Sapporo Group Business Results Presentation for
FY2012February 12, 2013

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

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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Contents
Sapporo Group Management Plan 2013-2014
1. Overview of 2012 Results
・Progress of Implementation of 2012 Basic Strategies･
Overview of 2012 Results･
Reference: Supplementary Information to 2012 Results
2. Sapporo Group Management Plan 2013-2014･
Management Targets･
Basic Strategies･
Business Plans･
Returning Profits to Shareholders
3. 2012 Financial Results Supplementary Information and 2013 Forecasts(Accompanying document: Supplementary Information to Earnings Report)
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Sapporo Group Management Plan 2013-2014- Establishing the Foundation for Realizing the New Management
Framework and Generating ResultsFebruary 8, 2013

Sapporo Holdings Ltd.

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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1. Overview of 2012 Results

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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Progress of Implementation of 2012 Basic Strategies
We promoted three basic strategies for achieving dramatic growth
Challenge toward growthin all businesses

Creating new opportunities for
growthWe will continue to aggressively
pursue M&As and alliances
both in Japan and overseas

We will leverage the strengths of ourvarious businesses’ brands andmanagement resources to accept
new challenges to beatthe competition

Carrying out growth measures
To realize the fruits of the various
initiatives undertaken in recent years,
we will continue to make forward
investments and take steps tostrengthen the business foundation

Creating new opportunities for growth¾ International Business：¾ Japanese Alcoholic Beverages：¾ On January 31, 2012, we acquired a 15% stake in M’s Beverage ¾ Create a new beer culture and revitalize the market
Co., Ltd., a wholly owned alcoholic beverage distribution subsidiary¾ Established Hyaku-nin Beer Lab, a customer participation beer productsof Maeil Dairies Co., Ltd. for approx. ¥51mn to boost Sapporo’s
development website, using Facebook
brand value and strengthen our product distribution network in• Started Waku Waku Brewery, a website where customers can create oneSouth Korea. *A non-equity method affiliate

of-a-kind original beer products by designing their own labels and choosing¾ On January 31, 2012, we acquired 51% of outstanding shares intheir own combination of beer flavor and bottle color.
Silver Spring Citrus, the largest U.S. maker of private-brand chilleddrinks, from the Toyota Tsusho Group for approx.¥1.8bn to make a • Held the first Japan Beer Certificate Examination (known as Beerken).
full-scale entry into the U.S. beverage business.
• Sales of regional products (i.e. for certain regions only) and products in*Started consolidating the profit/loss items from April
collaboration with specific retailers

Challenge toward growth in all businesses¾ See the segment pages under Supplementary
Information to 2012 Results
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Regional

Specific retailer

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Progress of Implementation of 2012 Basic Strategies
Carrying out growth measures¾ Steps for boosting the value of Yebisu Garden Place•Increased the stake in Yebisu Garden Place to 100% in March 2012; started implementing measures to boost its value
towards its 20th anniversary in 2014.
•Taking into account the anticipated recovery in rent levels from 2013 onwards when excess supply in the real estate rental market
caused by the boom in new office building construction is eliminated, we have embarked on renovation of properties to boost their value
starting this year.
•In addition to improving the convenience of the offices, we will refurbish them with a focus on features including disaster prevention
measures, safety and security and enhanced emergency power supply facilities to ensure business continuity during disasters.
•Refurbish commercial and restaurant facilities to boost the attractiveness of the entire
Ebisu region in addition to that of Yebisu Garden Place.

¾ Preparations for start-up of POKKA SAPPORO FOOD & BEVERAGE LTD. in Jan. 2013
•Announced the new structure and organization in October in addition to thelogo.
•Started the integrated operation of the newcompany from January 2013

Yebisu Garden Place(opened in 1994)

Logo of POKKA SAPPORO
FOOD & BEVERAFE LTD.

¾ Strengthening of the alcoholic beverages and soft drinks business in Southeast Asia
•Alcoholic beverages business: Position Vietnam as the bridgehead of our Southeast Asia strategy and gradually expand intoneighboring countries.
•Soft drinks business: With Pokka Singapore at the center, take measures to gradually boost the presence in surrounding
countries.
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Progress of Implementation of 2012 Basic Strategies

Carrying out growthmeasures¾ Progress in the alcoholic beverages business inVietnam, where we made a full-scale entry•We entered the Vietnamese market at the end of February 2012 and launched full-scale marketing from April. Sales volume
and exports to surrounding countries have been making good progress.
•We started selling beer in kegs so as to spread the beer culture within Vietnam.
•In Vietnam, our products are being delivered to about 1,500 restaurants primarily in Ho Chi Minh as of the end of December andabout 2,000 retail outlets such as CVS and major supermarkets.
•We started exporting to surrounding countries in 2012. As of the end of December, we were exporting to Malaysia, Singapore, Thailand,
Australia, New Zealand, South Korea, Indonesia, Hong Kong, the Philippines and Myanmar. Next, we plan to export to Cambodia.
The 3rd largest market in•With the addition of Cambodia, the Sapporo brand will have a presence in eight out of the10 ASEAN countries.
June, September and December single month index when February
single month sales volume (excl. exports) is set as 100
1,810

