Sapporo Holdings Limited · TSE:2501
Sapporo — FY2022 Earnings Presentation
54 slides from Sapporo's earnings presentation, Feb 15, 2023
Slide 1: Sapporo Group Business Results for 2022 / Management Plan for 2023
Sapporo Group Business Results for 2022 Management Plan for 2023 *In this document, the following company name abbreviations are used: February 15th 2023 SH: Sapporo Holdings Limited SB: Sapporo Breweries Ltd. SLN: Sapporo Lion, Inc. URL https://www.sapporoholdings.jp/en/ PS: Pokka Sapporo Food & Be
Slide 2: １. Summary ２. Business Results for 2022 ３. Management Plan for 2023
１. Summary ・・・P3 ~P5 ２. Business Results for 2022 ・・・P6~P14 ３. Management Plan for 2023 ・・・P15~P36 ４. Appendix ・・・P37~P54 Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 2/54
Slide 3: Summary
Summary Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 3/54
Slide 4: Overall Results for 2022
Summary ➢ Overall Results for 2022 ⚫ Increased revenue and profit ・Revenue +9.4% Main factors were revenue growth of alcoholic beverages overseas, especially in North America, and the recovery in commercial-use products in Japan alcoholic beverages and restaurant businesses ・Core operating profit +1
Slide 5: Policy for 2023
Summary ➢ Policy for 2023 ⚫ Promote specific initiatives to enhance corporate value (initial fiscal year of the Medium-Term Management Plan) ・Strengthen Japan beer business and realize effects of Sendai Brewery reorganization ・Develop foundation for growth in U.S. ・Reshuffle business portfolio and c
Slide 6: Business Results for 2022
Business Results for 2022 Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 6/54
Slide 7: Financial Highlights for FY2022
Financial Highlights for in FY2022 2021 2022 YoY changes YoY changes （billions of yen） Result Result (amount) (%) Revenue 437.2 478.4 41.3 9.4% Revenue（Excluding liquor tax） 331.2 364.2 33.0 10.0% Overseas revenue 74.5 102.2 27.7 37.2% EBITDA 28.6 29.9 1.2 4.3% Core operating profit 8.1 9.3 1.2 14.4
Slide 8: Financial Highlights for FY2022
Financial Highlights for in FY2022 YoY YoY YoY YoY 2021 2022 2021 2022 （billions of yen） changes changes （billions of yen） changes changes Result Result Result Result (amount) (%) (amount) (%) Core Operating Profit Revenue by Segment 437.2 478.4 41.3 9.4% 8.1 9.3 1.2 14.4% by Segment Alcoholic Bever
Slide 9: Financial Summary in FY2022
Financial Summary in FY2022 Revenue increased overall driven by the alcoholic beverages business Main factors were revenue growth of overseas alcoholic beverages predominantly in North America, commercial-use market recovered, initiated price revisions in response to rising costs, and effect of exch
Slide 10: Financial Summary in FY2022
Financial Summary in FY2022 Increased profit thanks to the effects of increased revenue and structural reforms of the Restaurants and Food & Soft Drinks businesses despite the impact of rising raw materials costs, etc. Steadily implementing price revisions in response to higher costs such as surging
Slide 11: Review of Financial Results for 2022: Alcoholic beverages
Review of Financial Results for 2022 *SPB: SAPPORO PREMIUM BEER Alcoholic beverages in Japan Alcoholic beverages in overseas Enhanced beer and RTD amid various changes in operating Acquired all shares of Stone Brewing Co. LLC environment Accelerated pace of overseas business growth centered on SPB*
Slide 12: Review of Financial Results for 2022: Restaurants and Food & Soft Drinks
Review of Financial Results for 2022 Alcoholic beverages in restaurants Food & Soft Drinks Enhanced corporate structure through Implemented structural reforms aimed at “shifting structural reforms management resources to growth areas” Greatly narrowed loss through structural reforms promoted since 2
Slide 13: Review of Financial Results for 2022: Real estate
Review of Financial Results for 2022 Real estate *YGP: Yebisu Garden Place Enhanced property value of YGP* and implemented measures to diversify revenue structure Working to improve value of YGP* properties Began updating HVAC Completed seismic damping work Systematically update over about 10 years
Slide 14: Review of Financial Results for 2022: Vs. plan
Review of Financial Results for 2022 Vs. plan: operating profit achieved the plan (+¥2.8 billion), but revenue (¥(0.3) billion) and core operating profit (¥(0.7) billion) fell short Main factors for core operating profit falling short of plan: sharp uptick in logistics costs for overseas alcoholic b
