Sapporo Holdings Limited · TSE:2501

Sapporo — Q3 2023 Earnings Presentation

38 slides from Sapporo's earnings presentation, Nov 10, 2023

  1. Slide 1: Sapporo Group Business Results Presentation for the Nine Months Ended September 30, 2023

    Sapporo Group Business Results Presentation for the Nine Months Ended September 30, 2023 *In this document, the name abbreviations are used: November 10th 2023 SH: Sapporo Holdings Limited SB: Sapporo Breweries Ltd. SLN: Sapporo Lion Limited. URL https://www.sapporoholdings.jp/en/ PS: Pokka Sapporo

  2. Slide 2: Contents

    １. Summary ・・・ P.3 ２. Earnings Forecast Revision ・・・ P.4~P.7 ３. Business Results ・・・ P.8~P.22 ４. Promotion of management that is aware of cost of capital and stock price ・・・ P.23~P.25 ５. Appendix ・・・ P.26~P.38 Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 2/38

  3. Slide 3: Summary

    Summary Business results: increased revenue and core operating profit 2022 Q3 2023 Q3 YoY YoY ● In addition to strong sales in the alcoholic （billions of yen） changes changes Result Result (amount) (%) beverages business, structural reforms are steadily contributing to profitability, resulting in in

  4. Slide 4: Earnings Forecast Revision

    Earnings Forecast Revision Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 4/38

  5. Slide 5: Earnings Forecast Revision

    Earnings Forecast Revision Earnings Forecast Revision We will upwardly revise the full-year earnings forecast for FY2023. We will implement appropriate measures to promote structural reforms and growth strategy. Initial Revised Revised 2022 Change （billions of yen） Plan Plan Amount Result Amount Rev

  6. Slide 6: Earnings Forecast Revision_Revenue

    Earnings Forecast Revision Earnings Forecast Revision_Revenue Revenue Initial Revised Revised 2022 Change Main revisions (billions of yen) Plan Plan Amount Result Amount Revenue 490.0 510.0 20.0 478.4 31.5 Alcoholic Beverages Japanese 250.0 265.0 15.0 -price Increased sales of commercial-use product

  7. Slide 7: Earnings Forecast Revision_Core operating profit

    Earnings Forecast Revision Earnings Forecast Revision_Core operating profit Core operating profit Initial Revised Revised 2022 Change Main revisions (billions of yen) Plan Plan Amount Result Amount Revenue 13.5 16.5 3.0 9.3 7.2 Alcoholic Beverages Japanese 12.5 14.5 2.0 -- Effect of increased revenu

  8. Slide 8: Business Results

    Business Results Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 8/38

  9. Slide 9: Financial Highlights

    Financial Highlights 2022 Q3 2023 Q3 YoY changes YoY changes （billions of yen） Result Result (amount) (%) Revenue 345.8 377.7 31.9 9.2% Revenue（Excluding liquor tax） 261.6 291.6 30.0 11.4% Overseas revenue 72.5 90.0 17.4 24.0% EBITDA 20.9 29.3 8.5 40.5% Core operating profit 5.8 14.4 8.6 149.8% Core

  10. Slide 10: Situation of External Environment Affecting Business Results

    Situation of External Environment Affecting Business Results Impacts of the COVID-19 pandemic Higher costs such as surging raw material costs Sales volume of commercial-use products for Japan alcoholic beverages Costs are expected to increase by ¥14.0 billion vs. 2022 and ¥1.5 billion vs. the and sa

  11. Slide 11: Financial Highlights

    Financial Highlights YoY YoY YoY YoY 2022 Q3 2023 Q3 2022 Q3 2023 Q3 （billions of yen） changes changes （billions of yen） changes changes Result Result Result Result (amount) (%) (amount) (%) Core Operating Profit Revenue by Segment 345.8 377.7 31.9 9.2% 5.8 14.4 8.6 149.8% by Segment Alcoholic Bever

  12. Slide 12: Financial Highlights: Revenue

    Financial Highlights Revenue increased 31.9 billion yen <+9.2%> driven by the alcoholic beverages business For Japan alcoholic beverages, in addition to the recovery in commercial-use beer products and strong performance of RTD, the price revision effect also contributed to increased sales The prima

  13. Slide 13: Financial Highlights: Core operating profit

    Financial Highlights Profit increased by 8.6 billion yen <+149.8%> due to increased revenue and the effect of structural reforms Increased revenue in the alcoholic beverages business and the effect of structural reforms on the restaurant business and Japan food & soft drinks business steadily contri

