Sapporo Holdings Limited · TSE:2501
Sapporo — FY2021 Earnings Presentation
53 slides from Sapporo's earnings presentation, Feb 10, 2022
Slide 1: Sapporo Group Business Results for 2021 / Management Plan for 2022
Sapporo Group Business Results for 2021 Management Plan for 2022 *In this document, the following company name abbreviations are used: February 10th 2022 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: Agenda
１. Executive Summary ・・・P3 ~P6 ２. Management Plan for 2022 ・・・P7~P19 ３. Business Results for 2021 ・・・P20~P38 ４. Appendix ・・・P39~P52 Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved. 2/53
Slide 3: Executive Summary
Executive Summary Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved. 3/53
Slide 4: Business Results for 2021 and Management Plan for 2022
Business Results for 2021 and Management Plan for 2022 Business Results for 2021 Revenue: ¥437.2 billion (up ¥2.4 billion YoY), Core operating profit: ¥8.1 billion (up ¥3.9 billion YoY) In Japan, revenue and profit rose on lower expenses from cost structure reforms and increased sales of RTD and alc
Slide 5: Results and Priorities for 2021
Results and Priorities for 2021 The management environment has been transformed due to COVID-19, but under the fundamental policy of the Medium- Term Management Plan, we steadily implemented growth strategy and structural reforms to address these changes with a sense of urgency ➡ Work on priorities
Slide 6: Policy for 2022 Initiatives
Policy for 2022 Initiatives Accelerate initiatives for growth strategy and structural reforms aimed at resolving priorities ◆ Key growth strategies and efforts to reform corporate structure Growth strategies Structural reforms ・Continue to increase canned beer sales Japanese Japanese ・Achieve growth
Slide 7: Management Plan for 2022
Management Plan for 2022 Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved. 7/53
Slide 8: Policy for 2022 Initiatives: Japan Alcoholic Beverages
Policy for 2022 Initiatives: Japan Alcoholic Beverages Pursuit of Premium Value and Reasonable Value ◆ Premium value: Various beer brands Total demand Flavor 2022 sales plan (cases) outlook Design evolution Innovation SH estimate <Black Label> (10,000 cases) Plan YoY vs 2019 YoY vs 2019 Product rene
Slide 9: Policy for 2022 Initiatives: Japan Alcoholic Beverages
Policy for 2022 Initiatives: Japan Alcoholic Beverages Pursuit of Premium Value and Reasonable Value ◆ Reasonable value: Segment concentration and core brand development 【New genre】 【RTD】 (1) Pursue specialization by strengthening (2) Transition Sendai Brewery to ＜GOLD STAR＞ “Izakaya feeling at home
Slide 10: Policy for 2022 Initiatives: International Alcoholic Beverages
Policy for 2022 Initiatives: International Alcoholic Beverages In Canada, increase RTD sales and improve unit price/product mix of beers In the United States, increase sales of home-use products and revitalize Anchor 2022 sales plan （cases） ◆ Canada ◆ U.S. （10,000 cases） Plan YoY ＜Beer＞ ＜USA＞ Intern
Slide 11: Policy for 2022 Initiatives: Restaurants
Policy for 2022 Initiatives: Restaurants Promote further structural enhancement aimed at disseminating the Group’s brands and achieving profitability ◆ Expansion and development of “small, small investment, suburban” business model 2022 sales plan（value) （billion yen） Plan YoY vs 2019 Restaurants 15
Slide 12: Policy for 2022 Initiatives: Food & Soft Drinks
Policy for 2022 Initiatives: Food & Soft Drinks Pursue structural reforms aimed at optimization of business portfolio, concentrating on plant-based ingredients centered on lemons *PS alone 2022 sales plan（value) （billion yen） Plan YoY Soft drinks 63.5 +1% Food* 35.9 +８% ➡Implement aggressive marketi
Slide 13: Policy for 2022 Initiatives: Real Estate
Policy for 2022 Initiatives: Real Estate Promote initiatives to improve the value of existing properties, boosting profits of new businesses ＜Core operating profit plan＞ Key initiatives for 2022 2021 2022 2023～ 1. Approach to improving the value of Yebisu Garden Place Seek to improve convenience tai
Slide 14: 2022: Group Management Plan