1,800
1,500

Changes in beer consumption in Vietnam (unit:
10,000 kiloliters）
300

It is expected to reach the size of theJapanese market by 2020

250

265
230

200

1,200

180

185

2007

2008

160
150

900
600
300

Asia after China and Japan

390

470

141

100

100
50

0
Feb

Jun

Sep

Dec

0
2005

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2006

2009

2010

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Progress of Implementation of 2012 Strategic Investments
Implementation Status of Strategic Investments(incl. ordinary capex)<Acquisition of stake in Silver Springs Citrus>¾ Acquired 51% of outstanding shares in Silver Springs Citrus andmade it a consolidated subsidiary¾ Started consolidating the balance sheet from the end of March andprofit/loss items from April¾ The cost of the share acquisition is approx. ¥1.8 bn¾ Net financial liabilities were approx. ¥0.7 bn
Total investment is approx. ¥2.5 bn<Acquisition of shares in M’s Beverage>¾ Acquired a 15% stake at the end of January (non-equity method
affiliate)
Total investment is approx. ¥50 mn<Acquisition of 15% of trust beneficiary rights in Yebisu Garden
Place>¾ Acquired from the joint holder on March 1 and started to reflect
profit/loss items from March
Total investment is approx. ¥40.5 bn<Capex (on a cash basis)/lease payments>
Consolidated total of approx. ¥17.3 bn¾ Breakdown: Japanese Alcoholic Beverages: ¥3.0 bn; International:¥1.9 bn; Sapporo Beverage: ¥0.1 bn; POKKA Group:¥7.7 bn;
Restaurants:¥0.6 bn; Real Estate:¥1.6 bn; General corporate: ¥2.0
bn, etc.
<Other investments> Consolidated total of approx. ¥5.4 bn¾ Breakdown: Japanese Alcoholic Beverages, POKKA Group, etc.
<Implementation status of strategic investment from Jan to Dec
2012 (incl. ordinary capex)>¾ Approx. ¥65.7 bn (2012 target: . ¥64.0 bn)
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Credit Ratings<Credit rating by JCR>
¾ As of February 8, 2013: A- (stable) rating<Credit rating by R&I>
¾ As of February 8, 2013: BBB+ (stable) rating<Achievement of low-cost finance>¾ In March 2012, issued five-year straight bonds worth ¥10 bn at alow cost.

Direction of Long-term Strategic Investments¾ We will continue to actively carry out strategic investments
for growth.
¾ We expect to make ¥150 bn to ¥200 bn worth of strategic
investments from 2012 to 2016 (basically accumulation of
cash flows from operations).
– Including ordinary capex (worth about half of the strategic
investments)

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Overview of 2012 Results: Special Factors
Breakdown of special factors that do not allow meaningful year on year comparisons between net sales and operating
income for 2012 and a year earlier
See the Supplementary Information to our Earnings Report for factors behind changes resulting from other businessactivities
Net Sales
Operating Income<International>¾ We started consolidating the profit/loss items ofSilver Spring Citrus from April ⇒ approx. +¥7.2 bn<Food & Soft Drinks: POKKA Group>¾ We started adding the profit/loss items from April
2011 and this meant net increase for the Jan -Mar
period ⇒ approx. +¥22.3 bn<Real Estate>¾ Started reflecting the profit/loss items from Marchfor the acquisition of 15% of trust beneficiary rights
for Yebisu Garden Place from the joint holder in thecomplex ⇒ approx. +¥2.0 bn<Total>¾ Approx. +¥31.5 bn<International>¾ We started consolidating the profit/loss items of Silver
Spring Citrus in April ⇒ approx. +¥0.1 bn<Food & Soft Drinks: Sapporo Beverage>¾ In April 2011 we started goodwill amortization for theacquisition of shares from Crescent Partners after it
converted CB holdings, and goodwill amortization was a
net increase in the Jan-Mar period of 2012
¾ ⇒ approx. -¥0.2 bn<Food & Soft Drinks: POKKA Group>¾ Started reflecting the profit/loss items from April 2011,
resulting in an operating loss for the Jan-Mar period of2012 ⇒ approx. -¥0.5 bn¾ Started reflecting the profit/loss items from April 2011and goodwill amortization resulting from the integrationof the POKKA Group was a net increase in the Jan -Mar
period of 2012 ⇒ approx. -¥0.4 bn<Real Estate>¾ Acquired 15% of trust beneficiary rights for Yebisu
Garden Place from the joint holder in the complex andhave been reflecting the profit/loss items from March⇒ approx. +¥1.0 bn<Total>¾ Approx. +-¥0.0 bn
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Overview of 2012 Results¾ Net sales: up YoY
Sales increased markedly for the Group as awhole with increases for Japanese Alcoholic
Beverages and Restaurants, which weredirectly affected by the earthquake, in addition
to the special factors discussed in the previous
slide.
The sales increase for Japanese Alcoholic
Beverages, the first increase in 8 years.

¾ Operating income: down YoY

2011 results

Net income rose ¥2.2 bn YoY as extraordinary
losses were reduced by ¥8.2 bn YoY (mainly an
impairment loss of ¥1.5 bn, a ¥1.0 bn loss due
to asset retirement obligations and a ¥5.4 bn
loss stemming from the disaster in 2011.)

268.1

274.4

6.3

2.3%

International

25.8

36.1

10.2

39.5%

108.0

132.1

24.1

22.3%

32.2
75.8

30.3
101.8

(1.9)
26.0

(5.9)%
34.3%

24.0

25.6

1.5

6.3%

22.4

23.2

0.7

3.3%

0.7

0.8

0.1

15.4%

449.4

492.4

43.0

9.6%

21.9

18.2

(3.6)

(16.8)%

9.3

7.5

(1.7)

(19.2)%

0.3

(0.0)

(0.4)

―

1.4
(1.0)

1.6
(1.7)

0.2
(0.7)

18.3%
―

3.6

0.3

(3.3)

(90.1)%

0.7
2.9
5.7

(0.0)
0.4
3.1

(0.8)
(2.5)
(2.6)

―
(85.9)%(45.7)%

Restaurants

0.2

0.5

0.3

146.0%

Real Estate

8.5

9.3

0.8

9.9%

Other

(0.6)

(0.4)

0.2

―

General corporate

(2.6)

(2.9)

(0.3)

―

18.8

14.4

(4.4)

(23.7)%

Consolidated ordinary income

16.8

13.6

(3.1)

(18.6)%

Consolidated net income

3.1

5.3

2.2

70.4%
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Food & Soft Drinks
Sapporo Beverage
POKKA Group

Restaurants*The 2011 first quarter consolidated net sales figure lacks continuity
with the figure announced last year due to retroactive adjustment of pastConsolidated operating income
years from the first quarter of fiscal 2012.
* POKKA Group’s profit/loss items have been consolidated since thesecond quarter of fiscal 2011.

