Sapporo Holdings Limited · TSE:2501
Sapporo — FY2010 Earnings Presentation
61 slides from Sapporo's earnings presentation, Feb 10, 2011
Slide 1: SAPPORO Group Management Plan 2011-2012
SAPPORO Group Management Plan 2011-2012 Solidifying the Growth Trajectory February 10, 2011 SAPPORO Holdings Ltd. URL http://www.sapporoholdings.jp
Slide 2: Contents
Contents Overview of 2010 Results SAPPORO Group Management Plan 2011-2012 • Financial targets • Basic strategies • Targets by Segment
Slide 3: Overview of 2010 Results
Overview Overview of of 2010 2010 Results Results
Slide 4: Overview of 2010 -Consolidated-
Overview of 2010 -Consolidated- Growth in both revenues and profits: Net sales, operating income, ordinary income, and net income all up vs. 2009 Net sales increased ¥1.7 bn year over year to ¥389.2 bn. The Japanese Alcoholic Beverages business booked unit sales growth for the first time in 6 years,
Slide 5: Overview of 2010 Results -By Segment-
Overview of 2010 Results -By Segment- Operating income growth in all businesses, except International Alcoholic Beverages which saw a decrease due to upfront investment costs in Vietnam. Operating Operatingincome income (billions of yen, YoY changes except percentages) 2008 2009 2010 Amount % *1. Ad
Slide 6: Overview of 2010 Results -Past 5 Years-
Overview of 2010 Results -Past 5 Years- Profits grew substantially in 2010; operating income rose for a 4th straight year Operating Operatingincome, income,ordinary ordinaryincome, income,and andnet netincome income (Income line (billions of yen) items) 18 16 15.4 14.6 14.3 14 12.3 12.8 12 10.5 10.7
Slide 7: Overview of 2010 Results -Results vs. Targets-
Overview of 2010 Results -Results vs. Targets- Performance Performanceby bySegment Segmentvs. vs.Targets Targets *2010 targets are the full-year targets issued in Q2. (billions of yen) Net sales Operating income EBITDA 2010 2010 2010 2010 2010 2010 Diff. Diff. Diff. results targets results targets r
Slide 8: Overview of 2010 Results -Management Indices-
Overview of 2010 Results -Management Indices- Further bolstered profitability and financial base and further strengthened foundations on which we will execute our growth strategies Japan Credit Rating Agency (JCR) raised Sapporo’s senior long-term debt rating by one notch to A– *2010 targets are the
Slide 9: Supplementary Information to 2010 Results
Supplementary Supplementary Information Information to to 2010 2010 Results Results *For information on each business’s profitability, please also see the Supplementary Information to our Earnings Report.
Slide 10: Japanese Alcoholic Beverages (1)
Japanese Alcoholic Beverages (1) Supplementary SupplementaryInformation Informationto to2010 2010Results Results 1. Strengthening alcoholic beverage marketing ¾ Enhancing brand power by focusing resources on core brands ¾ Yebisu, SAPPORO Draft Beer Black Label, Mugi to Hop ¾ Further diversifying alc
Slide 11: Japanese Alcoholic Beverages (2)
Japanese Alcoholic Beverages (2) Boosted market share by generating YoY Growth in core Yebisu and Mugi to Hop growth in unit sales which substantially brands outperformed total demand on a YoY basis Yebisu Yebisubrand brand Beer, Beer,happoshu, happoshu,new newgenre genretotal total 2010 unit sales
Slide 12: International Alcoholic Beverages
International Alcoholic Beverages Supplementary SupplementaryInformation Informationto to2010 2010Results Results Growth in North American business Sales in Local Currency (Jan-Dec) As in 2009, again outperformed 300 total demand in Canada in 2010 262.4 SLEEMAN (Canada) 250 241.7 212.9 221.7 ¾ Boost
Slide 13: Soft Drinks Business
Soft Drinks Business Supplementary SupplementaryInformation Informationto to2010 2010Results Results Unit sales up 2% YoY Steadily implemented cost Soft Drinks: Cost structure reforms complete* structure reforms (billions of yen) YoY cost gains realized * 1. Improvement of existing operations 2. Org
Slide 14: Real Estate Business (1)
Real Estate Business (1) Supplementary SupplementaryInformation Informationto to2010 2010Results Results Occupancy rates are averages for Jan-Dec 1. Boosting value of existing properties (at Dec. 31) Site area Floor area Occupancy Major rental properties rate No. of floors ¾ Set appropriate rent lev
Slide 15: Real Estate Business (2)
