2011
Sapporo Group Business Results Presentation
for the Six Months ended June 30, 2011

August 1, 2011

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

Copyright, 2011SAPPORO HOLDINGS LTD. All rights reserved.

1/27

Contents

1． Overview of First-Half 2011 Business Results
2． Operating Results by Segment
3. Growth Strategies and Future Policies
4. 2011 Full-Year Earnings Forecasts※These materials contain forward-looking statements that are based on information available when the materials were prepared and are subject to risks
and uncertainties. Actual performance may differ materially from the future outlook described for various reasons.

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

2/27

1.
1.Overview
Overviewof
ofFirst-Half
First-Half2011
2011BusinessBusinessResults
Results

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

3/27

Overview of First-Half 2011 Results – Consolidated
1H sales rose sharply as gains at the Soft Drinks Business and the consolidation of the POKKA Group compensated for
declines at the Japanese Alcoholic Beverage and Restaurants businesses, partially due to impact of the Great East Japan
Earthquake.
Operating income rose on cost reductions in all segments and contributions from the POKKA Group and the real estatebusiness.
1H extraordinary losses included ¥1.0 bn related to asset retirement obligations and ¥4.6 bn in disaster-related losses.
1H net loss consequently widened by 2.2 bn vs. the year-earlier.

(billions of yen, except percentages)*Additional POKKA CORPORATION shares acquired on March 29, 2011.
Income statement items consolidated from Q2.

2010

2011

Year-over-year changes

Amount%Consolidated net
sales

177.1

194.4

17.2

9.8%

Consolidated
operating income

1.2

3.0

1.7

149.2%

Consolidated
ordinary income

0.4

2.0

1.5

375.1%

Consolidated net
income

（0.6）

（2.9）

(2.2)

―

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

4/27

Overview of First-Half 2011 Results – By Segment
Excluding the Restaurants Business, which was hurt by the disaster, and the International Alcoholic Beverages
Business, which made a ¥0.4 bn investment in its Vietnam operations during the term, all other segments
posted YoY gains. Income gains were supported by cost cuts in all segments and contributions from the
POKKA Group and the real estate business.
OperatingOperatingIncome
Income(billions of yen,
exceptpercentages)

Year-over-year changes
2010Japanese Alcoholic
Beverages

2011

Amount

%

（0.１）

0.0

0.2

―

(0.1)
（0.0）
（0.1）

(0.2)
0.2
（0.4）

(0.1)
0.2
（0.3）

―
―
―

Soft Drinks

0.4

0.5

0.1

27.1%

POKKA Group

―

0.7

0.7

―

Restaurants

（0.4)

(0.6)

(0.2)

―

Real Estate

3.5

4.2

0.7

21.1%

Other

(0.4）

(0.3)

0.0

―

General corporate

(1.6)

(1.3)

0.2

―

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.
Consolidated
1.2
operating income

3.0

1.7

149.2%

International
Alcoholic
Beverages-North America, other-Vietnam

5/27

Overview of First-Half 2011 Results –Trends–
Sharp gains in both operating and ordinary income. Earnings remain on growthtrajectory, with surplus achieved in 1H for fourth straight year.
TrendsTrendsfor
forOperating
Operatingand
andOrdinary
OrdinaryIncome
Incomebillions of yen
3.0

2007

2008※12009※2

2010※3

2011※43.0

2011 initial plan※5

2.0
2.0

1.7
1.3

1.1
1.0

1.2
0.5

0.4
0.1

0.0

-0.7

-1.0
-1.2
-2.0

-3.0

-2.8

Ú3: Depreciation of new sales andlogistics system from 2010 led to¥1.0 billion cost increase in 2010

Ú1: Sold 15% co-ownershipstake in Yebisu GardenPlaceÚ 2: ¥1.2 billion increase in cost burden in2009 owing to accounting changes from
2009

Operating income

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

Ú5: As announced in February 2011
(before June revision factoring in addition of
POKKA Group)Ú4: Consolidation of POKKA Group
added ¥0.7 bn to operating income