2022: Group Management Plan 2021 2022 YoY changes YoY changes （billions of yen） Result Plan (amount) (%) Revenue 437.2 478.7 41.5 9.5% Revenue（Excluding liquor tax） 331.2 357.9 26.7 8.1% Overseas revenue 74.5 83.4 9.0 12.0% EBITDA 28.6 31.6 2.9 10.3% Core operating profit 8.1 10.0 1.9 23.2% Core ope
Slide 15: Revenue by Segment
Revenue by Segment 2021 2022 YoY changes YoY changes （billions of yen） Result Plan (amount) (%) Revenue by Segment 437.2 478.7 41.5 9.5% Alcoholic Beverages 289.7 333.7 44.0 15.2% Japanese 228.6 257.8 29.2 12.8% Overseas 53.4 60.4 7.0 13.1% Restaurants 7.6 15.5 7.9 103.2% Food & Soft Drinks 125.5 12
Slide 16: Main Contributors to Changes in Revenue for 2022
Main Contributors to Changes in Revenue for 2022 Increased revenue mainly from recovery in beer/restaurant businesses and growth overseas = Increase Alcoholic Beverages Food & Soft Drinks Real Estate = Decrease Canada+4.4 USA+2.4 2022 plan Japanese liquor +2.0 Beer +21.2 Wine, Spirits +1.1 Happoshu
Slide 17: Core Operating Profit by Segment
Core Operating Profit by Segment 2021 2022 YoY changes YoY changes （billions of yen） Result Plan (amount) (%) Core Operating Profit by Segment 8.1 10.0 1.9 23.2% Alcoholic Beverages 5.4 9.5 4.1 74.4% Japanese 7.9 7.5 (0.4) (5.3%) Overseas 1.7 2.6 0.9 50.5% Restaurants (4.2) (0.6) 3.6 ー Food & Soft D
Slide 18: Main Contributors to Changes in Core Operating Profit for 2022
Main Contributors to Changes in Core Operating Profit for 2022 Real estate experienced a temporary downturn in profits, but this was offset by the increase in profits of the Alcoholic Beverages/Food & Soft Drinks businesses Each business is impacted by soaring raw materials prices = Increase * Impac
Slide 19: Profit attributable to owners of parent
Profit attributable to owners of parent 2021 2022 （billions of yen） (Details) (Details） Result Plan Core operating Profit 8.1 10.0 Other operating income・ Gain on sales of fixed assets, expenses 13.9 impairment, etc. (2.7) Operating Profit 22.0 7.3 Profit before tax 21.2 6.9 Income taxes 8.9 1.8 Pro
Slide 20: Business Results
Business Results Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved. 20/53
Slide 21: Review of 2021: Results
Review of 2021: Results Strong sales of canned beers, lemon-based products, and plant-based milk Record high sales and shipment volume of RTDs and Sapporo brand in the United States Black Label canned YEBISU brand canned RTD product sales product sales volume product sales volume volume Up % YoY Up
Slide 22: Review of 2021: Results
Review of 2021: Results Progress of structural reforms ◆ Restaurant business progress in break-even point efforts ◆ Sales of real estate in 2021 Carried out reshuffling of store portfolio by closing stores and opening Due to sale of investment property new stores in low-cost format at the same time
Slide 23: Review of 2021: Issues
Review of 2021: Issues Commercial-use beer sales and the restaurant business struggled due to reduced business hours and restrictions on alcohol service Office occupancy rates declined due to deteriorating market conditions Beer (bottles・kegs） sales volume Yebisu Garden Place Restaurants sales offic
Slide 24: 2021: Highlights
2021: Highlights 2020 2021 YoY changes YoY changes （billions of yen） Result Result (amount) (%) Revenue 434.7 437.2 2.4 0.6% Revenue（Excluding liquor tax） 328.6 331.2 2.6 0.8% Overseas revenue 65.5 74.5 9.0 13.7% EBITDA 27.4 28.6 1.3 4.7% Core operating profit 4.3 8.1 3.9 91.1% Core operating profit
Slide 25: Results Highlights
Results Highlights Greatly impacted by COVID-19, but revenue and profit both increased on the growth in home-use sales in Japan and the overseas business along with the effects of structural reforms Revenue Core operating profit Profit attributable to owners of parent Alcoholic Beverages +4.3 （ bill
Slide 26: Results Highlight: Impact on Restaurant-Related Companies
Results Highlight: Impact on Restaurant-Related Companies Struggles of restaurant related companies continue to dampen overall profits Meanwhile, the restaurant business improved YoY on the effect of structural reforms, despite a sharp drop in revenue (billions of yen) Breakdown showing core operati