Real Estate Business (2) Overview Overviewof ofOur OurReal RealEstate EstateBusiness Business Real Estate business operating income is primarily from real estate leasing. Our real estate leasing assets are concentrated in central Tokyo (see prev. page). *EBITDA = Operating income + Operating Operati
Slide 16: Execution of Growth Strategy
Execution of Growth Strategy Steady executed initiatives to lay the groundwork for future growth • •Entry Entryinto intoVietnamese Vietnamesebeerbeerbusiness business →→ Began brewery constructionininJuly Began brewery construction July(slated (slatedfor forcompletion completionininautumn autumn2011
Slide 17: SAPPORO Group Management Plan 2011-2012
SAPPORO SAPPOROGroup GroupManagement ManagementPlan Plan2011-2012 2011-2012
Slide 18: Management Targets
Management Management Targets Targets
Slide 19: Long-term Management Strategies: New Management Framework
Long-term Management Strategies: SAPPORO Group’s New Management Framework Basic approach: Working steadily toward long-term goals while also boldly revising resource allocations, executing strategic investments, and enhancing competitiveness through aggressive management Goals (for 2016, 140th anniv
Slide 20: Position of SAPPORO Group Management Plan 2011–2012
Position of SAPPORO Group Management Plan 2011–2012 Solidify the growth trajectory to enable the SAPPORO Group’s dynamic future growth. Strengthening Group’s Solidifying the Dynamic Growth Business Foundations Growth Trajectory Strategic Targets 140th anniv. of Group’s founding 2011–2012 (2016) 2007
Slide 21: 2011-2012 Management Targets
2011-2012 Management Targets Producing solid gains toward achieving the New Management Framework’s targets. Consolidated Consolidated Targets Targets 2006 results 2010 results 2011 target 2012 target 2016 targets Consolidated net sales ¥435.0 bn ¥389.2 bn ¥482.0 bn ¥519.5 bn ¥600.0 bn *incl. liquor
Slide 22: 2011-2012 Management Targets (continued)
2011-2012 Management Targets (continued) Producing solid gains toward achieving the New Management Framework’s targets. Consolidated Consolidated Targets Targets 2006 results 2010 results 2011 target 2012 target 2016 targets Consolidated operating margin 2.9% 5.7% 5.0% 5.0% 9.0% *excl. liquor taxes
Slide 23: Management Targets - Net Sales by Segment
2011-2012 Management Targets -Net Sales by Segment- Targets Targetsby by Segment 2010 results 2011 targets 2012 targets Segment Japanese Alcoholic ¥279.3 bn ¥286.7 bn ¥290.6 bn Beverages International ¥25.3 bn ¥29.2 bn ¥32.2 bn Alcoholic Beverages Soft Drinks ¥33.9 bn ¥37.4 bn ¥39.8 bn Net sales POK
Slide 24: Management Target - Operating Income by Segment
2011-2012 Management Target -Operating Income by Segment- Targets Targetsby by Segment 2010 results 2011 targets 2012 targets Segment Japanese Alcoholic ¥9.2 bn ¥9.8 bn ¥10.6 bn Beverages International Alcoholic Beverages ¥0.5 bn ¥0.1 bn ¥0.3 bn Operating income Soft Drinks ¥1.2 bn ¥0.7 bn ¥0.7 bn P
Slide 25: Basic Strategies
Basic Basic Strategies Strategies
Slide 26: Basic Strategies
Basic Strategies We will solidify our growth trajectory through three basic strategies and by generating synergies through our integration with POKKA Corporation. I. Growth in new areas II. Growth in all III. Bolster management businesses capabilities that underpin We will pursue definitive growth r
Slide 27: Basic Strategies: I. Growth in New Areas
Basic Strategies Aimed at Solidifying the Growth Trajectory (Supplementary Information) I.I.Growth Growthin inNew NewAreas Areas ★ Producing definitive results by laying the groundwork for growth. 1. Expanding Business in the Food Sector (Soft Drinks & Food) • Produce definitive results in areas bas
Slide 28: Basic Strategies: II. Growth in All Businesses
Basic Strategies Aimed at Solidifying the Growth Trajectory (Supplementary Information) II. II.Growth Growthin inAll AllBusinesses Businesses ★ Reinforcing the Group’s foundations by generating further growth in all businesses. • Japanese Alcoholic Beverages Bolster brands by concentrating resources
Slide 29: Strategic Investment
Strategic Investment 2010 2010results results&&2011 2011plan plan Vs. prev. plan 2010 2011 2010-2011 plan +¥23.0 bn increase 2010–2011 plan ¥33.2 bn ¥31.8 bn ¥65.0 bn Total of ¥23.4 bn *Major strategic investments for 2010 generated in 2010 from Vietnam brewery construction: ¥1.4 bn +¥23.0 bn sale o
Slide 30: Business Plans
