Sapporo Holdings Limited · TSE:2501

Sapporo — Q3 2019 Earnings Presentation

39 slides from Sapporo's earnings presentation, Nov 6, 2019

  1. Slide 1: Sapporo Group Business Results Presentation for the Nine Months Ended September 30, 2019

    Sapporo Group Business Results Presentation for the Nine Months Ended September 30, 2019 November 6, 2019 URL https://www.sapporoholdings.jp./en/ Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 1/39

  2. Slide 2: Agenda

    １. Key Points of Third Quarter and Progress in Growth Fields ・・・p3-6 ２. Third-Quarter 2019 Highlights ・・・p7-19 ３. Revision of 2019 Full-Year Earnings Forecasts ・・・p20-21 ４. Reference Materials ・・・p22-39 Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 2/39

  3. Slide 3: Third-Quarter 2019 Key Points: Alcoholic Beverages

    ◆Third-Quarter 2019 Key Points Alcoholic Beverages: Domestic business was roughly in line with plan. In North America, Sapporo brand performed strongly but other brands struggled. Alcoholic Beverages Positive  Black Label and Yebisu brand canned products were <Quarterly operating profit (vs. previo

  4. Slide 4: Third-Quarter 2019 Key Points: Food & Soft Drinks

    ◆Third-Quarter 2019 Key Points Food & Soft Drinks: Lemon-based products were strong, but soft drinks struggled due to cool summer. Food & Soft Drinks Positive  Lemon-based products remain strong  Consolidation of Yasuma Co., Ltd. boosted revenue (billions of yen)  Profitability in Asia is on reco

  5. Slide 5: Third-Quarter 2019 Key Points: Real Estate and Corporate

    ◆ Third-Quarter 2019 Key Points Real Estate: Existing properties remained Corporate: Management platform development cost decreased but structural reform solid expenses expected to increase Real Estate Corporate/Other Structural (billions of yen) Property sale reform (billions of yen) -6.5 bn yen Pr

  6. Slide 6: Strengthening of Beer Business and Approach to Low Price Category

    Strengthening of Beer Business and Approach to Low Price Category Steady progress in strengthening of beer business <YoY changes in beer category sales volume > (%) (Cumulative sales for each month) 110 4 ＋ % 100 ＋ 3 % 90 80 Jan Feb Mar Apr May Jun Jul Aug Sep Total beer demand (forecast by Sapporo)

  7. Slide 7: Business Results

    Business Results Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 7/39

  8. Slide 8: Third Quarter 2019 Highlights

    Third Quarter 2019 Highlights Certain level of success achieved in nurturing beer, RTD, and lemon-based food brands Challenges remain in structural reforms of North American and Japanese soft drinks YoY change Operating Profit attributable to Revenue YoY change profit owners of parent YoY change 201

  9. Slide 9: Third Quarter 2019 Highlights

    Third Quarter 2019 Highlights Balance of net debt Equity Cash basis investment 2018-end 2018-end 2019 plan 2019 3Q 2019 3Q YoY change D/E ratio (net) times ±0.0 times (billions of yen) Transformation of the Group Group topics management platform  Construction of industry’s first hybrid beer/soup pl

  10. Slide 10: Revenue by Segment

    Revenue by Segment (billions of yen) 2018 2019 YoY changes YoY changes 3Q 3Q (amount) (%) Revenue by Segment 381.0 0.4% Alcoholic Beverages 239.5 (0.4)% Japan & Asia 180.7 0.4 0.2% North America 37.9 (1.3) (3.4)% Restaurants 20.9 (0.2) (0.8)% Food & Soft Drinks 118.7 2.3% Japan & Asia 98.4 1.4 1.4%

  11. Slide 11: Main Factors Contributing to Changes in Revenue

    Main Factors Contributing to Changes in Revenue Beer and RTD grew, while new genre products were on a recovery track thanks to the impact of the Mugi to Hop relaunch = Increase Profit increased YoY with Yasuma consolidation and sales recovery in North America = Decrease contributing Alcoholic Bevera

  12. Slide 12: Operating Profit by Segment

    Operating Profit by Segment (billions of yen) 2018 2019 YoY changes YoY changes 3Q 3Q (amount) (%) Operating Profit by Segment 6.8 12.9% Alcoholic Beverages 2.7 68.3% Japan & Asia 2.1 2.3 109.8% North America 0.8 (0.8) (89.5%) Restaurants (0.1) 0.3 - Food & Soft Drinks 0.5 - Japan & Asia 1.1 (2.4) -

  13. Slide 13: Main Factors Contributing to Changes in Operating Profit

    Main Factors Contributing to Changes in Operating Profit Contributions from cost control in Alcoholic Beverages in Japan and improved profitability in Vietnam = Increase Improvement in profitability of Soft Drinks in Asia and sale of investment real estate in 1Q = Decrease also contributed to profit

  14. Slide 14: Special factors in the business results

    Special factors in the business results Impact of exchange rates on operating profit is minimal <Special factors in business results (YoY)> Impact on Impact on Business segment Details revenue operating profit Alcoholic Wild Rose Brewery LTD. -: negligible impact - - Beverages Consolidated from 2Q o

