Real Estate>¾ March 2012 inclusion of 15% of trust beneficiary rights for
Yebisu Garden Place in the profit and loss accountJan-Feb 2013 net increase ⇒ approx. +¥0.2 bn<Consolidated Total>¾ Approx. +¥7.0 bn<Consolidated Total>¾ Approx. +¥0.3 bn

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Overview of Results for the First Nine Months of 2013 –Consolidated–(billions of yen)

YoY change

2012 3Q

2013 3Q

Amount%Consolidated net
sales

354.7

369.5

14.7

4.2%

Consolidated
operating income

5.5

9.4

3.8

68.9%

Consolidated operating
income before goodwill
amortization

8.4

12.4

3.9

47.0%

Consolidated
ordinary income

4.4

8.8

4.4

100.1%

Consolidated net
income

0.5

5.4

4.8

817.1%

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Overview of Results for the First Nine Months of 2013 by Segment
Operating Income
YoY change(billions of yen)2012 3Q*
Japanese Alcoholic
Beverages

2013 3Q%

Amount

0.8

5.5

4.6

541.2%

0.1
1.4
(1.3)

1.0
2.3
(1.3)

0.8
0.9
(0.0)

595.6%
67.0%
―

(0.1)

(1.5)

(1.3)

―

Restaurants

0.2

0.2

(0.0)

(17.2%)

Real Estate

7.1

6.7

(0.3)

(5.2%)

Other

(0.3)

0.1

0.4

―

General corporate

(2.4)

(2.7)

(0.3)

―

Consolidated operating income

5.5

9.4

3.8

68.9%

Consolidated operating income
before goodwill amortization

8.4

12.4

3.9

47.0%

International
North America, other
VietnamFood & Soft Drinks*Effective the three months ended March 31, 2013, Sapporo Logistics Systems Co., Ltd., which was previously included in the J apanese Alcoholic
Beverages segment, and Pokka Logistics Co., Ltd., which was previously included in the Food & Soft Drinks segment, were recla ssified to the Other
segment. Additionally, effective the three months ended March 31, 2013, Pokka Food (Singapore) Pte. Ltd. which was previously included in the Food
& Soft Drinks segment was reclassified to the Restaurants segment These changes have been retroactively applied to the above figures for 2012.
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Reference: 2013-2014 Management Targets*2013-2014 management targets are unchanged from thefigures announced on February 8, 2013.

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2013-2014 Management Targets
Consolidated targets
2006 results2012 results2013 targets

2014 targets

2016 targets

Consolidated net sales*incl. liquor taxes¥435.0 bn¥492.4 bn¥512.0 bn¥533.0 bn¥600.0 bn(excl. liquor taxes)¥294.0 bn¥379.7 bn¥397.3 bn¥416.0 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¥14.4 bn

¥15.3 bn

¥17.8 bn

¥8.6 bn¥18.2 bn

¥19.2 bn

¥21.6 bn

¥5.8 bn¥13.6 bn¥14.0 bn

¥16.5 bn–

¥2.3 bn¥5.3 bn¥5.5 bn¥7.0 bn

–

2.9%

3.8%

3.9%

4.3%

2.9%

4.8%

4.4%

5.2%

D/E ratio

2.1 times

1.9 times

1.8 times

1.7 times

ROE

2.1%

4.2%

4.1%

5.1%

(before goodwill
amortization)

2.1%

7.3%

7.1%

8.0%

¥40.0 bn

9.0%
Around 1:1
8% or higher*Assumed exchange rates: 2013-2014: US$ = ¥85.00, CAN$ = ¥83.00*Since the government's consumption tax policy was uncertain as of February 8, the above 2014 targets do not take into account the impact of a consumption tax increase.
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2013-2014 Management Targets by Segment
Targets