Ordinary income

6/27

Overview of First-Quarter 2011 Results –Earthquake’s Impact
Breakdown
Breakdownof
of¥4.6¥4.6bnbnininquake-related
quake-related
extraordinary
lossestaken
extraordinary losses takenin
in1H
1H※Reference※Reference
Breakdown
Breakdownof
of¥5
¥5bn
bnin
inquake-related
quake-relatedextraordinary
extraordinary
lossestobetaken
during2011
losses to be taken during 2011

¾ Fixed asset disposals and inventory losses¾ Fixed asset disposals and inventory losses• ¥0.9 bn¾ Costs of restoring assets to original state• ¥1.2 bn¾ Costs of restoring assets to original state• ¥2.0 bn¾ Fixed costs incurred during work stoppages• ¥2.０ bn¾ Fixed costs incurred during work stoppages• ¥1.5 bn¾ Other disaster-related expenditures• ¥1.４ bn¾ Other disaster-related expenditures• ¥0.2 bn• ¥0.４ bn

DamagesDamagesandandcurrent
currentstatus
statusof
ofmainmainproduction
productionfacilities
facilities

Restoration status¾ Chiba Brewery• Packaging line resumed partial operation on March 28• Brewing process completely reinstated on April 25¾ Sendai Brewery• Packaging line resumed partial
operation on May 2• All processes resumed on May 19

We are now prepared to meet peak season demand for beer
without trouble, including necessary responses to power
shortages.
Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

7/27

2.
2. Operating
OperatingResults
Resultsby
bySegment
Segment※Please refer to the Supplementary Information for more details on each business’s profitability

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

8/27

1H Results: Japanese Alcoholic Beverage Business (1)(billions of yen except
percentages)

Results
Resultshighlights
highlights

Sales down on Earthquake impact.
Operating income improves by ¥0.2 bn onlower capital investment and other cost
reductions
Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
status
1. Bolster brand strength by focusing on core products

Year-over-year changes

2010

2011

Amount%Net sales

125.9

118.2

(7.7)

(6.2)%

Operatingincome

(0.1)

0.0

0.2

―

2. Positioning for growth in expandingareas
Non-alcoholic beer market initiatives¾ Bolstering brand strength by strategically concentrating resources ¾ Mar 16: launched Premium Alcohol Free
on Yebisu Beer, Sapporo Beer Black Label, and Mugi to Hop• Unit sales exceeded plan despite self-restraint on¾ By holding back on new product launches, and instead focusing
advertising after earthquake; doubled annual sales
on 3 core brands, as we also did in 2010, we achieved atarget to 1.2 million cases
turnaround in core brand sales volume from April , however 1H¾ Surpassed 0.6 million cases in July
total shipments still fell short of the industry-wide YoY growth for
all categories.
¾ See slide 10 for 1H sales trends for core brands

Low-alcohol beer segment initiatives¾ Feb: Launched limited-quantity Sapporo Nectar Creamy Peachcocktail-style drink¾ April: Released new, improved Sapporo Nectar Sour Sparkling
Peach¾ May 11: Launched Triangle Ginger Highball (postponed fromoriginal launch date of Mar. 23 owing to earthquake)

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

9/27

1H Results: Japanese Alcoholic Beverage Business (2)Announcements
Announcementsin
in1H
1Hof
ofnew
newmoves
movestoward
towardgrowth
growthininexpandingareas
expanding areas

Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
status

3. Strengthening operating base

¾ Signed sales agreement with major Korean foods maker CJGroup Commercial sales of CJ Bonga Maccori launched from Jul
13

Cost structure reforms¾ Implementing management-driven projects targeted at
reducing costs by ¥3.0 bn from 2011 to 2013

• Not included in 1H results¾ Bringing cost-cutting targets forward owing to quake’s impact

ImpactImpactof
ofGreat
GreatEast
EastJapan
JapanEarthquake;
Earthquake;status
statusofofrestoration
efforts
restoration efforts¾ Sendai and Chiba breweries: operations halted• Full ops restored as of Apr 25 at Chiba
and May 19 at Sendai¾ Entered into alliance with Bacardi Japan, supplier of many world
No. 1 brands; Will begin sales of following brands from Oct 1•Sales of 90 items across 29 brands•Expand western spirits into earnings pillar equal towine/shochu•2016 western spirit sales target: ¥10.0 billion•Not included in 1H results