Business Business Plans Plans
Slide 31: Japanese Alcoholic Beverages
Japanese Alcoholic Beverages Quantitative To achieve sustained growth, we will aim to 2010 results 2011 targets 2012 targets targets provide the greatest excitement and joy to customers in the beer, shochu, wine, and RTD Net sales ¥279.3 bn ¥286.7 bn ¥290.6 bn (ready-to-drink) sectors while implemen
Slide 32: Japanese Alcoholic Beverages (continued)
Japanese Alcoholic Beverages Launch SAPPORO Premium Free Management ManagementPlan Plan2011-2012 2011-2012Key KeyPoints Points in March, a new product that provides a strong, full flavor to (continued) (continued) satisfy beer lovers. (2) Laying the groundwork for growth in expanding areas To lay th
Slide 33: International Alcoholic Beverages
International Alcoholic Beverages We will strengthen and expand our brand in North Quantitative America and Asia as our top priorities while also targets 2010 results 2011 targets 2012 targets expanding beyond our traditional alcoholic beverages operations to transform the International Alcoholic Ne
Slide 34: International Alcoholic Beverages (continued)
International Alcoholic Beverages Management ManagementPlan Plan2011-2012 2011-2012Key KeyPoints Points(continued) (continued) 2. Expanding into the Asian market (1) Operations in Vietnam • In 2011, we will continue brewery construction with completion scheduled for autumn while also strengthening o
Slide 35: Soft Drinks
Soft Drinks The Soft Drinks business will pursue a growth strategy based Quantitative targets 2010 results 2011 targets 2012 targets on brand-building and undertake measures designed boost its operating margin, under our corporate vision ," For everyone's smile, we will provide unforgettable taste w
Slide 36: Restaurants
Restaurants We will work to invigorate existing restaurants and Quantitative 2010 results 2011 targets 2012 targets develop formats differentiated from the competition. targets We will also undertake cost structure reforms from a medium-term perspective to enable the business to Net sales ¥26.4 bn ¥
Slide 37: Real Estate
Real Estate We will work to maintain and reinforce our stable Quantitative 2010 results 2011 targets 2012 targets profit structure and enhance the value of the targets SAPPORO Group's properties. We will carefully screen new prospects and acquire only prime Net sales ¥23.5 bn ¥23.0 bn ¥24.7 bn prope
Slide 38: Other Businesses (Food)
Other Businesses (Food) Quantitative targets 2010 results 2011 targets 2012 targets We will seek to offer a line of distinctive products and expand profits in the Food business through Net sales ¥0.6 bn ¥1.3 bn ¥2.0 bn maximization of intra-group synergies, streamlining, and greater efficiency. Oper
Slide 39: Group Management Strategy
Group Management Strategy ★ We will bolster our flexible, efficient group management framework to meet the challenges presented by the Group’s business domains, which will expand and diversify as we execute our growth strategy. Restructuring Restructuringof ofGroup GroupHeadquarters Headquarters • W
Slide 40: Returning Profits to Shareholders
Returning Returning Profits Profits to to Shareholders Shareholders
Slide 41: Returning Profits to Shareholders
Returning Profits to Shareholders Basic Policy • Providing fair returns to our shareholders is a key management policy of our Group. Our basic policy is to pay stable dividends to the extent permitted by our operating performance and financial condition. We also aim to maximize corporate value by in
Slide 42: To make people's lives richer and more enjoyable.
To make people’s lives richer and more enjoyable. 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 assessment of potential risks and uncertainties. Actual outcomes may differ mate
Slide 43: Commencement of Discussions on Operational Integration of SAPPORO Group and POKKA Group
Commencement Commencement of of Discussions Discussions on on Operational Operational Integration Integration of of the the SAPPORO SAPPORO Group Group and and POKKA POKKA GroupGroup SAPPORO HOLDINGS LTD. POKKA CORPORATION February 10, 2011 1 Copyright 2011, SAPPORO HOLDINGS LTD. All Rights Reserved
Slide 44: Contents
Contents • Background to Commencement of Integration Discussions • Steps to Integration • New Post-Integration Structure • Future Plans 2 Copyright 2011, SAPPORO HOLDINGS LTD. All Rights Reserved.