  15. Slide 15: Changes in Balance Sheets: Assets

    Changes in Balance Sheets Total assets increased ¥5.4 billion from year end Total assets Total assets (billions of yen) Cash and cash equivalents Trade receivables 10.0 22.1 Current assets →Seasonal factors, etc. 93.3 74.5 YoY change - 2.6 Inventories 37.1 40.8 13.1 13.5 Other current assets 164.7 1

  16. Slide 16: Changes in Balance Sheets: Liabilities and Equity

    Changes in Balance Sheets Total liabilities declined ¥2.0 billion from year end, total equity increased ¥7.4 billion (billions of yen) Trade payables Total liabilities and Total liabilities and equity equity Short-term financial liabilities 35.3 34.8 Other current liabilities 73.9 71.2 Current liabi

  17. Slide 17: Financial Status

    Financial Status Investment on a cash basis was ¥35.1 billion ① <Capital expenditure> Consolidated total of approx. ¥ billion <Consolidated cash flow (CF) statement> (property, plant and equipment, intangible assets) <Major items> 2018 3Q 2019 3Q Change Change (%) ・“Alcoholic Beverages,” “Food,” and

  18. Slide 18: Construction of industry's first hybrid beer/soup production plant completed

    Transformation of the Group Management Platform Construction of industry’s first hybrid beer/soup production plant completed - Utilization of existing beer plant platform / Reduction of environmental load through sharing of production utilities - POKKA SAPPORO Food & Beverages Ltd. (“PS”) has commen

  19. Slide 19: Introduction of a plan-driven logistics system that harnesses AI technologies

    Transformation of the Group Management Platform Introduction of a plan-driven logistics system that harnesses AI technologies -Building a common system for three Sapporo Group companies- Sapporo Group has introduced an AI technology-based product supply and demand planning system called the “Supply

  20. Slide 20: Revision of 2019 Full-Year Earnings Forecasts

    Revision of 2019 Full-Year Earnings Forecasts Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 20/39

  21. Slide 21: Revision of 2019 Full-Year Earnings Forecasts

    Revision of 2019 Full-Year Earnings Forecasts 2019 2019 Revision 2018 (billions of yen) Initial Revised amount Results Change <Alcoholic Beverages> forecast forecast Revenue: -¥4.1 billion Consolidated revenue Operating profit: -¥1.9 billion 548.8 542.0 (6.8) 521.9 20.1 ➡Impact of exchange rates and

  22. Slide 22: Appendix

    Appendix Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 22/39

  23. Slide 23: Conversion Table of Revenue, Operating Profit by Segment

    Appendix: 2018 3Q ( Previous year’s result ) Conversion Table of Revenue, Operating Profit by Segment Former segments New segments *( ) denotes new segment (5 business domain (3 business domain Difference Remarks (billions of yen) structure) structure) Revenue (billions of yen) 381.0 - Japanese Alco

  24. Slide 24: Major sales & sale volume

    Appendix：Major sales & sale volume Alcoholic Beverages (Japan) (10,000 cases) Soft Drinks (POKKA SAPPORO FOOD & BEVERAGE) (10,000 cases) Full-year Full-year Jan. 1 - Jan. 1 - Fiscal 2018 Jan. 1 - Jan. 1 - Fiscal 2018 YoY estimate for YoY YoY estimate for YoY Sep.30, 2018 Sep.30, 2019 Actual fiscal 2

  25. Slide 25: Alcoholic Beverages (Japan)

    Appendix：Alcoholic Beverages (Japan) ＜Y-o-y change in sales volume of 3 core brands＞ （Cumulative sales） 【Beer】（Sales volume） %  Jan- Sep up ％ y-o-y 110  Black Label brand total : Unchanged y-o-y （Sales of the canned version：up ％ y-o-y） 100 90  Yebisu brand total : down ％ y-o-y 80 （Sales of the ca

  26. Slide 26: Alcoholic Beverages (Japan)

    Appendix：Alcoholic Beverages (Japan) (10,000 cases) ＜3 Core brand Jan- Sep Sales volume change＞ ＜Beer lineup (Jan- Sep break down)＞ 1,400 1,200 17% 1,000 27% 800 600 57% 400 200 Black label Yebisu Other 0 2013 2014 2015 2016 2017 2018 2019 Black label brand total Yebisu brand total Mugi to Hop Copyr

  27. Slide 27: Alcoholic Beverages (Japan)

    Appendix：Alcoholic Beverages (Japan) ※Incl. liquor tax ＜Jan- Sep sales revenue＞ ＜Jan- Sep sales breakdown by category＞ 200.0 (Billions of yen) 180.0 160.0 5% 8% Beer 140.0 54.8 60.0 48.8 44.4 52.5 37.8 34.2 Happoshu & New genre 120.0 8% Wine & Spirits 100.0 Japanese liquor 80.0 RTD & Non-alcoholic b