BacardiBombay Sapphire

Gray Goose

Martini

Dewar’
Dewar’s

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

America’s No. 1
scotch whisky onvolume/value basis¾ Supply shortages forced focus on own-brands•Prioritized supply of core brands Yebisu Beer,
Sapporo Black Label, and Mugi to Hop• Suspended product sales resumed as of Aug 1¾ Total “Disaster-related losses” booked in 1H: ¥4.2 bn,
including fixed assets, inventory losses, fixed costs
during work stoppages
World’s No. 1 rum※ Full-year estimate: ¥4.6 bnbrand onvolume/value basis

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

World’s No. 1
gin brand onvalue basis

World’s No. 1
super premium
vodka onvolume/value basis

10/27

1H Results: Japanese Alcoholic Beverage Business (3)Shipment growth at core brands Yebisu, Sapporo Draft Beer Black Label and Mugi to Hop has beaten trend
for total demand since April but concentration on core brands following earthquake has resulted in
shipments of Sapporo beer, happoshu, and new-genre beer lagging YoY growth in aggregate demand forthree categories in Jan-Jun.
Sapporo Draft Beer Black Label—monthly unit sales growth in 2011 (YoY)

Yebisu Gold Label—monthly unit sales growth in 2011 (YoY)
115％

Yebisu Gold

105％

Black label

Total beer demand

Total beer demand

101.3

110.2

99.4

99.2

105.5
105

101.7

94.9

99.4
94.9

93.9

95

93.9

90.5

90.6
89.4

90.5

89.4

94.9

94.4

95

98.6

88.2
85

Jan-Mar total

April

May

June

Jan-Jun total

85

Jan-Mar total

Mugi to Hop—monthly unit sales growth in 2011 (YoY)％

Mugi to Hop

117.6

April

May

June

Jan-Jun total

New genre total demand

115.9

Total
Totalshipments
shipmentsof
ofbeer,beer,happoshu,
happoshu,andandnew-genre
new-genrebeer
beer

115

100

108.3

％

SapporoTotal demand

104.8
105

102.8 100.9
98.1

99.5

95.1

94.8

94.3

95

93.1
91.4

94.3

95

90

90.5

85

89.1

85

Jan-Mar total

April

May

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

June

Jan-Jun total

Jan-March total

April June total

Jan-June total

11/27

1H Results: International Alcoholic Beverages (1)(billions of yen, except
percentages)

Results
Resultshighlights
highlights

Yen appreciation wiped out strong gains in local
currency terms, especially in North America,
keeping segment sales flat YoY in yen terms.

Year-over-year changes
2010

1. Growth of North American business
130

12.4

(0.0)

(0.3)%

income

(0.1)
（0.0）
（0.1）

(0.2)
0.2
(0.4）

(0.1)
0.2
（0.3）

－
－
－

102.8

Sleeman (Canada)

104.6

100
2007

2008

2009

2010

2011

Sleeman (C$ millions)30
25-North America,
other-Vietnam

127.4

114.7

115

27.8

21.7

24.7

23.5
20.8

20
15
2007

2008

2009

2010

2011

USA ($ millions)

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

%

12.4

Sales in local currency (Jan-Jun)
123.6

AmountNet sales

Operating loss increased by ¥0.1 bn on a ¥0.4 bn
Operatinginvestment in Vietnam business.
Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
status

2011¾ Sales expanded on increased
investment in marketing of premium
brands• Sales growth higher than that for
total demand in Canada

Sapporo USA¾ Expanding from JapaneseAmerican market base into wider
US and Asian-American markets• Over 30% growth in AsianAmerican market

5th straight year of Year-on-year volume（Jan-Jun）
growthYear-on-yearsales volume

2010

2011

Sleeman brand

106%

105%

Total Canadiandemand99%

97%（Jan-Jun）

Continues to outperform total demand forimported beers in US

Year-on-yearsales volume

2010

2011

ＵＳＡ companies

120%

109%

Total US Demandfor beer imported
beer

96%

108%

12/27

1H Results: International Alcoholic Beverages (2)Key
Keypoint
pointininbusinessbusinessplan:
plan:implementation
implementationstatus
statusExpansion in Asian market (incl. Oceania)
Developments in Vietnam¾ Plant construction proceeding smoothly toward
planned start of operation in autumn 2011
¾ Putting together production system, marketingstrategy and supply network in preparation for local
beer production and sales by end of year