  14. Slide 14: Action Plan

    Action Plan Plan to steadily disclose On slides after page 15, we have included further explanations for action plan numbers (1-1) through (10) details of action plan 2023 2024 2025 to 2026 Japan alcoholic Increase beer sales(1-1) ★ Alcohol tax revisions ★ Alcohol tax revisions beverages Increase RT

  15. Slide 15: Alcoholic Beverages ～Japanese～

    Alcoholic Beverages ～Japanese～ Reorganize RTD locations +1.1 Reasons for changes in core operating profit(billions of yen） Streamlining promotional expenses +0.6 Revenue：192.5billions of yen（YoY+14.1billions of yen、＋7.9%） Increase in expenses associated with personnel investment and resumption of ac

  16. Slide 16: Alcohol tax revisions: Efforts from October

    Alcoholic Beverages ～Japanese～ Alcohol tax revisions: Efforts from October Market trends: A shift to beer/RTD is expected Image of pricing before/after Oct. 2023 alcohol tax revisions Change in volume share of canned beer-type beverages/RTD (%) The price gap between beer and new genre has narrowed,

  17. Slide 17: Alcohol tax revisions: Efforts from October

    Alcoholic Beverages ～Japanese～ Alcohol tax revisions: Efforts from October Our efforts: These changes present a possible opportunity for our company, which has a high proportion of beer products Break away from low profitability and realize business growth by strengthening main brands and proposing

  18. Slide 18: Alcoholic Beverages ～Overseas～

    Alcoholic Beverages ～Overseas～ Reasons for changes in core operating profit(billions of yen） Revenue：66.9billions of yen（YoY+15.2billions of yen、＋29.3%） Including Stone‘s loss and integration cost (Because SPB* is in preparation for production) Core operating profit： 0.8billions of yen （YoY+(0.2)bil

  19. Slide 19: Alcoholic Beverages ～Restaurant～

    Alcoholic Beverages ～Restaurant～ Reasons for changes in core operating profit(billions of yen） Revenue：14.9billions of yen（YoY+4.1billions of yen、＋37.7%） Core operating profit： 1.7billions of yen（YoY+2.5billions of yen） SLN Affiliated （non-consolidated companies settlement） and others The effect of

  20. Slide 20: Food & Soft Drinks

    Food & Soft Drinks ～Japanese～ ～Overseas～ Revenue：67.6billions of yen（YoY(3.9)billions of yen、(5.5)%) Revenue：19.8billions of yen（YoY+1.8billions of yen、＋9.9%） Core operating profit： 1.9billions of yen（YoY+2.2billions of yen） Core operating profit： 1.1billions of yen（YoY+0.1billions of yen、＋5.0% ） Re

  21. Slide 21: Real Estate

    Real Estate Reasons for changes in core operating profit(billions of yen） Revenue：16.0billions of yen（YoY+0.7billions of yen、＋4.9%） Impact of office HVAC work Core operating profit： 4.2billions of yen （YoY+(0.7)billions of yen 、(13.7)% ） YGP Sapporo Others While there was increased revenue from YGP

  22. Slide 22: Action Plan KPI

    Action Plan KPI ※1Forex assumption: ¥130 Q3results Full year medium-term ※2 Local currency basis (Singapore dollar) plan Target ＊ to be disclosed in Q2 or fiscal year end financial results 2022 Q3 2023 Q3 2022 2023Plan Japan alcoholic Reinforcement of Beer / Improving Profitability of Beer-type Bev.

  23. Slide 23: Promotion of management that is aware of cost of capital and stock price

    Promotion of management that is aware of cost of capital and stock price Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 23/38

  24. Slide 24: Promotion of management that is aware of cost of capital and stock price

    Promotion of management that is aware of cost of capital and stock price While the P/B ratio is above 1.0, we recognize that the current ROE level does not sufficiently exceed the cost of shareholders’ equity as required by the market Change in P/B ratio - Past 10 years Change in ROE - Past 10 years

  25. Slide 25: Promotion of management that is aware of cost of capital and stock price

    Promotion of management that is aware of cost of capital and stock price To promote a financial strategy that emphasizes "sustainable growth" and "capital efficiency," which we have been working on for some time, and to achieve an increase in corporate value Policy - Aim to achieve Medium-Term Manag

  26. Slide 26: Appendix

    Appendix Copyright, 2023 SAPPORO HOLDINGS LTD. All rights reserved. 26/38

  27. Slide 27: Financial Indicator: Financial Targets

    Financial Indicator Financial Targets medium-term Q3results Full year plan Target 2023 plan 2022 Q3 2023 Q3 2022 <Initial plan> 2026 Target 4.1% ROE - - 3.3% <3.3%> 8.0% 16.5 Core operating profit 5.8 14.4 9.3 <13.5> 25.0 * (Approximation) * billions of yen billions of yen billions of yen billions o