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

YoY changes(amount, %)(billions of yen)Japanese Alcoholic
Beverages

Real Estate
While operating income showed a YoY 4Q
increase, this was not sufficient to offset the
Otherdecline for the nine-month through 3Q.
For the whole year, while profits increased for Consolidated net sales
Restaurants and Real Estate, overall operating Operating income before GW
income decreased by ¥4.4 bn YoY due toamortization
increased marketing costs compared with theJapanese Alcoholicprevious year in Japanese Alcoholic Beverages
Beverages
and Food & Soft Drinks, reversion to the norm
after the surge in demand in Food & Soft Drinks
International
following the earthquake in 2011, andNorth America
increased investment by International Business
Vietnamfor development of the Vietnam market in
addition to the special factors described in the
Food & Soft Drinks
previous slide.
Sapporo Beverage(Operating income before GW amortization
POKKA Groupdecreased by ¥3.6 bn YoY)
Before GW amortization¾ Net income: up YoY

2012 results

Overview of 2012 Results - Revised Targets vs. Results(billions of yen)Japanese Alcoholic
Beverages(3.0)(1.1)%

37.3

36.1

(1.1)

(3.2)%

128.1

132.1

4.0

3.2%

30.1
98.0

30.3
101.8

0.2
3.8

0.7%
4.0%

Restaurants

24.9

25.6

0.7

2.9%

Real Estate

24.4

23.2

(1.1)

(4.9)%

Other

0.8

0.8

0.0

8.9%

493.0

492.4

(0.5)

(0.1)%

19.9

18.2

(1.6)

(8.1)%

9.0

7.5

(1.4)

(16.4)%

0.0

(0.0)

(0.0)

―

1.8
(1.8)

1.6
(1.7)

(0.1)
0.0

(8.3)%―

Sapporo Beverage
POKKA Group

Business, while managing to increase themarket share with sales of beer products
rising YoY, net sales was short of thetarget as total demand declined during thepeak summer period and December.

Consolidated net sales¾ Operating income: Unachieved

・While operating income rose by about¥2.4bn at the Japanese Alcoholic
Beverages business for 4Q YoY, it was
not sufficient to offset the decline forthe nine-month period through 3Q,
thus falling short of the target.

¾ Although net sales and operating
income were short of the target,
ordinary income exceeded thetarget on lower interest payments
and foreign exchange gains, while
net income also exceeded the target,
thanks to a reduction in loss on
valuation of investment securities.

Vs. Targets(amount,%)

274.4

Food & Soft Drinks

・The Japanese Alcoholic Beverages

2012 results

277.5International¾ Net sales: Unachieved

2012 revised
targets

Operating income before GW
amortization
Japanese Alcoholic
Beverages
International
North America
VietnamFood & Soft Drinks

0.2

0.3

0.1

82.0%

Sapporo Beverage
POKKA Group
Before GW amortization

(0.2)
0.4
2.9

(0.0)
0.4
3.1

0.1
0.0
0.2

―
3.3%
7.5%

Restaurants

0.6

0.5

(0.0)

(10.2)%

Real Estate

9.3

9.3

0.0

1.0%

Other

(0.4)

(0.4)

(0.0)

―

General corporate

(2.7)

(2.9)

(0.2)

―

Consolidated operating income

16.0

14.4

(1.5)

(9.9)%

Consolidated ordinary income

13.0

13.6

0.6

5.3%

Consolidated net income

3.6

5.3

1.7

49.8%
11/47

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Overview of 2012 Results – Management Indices,
Disclosure of Real Estate Leasing Asset Prices Management Indices vs. Targets and Previous Year
Results vs. Targets
2012
Revised targets

2012
Results

2011 vs. 2012 Results

Change2011
Results

2012
Results

ChangeOperating margin(excl. liquor taxes,
beforegoodwill amortization

5.1％

4.8％

(0.3)%

6.5％

4.8％(1.7)%

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

249.0

257.6

8.6

219.1

257.6

38.5

D/E ratio (times)

2.0

1.9

(0.1)

1.8

1.9

0.1

ROE(%)

2.9%
6.1%

4.2%
7.3%

1.4%
1.2%

2.5%
5.1%

4.2%
7.3%

1.8%
2.2%

before gw amortization

Disclosure of real estate leasing assets(As of Dec. 31, 2012)(billion yen)
Carry value on consolidated B/S 209.9
Fair value at end of term

335.6

Difference

125.7

See Earnings Report for further details
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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Reference: Supplementary Information to 2012
Results*For information on each business’s profitability, please also
see the Supplementary Information to our Earnings Report

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13/47

Japanese Alcoholic Beverages (1)(billions of yen)

Results highlights

Year-over-year changes

2011

2012

Amount%Net sales*

268.1

274.4

6.3

2.3%

Operatingincome

9.3

7.5

(1.7)

(19.2)%*Incl. liquor taxes

Net sales increased first time in eight years as sales volumes ofbeer, happoshu and new-genre beer products rose comparedwith the same period a year earlier, exceeding the generaldemand in each quarter, and with increased sales of RTD,
wines, western spirits and shochu.
Operating income declined due to the cost incurred fromaggressive marketing and increased burden of fixed cost during
the down period for the loss caused by the 2011 disaster.

YoY sales volume for Jan-Dec (beer, happoshu, new-genre beer products)

104 ％Key points in business plan: implementation status

103.0

1. Bolster brand strengths of core products¾ Further bolstered brand strength of the three core brands of101
Sapporo Draft Beer Black Label, Yebisu Beer and Mugi to Hopand of Premium Alcohol Free, a non-alcoholic beer-taste
beverage.
¾ While the rebound from the direct impact of the earthquake also
98
contributed, Jan-Dec total shipments of beer, happoshu, andnew-genre beer products were 100.9% compared with the same
period a year earlier, outperforming the 99.2% for generaldemand and increasing the market share, as we focused on thethree core brands.
95¾ With the contribution from Premium Alcohol Free Black, the world’s
first non-alcoholic canned dark beer introduced in May, sales ofPremium Alcohol Free increased 7.3% year over year in the Jan-Dec
period. However, the brand fell short of achieving the target partly
due to new products launched by competitors.
¾ With the contribution from Mugi to Hop Black introduced in March,sales of Mugi to Hop rose 3.2% YoY in the Jan-Dec period,
outperforming the 101% for general demand and increasing themarket share.
¾ We introduced new-genre beer product Hokkaido PREMIUM in July
as a refreshingly flavored product to enhance the lineup.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Sapporo