Developments in Singapore¾ Expanding imported beer sales in local householdmarket in cooperation withPOKKA CORPORATION.
(POKKA has top share in local tea-based drink market¾ Sales of Imported Sapporo beer up 10% Y on Y

Developments in South Korea¾ Started sales of imported beer to household andcommercial markets with cooperation of partner Maeil
Diaries Co., Ltd. (Maeil has top shares in cheese, lowfat milk, and chilled drinks)

Developments in Oceania¾ Will enter Australian/New Zealand premium beermarket from October via licensing agreementwith Coopers Brewery Ltd.(not included in 1H results)(Coopers is No.3 in Australia’s beer market, No. 2 inpremium beer market with 17.3% share)

Vietnam plant under construction (June 29)
Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

13/27

1H Results: Soft Drinks(billions of yen, except
percentages)

Results
Resultshighlights
highlights
Achieved large YoY sales increase in 1H despite impactof earthquake and flat industrywide demand

Year-over-year changes
2010Soft drinks monthly unit sales growth in 2011 (YoY)
115

％

115

SapporoTotal demand

114

111

110
107
105

103
101

102

102

102

2011

Amount

%

Sales

14.5

17.6

3.0

21.1%

Operating inc
before GW
amortization

0.4
0.4

0.5
0.7

0.1
0.3

27.1%
92.3%

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

ImpactImpactof
ofGreat
GreatEast
EastJapan
JapanEarthquake;
Earthquake;status
statusof
ofrestoration
restoration
efforts
efforts
95

Jan-Mar total

April

May

June

Jan-Jun total

Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
statusBrand strengthening/cultivation¾ Concentrate marketing investment and sales effort oncore brands¾ 1H disaster-related losses: ¥100 million
Inventory losses, asset disposal costs, fixed costs during work
stoppages, etc.
*Forecast for the year: ¥90 million¾ Supply shortages forced us to focus on a few core brands anddelay new product launches•Planned serial resumption•Gerolsteiner: 17％ YoY growth¾ Rising demand for mineral water, unsweetened beverages• Gabunomi: 3% YoY growth

Synergies
Synergieswith
withKyodo
KyodoMilk
MilkIndustry
IndustryCo.,Ltd.
Co.,Ltd.

•Ribbon: Same as a year-earlier¾ Creation of new value propositions• Oishii Tansansui, Sonomama Zukuri
Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

¾ Released first collaborative product, Chousyoku Fruits, in April• Quake delays release of new Ribbon-chan package scheduled
for March

14/27

POKKA CORPORATION 1H results（1）newly consolidated(billions of yen,
except percentages)

Results
Resultshighlights
highlights
New consolidation makes previous year comparisons meaningless, but acomparison based on figures below shows POKKA sales up by ¥0.4 billion asrising demand for Domestic Beverages and Foods Business’s lemon based
products made up for sales decline at the Overseas Beverages and Foods
business, with a negative calendar effect from a shift in demand to before
Singapore’s lunar new year celebrations. (POKKA Singapore’s fiscal year ends inJanuary. Feb-Apr results were consolidated, but the pre-lunar new year demandcame in January this year, as opposed to February in 2010.)

Ref:
Ref:Apr-Jun
Apr-Junsegment
segmentsales
salesandandYoY
YoYgrowth
growth(beforeintergroupeliminations)(before intergroup eliminations)※Intergroup eliminations for Apr-Jun total ¥0.6 billion.

Net sales
Operating inc
beforegoodwill
amortization

2010

2011

Amount

―

24.0

24.0

―

―

0.7
1.0

0.7
1.0

―
―

―

%

*Profit/loss item consolidated after 1H of fiscal year. 2011: Apr-June(billions of yen,
except percentages)

2010Year-over-year changes

2011Year-over-year changes
Amount%Japanese Alcoholic
Beverages

18.1

18.6

0.4

2.7%

International Alcoholic
Beverages

2.7

2.4

(0.3)

(11.9)%

Restaurants（domestic）

1.3

1.4

0.0

6.6%

Restaurants（overseas）

1.0

1.1

0.1

10.5%

Other

2.2

2.3

0.1

5.0%

POKKA companies

(1.3)

(1.4)