Slide 27: Results Highlight
Results Highlight Balance of net debt Equity Capital expenditure (cash basis) 2020 2020 2020 2021 221.5 180.7 2021 149.6 163.3 2021 21.2 16.1 （billions of yen） D/E ratio (net) Down 40% YoY （billions of yen） （billions of yen） Market value info on Reforms of Group management foundation and Group topic
Slide 28: Revenue by Segment
Revenue by Segment 2020 2021 YoY changes YoY changes （billions of yen） Result Result (amount) (%) Revenue by Segment 434.7 437.2 2.4 0.6% Alcoholic Beverages 285.4 289.7 4.3 1.5% Japanese 227.9 228.6 0.7 0.3% Overseas 46.2 53.4 7.2 15.7% Restaurants 11.3 7.6 (3.7) (32.5%) Food & Soft Drinks 125.9 12
Slide 29: Main Contributors to Changes in Revenue
Main Contributors to Changes in Revenue Commercial-use beer, restaurant business and domestic soft drinks struggled, but higher revenue from RTD and overseas alcoholic beverages helped push overall revenue higher (up ¥ billion) Alcoholic Beverages Food & Soft Drinks Real Estate = Increase YoY Change
Slide 30: Core Operating Profit by Segment
Core Operating Profit by Segment 2020 2021 YoY changes YoY changes （billions of yen） Result Result (amount) (%) Core Operating Profit by Segment 4.3 8.1 3.9 91.1% Alcoholic Beverages 2.4 5.4 3.1 129.7% Japanese 6.7 7.9 1.3 18.9% Overseas 0.5 1.7 1.3 270.2% Restaurants (5.0) (4.2) 0.8 ー Food & Soft D
Slide 31: Main Contributors to Changes in Core Operating Profit
Main Contributors to Changes in Core Operating Profit While profit declined in commercial-use beer, new-genre beer, and the Real Estate business, growth in RTD, recovery overseas, and cost control resulted in an increase of ￥ billion. ➡ Covered reversal of ¥(1.7) billion COVID-19 loss transfer* = In
Slide 32: Profit attributable to owners of parent
Profit attributable to owners of parent 2020 2021 （billions of yen） (Details) (Details） Result Result Core operating Profit 4.3 8.1 Other operating income 3.7 Gain on sales of non-current assets: +1.6 28.5 Gain on sales of non-current assets: +23.2 COVID-19 related subsidies: +4.5 Impairment losses
Slide 33: Alcoholic Beverages
Alcoholic Beverages Commercial-use beer and the restaurant business, which both struggled due to COVID-19, are recovering Increased revenue and profit on the effect of higher revenue from home-use beer, RTD and overseas alcoholic beverages along with the effect of cost structure reforms <Revenue> Ja
Slide 34: Food & Soft Drinks
Food & Soft Drinks Soft drink sales and certain vending machine locations struggled due to COVID-19 and bad weather, despite strong sales of lemon-based products and a recovery overseas Heading toward core operating profit buoyed by cost controls and a reduction in depreciation due to the previous y
Slide 35: Real Estate
Real Estate Revenue and profits were down on weaker office market conditions and impacts from the departure of some tenants <Revenue> In addition to a YGP occupancy rate at YGP, 2H was impacted by property (billions of yen) sales and lower rents charged to 2020 rent reductions commercial wing tenant
Slide 36: Changes in Balance Sheets
Changes in Balance Sheets Total assets decreased ¥21.8 billion from year end Cash and cash equivalents Total assets Total assets (billions of yen) Trade receivables 19.7 17.4 ➢ Impact of seasonal factors and bank holidays Current assets 84.5 YoY change Inventories 91.5 +7.0 36.0 20.6 39.2 Other curr
Slide 37: Changes in Balance Sheets
Changes in Balance Sheets Total liabilities declined ¥35.6 billion from year end, total equity increased ¥13.8 billion Total liabilities and equity Total liabilities and equity Trade payables (billions of yen) Short-term financial liabilities 31.9 ➢ Redemption of bonds 33.2 83.2 61.2 Current liabili
Slide 38: Financial Status
Financial Status Investment on a cash basis was ¥ billion <Investment total (①+②+③)> ¥ billion <Consolidated cash flow (CF) statement> ➀ Capital expenditure (cash basis) : ¥ billion (Property, plant and equipment, intangible assets, investment property) 2020 2021 （billions of yen） Change Change (%)
Slide 39: Appendix
