Sapporo Holdings Limited · TSE:2501

Sapporo — FY2016 Earnings Presentation

55 slides from Sapporo's earnings presentation, Feb 14, 2017

  1. Slide 1: Group Business Results 2016 & 2017 Business Strategy

    Sapporo Holdings Limited Group Business Results 2016 & 2017 Business Strategy February 14, 2017 Sapporo Holdings Ltd. URL http://www.sapporoholdings.jp/english Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  2. Slide 2: Sapporo Group Business Results Presentation for 2016

    Section 1 Sapporo Group Business Results Presentation for 2016 Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  3. Slide 3: Contents

    Contents １．Overview of 2016 Appendix：Collection of Data by business Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  4. Slide 4: 1. Overview of 2016

    １. Overview of 2016 Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  5. Slide 5: 2016 Group Results Overview

    2016 Group Results Overview Earnings: operating income improves ¥6.3 billion y-o-y (billions of yen) 2015 2016 change Net sales significantly increased. International Business also grew on a local currency basis. Net sales 533.7 541.8 8.0 Operating income of all businesses also rose, partly Operat

  6. Slide 6: Various Initiatives by the Sapporo Group in 2016

    2016 Group Results Overview Various Initiatives by the Sapporo Group in 2016  Mar 15: The Hokkaido Brewery received the Agriculture, Forestry and Fisheries Minister’s Award for promotion of environmental measures such as energy ① ② saving in the environment division of the 37th Food Industry Excel

  7. Slide 7: Overview of 2016 Japanese Alcoholic Beverages

    Overview of 2016 Japanese Alcoholic Beverages  We carried out our word of making it the “first year of a new period of growth in the beer business.” The three mainstay brands registered growth amid declining total demand Japanese Beer Business Y-o-y change in sales volume of 3 core brands <Beer> (s

  8. Slide 8: Overview of 2016 International

    Overview of 2016 International SLEEMAN has grown into a pillar of the International Business in 10 years from acquisition. Sales in Vietnam also increased steadily Y-o-y change in North American Beer sales volume North American beer business Value  Both SLEEMAN and USA posted record profits in Nor

  9. Slide 9: Overview of 2016 Food & Soft Drinks

    Overview of 2016 Food & Soft Drinks Brand enhancement, primarily of soups and lemon-based products, and growth of tea drinks; earning capacity improved thanks to cost reduction Domestic food and soft drinks Y-o-y change in Jan- Dec Y-o-y change in Jan-Dec soft drinks sales volume foods sales value

  10. Slide 10: Overview of 2016 Restaurants

    Overview of 2016 Restaurants Amid the sluggish food service market, enhancing earnings capability through structure reforms Restaurants business in Japan <Change in the number of Sapporo Lion and net sales> (billions of yen) outlets <Sapporo Lion>  Comparable-store sales: down 1% y-o-y; operating

  11. Slide 11: Overview of 2016 Real Estate

    Overview of 2016 Real Estate Steadily improve asset holdings value and contribute to brand enhancement as well as revenues of the group Real estates <Other properties>  Ebisu First Square has been maintaining 100% occupancy <Yebisu Garden Place> rate since its inauguration  Value enhancement of t

  12. Slide 12: 2016 Results Highlight

    2016 Results Highlight (billions of yen) Consolidated YoY changes 2015 2016 financial results (amount, %) Net sales ※Exchange rate 533.7 541.8 8.0 1.5% 2015: (incl. liquor tax) US$=¥121.11 Net sales CAN$=¥94.82 418.3 424.0 5.7 1.4% (excl. liquor tax) 2016:US$=¥108.81 Overseas net sales to 22.6％ 20.5

  13. Slide 13: Overview 2016 Results (1) Net Sales by Segment

    Overview 2016 Results (1) Net Sales by Segment YoY change （billions of yen） 2015 2016 Notes （amount,%） Consolidated 533.7 541.8 8.0 1.5% net sales Japanese Alcoholic 273.6 279.4 5.8 2.1% Beverages International Negative impact of foreign 70.5 65.4 (5.1) (7.2) Business exchange rates ¥-8.0billion Neg

  14. Slide 14: Overview of 2016 Results (2): Factors Contributing to Change in Net Sales

    Overview of 2016 Results (2): Factors Contributing to Change in Net Sales ＜ Ｍain Factors Contributing to Changes in Net Sales＞ 増加 Increase 減少 Decrease (billions of yen) Jan-Dec 2016 Jan-Dec 2015 Sales Consolidated Consolidated volume net sales net sales increase, ¥541.8 billion etc. in ¥533.7 billio