Net sales
Operating incom eJapanese Alcoholic Beverages
International Business
Food & Soft Drinks
Restaurants
Real Estate
Other Businesses
Corporate and intercompany
transactions
Consolidated total
Japanese Alcoholic Beverages
International Business
Food & Soft Drinks
Restaurants
Real Estate
Other
Corporate and intercompany
transactions
Consolidated total
Consolidated total(before goodwill amortization)2012 results*

2013 targets

2014 targets¥269.9 bn¥36.1 bn
¥129.0 bn¥26.6 bn
¥23.2 bn
¥7.5 bn¥275.2 bn¥43.3 bn
¥136.5 bn¥26.8 bn
¥23.6 bn
¥6.6 bn¥283.5 bn¥46.4 bn
¥145.5 bn¥28.2 bn
¥22.4 bn¥7.0 bn–––¥492.4 billion¥7.5 bn(¥0.0 bn)¥0.3 bn¥0.5 bn¥9.3 bn(¥0.4 bn)

¥512.0 billion¥9.0 bn¥0.0 bn¥1.0 bn¥0.8 bn¥8.3 bn(¥0.1 bn)

¥533.0 billion¥9.0 bn¥1.1 bn¥2.7 bn¥1.0 bn¥7.3 bn¥0.0 bn(¥2.9 bn)(¥3.7 bn)(¥3.3 bn)

¥14.4 bn

¥15.3 bn

¥17.8 bn

¥18.2 billion¥19.2 billion¥21.6 billion*Assumed exchange rates: 2013-2014: US$ = ¥85.00, CAN$ = ¥83.00*Effective the three months ended March 31, 2013, Sapporo Logistics Systems Co., Ltd., which was previously included in the J apanese Alcoholic Beverages segment, and Pokka Logistics Co., Ltd.,
which was previously included in the Food & Soft Drinks segment, were reclassified to the Other segment. Additionally, effective the three months ended March 31, 2013, Pokka Food (Singapore) Pte.
Ltd. which was previously included in the Food & Soft Drinks segment was reclassified to the Restaurants segment These change s have been retroactively applied to the above figures for 2012.
*Since the government's consumption tax policy was uncertain as of February 8, the above 2014 targets do not take into account the impact of a consumption tax increase.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

18/27

Reference: Supplementary Information to
Results for the First Nine Months of 2013

For information on the profitability of each business, please see theSupplementary Information to our Earnings Report.

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19/27

Japanese Alcoholic Beverages(billions of yen)

Results highlights

2012 3Q

2013 3Q

AmountNet sales*

192.2

195.3

3.1

1.6%

Operatingincome

0.8

5.5

4.6

541.2%*Incl. liquor taxes

Net sales increased year over year and total sales volumes for beer
and beer-type beverages exceeded the previous year’s level, as
sales volume of beer grew 2% year over year and sales of wine,
western spirits and shochu also rose year over year.
Operating income significantly rose as a result of higher sales
as well as cost control over items including marketing expenses.

Key points in business plan: implementation status

1. Bolstering of brand strength of core products(excl. beer and new-genre)¾ Premium Alcohol Free: down 1% year over year in
the Jan-Sep period

2. Growth as a comprehensive alcoholic
beverage enterpriseRTD¾ Although Bacardi performed favorably, up 34% from the same period a year
earlier, sales volume declined year over year, partly due to lower -thanexpected sales of Nectar RTD and TEA’S HI .
¾ Following the launch of RTD Bacardi Mojito in April, the Bacardi Pina Colada
Fizz Bottle was introduced in July.
¾ Sales of Sapporo Otokoume Sour launched in April for a limited period
have been strong and it was made available year -round from the end of
September.