102.6
100.5

Total demand

102.6
100.9

100.2
98.9

99.2

98.2
96.3

Jan-MarApr-Jun

Jul-Sep

Oct-Dec

Jan-Dec

Re-launch on
Feb 13, 2013

14/47

Japanese Alcoholic Beverages (2)Key points in business plan: implementation status
2. Laying the groundwork for growth in expanding areas
RTD-related actions <Sapporo’s first year of promoting Ready
To Drink products: Triple the sales>¾ While sales for Jan-Dec period significantly exceeded the level
for the same period a year earlier by 68%, this did not meet ourtarget as competition intensified with the introduction of new
products by other companies.
¾ We re-launched existing products and carried out line extension
while expanding offering of trial drinks and ensuring market
penetration in addition to bringing about collaborative synergies
and increased public interest.
¾ As shown below, we actively introduced new products in Oct-Dec:•
Oct 10: Launched Bacardi Apple Mojito•
Nov14: Launched CJ Oishii Makgeoli Yuzu•
Nov 21: Launched Nectar Tsubu-tsubu Cocktail•
Nov 28: Launched TEA’S HI Darjeeling & Muscat

RTD launched in Oct-Dec

Nonalcoholic
RTD

3. Expanding sales of wine, western spirits and shochu

Wine¾ Sales of Japanese wines were same as the previous year, while
imported wines registered significant growth YoY.
¾ Imported wine: Growth in Beringer, Santa Rita and Garcia Carrion¾ Japanese wine: Growth in Grande Polaire

Western Spirits¾ Signed sales agreement with No.1 Korean foods maker CJ (Cheil
Jedang) Group. Launched CJ Bonga Makgeolli in July 2011 in theindustrial-use market. Sales approximately doubled YoY andexceeded target.
¾Entered into alliance with Bacardi Japan, supplier of world No. 1
rum brand, and started sales in October 2011.
•Launched Bacardi Classic Cocktails Mojito, Japan’s first
Mojito base that can be served with soda, in April and achieved
full-year target in three months. The target was revised to
60,000 cases, three times the initial figure, which was alsoachieved.

Shochu¾ Achieved year-over-year sales growth¾ Singly-distilled Waramugi and Karariimo also exceeded
previous year’s figures¾ Strong sales in blended shochus Imo Shochu Kokuimo andMugi Shochu Koimugi¾ Kuroumesyu also contributed to rise in sales

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

15/47

International Business (1)(billions of yen)

Results highlights

Year-over-year changes

Sales increased 39.5% YoY primarily in North America on
the back of gains in local currency terms and the additionof Silver Springs Citrus’s results. Operating income
declined due to the impact of expenses related tocultivating the Vietnamese market.

2011
Net sales

2012

25.8

45

Key points in business plan: implementation status

North America, others

1. North American business growth

Vietnam

0.3
1.4
(1.0)

308.8
278.8
262.4
212.9

221.7

200
150
2007

2008

2009

2010

2011

2012

SLEEMAN(CAN$ millions）

Sapporo UＳＡ: Sales in local currency (Jan-Dec)
55

52.0

45

42.9

53.2

46.9

46.7

2008

2009
2010
USA（US$ millions）

2008

Sapporo USA(U.S.)¾Expanding from the JapaneseAmerican market into wider U.S. andAsian-American markets

2011

2012

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

10.2

39.5%

(0.4)
0.2
(0.7)

−
18.3%
−

46.9

(0.0)
1.6
(1.7)

2009
2010
USA ($ millions)(Jan-Dec)

2011

Since M&A, 6th straight year of
year-on-year volume growth!

Unit sales (YoY)

2011

2012

SLEEMANbrand

109%

105%

Canada total
demandApprox.

Approx.

99%

102%

YoY growth in total sales volume
since 2009, when sales wereaffected by the Lehman crisis
Unit sales (YoY)
2011
2012

(Jan-Dec)

Silver Springs Citrus (U.S.)

41.9

35
2007

SLEEMAN (Canada)

2007

59.9

%

41.9

¾Sales expanded on increased
investment in marketing of premium
brands• Sales growth higher than that for
total demand in Canada

241.7

250

42.9

35

Sleeman: Sales in local currency (Jan-Dec)
300

36.1

55
46.7

OperatingincomeAmount¾Acquired a 51% stake in Silver Springs Citrus, thelargest U.S. market of private-brand chilled drinks• Full-fledged entry into beverages business in
the North American market• Started consolidation of profit/loss items
from April

Sapporo US

110%

101%

U.S. generaldemand forimported beer

Approx. 100%

Approx. 100%

16/47

International Business (2)Key points in business plan: implementation status

2. Expansion in Asian market (incl. Oceania)
Developments in Vietnam¾ Full-fledged entry of locally produced beer in the market
from end of February 2012
¾ Started full-scale marketing in the country including
through billboards and TV commercials
from April 2012
¾ Positioned Vietnam as the bridgehead and are
gradually expanding into ASEAN countries.

Developments in South Korea¾ Strengthened Sapporo brand value and sales structure in
South Korea by acquiring 15% sake in M’s Beverage Co.,
Ltd., a wholly owned liquor sales subsidiary of Maeil
Dairies Co., Ltd. (which has top share in cheese, low-fat
milk, and chilled coffee drinks market), signing theagreement on Jan 31, 2012. A non-equity method affiliate¾ Sales targets: 380,000 cases in 2012: Achieved target with sales of
420,000 cases (1 case = 350ml ×24 bottles)¾ Sales targets: 1.5 million cases in 2015(1 case = 350ml ×24 bottles)¾ Aim to become the No.1 imported brand

Development in Oceania¾ In October 2011, we entered 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-fledged entry from 2012 : aim to be the top Japanesebeer brand¾ Sales targets: 160,000 cases in 2012 :Achieved target of
160,000 cases (1 case = 355ml×24 bottles)

Developments in Singapore¾ Sales targets: 500,000 in 2016
¾Expanding imported beer sales channels in local household (1 case = 355ml ×24 bottles)

market in cooperation with POKKA Corporation¾Sales target: 150,000 cases in 2014 (1 case = 355ml×24 bottles)¾Aim to be the top Japanese beer brand.