(0.0)

－

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved. 24.2
Total

※24.6

0.4

15/27
1.7%

POKKA CORPORATION 1H results（2）newly consolidated
Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
statusBeverages & Foods Business (Japan): POKKA Corp.
１．Beverages Business

Beverages & Foods Business (Japan): 6 vending
machine operators¾ Concentrating investments in core brands
Kireto Lemon‥10th anniversary sales campaign‥ Introduced Kireto Lemon Soukai Sparkling
Canned coffee sales supported by promotional cans

Dragonball promotional cans

２．Food Business¾ Concentrating investments in growth products
Invested in TV commercials for Kantanbimi brandof Korean soups¾ POKKA Lemon 100
marketing as a drink to ‘take in’ the morning
３．Cost-cutting efforts¾ Lowered COGS by using a competitive procurement
process, reduced fixed expenses
ImpactImpactof
ofGreat
GreatEast
EastJapan
JapanEarthquake
Earthquake(Apr-Jun);(Apr-Jun);statusofrestoration
efforts
status of restoration efforts
・Damage at Gunma Plant’s automated warehouse
Operations in Apr-Jun large returned to pre-quake levels
Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

¾ Halt in supply of ingredients and materials forced cancellation ofsome product launches¾ “Disaster-related losses” booked in Apr–Jun: ¥30 million, includes
inventory losses, fixed costs during work stoppages※ Full-year estimate: ¥50 million

16/27

POKKA CORPORATION 1H results（3）newly
consolidated
Key
Keypoints
pointsin
inbusinessbusinessplan:
plan:implementation
implementationstatus
statusBeverages & Foods Business (Overseas): POKKA Singapore

Restaurants Business (Domestic): POKKA CREATE Co.,Ltd.

Shift in lunar new year led to quiet month in February

１．Expand sales via growth at existing stores and chain expansion

Demand picked up from March but Feb-Apr sales were down

¾ Locations： １５８ (103 in Kanto, 32 in Tokai, 20 in Kansai, and 3
in Kyushu (as of July 2011)

１．Increase production capacity¾ Raised in-house production ratio, boosted efficiency¾ Expansion plans ＝15 outlets a year (4 directly run/11
franchises)

２．Strengthened ＳＣＭ¾ Effectively using remodeling plan to strengthening brand image¾ Lowered distribution andwarehousing costs

２．Profits up on successful efforts tolift profit ratio¾ Reduced inventories

Exporting products to
60 countries

High share of Singapore’s green
tea market

POKKA ACE (M)
SDN. BHD.
（Malaysia）
Malaysia）¾ Improved COGS ratio¾ Closed unprofitable stores
Restaurants Business (Overseas): POKKA CORPORATION(Hong Kong) and POKKA Food (Singapore) Pte. Ltd.

・Nuclear plant accident has caused sales to fall, albeit only
slightly. Hong Kong performance strong.
POKKA
CORPORATION（SINGAPORE）
SINGAPORE）PTE LTD(Singapore)

Otherbusinesses

・Ice cream business¾ Locations: 38 (as of June 2011)
Hong Kong 26; Singapore 10, Macao 1¾ New store openings in
Feb-Apr 2011
Hong Kong 1

Foremost Blueseal brand (Okinawa)

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

17/27

1H Results: Restaurants(billions of yen,
except percentages)

Results
Resultshighlights
highlights
Consumer spending dropped sharply after the Great East Japan
Earthquake. While consumer spend has been recovering more
recently, the business environment remains highly competitive.
The decline in comparable store sales improved from −16.2%
YoY in 1Q to −7.7% in 2Q, for a 1H decline of 11.8%. As a result,both sales and income fell in 1H.

Year-over-year changes
2010

2011

Amount%Net sales

12.4

10.5

(1.9)

(15.3)%

Operatingincome

(0.4)

(0.6)

(0.2)

－

(Large impact from 33.5% drop in March; June sales down only 1.3%.)