YoY change%Wine¾ Total net sales rose year over year on growth from imported wines in
addition to higher sales of domestic wines.
¾ Imported wines: Strong performance from Yellow Tail andGarcia Carrion¾ Domestic wines: Strong performance from Grande Polaire

Western Spirits¾ Conclusion of an operating alliance agreement with Bacardi Japan,
supplier of the world’s No.1 rum brand.
Start of sales in Oct 2011
•Significant year-over-year increase in net sales•Active business development in both the household andcommercial markets¾ Sales of RTS* product “Bacardi Classic Cocktails Mojito” have been
progressing at a rate significantly exceeding the plan
*Ready to serve. Liqueur which can be made into cocktail just by adding soda, etc.

Shochu¾ Significant year-over-year increase in net sales¾ Solid performance from Imo Shochu Kokuimo
blended shochu¾ Contribution to the sales increase from Kuroumesyu
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20/27

International Business(billions of yen)2012 3Q

2013 3Q

AmountNet sales

26.3

36.2

9.9

37.6%

Operatingincome

0.1
1.4
(1.3)

1.0
2.3
(1.3)

0.8
0.9
(0.0)

595.6%
67.0%−

Results highlights
Net sales increased 37.6% year over year as a result of local
currency-based growth, mainly in North America, the impact ofyen depreciation, and the addition of the Jan-March results ofSilver Springs Citrus (SSC).
Operating income rose as increases in income from the North
American business as well as SSC significantly exceeded
growth in expenses for market development in Vietnam.

Key points in business plan: implementation status

1. North American business growth (excl. SLEEMAN,
Sapporo USA)
Silver Springs Citrus (U.S.)¾

Acquired a 51% stake in Silver Springs Citrus, the largest U.S.
maker of private-brand chilled drinks•••

Full-scale entry into the beverage business in the North American
marketConsolidation of the profit and loss account fromApril, 2012
Contributing to sales and profits

2. Asian and Oceania Market (excl. Vietnam)
Developments in Singapore

YoY change

North America,
othersVietnam%Developments in South Korea¾ Strengthened Sapporo brand value and sales structure in South Korea by entering
into an alliance with Maeil Dairies Co., Ltd. (market share leader in cheese, low-fat
milk, and chilled coffee drinks) in January 2012 and acquiring a 15% stake in M’s
Beverage Co., Ltd., a wholly owned liquor sales subsidiary of Maeil
Non-equity method affiliate¾ 2012 sales target of 380,000 cases (1 case = 350 ml× 24 bottles):
420,000 cases sold and target achieved¾ 2015 sales target of 1.5 million cases (1 case = 350 ml×24 bottles)¾ Aiming to be the No. 1 imported brand.
¾ 2013 3Q: Outperforming the plan. Double digit growth year over year

Developments in Oceania¾ October 2011 entry into the Australian/New Zealand premium beer market
via a licensing agreement with Coopers Brewery Ltd. (No.3 in Australia’sbeer market, No. 2 in premium beer market with a 17.3% share)¾ Full-scale start-up in 2012 Aiming to be the No. 1 Japanese beer brand.
¾ Household market sales channel expansion in collaboration with POKKA for¾ 2012 sales target of 160,000 cases (1 case = 355 ml×24 bottles）:
beer produced in Vietnam
160,000 cases sold and target achieved¾ 2014 sales target: Approx. 150,000 cases (1 case = 355 ml× 24 bottles）¾ Striving to be the No. 1 Japanese beer brand.

¾ 2016 sales target of 500,000 cases (1 case = 355 ml×24 bottles ）¾ 2013 3Q: outperforming the plan. Double digit growth year over year

¾ 2013 3Q: Progressing in line with the plan. Double digit growth year
over year

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21/27

Food & Soft Drinks (1)(billions of yen)

YoY change

Results highlights
While domestic beverages sales declined due to the impact ofintegration preparations and the reduction in the number ofNet sales
product items, overall sales increased with a net increase fromthe consolidation of Pokka Ace (M) SDN. BHD.
Operating income declined, reflecting the significant sales decline Operating
incomein domestic beverages.
Before GW
amortization
Key points in business plan: implementation status2012 3Q