  15. Slide 15: Overview of 2016 Results (3) Operating Income by Segment

    Overview of 2016 Results (3) Operating Income by Segment （billion of yen） 2015 2016 Change Notes Consolidated Operating income 13.9 20.2 6.3 Japanese Alcoholic Beverages 8.6 11.7 3.1 Beer and related products 5.6 8.3 2.7 Marginal profit+2.5 Fixed cost and other +0.3 Wine and spirits 2.2 2.4 0.2 Othe

  16. Slide 16: Overview of 2016 Results (4) Factors Contributing to Change in Operating income

    Overview of 2016 Results (4) Factors Contributing to Change in Operating income <Main Factors Contributing to Changes in Operating income> Increase Decrease (billions of yen) Jan-Dec 2016 Consolidated Operating income Jan-Dec 2015 ¥20.2 billion Consolidated North Vending America, etc. Machine Sales

  17. Slide 17: Overview of 2016 (5) Special factors

    Overview of 2016 (5) Special factors <Special factors in the business results (year-on-year)> （ ―：minor） Operating Business segment Details Sales impact income impact 2015: Silver Spring Citrus account period change (changed from Oct 2015 to Sep 2016 -> Jan 2016 to Dec 2016) Approx. International ⇒2

  18. Slide 18: Overview of 2016 Results (6) Changes in Extra Ordinary Gains and Losses

    Overview of 2016 Results(6) Changes in Extra Ordinary Gains and Losses Consolidated Statements of income （billions of yen） 2015 2016 Change Primary Reasons Net sales 533.7 541.8 8.0 Operating income 13.9 20.2 6.3 Financial account balance (0.9) (0.8) 0.1 Other non-operating expenses 0.2 (0.3) (0.4)

  19. Slide 19: Overview of 2016 Results (7) Financial Status 1

    Overview of 2016 Results (7) Financial Status 1 Breakdown of Strategic Investments Financing Status (including ordinary capex, on a cash bases)  In Mar. 2016 issued five-year straight bonds worth ¥10.0 billion at (1) <Capital expenditure and lease fees> annual interest rate of 0.25% Consolidated to

  20. Slide 20: Overview of 2016 (7): Financial Status 2

    Overview of 2016 (7): Financial Status 2 Dividends from retained earnings  We position providing appropriate returns to shareholders as a key management policy of the Company. As for dividend payment from retained earnings in 2016, we plan to increase dividends as described below taking into consid

  21. Slide 21: Overview of 2016 Results (8) Balance sheets

    Overview of 2016 Results (8) Balance sheets Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  22. Slide 22: Appendix: Collection of Data by Business

    Appendix： Collection of Data by Business Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  23. Slide 23: 2016: Major Sales and Sales Volume (YoY)

    2016 :Major Sales and Sales Volume (YoY) Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved.

  24. Slide 24: Reference Material (1) Japanese Alcoholic Beverages

    Reference Material (1) Japanese Alcoholic Beverages Beer and Beer-Type Beverages Data <Beer and beer-type beverages category <Beer lineup (Jan-Dec breakdown)> (10,000 cases) Jan-Dec sales volume YoY change (Shipment base)> 30.48 million Cases (1) Sapporo Lager Beer: Japan’s oldest heat treated beer.

  25. Slide 25: Reference Material (2) Japanese Alcoholic Beverages Beer Category Data

    Reference Material(2) Japanese Alcoholic Beverages ～Beer Category Data～ ＜Jan〜Dec Net sales> （billions of yen)Wine Beer + Beer type beverages (incl. liquor tax) Spirits Japanese Liquor Promotion of diversification of product offering ＜Japanese Alcoholic Beverage Business Jan-Dec sales breakdown by ca

  26. Slide 26: Reference Material (3) Liquor Tax Reform

    Reference Material(3) Japanese Alcoholic Beverages ～Liquor Tax Reform ～ Proposed revision Liquor tax reform in the outline of fiscal year 2017 tax reform Category Present Phase 1 Phase 2 Phase 3 <Review of tax rate structure> Carbonated alcoholic beverages ¥220,000 ¥200,000 ¥181,000 ¥155,000  To un

  27. Slide 27: Reference Material (4) International Business Data

    Reference Material(4) International Business ～Data ～ ＜Trend of overseas sales volume of SAPPORO brand products (Jan-Dec> SLEEMAN Net Sales in Local Currency (Jan-Dec) （10,000 cases) (before elimination of inter-company transactions) Sapporo USA Net Sales in Local Currency (Jan-Dec) (before eliminati