Key
Keypoint
pointininbusinessbusinessplan:
plan:implementation
implementationstatus
status１．Positioning for growth
New restaurant opening strategy¾ Synergy with Japanese Alcoholic Beverage business：Openingof Yebisu Bar outlets•

Opened #3 outlet in Osaka’s Umeda district, #4 in Tokyo
Dome City, #5 in Tokyo’s Kagurazaka district¾ Ginza Lion chain expansion• Mini Brasserie Ginza Lion opened in Sapporo¾ 3 other locations opened for total of 7 in 1H•

All locations performing as planned

ImpactImpactof
ofGreat
GreatEast
EastJapan
JapanEarthquake;
Earthquake;status
statusof
ofrestoration
restoration
efforts
efforts¾ Only 1 store still closed, all others have reopened
Resumed operations at all stores but the one in Natori City
Cultural Center, which is being used as an evacuation
center¾ 1H disaster-related losses: ¥80 million¾ Inventory losses, restoration expenses, fixed costs during work
stoppages※Full-year estimate: ¥70 million
GINZA ＹＥＢＩＳＵ ＢＡＲ

２．Earnings structure reform¾ Locations closed in 1H: 5¾ Locations operating at end of 1H: 196
Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

18/27

1H Results: Real Estate (1)(billions of yen,
except percentages)

Year-over-year changes

Results
Resultshighlights
highlights

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

1. Boosting value of existing properties¾ Keeping rents at appropriate levels¾ Redeveloping existing properties•

Continuing negotiations with current
tenants before rebuilding the Seiwa
Yebisu Building¾ Maintaining high occupancy rates•

Occupancy rates at our Tokyo
properties (table at right) compare
favorably with the 91% average for
office buildings in metropolitan Tokyo(5 central wards).

2. Growth initiatives¾ Acquire new properties
•

2010

2011

Amount%Net sales

11.3

11.0

(0.2)

(2.5)%

Operatingincome

3.5

4.2

0.7

21.1%
（as of June 30)

Major rental properties inTokyo’s 23 wards

Site area（㎡）

Floor area（㎡）

Occupancy rates（%）

Yebisu Garden Palace*1

56,943

298,00794%

40 floors above
ground, 5 below
groundSeiwa Yebisu Building

2,617

10,40083%

6 floors above ground,
1 below ground

Yebisu Square

1,561

9,126

84%

7 floors above ground,
1 below ground

Shibuya Saｋuragaoka
Square

1,200

9,268

100%

10 floors above
ground, 1 below
groundSapporo Ginza Building

530

4,232

96%

10 floors above
ground, 4 below
ground1,117

11,411100%

13 floors above
ground, 1 below
groundStrata Ginza*2

Number of stories

areas are taken from the land registry. Floor areas are as per building certification.
Storia Shirokanedai rental apartment building Site
Occupancy rates are averages for January–March.
acquired in February*1. Figures are for entire property. Sapporo holds an 85% stake (jointly managed). Number of stories is for

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

office wings/buildings only. Occupancy rates are for office areas only.
*2: Figures are for entire property. Sapporo owns 922m2 of the site (sectional ownership) and 89.72% of thebuilding (joint management).
Visit the website below for more details about our Real Estate business’s properties.
(http:/www.yebisu-gp.jp/business/index.html)

19/27

1H Results: Real Estate (2)ImpactImpactof
ofGreat
GreatEast
EastJapan
JapanEarthquake;
Earthquake;status
statusofofrestoration
efforts
restoration efforts

Overview
Overviewof
ofRealRealEstate
EstateBusinessBusiness¾ Majority of the business’s operating income is from real estate leasing– Property portfolio largely comprises properties in metropolitan
Tokyo (5 central wards; see previous page)¾ Targeting growth via new acquisitions¾ Also considering redevelopment of existing properties to boost value

OperatingOperatingincome
income2010
JanJune2011 JanJune¾ Some properties temporarily subjected to use restrictions(due to planned power outages)• All properties now operating under normal conditions¾ 1H disaster-related losses: ¥110 million
Fixed costs incurred during facility repairs/operation stoppages※ Full-year estimate: ¥100 million(billions of yen,
except percentages)

Change2010 (fullyear)

2011 revised
forecast

EBITDAEBITDA
ChangeReal estate leasing(billions of yen,
except percentages)

2010
JanJune

2011
JanJuneChange

2010
(full
year)

2011
revisedforecast

ChangeReal estate leasing

Tokyo’s 23
wards

3.1

3.6

0.5

6.7

7.1

0.4

Tokyo’s 23
wards

5.7

5.3

(0.3)