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

17/47

Food & Soft Drinks – Sapporo Beverage
Results highlights(billions of yen)

Sales volume declined to 93% of the previous year against ageneral demand rise to103%, partly due to the reversal of thesurge in demand (for Japanese drinking water) following thedisaster in 2011.
*After retroactive
The decline in sales volume was accompanied by a decline
adjustment
in operating income.
Operating income margin (before goodwill amortization) was Net sales
3.0%.
Key points in business plan: implementation status

Strengthening/cultivation of competitive brands¾ Concentrating investment on important categories and brands•Ribbon: -9% YoY growth⇒Raised brand recognition by airing a short animation of
Ribbon-chan on TV.
⇒Carried out a promotion campaign in collaboration with apopular video game to expand sales.
•Gabunomi: -8% YoY growth⇒Carried out a tie-up campaign with a popular cartoon film tobroaden sales channels and enhance market penetration•Gerolsteiner: +10% YoY growth⇒Further promoting trials and building repeat customers¾ Other brands•Oishii Tansansui: +64%
Growth on the back of higher demand for alcohol
consumption at home⇒Continued focus

OperatingincomeBefore GW
amortization

Year-over-year changes
2011

2012

Amount

%

*32.2

30.3

(1.9)

(5.9)%

0.7
1.5

(0.0)
0.9

(0.8)
(0.5)

−
(39.0)%

Collaboration with other companies to bolster core brands¾ In April, re-launched Chosyoku Fruits, a productin collaboration with Kyodo Milk Industry Co., Ltd.
¾ In March, launched Ribbon Napolin Ice, aproduct in collaboration with Akagi Nyugyo Co.,
Ltd., in Hokkaido¾ Presented to mass retailers a collaboration
campaign of Gabunomi and other products with
Kyodo Milk’s Homerum Bar

Synergies with POKKA Corporation¾ Synergies led to cost saving of ¥324 mn in Jan-Dec•Synergies from joint procurement and consigned production

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

18/47

Food & Soft Drinks – POKKA Group (1)Year-over-year change(billions of yen)

Results highlights
Net sales increased partly due to the full-year contribution from theconsolidation, which was implemented in April.
Operating income declined due to higher good will amortization andan operating loss in the first quarter, as well as due to the active
spending for the switch to common Sapporo Group palettes andmarket development.
Key points in business plan: implementation status

Net sales
OperatingincomeBefore GW
amortization

Apr-Dec
2011*

Jan-Dec
2012

75.8

101.8

26.0

34.3%

2.9
4.2

0.4
2.1

(2.5)
(2.0)

(85.9)%(48.1)%

Amount%*Started consolidating POKKA’s profit/loss items from 2011 2Q.

■ Beverages & Food Business (Japan): POKKA Corp. and six group vending machine operators
1. Beverages Business¾ Concentrating investments in core brands
・Kireto Lemon ‥Re-launch of spring , summer products, airing of
new commercials
・Aromax ・・Re-launched all products under the brand・Yasuragi Kibun no Corn-cha ・・Taking on the challenge of
nurturing a new category in the tea beverages market; commercial
being aired
2. Food Business¾ Focused on core and growth brands
・Jikkuri Kotokoto Kongaripan ‥Series completely
revamped
・Pokka Lemon 100 ‥Added new Lemonja designs
・Kantanbimi ‥ Expanded product lineup by launching
Korean seasonings
3. Started Working on Maintenance Plan for
Nagoya Plant¾ Construct new building on the site to manufacture
Pokka Lemon
・Correspond to the growth strategy for the corebusiness of Pokka Lemon 100
・The plant is to start operation in mid 2013
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Synergies with Sapporo Beverage¾ Synergies led to savings of about ¥390 mn in the
Jan-Dec period•Synergies from joint procurement andcommissioned manufacture

19/47

Food & Soft Drinks – POKKA Group (2)Key points in business plan: implementation status■ Beverages & Foods Business (Overseas): POKKA Singapore
1. Expand into Singapore’s neighboring countries¾ Implementing measures to activate markets in Indonesia andMalaysia and increase production capacity
2. Bolster sales in existing markets¾ Strengthening alliances with agencies in Middle East andEuropeGreen Tea boasting the top share(about 70%) in green tea-based
beverages market in Singapore

Exporting products to 60
countries
POKKA ACE (M)
SDN. BHD.
(Malaysia)■ Restaurants Business (Domestic): POKKA CREATE Co., Ltd.
1. Expanded sales via growth at existing stores,
introduction of new seasonal products¾ Outlets: 163 (97 in Kanto, 35 in Chukyo, 24 in
Kansai, 6 in Kyushu, 1 in Shikoku; as ofDecember 31, 2012)¾ Effectively using re-modeling plan
to strengthen brand image
2. Profits up on successful efforts
to lift profit ratio¾ Promoted refurbishment of outlets
with a new brand package¾ Actively introduced new menu
items on a regular basis

POKKA CORPORATION(SINGAPORE)PTE LTD(Singapore)■ Restaurants Business (Overseas)* POKKA CORPORATION(Hong Kong) and POKKA Food (Singapore) Pte. Ltd.
¾ Outlets: 42 in total (as of December 31, 2012)■ Other businesses
・Ice cream business
Foremost Blueseal brand (Okinawa)¾ Opened first company-run outlet in Naha, Okinawa
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

・Kong Kong 30, Singapore 11, Macao 1¾ New outlets opened in Jan-Dec 2012
・Hong Kong: Pokka Café 1, Mikichi 1,
Kurotaki 1
・Singapore: Rive Gauche 2

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Restaurants
Results highlights(billions of yen)

Sales for the Jan-Dec period increased 2.4% YoY at existing
stores in the Restaurant Business, which was directly
affected by the Great East Japan Earthquake in 2011.
In addition to this, operating income improved YoY, on
closure of unprofitable outlets, cost reductions andcontributions from new outlets.
Key points in business plan: implementation status

Year-over-year changes
2011

2012

AmountNet sales

24.0

25.6

1.5

6.3%

Operatingincome

0.2

0.5

0.3

146.0%

1. Positioning for growth
New restaurant opening strategy¾ Synergy with the Japanese Alcoholic Beverage Business:
Opening Yebisu Bar outlets•

Opened new mid-sized Ginza Lion
Opened new outlet in the Ueno Saigo Hall

¾ New business format•••

Ginza 3-chome,
Oshamanbe
pub/restaurant

In addition to two new outlets in Akasaka and Tokyo Station’s
Kurobei Yokocho, the format of the Osaki and Ginza 2-chomeoutlets was changed, increasing the number of Yebisu Bar outlets
to 9 as of the end of December.