Slide 15: Management Plan for 2023
Management Plan for 2023 Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 15/54
Slide 16: Assumptions of Management Plan for 2023
Assumptions of Management Plan for 2023 Impacts of the COVID-19 pandemic Higher costs such as surging raw material costs Japan alcoholic beverages: commercial-use sales Expect cost increases of ¥12.5 billion yen compared to 2022. We’ll volume expected to recover to 73% of 2019 level respond with var
Slide 17: Group Management Plan 2023
Group Management Plan 2023 2022 2023 YoY changes YoY changes （billions of yen） Result Plan (amount) (%) Revenue 478.4 490.0 11.6 2.4% Revenue（Excluding liquor tax） 364.2 374.2 9.9 2.7% Overseas revenue 102.2 111.8 9.6 9.4% EBITDA 29.9 34.7 4.8 16.2% Core operating profit 9.3 13.5 4.2 45.0% Core oper
Slide 18: Financial Targets
Group Management Plan 2023 Financial Targets 2022 Result 2023 Plan 2026 Target ROE 3.3% 3.3% 8.0% (Approximation) Core operating profit * 9.3billion yen 13.5billion yen 25.0billion yen EBITDA Average growth rate (CAGR) 16.2% About 10% (Approximation) EBITDA * 29.9billion yen 34.7billion yen 50.0bill
Slide 19: Group Management Plan 2023
Group Management Plan 2023 YoY YoY YoY YoY 2022 2023 2022 2023 （billions of yen） changes changes （billions of yen） changes changes Result Plan Result Plan (amount) (%) (amount) (%) Core Operating Profit Revenue by Segment 478.4 490.0 11.6 2.4% 9.3 13.5 4.2 45.0% by Segment Alcoholic Beverages 334.6
Slide 20: Drivers behind increased revenue of Alcoholic Beverages
Group Management Plan 2023 Drivers behind increased revenue of Alcoholic Beverages business Main factors will be price revisions of Japan alcoholic beverages, strengthening of beer/RTD, and inclusion of results of Stone Brewing in overseas alcoholic beverages, etc. Effect of exchange rates ¥(4.7) bi
Slide 21: Reasons for changes in core operating profit
Group Management Plan 2023 We expect higher costs amid additional surges in raw materials costs, but profit will increase amid increased revenue of Japan alcoholic beverages and structural reforms of the Food & Soft Drinks business Decrease in revenue caused by surging raw material costs: ¥(12.5) bi
Slide 22: Target for core operating profit
Group Management Plan 2023 Target for core operating profit 2022 Result 2023 Plan 2026 Target Alcoholic beverages in Japan 3.5% 5.0% 5.7% Alcoholic beverages in Overseas (0.4%) 0.6% 6.2% Alcoholic beverages in Restaurants (3.3%) 2.1% 5.0% Food & Soft Drinks In Japan 0.9% 1.3% 3.8% Food & Soft Drinks
Slide 23: Balance sheet reforms and Dividend plan
Group Management Plan 2023 Balance sheet reforms Dividend plan Reduce cross-shareholdings of stocks (2022 Result) Plan to increase dividend in 2023 Sale amount (million yen) Number of brands (brands) ¥ ¥ (2022) (plan for 2023) Dividend policy Achieve a consolidated dividend payout ratio of at least
Slide 24: Monitoring System for Achieving the Medium-Term Plan Targets
Monitoring System for Achieving the Medium-Term Management Plan Targets The Board of Directors will conduct appropriate monitoring to increase the attainability of the plan’s targets Progress will be disclosed to stakeholders Monitoring by supervision side (Board of Directors including outside direc
Slide 25: 2023 Action Plan
2023 Action Plan 2023 2024 2025 to 2026 Japan alcoholic Increase beer sales(1-1) ★ Alcohol tax revisions ★ Alcohol tax revisions beverages Increase RTD sales(1-2) Reorganize RTD production locations(2) Overseas Generate synergies through function integration(3-1) alcoholic Begin producing SPB (barre
Slide 26: Increase Beer & RTD sales
2023 Action Plan Japan alcoholic beverages Increase Beer & RTD sales（1-1~2） Take action to increase sales of beer and RTD eyeing revisions to alcohol tax and the recovery of restaurant demand 2023 sales plan Total demand Market outlook outlook (10,000 cases) Plan YoY vs 2019 YoY vs 2019 Recovery in
Slide 27: Promote appeal of beer; products that create new markets
2023 Action Plan Promote increased appeal of beer Products that create new markets Strengthening Increase appeal of our many Creation of new categories/new categories/new mainstay brands beer brands competitive edge Lager beer Set to release New Lemon Sour, which will be promoted as going great Esta
Slide 28: Reorganize RTD production locations