Appendix Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved. 39/53
Slide 40: Sapporo Group Environmental Vision 2050
Appendix: Initiatives for Sustainability Management Sapporo Group Environmental Vision 2050 Toward a “carbon-free society, recycling-oriented society and society in harmony with nature” Specific initiatives Carbon-free society ・Reduce CO2 of our own business sites by 20% (by 2030 vs. 2013) SB PS -Re
Slide 41: Appendix: Initiatives for Sustainability Management
Appendix: Initiatives for Sustainability Management Business Highlights for 2021 Release Date Topic Related Priority Issues Formulation of a global slogan “Promote Responsible Drinking” Dec. 27 https://www.sapporoholdings.jp/csr/news/dit/?id=8874 * Japanese Formulation of Sapporo Group Plastics Poli
Slide 42: Appendix: Major sales volume & sales
Appendix： Major sales volume & sale Sales:Beer (Japan) *including liquor tax (billions of yen) Sales Volume:Beer (Japan) ※1 (10,000 cases) YoY Fiscal 2020 Fiscal 2021 YoY Change(%) Fiscal 2020 Fiscal 2021 Change(%) Beer 137.2 131.8 (4.0%) Sapporo Draft Beer Black Label (total) 1,335 1,249 (6.5%) Hap
Slide 43: Appendix: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) <Domestic beer and beer-type beverages: <YoY changes in sales volume of beer and beer-type YoY change in sales volume by genre> (Jan – Dec) beverages by genre> (cumulative for each month) （％） [Beer and beer-type beverages total] down ％ y-o-y ✓ Beer： down ％ y-o-y
Slide 44: Appendix: 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) Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved. 44/53
Slide 45: Appendix: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) ＜ Jan- Dec sales revenue ＞ ＜ Jan- Dec sales breakdown by category ＞ (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
Slide 46: Appendix: 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. 1.3 2.0 8.2 8.5 8.5 1.6 8.2 8.4 1.8 6.8 6.5 19.8 1.6 15.2 13.7 1.4 1.4 11.8 5.3 5.0 5.1 4.7 4.3 7.0 3.6 3.3 4.3 5.1 2015 2016 2017 2018 2019 2
Slide 47: Appendix: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) ＜Changes in the amount of liquor tax per 350 ml＞ （yen） 77 70 63.35 ✓ Beer and Beer 54.25 type beverages 46.99 yen 37.8 ✓ RTD 35 yen 28 2020 2023 2026 （year） Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved. 47/53
Slide 48: Appendix: Alcoholic Beverages (Overseas)
Appendix：Alcoholic Beverages (Overseas) ＜Overseas beer : YoY change in sales volume＞ ＜ Overseas sales volume by brand(Jan-Dec) ＞ (Jan – Dec) （10,000cases） 【North America Total】 up ％ y-o-y ✓ Overseas brand %* YoY down ％ y-o-y ✓ Sapporo brand 2020 2021 up ％ y-o-y In Canada, sales of Sleeman Clear bran
Slide 49: Appendix: Alcoholic Beverages (Restaurants)
Appendix：Alcoholic Beverages (Restaurants) ＜ Sales revenue and number of Sapporo Lion Outlets ＞ ＜Sapporo Lion outlets As of Dec 31, 2021 ＞ (Billions of yen) ※before rebate deduction （Jan- Dec） ＜ Total number of outlets ＞ ＜Brands＞ Copyright, 2022 SAPPORO HOLDINGS LTD. All rights reserved. 49/53
Slide 50: Appendix: Food & Soft Drinks
Appendix：Food & Soft Drinks ＜ Japanese soft drinks POKKA SAPPORO Food & Beverage ＞ ＜ Japanese soft drinks POKKA SAPPORO Food & Beverage ＞ Sales volume & Sales by genre(Jan- Dec) Sales composition by sales channel (Jan- Dec) 【Lemon based-drinks】 【Lemon-based food products】 ✓ up ％ y-o-y ✓ up ％ y-o-y （
Slide 51: Appendix: Food & Soft Drinks
Appendix：Food & Soft Drinks 【 Pokka Create Co., Ltd .】 ＜ Food & Soft Drinks segment Revenue break down by geographic area ＞ ✓ Jan- Dec Sales revenue billion ※Except connection adjustment up ％ y-o-y ＜ Number of outlets as of December 31, 2021> ＜Japanese soft drinks POKKA SAPPORO Food & Beverage＞ Decr
Slide 52: Appendix: Real Estate
Appendix：Real Estate ＜ Information about Investment property ＞ ＜ Major rental properties & occupancy rates：（Averages for 2021)> (billions of yen) ※ Fair value information will be updated in 1Q 2022 400.0 Occupa Site area Floor area ncy rate No. of floors （㎡） （㎡） （%） 300.0 40 floors above ground, Yeb
Slide 53: 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. 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