  28. Slide 28: Reference Material (5) Food & Soft Drinks Data

    Reference Material(5) Food & Soft Drinks ～ Data ～ <Soft Drinks (Japan): POKKA SAPPORO Food & Beverage Ltd.> Japanese soft drinks sales Japanese soft drinks sales POKKA SAPPORO Food & composition by sales channel Beverage sales composition volume composition by genre ＜Lemon-based (Jan-Dec) drinks＞ (J

  29. Slide 29: Reference Material (6) Restaurants Data

    Reference Material(6) Restaurants ～ Data ～ ＜New Sanko Outlets＞ ＜Sapporo Lion outlets＞  1954 Established in Oar Outlets(as of Dec 31, 2016)  9 Outlets located in Hokkaido  Reopening of ※2 Sapporo Lion flagship outlets ＜Marushinkawamura Outlets＞ ・Ginza Lion Shimbashi 3 floor, Approx. 401㎡  Kushiro

  30. Slide 30: Reference Material (7) Real Estate Data

    Reference Material(7) Real Estate ～ Data ～ Major rental properties & occupancy rates * Information about real estate for lease (*Averages for 2016 4Q (contract basis) Major rental properties in Occupancy rate Site area (m2) Floor area (m2) (%) No. of floors Balance sheet value at December 31, 2016 :

  31. Slide 31: Reference Material (8) Miyasaka Jozo Co., Ltd.

    Reference Material(8) Miyasaka Jozo Co., Ltd.  Aim to expand the food domain with the Shinsyu Ichi brand at the core September 5, 2016: Purchased a 51% stake in Miyasaka Jozo Co., Ltd., which manufactures and markets miso, instant miso soup and freeze- dried products. Company profile  Trade name:

  32. Slide 32: 2017 Business strategy

    Section 2 2017 Business strategy Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  33. Slide 33: 2026 Group Vision

    The Sapporo Group will be a company with highly unique 2026 Group brands in the fields of Vision "Alcoholic Beverages", "Food", and "Soft Drinks" around the world. Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  34. Slide 34: SPEED150 First Medium-Term Management Plan

    First Medium‐Term Management Plan Transform with unprecedented speed SPEED150 First Medium-Term Second Medium-Term Third Medium-Term Management Plan Management Plan Management Plan (2017-2020) (2021-2023) (2024-2026) Transform with Long-term Vision unprecedented speed to Proactively invest and Tackl

  35. Slide 35: Year 2017 in Medium-Term Management Plan

    40 35 The year to transform the Group management platform by expanding sales and profits at all 30 businesses, with the performance level of 2016 as the base 25 Year 2017 in More than Medium-Term 20 billion yen Management every term Plan 15 More than 10 billion yen every term 5 0 2007 2008 2009 2010

  36. Slide 36: Management Plan for 2017, First Year of SPEED150

    Management Plan for 2017, First Year of SPEED150 Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  37. Slide 37: Steady growth toward FY2020

    Steady growth toward FY2020 (billions of yen) 2016 2017 2020 Net Sales Net Sales Net Sales FY2017 Management Plan Operating income Operating income Operating income (before goodwill (before goodwill (before goodwill amortization)Op income amortization) amortization) Op income Profit attributable Pro

  38. Slide 38: Enhance cash flow generation capabilities

    Enhance cash flow generation capabilities (billions of yen) 4 years 2016 2017 2018〜2020 Total (2017~2020) Cash flows Cash flows Cash flows from operating from operating from operating activities activities activities FY2017 Management Cash flows Plan from investing Cash flows Cash flows from investi

  39. Slide 39: Continuous growth in existing businesses

    Continuous growth in existing businesses Japanese Food & Alcoholic International Restaurants Real Estate Soft Drinks Beverages (billions of yen) Y-O-Y Y-O-Y Y-O-Y Y-O-Y Y-O-Y FY2017 Net Sales Management Plan Operating Y-O-Y Y-O-Y Y-O-Y Y-O-Y Y-O-Y income (before goodwill amortization) Operating inco

  40. Slide 40: FY2017 Specific Initiatives by Each Business

    FY2017 Specific Initiatives by Each Business Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  41. Slide 41: Japanese Alcoholic Beverages

    (billions of yen) Net Sales YoY Change #1 <Strengthen core beer brands> - Continue strengthening Black Label and Yebisu - Strengthen Lager, Shirohonoka and other beers - Promote a new genre with Mugi to Hop at the core Operating income YoY (before goodwill amortization) Change Japanese Alcoholic #2