11.4

10.5

(0.9)

Other areas

0.4

0.4

(0.0)

0.8

0.8

(0.0)

Other areas

0.7

0.7

0.0

1.5

1.5

0.0

Real estate leasing
total

3.5

4.0

0.5

7.5

7.9

0.3

Real estate leasing
total

6.4

6.1

(0.3)

12.9

12.0

(0.9)

Real estate sales

0.0

0.4

0.3

0.5

0.4

(0.1)

Real estate sales

0.0

0.4

0.3

0.5

0.4

(0.1)

Other operations*

(0.1)

(0.2)

(0.1)

(0.1)

(0.3)

(0.2)

Other operations*

0.0

(0.0)

(0.1)

0.1

(0.0)

(0.2)

Total

3.5

4.2

0.7

8.0

8.0

0.0

Total

6.6

6.4

(0.1)

13.6

12.4

(1.2)

※”Other operations” includes back-office operations

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

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

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3.
3.Growth
GrowthStrategies
StrategiesandandFuture
FuturePolicies
Policies

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

21/27

Growth Strategy and Future Policies
Strategic
StrategicInvestments
Investmentsduring
during1H
1H

Direction
Directionof
ofLong-Term
Long-TermStrategic
StrategicInvestments
Investments

Additional acquisition of shares in conjunction with integration withPOKKA CORPORATION¾ Acquired an additional 65.35% on March 29, making POKKA a¾ Investment plans will take into account the 2016
consolidated subsidiarymanagement benchmark for D/E ratio of around 1:1(Post-acquisition: 86.76% ownership stake)¾ Acquisition price = ¥22.4 bn + ¥8.2 bn in assumed net financial liabilities ¾ Will continue making strategic growth investments as wetarget continued growth
Total investment : ¥30.6 bn¾ Acquired another 10.03% since April for ¥4.6 bn¾ Raised 2011 strategic investment plan from initial ¥63.5 bn
to ¥64.4 bn(Equity stake at 96.79% as of end-June)¾ Total investment: ¥35.2 bn (total invested in 2011 1H, excludes earlier¾ Still envision strategic investments totaling ¥150–200 bn
investment in 21.41% equity stake)during 2012–16

Acquisition of Sapporo Beverages Co.,Ltd.shares following CB– Includes ordinary capital expenditures (about half of total
execution
strategic investments)¾ Acquired shares on April 28 from YK,Crescent Partners after it converted
CB holdings¾ If our growth strategy necessitates investment that will
¾ Total investment ¥7.1 bn = acquisition price of ¥10.8 bn − ¥3.8 bn stock drive the above the management index over its target value,issuance price
we may consider liquidating some real estate property
Capital expenditure (cash basis) > Consolidated total: ¥7.3 bn¾ Breakdown: Japanese Alcoholic Beverages ¥1.5bn, International
Alcoholic Beverages ¥2.1bn, Real Estate ¥2.9bn, etc.

holdings

Other investments > Consolidated total: ¥0.9 bn¾ Breakdown: Japanese Alcoholic Beverages etc.
Total strategic investment in 1H (includes ordinary capex)¾ ¥50.5 bn
Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

22/27

4.
4.2011
2011Full-Year
Full-YearEarnings
EarningsForecasts
Forecasts※Please also refer to our June 30 news release “Supplementary Information on Consolidated Earnings”

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

23/27

2011 Consolidated Earnings Forecasts (vs initial plan)
We estimate the impact of the Great East Japan Earthquake will keep sales of the Japanese
Alcoholic Beverages and Restaurants businesses below initial targets.
Operating income should be supported by higher income at the Soft Drinks Business, the POKKA
Group’s contribution, and cost cuts at the Japanese Alcoholic Beverages.
We therefore stay with the initial target.
We project full-year disaster-related extraordinary losses of ¥5.0 bn and have lowered our net
income forecast by ¥3.3 bn from the initial plan.
(billions of yen, except percentages)*Additional POKKA CORPORATION shares acquired on March 29, 2011.
Income statement items consolidated from Q2.