  28. Slide 28: Financial Indicator: Target for core operating profit margin

    Financial Indicator Target for core operating profit margin medium-term Q3results Full year plan Target 2023 plan 2022 Q3 2023 Q3 2022 (Initial plan) 2026 Target 5.5% Alcoholic beverages in Japan 2.6% 5.3% 3.5% <5.0%> 5.7% 0.1% Alcoholic beverages in Overseas 2.0% 1.2% (0.4)% <0.6%> 6.2% Alcoholic b

  29. Slide 29: Balance Sheets

    Balance Sheets （billions of yen） Total assets End of 2022 2023 Q3 Change Total liabilities and equity End of 2022 2023 Q3 Change Cash and cash equivalents 15.4 18.6 3.2 Trade payables 35.7 37.1 1.4 Trade receivables 96.6 91.0 (5.6) Short-term financial liabilities 86.5 53.4 (33.2) Inventories 47.5 5

  30. Slide 30: Status of Each Cash Flow

    Status of Each Cash Flow （billions of yen） 2022 Q3 2023 Q3 Change Change (%) CF from operating activities 13.6 38.2 24.6 180.0% CF from investing activities (42.0) (15.2) 26.8 ー ＜Investment total（①＋②）＞ billion Free CF (28.4) 23.0 51.4 ー CF from financing activities 30.7 (19.9) (50.7) ー ➀ Capital exp

  31. Slide 31: Alcoholic Beverages Data

    Alcoholic Beverages Data ※1：:Following the agreement of the Brewers Association of Japan, Japanese there is no disclosure of the sales volume for the first quarter. The sales volume for the first half and end of the fiscal year shall be disclosed. (10,000 cases) YoY Sales Volume:Beer (Japan) (※1) 20

  32. Slide 32: Alcoholic Beverages Data

    Alcoholic Beverages Data Japanese ＜ Jan- Sep sales revenue ＞ (billions of yen) （billions of yen） YoY Sales:Beer (Japan) 2022Q3 2023Q3 Change(%) Beer 104.0 112.3 8.0% Happoshu 4.5 4.5 (0.4%) New genre 32.4 31.1 (3.8%) Beer, happoshu, and new genre 140.9 148.0 5.0% RTD 16.8 20.0 19.2% Domestic wines 2

  33. Slide 33: Alcoholic Beverages Data

    Alcoholic Beverages Data Japanese ＜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. 33/38

  34. Slide 34: Alcoholic Beverages Data

    Alcoholic Beverages Data Overseas (10,000 cases) YoY Sales Volume:Beer (International) 2022Q3 2023Q3 Change(%) Overseas brand (※1) 1,039 1,222 17.6% Sapporo brand 319 325 2.0% ①North America 1,358 1,547 14.0% Sapporo brand 180 206 14.6% ②Other areas 180 206 14.6% Total（①＋②） 1,538 1,753 14.0% Sapporo

  35. Slide 35: Alcoholic Beverages Data

    Alcoholic Beverages Data Restaurants ＜Composition of Restaurants by Format＞ YoY Restaurants 2022Q3 2023Q3 Change(%) Revenue （billions on yen） 10.8 14.9 37.7% Number of Restaurants 153 135 (11.8%) ＜Trend in Revenue of Restaurants Business 135Outlets and Number of Restaurants＞（Jan-Sep） （billions of ye

  36. Slide 36: Food & Soft Drinks Data

    Food & Soft Drinks Data Japanese （billions of yen） YoY Sales:Food & Soft Drinks (Japan) (※1) 2022Q3 2023Q3 Change(%) Soft Drinks 45.7 43.1 (5.8%) Food（Lemon・Soups・Plant milk) 21.8 20.5 (5.8%) ※1：Only domestic sales(Before Rebate subtracted from sales) ＜ Japanese soft drinks POKKA SAPPORO Food & Beve

  37. Slide 37: Real Estate Data

    Real Estate Data Real Estate ＜ Information about Investment property ＞ (billions of yen) ＜ Major rental properties & occupancy rates：（Averages for 2023 Q3)> 400.0 Occupa Site area Floor area 300.0 ncy rate No. of floors （㎡） （㎡） （%） 200.0 382.9 385.7 40 floors above ground, Yebisu Garden Place（1） 56,

  38. Slide 38: As an intrinsic part of people's lives, Sapporo will contribute to the evolution of creative, enriching and rewarding lifestyles

    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

Sapporo Holdings — Q3 2023 Earnings Presentation on 6ix