  42. Slide 42: International

    #1 <North America (beer)> (billions of yen) SLEEMAN Sales YoY Change - Actively invest in premium brand - Focus on the 4 states that account for 90% of beer consumption - Value brand pricing and packaging strategy Sapporo USA - Focus on California and Texas Operating income YoY - Bolster sales staff

  43. Slide 43: Food & Soft Drinks

    #1 <Soft drinks> (billions of yen) - Bolster profits by sorting out unprofitable products, Sales YoY channels Change - Strengthen food texture-type, ingredient-type and Gabunomi brands #2 <Lemon> - Focus on function research, pursue feasibility of unexplored fields - Carry out procurement correspond

  44. Slide 44: Restaurants

    (billions of yen) Sales YoY Change #1 <Sapporo Lion> - Secure customers through apps, point cards - Open new restaurants of Ginza Lion and Yebisu Bar - Drive forward restaurant refurbishment, facility repairs Operating income YoY (before goodwill amortization) Change #2 <New Sanko> - Strengthen sale

  45. Slide 45: Real Estate

    (billions of yen) Sales YoY Change #1 <Yebisu Garden Place> - Upward revision of office rent per unit - Initiate needs for expanding floors and review tenant composition - Quantitative target: average annual occupancy rate Operating income of 99% and above YoY (before goodwill amortization) Change #

  46. Slide 46: Main Factors Contributing to Changes in Operating income (before goodwill amortization)

    Main Factors Contributing to Changes = Increase in Operating income = Decrease (before goodwill amortization) (billions of yen) 0.1 0.6 FY2017 0.8 0.7 0.5 Management 2.7 0.1 1.0 Plan 2.0 0.5 0.2 0.1 0.8 0.3 0.5 0.4 0.6 Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  47. Slide 47: FY2017 Transforming Group Management Platform

    FY2017 Transforing Group Management Platform Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  48. Slide 48: Transforming Group Management Platform

    Transforming Group Management Platform Transforming the system to accelerate creation of new values - Establish a strategic research organization for expanding the food field R&D - Establish an organization for improving success rate of commercialization (incubation) - Promote reorganization of the

  49. Slide 49: Appendix: Collection of Data

    Appendix：Collection of Data Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  50. Slide 50: Full-Year Consolidated Business Results Estimate Highlights

    （billions of yen） 2016 2017 Change Net sales(including liquor tax) 541.8 563.8 21.9 4.1% Net sales（excluding liquor tax) 424.0 443.0 19.0 4.5% Overseas net sales to total (excluding liquor tax) 20.5 ％ 21.2 ％ 0.7 - Operating income 20.2 21.3 1.0 5.1% Operating income Appendix (before goodwill amortiz

  51. Slide 51: Major Sales and Sales Volume

    Appendix Major Sales and Sales Volume Full-Year estimate Copyright, 2017 SAPPORO HOLDINGS LTD. All rights reserved.

  52. Slide 52: Net sales by segment estimate

    （billions of yen） 2016 2017 Change Notes Net sales 541.8 563.8 21.9 4.1％ Japanese Alcoholic 279.4 286.0 6.5 2.3％ Beverages Exchange rates（2017） International 65.4 70.3 4.8 7.5% US$1=¥110 Appendix CA$1＝¥84 Full-Year Consolidated Food & Soft Drinks 137.9 142.2 4.2 3.1% Business Results estimate Net sa

  53. Slide 53: Operating income by segment estimate

    （billions of yen) 2016 2017 Change Notes Operating income 20.2 21.3 1.0 Japanese Alcoholic Beverages 11.7 11.8 0.0 Marginal profit+2.6, Beer and related products 8.3 8.6 0.3 Fixed cost and other -2.3 Wine and spirits 2.4 2.5 0.1 Other 1.1 0.6 (0.4) International 0.9 1.4 0.4 Marginal profit+0.6, Appe

  54. Slide 54: Extra Ordinary Gains and Losses, Cash Flows estimate

    Primary （billions of yen） 2016 2017 Change Reasons Net sales 541.8 563.8 21.9 - Operating income 20.2 21.3 1.0 - Ordinary income 19.2 20.3 1.0 - Appendix Profit before income tax 16.4 17.8 1.3 - Full-Year Consolidated Corporate tax, (7.0) (7.1) (0.1) - Business Results estimate non-controlling inter

  55. Slide 55: Closing statement and forward-looking statements

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

Sapporo Holdings — FY2016 Earnings Presentation on 6ix