¾ Ginza Lion chain expansion••

Ginza YEBISU BAR%

Opened the Kitchen Ginza Lion, a new outlet which specializes inroast beef
Opened Suruga Maru, a seafood and tempura rice bowl shop in a
highway rest area
Opened Ooi Hokkaido Oshamanbe Japanese pub/restaurant
serving seafood from Hokkaido
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

¾ Total of 13 outlets opened from January throughDecember 2012
• All outlets are performing as planned

2. Earnings structure reform¾ Locations closed in the Jan-Dec period: 11¾ Locations operating as of the end of December: 193
21/47

Real Estate (1)(billions of yen)

Year-over-year changes

Results highlights

Despite decline in real estate revenues, sales and income
rose from March onwards as we acquired 15% trust
beneficiary rights in Yebisu Garden Place. Maintaining stablerevenues even as Tokyo office leasing market is affected by
the supply of a large volume of new office buildings.
Key points in business plan: implementation status¾ Maintain and improve occupancy rate and achieve
appropriate rent levels•••

In March, we acquired the 15% trust beneficiary rights fromthe joint holder needed for 100% ownership
Maintained high occupancy rates and rent levels as of theend of December at Yebisu Garden Place and other major
Tokyo properties (table at right) compared to the 91%
average for office buildings in Tokyo’s 5 central wards
Started working to enhance the value by adding emergency
power supply facilities, etc.

Redevelopment of Ginza and Ebisu Areas¾ Redevelopment of Seiwa Yebisu Building

2012

Amount%Net sales

22.4

23.2

0.7

3.3%

Operatingincome

8.5

9.3

0.8

9.9%

Occupancy rates are averages for January–December 2012
Site areas are taken from the land registry. Floor areas are as per building certification.

Boosting value of existing properties
Yebisu Garden Place

2011(As of December 31)

Major rental properties inTokyo’s 23 wards

Site area(m2)

Floor area(m2)

Averageoccupancy rate(%)

Yebisu Garden Place(1)56,943

298,00796%

40 floors aboveground, 5 below

Seiwa Yebisu Building*

2,617

―

*44%

6 floors aboveground, 1 below

Yebisu Square
Shibuya Sakuragaoka
Square

1,561

9,126

94%

7 floors aboveground, 1 below

1,200

9,268

100%

10 floors aboveground, 1 below

Sapporo Ginza Building

530

4,232

96%

10 floors aboveground, 4 below

1,117

11,41199%

13 floors aboveground, 1 below

Strata Ginza (2)No. of floors*1. Figures are for entire property. Number of floors for office wings/buildings only. Occupancy rates are for office areasnly.
o*2: Figures are for entire property. Sapporo owns 922m2 of the site (sectional ownership) and 89.72% of the building (joint
management)•

Redevelopment (including expansion of floor area) has started andwill be completed in the fall of 2014
• All tenants vacated the building in October in line with the rebuilding
plan(*Average occupancy rate down to 44% from 67% in the same
period a year earlier)Seiwa Yebisu
Building(completed 1975)

Sapporo Ginza
Building(Completed 1970)¾ Redevelopment of Sapporo Ginza Building•

We drafted the plan for redevelopment of Ginza 5-chome including
expansion of floor area and began negotiations with involved
parties.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

22/47

Real Estate (2)Overview of Real Estate Business¾Majority of the business’s operating income is from real estate leasing– Property portfolio largely comprises properties in Tokyo 5 central wards; see the previous slide– Unrealized gains on properties for lease as of the end of December 2012 was ¥125.7 billion.

¾In January, we changed the trade name of Yebisu Garden Place Co., Ltd. to Sapporo Real
Estate Co., Ltd. to raise the Sapporo brand value and strengthen Group synergies.
Operating Income

EBITDA(billions of yen)

FY2011
Real estate leasing
Tokyo’s 23
wards
Other areas
Real estate leasing
total
Sales
Other operations*
Total

7.6
0.8
8.5
0.4
(0.3)
8.5

FY2012
8.6
1.0
9.6
−
(0.2)
9.3

* “Other operations” includes back-office operations

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

FY2011

Change
0.9
0.1
1.0
(0.4)
0.1
0.8

(billions of yen)

Real estate leasing
Tokyo’s 23
wards
Other areas
Real estate leasing
total
Sales
Other operations*
Total

FY2012

11.0
1.5
12.6
0.4
(0.0)
12.9

12.1
1.7
13.8
−
0.1
14.0

Change
1.1
0.1
1.2
(0.4)
0.2
1.0

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

23/47

2. Sapporo Group Management Plan
2013-2014

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

24/47

Medium- to Long-Term Strategy

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

25/47

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

amortization)◆ Group strategies
1. Concentrate resources on creation of high -value-added
products and services
2. Engage in strategic alliances aimed at building competitive
advantage and expanding business3. Actively expand overseas operations
4. Expand group synergies on the strategic and operational fronts

Food value creation
2007

Creating comfortablesurroundings(Announced October 2007)

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

26/47

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

Food value creation
Japanese Alcoholic
Beverages

Food & Soft Drinks

The core domain driving the Group’s
great dynamic growth

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Real Estate

Creating
comfortablesurroundings

The business domain expected tocontribute stable profits backed byprime properties

27/47

2013-2014 Management Targets

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

28/47

Position of Sapporo Group Management Plan 2013-2014
Four years are left until 2016. We position 2013 and 2014 as a crucial period in building
the foundation for achieving the plan and drive forward initiatives for further improving
our corporate value under the new group management structure, also with an eye on
achieving various goals ahead of schedule.

Building foundation andgenerating results
Build foundationand generate resultswith the new groupmanagement structure
for dynamic growth

Dynamic growthIII. Creating new opportunities for growth

II. Carrying out growth measures

I. Challenge toward growth in all businesses

2013

2014

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

2015

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

29/47

2013-2014 Management Targets
Consolidated targets
2006 results2012 results2013 targets

2014 targets

2016 targets

Consolidated net sales*incl. liquor tax¥435.0 bn¥492.4 bn¥512.0 bn¥533.0 bn¥600.0 bn(excl. liquor tax)

¥294.0 bn¥379.7 bn¥397.3 bn¥416.0 bn¥450.0 bn

Consolidated operating
income¥8.6 bn¥14.4 bn

¥15.3 bn

¥17.8 bn

(before goodwill
amortization)
Consolidated ordinary
incomeConsolidated net
incomeConsolidated operating
margin*excl. liquor tax(before goodwill
amortization)¥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%

4.8%

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: 2012-2013: US$ = ¥85, CAN$ = ¥83*The 2014 targets above do not reflect the impact of tax increases, as there is uncertainty surrounding future direction of onsumptionctax.