2013 3Q

Amount

%

93.4

95.9

2.5

2.7%

(0.1)
1.8

(1.5)
0.5

(1.3)
(1.3)

−
(70.7%)■ Soft Drinks and Food (Domestic): Pokka Sapporo Food & Beverages Ltd. , vending machine operators
Organization of products in five business categories to leverage thestrengths of both companies and invest in sales promotion of key brands
Lemon,
natural foods

Beverages

Soup, foods

OverseasbrandsVending machine
channel: 100,000
machine network

Commercial
marketFurther strengtheningof marketing tocorporate customers

Spring/Summer 2013
Key Products

Kireto Lemon

Aromax Fantasista

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Focus on investment insales promotion insegments in which thecompany can compete
and winTo start
offering Vittel+ Contrex
from 2014
Gerolsteiner

22/27

Food & Soft Drinks (2)Key points in business plan: implementation status■ Soft Drinks (International):
POKKA Corporation (Singapore) Pte Ltd■ Restaurants (Domestic): POKKA CREATE Co., Ltd.
1. Expand into countries neighboring Singapore¾ Market activation and production capacity expansion measures

2. Bolster sales in existing export
markets¾ Strengthening of alliances withagencies in the Middle East andEuropePOKKA brand green tea-based
drinks have high market sharein Singapore.

1. Accelerate opening of highly profitable outlets: newmarkets, new collaborations
2. Ensure growth potential of existing outlets: effective
renovation
3. Improve speed and quality of
product development
4. Improve and strengthen capabilityof FC head officeOutlets: 170 (as of September 30, 2013)
Kanto 97, Tokai 36
Kansai 28, Kyushu 7, Shikoku 2■ Restaurants (International):
POKKA CORPORATION (Hong Kong)¾ Outlet: 36 in total (as of September 30, 2013)
・Hong Kong 35, Macau 1¾ New opening in Jan-Sep 2013 period
・5 in total: Tonkichi MomijiTei, Mikichi,
Cooper Luwak Art Coffee

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Restaurants
Results highlights
While net sales increased as cumulative sales at existing outlets
exceeded the previous year’s level by 1%, operating income was at thesame level as the previous year due to the significant impact of profit
decline in September, when the business was affected by lower sales
due to bad weather and the cancellation of special events.

Key points in business plan: implementation status

1. Strengthening of brand appeal and new outlet
opening (Japan)¾ Locations opened Jan-Sep(billions of yen)

YoY change
2012 3Q

2013 3Q

Amount%Net sales

19.9

20.2

0.3

1.7%

Operatingincome

0.2

0.2

(0.0)

(17.2%)

New restaurant opening strategy
2013: 9 outlets¾ Synergy with Japanese Alcoholic Beverages: Opening of Yebisu Bar
outlets•

New outlet opened in Kyoto, Kobe Sannomiya and Ochanomizu, bringing
the number of outlets to 12 as of September 30, 2013

¾ Opening of beer garden•

In the first long-term event at Hisaya Odori Koen Park in Nagoya (as apartner of Nagoya municipality parks)“Sakae Fountain Beer Festa 2013” (from May 23 to Sept 23 ）Yebisu Bar Kyoto
Yodobashi

Yebisu Bar Kobe
Sannomiya

Yebisu Bar Ochanomizu

2. Earnings structure reform¾ Locations closed Jan-Sep 2013: 16¾ Locations operating as of September 30, 2013:
186 in Japan, 11 in Singapore

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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Real Estate (1)(billions of yen)

YoY change

Results highlights
2012 3Q

2013 3Q

Amount%Net sales

17.3

16.8

(0.4)

(2.8%)

Operatingincome

7.1

6.7

(0.3)

(5.2%)

Major rental properties inTokyo*s 23 wards

Site area(m2)

Floor area(m2)

Occupancy rate(%)

Yebisu Garden Place *1

56,943

298,007

91%

Maintained high occupancy rates and rent levelsin September on a Seiwa Yebisu Building*single -month basis at major Tokyo properties (table at right)
Yebisu Squarecompared to the 92% average for office buildings in Tokyo’s 5central wards
Shibuya Sakuragaoka
Augmentation of emergency power supply facilities for completion in Squarespring 2014, has been progressing according to the plan,
Sapporo Ginza
renovation of the communal space in the second basement, which Building*is a restaurant floor.