2023 Action Plan Japan alcoholic beverages Reorganize RTD production locations（2） Start production of RTD in Sendai eyeing Cost reduction effect further growth of the RTD business 2023 will see a reverse in accelerated depreciation and the Background: RTD market expected to grow over the medium to l
Slide 29: Achieve synergies with Stone Brewing quickly
2023 Action Plan Overseas alcoholic beverages Growth of SPB* in the U.S. vs 2010 Achieve synergies with Stone Brewing quickly（3-1~3） x growth Further growth of SPB* in the U.S. as well as lower logistics costs and stabilize quality through local production for local consumption 2010 2011 2012 2013 2
Slide 30: Reduce unprofitable restaurants; increase sales in overseas soft drinks
2023 Action Plan Restaurant *Marketing share calculated by Sapporo Holdings based on data reported by NielsenIQ through Market Track Service using RTD tea category for 260 Overseas Soft Drinks Reduce unprofitable restaurants （4-1~2） weeks up to December 2022 Copyright © 2023, NielsenlQ Shift focus t
Slide 31: Build an asset turnover business model
2023 Action Plan Real Estate Asset share of securitization business Build an asset turnover business model（7） Move ahead with preparations to establish private placement fund and REIT (2022) (2026) Aim to establish REIT Preparation Office in spring 2023 and investment advisory firm in autumn Real Es
Slide 32: Approach to Portfolio Consolidation
2023 Action Plan Entire Group Fundamentally reshuffle business portfolio（9） Studied each business from six perspectives and categorized them into four quadrants. Businesses categorized as “business liquidation” will be promptly executed. Other businesses will be carefully monitored annually for achi
Slide 33: Generate Group synergies around brand and connections
2023 Action Plan Entire Group Generate Group synergies around brand and connections with customers and communities（10） Japan alcoholic beverages x Japan food & soft drinks Japan alcoholic beverages x real estate Set to release New Lemon Sour, which will be promoted as going Experience at Yebisu Gard
Slide 34: Action Plan KPI
Action Plan KPI Establish KPI for each business segment and manage progress appropriately to achieve the targets of the Medium-Term Management Plan PowerPoint materials for Medium-Term Management Plan 2022 2023 2026 Vs. 2022 Japan alcoholic Reinforcement of Beer / Improving Profitability of Beer-typ
Slide 35: Sustainability Management Initiatives: Key Sustainability Issues
Sustainability Management Initiatives: Key Sustainability Issues Total revision of key sustainability issues when formulating the Medium-Term Management Plan. Positioned “Creating a decarbonized society,” “Harmonizing with local communities” and “Active participation of diverse human resources” as f
Slide 36: Sustainability Management Initiatives: Sustainability Targets
Sustainability Management Initiatives: Sustainability Targets Established targets for key sustainability issues and now we are promoting initiatives to achieve them Black text indicates results and blue text indicates targets Classification Material Issues Specific Initiatives Targets Setting Compan
Slide 37: Appendix
Appendix Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 37/54
Slide 38: Initiatives to Address Key Sustainability Issues: Harmony with the Environment
Appendix: Initiatives to Address Key Sustainability Issues Installed solar power generation system at Sapporo Beer’s Hokkaido Brewery Harmony with the Environment Realization of a decarbonized society Began test sales of Sapporo Draft Beer Black Label using a six-can pack that significantly reduces
Slide 39: Co-prosperity with Society, Activation of Human Resources
Appendix: Initiatives to Address Key Sustainability Issues Co-prosperity with Society Activation of Human Resources and Potentials Mutual prosperity with local communities Active participation of diverse human resources Sustainable community development that helps enhance area brand value Sapporo Be
Slide 40: Initiatives to Strengthen Management Foundation
Appendix: Initiatives to Strengthen Management Foundation Strengthening of management foundation Strengthening of management foundation DX New value creation Sapporo Beer and IBM Japan are officially implementing an AI system called Linkage between Uchi-repi, an app supporting family meals, and N-Wi
Slide 41: Quarterly results for FY2022