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

30/47

2013-2014 Management Targets by Segment
Targets
Japanese Alcoholic Beverages
International BusinessNet sales

Food & Soft Drinks
Restaurants
Real Estate
Other
Corporate and intercompany
eliminations
Consolidated total

Operating incom eJapanese Alcoholic Beverages
International Business
Food & Soft Drinks
Restaurants
Real Estate
Other
Corporate and intercompany
eliminations
Consolidated total
Consolidated total(before goodwill amortization)2012 results2013 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 bn¥7.5 bn(¥0.0 bn)¥0.3 bn¥0.5 bn¥9.3 bn(¥0.4 bn)

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

¥533.0 bn¥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 bn

¥19.2 bn

¥21.6 bn

*Assumed exchange rates: 2012-2013: US$ = ¥85, CAN$ = ¥83* SAPPORO LOGISTIC SYSTEMS CO., LTD., previously accounted for in Japanese Alcoholic Beverages, and POKKA Logistics Co., Ltd. , previously accounted for in Food & Soft Drinks were moved to
Others from FY2013. Also, Pokka Food (Singapore) Pte. Ltd. was moved from Food & Soft Drinks to Restaurants. Due to these fa ctors, the figures under 2012 results have been retroactively adjusted .
*The 2014 targets above do not reflect the impact of tax increases, as there is uncertainty surrounding future direction of onsumptionctax.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

31/47

2013-2014 Basic Strategies

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

32/47

Basic Strategies for Promoting Dynamic Growth
I. Challenges toward growth in all businesses★While leveraging the strengths of each business’s brands andmanagement resources, we will accept new challenges tobeat the competition in all of our businesses.
II. Carrying out growth measures★To realize the fruits of the initiatives undertaken by the Groupin recent years, we will continue to make forward investments andtake other steps to strengthen our foundations.
III. Creating new opportunities for growth★We will continue to aggressively pursue attractive M&A deals andalliances, both in Japan and overseas.
*Details of each strategy will be discussed
under business plans by each segment.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

33/47

Strategic Investment
Basic concept of strategic investment◇We will continue to pursue active strategic investments aimed at further
developing the Sapporo Group.
◇We envisage strategic investments worth ¥150 billion to ¥200 billion from 2012
through 2016. These investments will generally be made within the scope ofoperating cash flows.
◇For FY2013, we plan to make strategic investments of approximately ¥28 billion.
*Strategic investments includes ordinary capex.

<FY2013 strategic investment> *Projects that have been decided as of now
・Investment for raising the value of Yebisu Garden Place complex and rebuilding Seiwa Yebisu
Building
・Capital investment in the Japanese alcoholic beverage and foods & soft drinks businesses aimed atfurther improving efficiency
・Openings of new restaurants, etc. in Japan and abroad
Yebisu Garden Place
CAFE de CRIE

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

*Drawing of how Seiwa
Yebisu Building will look(post reconstruction)

YEBISU BAR

34/47

Overall Group Strategy

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

35/47

Overall Group Strategy
1. Further promotion of efficiency in Group Management
As the size of the Group expands, we will further
concentrate common operations on SGM, a functional
support company.

Holding company/Group headquarters
Sapporo Holdings Ltd.

Functional company

Sapporo Group Management LTD.

Sapporo Breweries Ltd.
Sapporo International Inc.
Operating companies

POKKA SAPPORO FOOD & BEVERAGE LTD.

Operations started
in January 2013

Sapporo Lion Limited
Sapporo Real Estate Co., Ltd.

2. Initiatives for enhancing Group brandWe will implement Group-wide initiatives for increasing the no. of Sapporo Group fans primarily inthe areas where we can leverage the Group’s strengths.

3. Strengthening development of Group human resources
We will develop human resources so as to strengthen abilities to implement growth strategy andrespond to changes.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

36/47

Business Plans

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

37/47

Japanese Alcoholic Beverages
We are pursuing the dual strategies of “Growthin the beer-taste market” and “Growth as acomprehensive alcoholic beverage enterprise,”
under which we aim to display to the markets
the qualities unique to the Sapporo brand whilefurther enhancing profitability, and raising
corporate value and brand value.

(billions of yen)

Quantitative
targets

2012 results2013 targets

2014 targets

Net sales

269.9

275.2

283.5

Operating income

7.5

9.0

9.0

Key Points in Management Plan 2013-2014
1. Bolster brand strength by focusing management resources on the core beer -taste products
Our beer business will continue to focus on its three core brands - Yebisu, Sapporo Draft Beer
Black Label, and Mugi to Hop - while also devoting resources to enhance the brand image of
Sapporo Premium Alcohol Free to be re -launched in February this year in the nonalcoholicbeer beverage market.

Campaign Slogan
Bringing more cheer to your ‘Cheers’!

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

38/47

Japanese Alcoholic Beverages
Key Points in Management Plan 2013-2014 (cont.)
2. Revitalize beer market and disseminate information
In a bid to revitalize the beer market and enhance information
dissemination, we, as an organization that creates beer
culture, are holding the Japan Beer Certificate Examination,
and also hosting the Hyaku -nin Beer Lab and Hokkaido Likers
aimed at directly communicating with customers via Facebook.
We are also offering the Waku Waku Brewery service, making
a dream come true for our customers, by enabling them tocustomize their beer.

Hyaku-nin Beer Lab（facebook）
Japan Beer Certificate
Examination
Waku Waku
Brewery

3. Growth as a comprehensive alcoholic beverage enterprise
We aim to grow as a comprehensive alcoholic beverage
enterprise and pursue growth of wine, western spirits,
shochu and umeshu, and RTD products as a stable sourceof profits behind beer products.

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

39/47

International Business(billions of yen)

In North America, we will accelerate thegrowth of the business by capitalizing on its
strengths in the premium beer category andaim to boost sales by actively engaging in
growth markets in Asia and elsewhere. We
also will promote expansion of businesses
other than alcoholic beverages.