2,617

―

*0%

1,561

9,126

100%

1,200

9,268

100%

40 floors above
ground, 5 below
6 floors above
ground, 1 below
7 floors above
ground, 1 below
10 floors above
ground, 1 below

530

4,232

*79%

10 floors above
ground, 4 below

A stable revenue structure was maintained amid weakeningof rent levels in the Tokyo metropolitan area office leasing
market.
Key points in business plan: implementation status

Boosting the value of existing properties
Yebisu Garden Place¾ Maintenance and improvement of the occupancy rate andachievement of appropriate rent levels••

Redevelopment of the Ginza and Ebisu Areas¾ Redevelopment of Seiwa Yebisu Building*••(As of September 30, 2013)
No. of floors

13 floors above
ground, 1 below
Site areas are taken from the land registry. Floor areas are as per building certification.
Occupancy rates are averages for Jan–Sep 2013.
*1. The number of floors is for the office block only. Occupancyrates are for office areas only.
*2: Figures are for entire property. Sapporo owns 922m2 of the site (sectional ownership) and89.72% of the building (joint management)

Strata Ginza *2

Started redevelopment including expansion of floor area
Making smooth progress towards completion in the autumn of 2014
(tentative name: Sapporo Ebisu Building)

1,117

11,411

100%

For more details about our Real Estate business’s properties, visit the following website:(http:/www.yebisu-gp.jp/business/index.html)¾ Redevelopment Sapporo Ginza Building*•Continuing with assessment , through ongoing discussion with concerned
parties, of redevelopment to include total floor area expansion in
preparation for redevelopment of the Ginza 4-chome area
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Sapporo Ginza
Building(completed 1970)

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Real Estate (2)Overview of Real Estate Business¾ The majority of operating income from the Real Estate business is from real estate leasing.
– The property portfolio largely comprises properties in Tokyo (5 central wards: see previous page).
– Unrealized gain on real estate for lease was ¥125.7 billion as of Dec. 31, 2012.
Balance sheet value at Dec.31, 2012:209.9 billion yen
Fair value at Dec.31,2012:335.6 billion yen

Operating Income
Change(value)Jan-Sep 2013

6.4

6.0

(0.4)

8.6

7.8

(0.8)

Other areas
Real estate leasing
total

0.8

0.8

0.0

1.0

0.9

(0.0)

7.2

4.6

(0.3)

9.6

8.8

(0.8)

Real estate total

−
(0.1)
7.1

−
(0.1)
6.7

−
(0.0)
(0.3)

−
(0.2)
9.3

−
-0.5
8.3

−
(0.2)
(1.0)

Real estate leasing
Tokyo’s 23
wards

Other operations*
Total

Other areas
Real estate leasing
total
Real estate total
Other operations*
Total

FY2013 est.

(billions of yen)*”Other operations” includes back-office operations.
EBITDA = operating income + depreciation and amortization

EBITDA

Real estate leasing
Tokyo’s 23
wards

FY2012

Change(value)Jan-Sep 2012

Change(value)Jan-Sep 2013

9.1

8.5

(0.5)

12.1

11.2

(0.9)

1.3

1.4

0.0

1.7

1.6

(0.0)

10.5

10.0

(0.5)

13.8

12.9

(1.0)

−
0.1
10.6

−
0.1
10.1

−
(0.0)
(0.5)

−
0.1
14.0

−
(0.1)
12.7

−
(0.2)
(1.3)

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

FY2012FY2013 est.

Change(value)Jan-Sep 201226/27

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.

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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