Appendix: Quarterly results for FY2022 YoY YoY YoY YoY YoY YoY YoY YoY 2021 Q1 2022 Q1 2021 Q2 2022 Q2 2021 Q3 2022 Q3 2021 Q4 2022 Q4 changes changes changes changes changes changes changes changes （billions of yen） Result Result (amount) (%) Result Result (amount) (%) Result Result (amount) (%) Re
Slide 42: Changes in Balance Sheets
Appendix：Changes in Balance Sheets （billions of yen） Total assets End of 2021 End of 2022 change Total liabilities and equity End of 2021 End of 2022 change Cash and cash equivalents Trade payables 17.4 15.4 (2.0) 33.2 35.7 2.5 Trade receivables Short-term financial liabilities 91.5 96.6 5.1 61.2 86
Slide 43: Financial Status
Appendix： Financial Status Investment on a cash basis was ¥ billion ＜ Investment total (①＋②＋③)> ¥ billion ＜Consolidated cash flow (CF) statement＞ 2021 2022 ➀ Capital expenditure (cash basis): ¥ billion （billions of yen） Change Change (%) Result Result （Property, plant and equipment, intangible asset
Slide 44: Major sales volume & sales
Appendix： Major sales volume & sale (Beer and beer-type beverages and non-alcoholic beer calculations based on large bottles,RTDs are calculated by 250 ml × 24 bottles.) Sales Volume:Beer (Japan) ※1 Sales:Beer (Japan) *including liquor tax YoY YoY Fiscal 2021 Fiscal 2022 Fiscal 2021 Fiscal 2022 Chan
Slide 45: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) <Domestic beer and beer-type beverages: <Major domestic brands: YoY change in sales volume> YoY change in sales volume by genre> (Jan – Dec) (Jan – Dec) [Beer and beer-type beverages total] up % YoY ✓ Black Label brand ✓ YEBISU brand up ％ y-o-y down ％ y-o-y ✓ Bee
Slide 46: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) ＜Main brand Jan- Dec Sales volume change＞ ＜ Beer lineup sales volume(Jan- Dec break down) ＞ (10,000 cases) (Jan – Dec) (Jan – Dec) Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 46/54
Slide 47: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) ＜ Jan- Dec sales breakdown by category ＞ ＜Jan- Dec sales revenue＞ (billions of yen) ※Incl. liquor tax *Before subsidiary companies sales, elimination of inter- company transactions and rebate deduction *From 2021, Hyosai Sour and 99.99 keg are reclassified from S
Slide 48: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) ＜ Jan- Dec sales revenue ＞ (billions of yen) *From 2021, Hyosai Sour and 99.99 keg are reclassified from Spirits to RTD. Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 48/54
Slide 49: Alcoholic Beverages (Japan): liquor tax changes
Appendix：Alcoholic Beverages (Japan) ＜Changes in the amount of liquor tax per 350 ml＞ （yen） 77 70 63.35 Beer ✓ Beer and Beer 54.25 Happoshu type beverages 46.99 yen New genre RTD 37.8 35 ✓ RTD 28 yen 2020 2023 2026 （year） Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 49/54
Slide 50: Alcoholic Beverages (Overseas)
Appendix：Alcoholic Beverages (Overseas) ＜Overseas beer : YoY change in sales volume＞ ＜ Overseas sales volume by brand (Jan-Dec) ＞ (Jan – Dec) （10,000 cases） 【North America Total up ％ y-o-y ✓ Overseas brand up ％ y-o-y ✓ Sapporo brand up ％ y-o-y 【Other Areas Total】 up ％y-o-y ＜ Overseas sales volume by
Slide 51: Alcoholic Beverages (Restaurants)
Appendix：Alcoholic Beverages (Restaurants) ＜ Sales revenue and number of Sapporo Lion Outlets ＞ ＜Sapporo Lion outlets As of Dec 31, 2022 ＞ (Billions of yen) ※before rebate deduction （Jan- Dec） （Including FC stores） ＜ Total number of outlets ＞ ＜Brands＞ 140 Outlets Copyright, 2023 SAPPORO HOLDINGS LTD
Slide 52: Food & Soft Drinks
Appendix：Food & Soft Drinks ＜ Japanese soft drinks ＜Japanese soft drinks ＜Japanese soft drinks POKKA SAPPORO Food & Beverage ＞ POKKA SAPPORO Food & Beverage＞ Sales composition by genre (Jan- Dec)> Sales composition by sales channel (Jan- Dec) Sales composition (Jan- Dec) 94.0 37.60 million 37.60 mil
Slide 53: Real Estate
Appendix：Real Estate ＜ Information about Investment property ＞ ＜ Major rental properties & occupancy rates：（Averages for 2022)> (billions of yen) ※ Fair value information will be updated in 1Q 2023 Occupa 400.0 Site area Floor area ncy rate No. of floors （㎡） （㎡） （%） 300.0 40 floors above ground, 200
Slide 54: As an intrinsic part of people's lives, Sapporo will contribute to the evolution of
As an intrinsic part of people's lives, Sapporo will contribute to the evolution of creative, enriching and rewarding lifestyles. This document was prepared for the purpose of providing information to serve as a reference for investors in making investment decisions and not for the solicitation of i