Quantitative
targets

2012 results2013 targets

2014 targets

Net sales

36.1

43.3

46.4

Operating income

(0.0)

0.0

1.1

Key Points in Management Plan 2013-2014
1. Business strategy in North America
・ In Canada, SLEEMAN BREWERIES will continue to spend
aggressively on marketing as it seeks to maintain and enhance thevalue of its core premium brands. Including sales of its growing value
brands, the company aims to achieve unit sales growth that exceeds
total demand growth.
・ In the United States, Sapporo USA also aims for unit sales growth inexcess of total demand growth. While continuing to target the Japanese American market segment, Sapporo USA will redouble its efforts tostrengthen our presence in the wider Asian -American and general
population sections of the US beer market.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

40/47

International Business
Key Points in Management Plan 2013-2014 (cont.)
2. Expansion in Asia and Oceania
・ We aim to boost sales by actively engaging in growth markets inSoutheast Asia and elsewhere while keeping an eye on opportunities totap into new markets as we strengthen the foundations of ourInternational Business segment and expand its operations.
・ In particular, we will continue with full -scale marketing efforts in Vietnam
to quickly establish and expand our Sapporo brand in that market. In
addition we will extend our sales activities, from the current focus on the
Ho Chi Min area to the Northern part of the country, including Hanoi.
・ To strengthen sales, we will utilize the 15% equity stake we acquired in
January 2012 in a company established by our local partner, Maeil Dairies
Co., Ltd. in South Korea and leverage our brewing and sales licensing
agreement with Australia’s Coopers Brewery in Oceania.

3. Expansion of business domain
We will leverage the strong business base of Silver Springs Citrus,
Inc., in which we acquired an equity stake in January 2012, to
expand our soft drinks business in the North American market.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Silver Springs Citrus, Inc.（USA)41/47

Food & Soft Drinks(billions of yen)

We will achieve complete integration of
POKKA SAPPORO FOOD & BEVERAGE
LTD., which commenced its business inJanuary 2013, and strongly pursue synergies
to grow the business into a third stable sourceof profits for the Group management.

Quantitative
targets

2012 results2013 targets

2014 targets

Net sales

129.0

136.5

145.5

Operating income

0.3

1.0

2.7

Key Points in Management Plan 2013-2014
・With the integration, the segment’s marketing division reviewed
its growth strategies and will develop business in five categories:
beverage brands, overseas brands, lemon & natural foods, soups & related foods, andcommercial-use products. We will expand the business with the aim of achieving 170.0 billion
yen in net sales and 8.5 billion yen in operating income before goodwill amortization in 2016,
which is the final year of the New Management Framework.
・We plan to concentrate marketing expenditures and resources on such core domestic andoverseas beverage brands as Gerolsteiner, Aromax, Ribbon, and Gabunomi, new brands
including Yasuragi Kibun no Corn-Cha tea drink, as well as primarily Kireto Lemon and POKKA
Lemon 100 products in the lemon & natural foods category.
・ We will increase the production capacity of our overseas soft drinks business to build afoundation for further growth.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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Restaurants
As the operating company engaged inrealizing both “Food value creation” and“Creating comfortable surroundings,” we aim
to expand sales by increasing customer
satisfaction through promotion ofdifferentiation strategies including bolstering
the brand attractiveness and opening newrestaurants.

(billions of yen)

Quantitative
targets

2012 results2013 targets

2014 targets

Net sales

26.6

26.8

28.2

Operating income

0.5

0.8

1.0

Key Points in Management Plan 2013-2014
・We will improve value and capitalize on differential advantage in the market
by enhancing our Lion brand through offering of high quality draft beer fromkegs, which is the biggest added value.
・We will actively expand business with focus on strong YEBISU BAR andsmall and medium-sized Ginza Lion restaurants. We will also pursue
development of a restaurant format that would lead to new openings
Ginza Lion
following YEBISU BAR and Ginza Lion, with the aim of opening about 15 to Marunouchi Center Building restaurant
20 outlets totaling around 700 tsubo ( approx.2,314 square meters)
・We will improve profitability through measures such as cost reduction
through centralized purchasing utilizing center -based distribution and thelowering of costs for opening restaurants by standardizing their interiors.
・We transferred Pokka Food Singapore, which was part of the Food & Soft
Drinks business until last year, to the Restaurant business in January sothat Sapporo Lion could operate the restaurant business in Singapore. Withan eye on the international expansion of beer hall business, we will drive
forward efforts to strengthen the revenue base of overseas restaurants and
YEBISU BAR
Kyoto Yodobashirestaurant
conduct field studies.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

43/47

Real Estate(billions of yen)

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

Quantitative
targets

2012 results2013 targets

2014 targets

Net sales

23.2

23.6

22.4

Operating income

9.3

8.3

7.3

・We will continue to work on improving occupancy rates and rent
levels. At Yebisu Garden Place, our core facility which willcelebrate its 20th anniversary in 2014, we will enhance BCP(business continuity plan) readiness through measures including
installation of additional emergency power -generation facilities
and refurbishment of commercial floors to boost its asset value
through further strengthening of brand attractiveness andimproving convenience of the entire facility.
・We will also steadily implement work on the reconstruction of the
Seiwa Yebisu Building, which will be the revelopment in the Ebisu
area, while driving forward the discussion for re -development of
Sapporo Ginza Building located at the Ginza 4 -chome intersection
including an increase in its floor space.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

Yebisu Garden Place
44/47*Drawing of how Seiwa Yebisu Building

will look (post reconstruction )Key Points in Management Plan 2013-2014

Returning Profits to Shareholders

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Returning Profits to Shareholders
Basic Policy¾Providing fair returns to our shareholders is a key management policy of
our Group. Our basic policy is to pay stable dividends to the extent
permitted by our operating performance and financial condition.
We also aim to maximize corporate value by internally retaining funds tostrengthen our financial base and strategically invest in growthbusinesses in accord with our Management Plan.
Dividend Policy¾We will pay a dividend of ¥7 per share from retained earnings for the year
ended December 31, 2012. For 2013, we plan to pay annual dividends of¥7 per share once again by enhancing earnings through steady
implementation of our Management Plan while taking into accountreturning profits to shareholders and internally retaining funds tostrengthen our financial base and make future strategic investments.
Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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To make people’s lives richer
and more enjoyable

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

Copyright, 2013 SAPPORO HOLDINGS LTD. All rights reserved.

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