Year-over-year changes

2011 initial plan2011 revised plan

Consolidated
net sales

482.0

462.0

(20.0)(4.1)%

Consolidated
operatingincome

18.0

18.0

0.0

0.0%

Consolidated
ordinary income

15.5

15.5

0.0

0.0%

Consolidated
net income

6.0

2.7

(3.3)

(55.0)%

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

Amount%24/27

2011 Operating Income Forecasts (vs initial plan) by Segment
Although we expect lower earnings at the Restaurants and Real Estate businesses, we maintain our initial target for consolidated operating
income on expected increases to profits from the Soft Drinks Business and the POKKA Group. Extraordinary costs attributed to fixed costs
incurred during disaster-related work stoppages are expected to total ¥1.2 bn at the Japanese Alcoholic Beverages Business and ¥1.4 bn on acompanywide consolidated basis.

OperatingOperatingIncome
Income(billions of yen,
exceptpercentages)

Year-over-year changes
2011 initial plan2011 revised plan

Amount%Japanese Alcoholic
Beverages

9.8

9.8

0.0

0.0%

International Alcoholic
Beverages-North America, other-Vietnam

0.1

0.1

0.0

0.0%

1.4
(1.3)

1.4
(1.3)

0.0
0.0

0.0%
0.0%

Soft Drinks

0.7

1.0

0.3

42.9%

POKKA Group

2.3

2.5

0.2

8.7%

Restaurants

0.4

0.0

(0.4)

(100.0)%Real Estate

8.3

8.0

(0.3)

(3.6)%

Other

(0.4)

(0.4)

0.0

―

General corporate

(3.2)

(3.0)

0.2

―

Consolidated
operating income

18.0

18.0

0.0

0.0%

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

25/27

2011 Consolidated Earnings Forecasts (vs 2010)
We expect consolidated sales to rise as positive contributions from the International Alcoholic Beverages and Soft
Drinks combine with the consolidation of the POKKA Group to offset disaster-induced earnings declines at theJapanese Alcoholic Beverages and Restaurants businesses.
We expect operating income to rise ¥2.5 bn YoY on expected contributions from consolidation of the POKKA Groupand earnings growth at the Japanese Alcoholic Beverages business. We look for ordinary income to rise for the fifth
straight year.
However, we project net income to fall ¥8.0 bn owing to the absence this year of the ¥8.1bn extraordinary gain on
asset sales in 2010 and the posting of extraordinary losses of ¥1.0 bn on asset retirement obligations and ¥5.0bn fordisaster-related costs.

*Additional POKKA CORPORATION shares acquired on March 29, 2011.
Income statement items consolidated from Q2.

2010

2011 revised plan(billions of yen,
except percentages)

Year-over-year changes

Amount%Consolidated
net sales

389.2

462.0

72.7

18.7%

Consolidated
operatingincome

15.4

18.0

2.5

16.9%

Consolidated
ordinary income

14.3

15.5

1.1

8.2%

Consolidated
net income

10.7

2.7

(8.0)

(74.9)%

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

26/27

2011 Operating Income Forecasts (vs 2010) by Segment
In addition to the consolidation of the POKKA Group, we expect positive contributions to operating income from all segments except International
Alcoholic Beverages, where earnings will be weighed down by investments in Vietnam, and Soft Drinks, which will book goodwill amortization of¥0.6 bn. Extraordinary costs attributed to fixed costs incurred during disaster-related work stoppages are expected to total ¥1.2 bn at theJapanese Alcoholic Beverages Business and ¥1.4 bn on a companywide consolidated basis.

OperatingOperatingIncome
Income(billions of yen,
exceptpercentages)

Year-over-year changes
2010

2011 revised plan

Amount%Japanese Alcoholic
Beverages

9.2

9.8

0.5

6.1%

International Alcoholic
Beverages-North America, other-Vietnam

0.5

0.1

(0.4)

(80.1)%

0.8
(0.3)

1.4
(1.3)

0.6
(1.0)

66.1%

Soft Drinks

1.2

1.0

(0.2)

(22.3)%POKKA Group

―

2.5

2.5

―

Restaurants

0.1

0.0

(0.1)

(100.0)%Real Estate

8.0

8.0

0.0

0.0%

Other

(0.7)

(0.4)

0.3

―

General corporate

(3.0)

(3.0)

0.0

―

Consolidated operating
income

15.4

18.0

2.5

16.9%

Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.

―

27/27