  28. Slide 28: Alcoholic Beverages (Japan)

    Appendix：Alcoholic Beverages (Japan) ＜Jan- Sep sales revenue＞ (Billions of yen) 10 14 9 12 8 7 10 6 5.3 5.1 5.4 5.4 8 4.9 5.2 5.4 5 6 12.0 4 3 4 8.0 2 3.9 3.7 2 5.3 3.4 3.5 3.5 3.3 3.1 2.1 3.3 3.3 3.8 1 0 0 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 Japanese wine Imported

  29. Slide 29: Major New Alcoholic Beverages (Japan) Product Launches

    Appendix：Major New Alcoholic Beverages (Japan) Product Launches in Jul, Aug, and Sep *incl. improved products (*1) Baisen Sapporo draft beer Kohaku Yebisu Mugi to Hop(*1) Limited version of HOPPIN’ GARAGE LAGER BEER Mugi to Hop Sapporo Seven Premium Ginza Lion Ale Kamifurano Osumisan no hop batake k

  30. Slide 30: Alcoholic Beverages (Overseas)

    Appendix：Alcoholic Beverages (Overseas) 【Overseas brand】 （Products of Sleeman and Anchor) ＜Overseas sales volume (Jan-Sep)＞  Jan- Sep down ％ （10,000 cases） 1,200 【Sapporo brand】  Jan- Sep down ％ 1,000 800 【Vietnam】  Jan- Sep up ％（including export） 600 1,039 1,007 ＜Y-o-y change in domestic sales v

  31. Slide 31: Alcoholic Beverages (Overseas)

    Appendix：Alcoholic Beverages (Overseas) ＜Sleeman：Sales revenue in local currency (Jan- Sep）＞ ＜Sapporo U.S.A.& Anchor：Sales revenue in local currency (Jan- Sep）＞ *before elimination of inter- company transactions *before elimination of inter- company transactions 450 70 Acquired Anchor J GAAP IFRS （E

  32. Slide 32: Alcoholic Beverages (Restaurants)

    Appendix：Alcoholic Beverages (Restaurants) ＜Sales revenue and number of Sapporo Lion Outlets> ＜Sapporo Lion outlets＞ As of Sep 30, 2019 (Billions of yen) ※before rebate deduction 200 20 188 186 177 180 15 168 173 170 160 7 11 158 10 19.6 14 Tokyo Metroporitan 19.0 18.9 18.7 19.0 18.1 18.3 140 4 Kant

  33. Slide 33: Food & Soft Drinks

    Appendix：Food & Soft Drinks ＜ Japanese soft drinks POKKA SAPPORO Food & Beverage Sales composition by sales channel (Jan- Sep) 【Lemon based-drinks】 【Lemon-based food products】  Jan-Sep up ％ y-o-y  Jan-Sep up ％ y-o-y （Sales volume) 45% （Sales volume) 31.22 million Vending machines Relailer 【Unsweet

  34. Slide 34: Food & Soft Drinks

    Appendix：Food & Soft Drinks ＜ ＜ Food & Soft Drinks segment 【Pokka Create Co., Ltd.】 Revenue break down by geographic area ＞  Jan- Sep Sales revenue billion 84% up ％ y-o-y ＜ Number of outlets as of Sep 30, 2019> 16% 112 East Japan 59 207 outlets Central Japan West Japan Japan Overseas Decreased 5 ou

  35. Slide 35: Major New Food & Soft Drinks (Japan) Product Launches

    Appendix: Major New Food & Soft Drinks (Japan) Product Launches in Jul, Aug, and Sep Risorante 「Hokkaido Origin」Series Jikkuri kotokoto Soup Jikkuri kotokoto Soup Unsweetened tea GRANDE LEMON MADE Sparkling Jikkuri kotokoto Soup series Karaou Soup Almond Breeze JELEETS LATTE JELLY Copyright, 2019 SA

  36. Slide 36: Real Estate

    Appendix：Real Estate ＜ Information about ＜ Major rental properties & occupancy rates：（Averages for 2019 3Q )>＞ Investment property ＞ (billions of yen) Occupancy 400.0 Site area Floor area rate No. of floors （㎡） （㎡） （%） 300.0 40 floors above Yebisu Garden Place（1） 56,943 298,007 99 ground, 5 below 20

  37. Slide 37: Ebisu Sustainable City Business Contest

    Appendix: Real Estate Ebisu Sustainable City Business Contest Sapporo Real Estate Co., Ltd. is holding an “Ebisu Sustainable City Business Contest” with the theme of “sustainable future urban development.” The company began accepting ideas from July 17 on a special dedicated website and the winner w

  38. Slide 38: The 11th Yebisu Beer Festival

    Appendix: Group The 11th Yebisu Beer Festival - Enjoy delicious Yebisu Beer at the main venue, designed to evoke the image of Japan’ first beer hall, Yebisu Beer Hall, which opened 120 years ago - The Sapporo Group held the 11th Yebisu Beer Festival from September 13 at Yebisu Garden Place, the birt

  39. Slide 39: As an intrinsic part of people's lives, Sapporo will contribute to the evolution of lifestyles

    As an intrinsic part of people's lives, Sapporo will contribute to the evolution of creative, enriching and rewarding lifestyles. Copyright, 2019 SAPPORO HOLDINGS LTD. All rights reserved. 39/39

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