Slide 45: Background to Commencement of Integration Discussions
Background to Commencement of Integration Discussions Synergies Synergies Derived Derived from from 2009 2009 Capital Capital and and Business Business Alliance Alliance Upon Uponformation formationof ofthe thecapital capitaland andbusiness businessalliance, alliance,the theefforts effortsof of both
Slide 46: Steps to Integration
Steps to Integration Toward Toward Launch Launch of of the the New New Organizational Organizational Structure Structure in in April April 2012 2012 • •The Thecompanies companieswill willnow nowpromptly promptlyestablish establishan anintegration integration committee committee and commence discussi
Slide 47: New Post-Integration Structure
New Post-Integration Structure Generating Generating Group G Group rowth and Growth and BBuilding uilding aa Well-balanced BBusiness Well-balanced usiness PPortfolio ortfolio ★The newly consolidated group will have annual sales exceeding ¥500 billion ★We will evolve into a group with firmly establis
Slide 48: New Post-Integration Structure: Food Value Creation Group
New Post-Integration Structure Building Building aa Food Food Value Value Creation Creation Group Group Based Based on on Complementary Complementary Businesses Businesses ★We will harness the complementary aspects of each company’s various business to generate synergies and build a food value creat
Slide 49: Enhancing Complementary Aspects of Soft Drink Operations
New Post-Integration Structure Enhancing Enhancing Complementary Complementary Aspects Aspects of of Soft Soft Drink Drink Operations Operations ★Combining each company’s strengths in the household, commercial-use, vending machine, and other markets to expand sales ★Enhance product lineups to reach
Slide 50: Expanding the Food Business
New Post-Integration Structure Expanding Expanding the the Food Food Business Business ★Market unique brands in the distinctive food sector ★Offer products that provide value by contributing to customers’ health and abundant lifestyles ★Expand the commercial-use market by using beer sales routes Lem
Slide 51: Expanding the Restaurants Business
New Post-Integration Structure Expanding Expanding the the Restaurants Restaurants Business Business ★Combine alcohol-selling format (nighttime) knowhow with cafe format (daytime) knowhow to develop new formats and menus Nighttime Hokkaido Kansai & Chugoku Tohoku Kyushu Chubu Kanto Total Number of l
Slide 52: Accelerating International Expansion
New Post-Integration Structure Accelerating Accelerating International International Expansion Expansion ★Accelerate expansion into Asia, an area of POKKA Hong Kong Restaurants strength for both companies Net sales: ¥3.5bn Operating income: ¥200mn ★Boost proportion of total sales from overseas (2010
Slide 53: Combining R&D and Technological Innovations
New Post-Integration Structure Combing Combing R&D R&D and and TTechnological echnological IInnovations nnovations to to Create N Create ew VValue New alue ★Insight born of a selective ★Insight accumulated from the Tap into new value markets approach to ingredients since coffee, lemon-based products
Slide 54: Future Plans
Future Plans Forming Forming an an IIntegration ntegration C ommittee Committee Integration Integrationcommittee committeeoverview overview ••We Wewill willset setup upthe thecommittee committeeas assoon soonasaspossible possible ••Both Bothcompanies’ companies’presidents presidentswill willprovide
Slide 55: Forward-looking statements
These materials contain forward-looking statements regarding but not limited to future earnings and future actions, circumstances, and occurrences. These statements are based on information available when these materials were prepared and are subject to risks and uncertainties. Actual results and fi
Slide 56: POKKA Corporation
POKKA Corporation 1. Representative: President & CEO Masatoshi Hori 2. Head office: 4-2-29 Sakae, Naka-ku, Nagoya Prefecture, Aichi, Japan 3. Established: April 11, 1968 (Founded: February 22, 1957) 4. Main businesses: Manufacture and sale of foods and beverages 5. Fiscal year end: March 31 6. Numbe
Slide 57: Performance by Business Segment
Performance by Business Segment Net sales (billions of yen) Beverages / Foods Restaurants Other Eliminations Consolidated FY2011Estimate 86.2 9.7 9.0 –5.9 99.0 FY 2010 83.3 9.4 8.9 –4.6 97.1 FY 2009 82.9 8.8 9.5 –4.7 96.5 Operating income (billions of yen) Beverages / Foods Restaurants Other Elimina
Slide 58: Beverages and Foods Business (Japan)
Beverages and Foods Business (Japan) POKKA Corporation Operates a nation-wide network of beverage vending machines based on its core lemon-based products, coffee, and soups businesses. Lemon Lemon Coffee Coffee Soup Soup Vending Vending machines machines Developing Developing new new Fine Fine flavo
Slide 59: Beverages and Foods Business (Overseas)
Beverages and Foods Business (Overseas) POKKA Corporation Singapore Pte Ltd •• Established Established in in 1977. 1977. In In 1993, 1993, POKKA POKKA Corporation Corporation Singapore Singapore established established aa joint-venture joint-venture company, company, POKKA POKKA Ace Ace (M) (M) Son.
Slide 60: Restaurants (Japan) / Restaurants (Overseas)
Restaurants (Japan) POKKA Create Co., Ltd. Operates Operates coffee coffee shop shop franchise franchise Cafe Cafe de de Crie: Crie: 101 101 locations locations in in the the Kanto Kanto area, area, 31 31 in in the the Tokai Tokai area, area, 17 17 in in the the Kansai Kansai area. area. Total: Tota
Slide 61: Other Businesses
Other Businesses Foremost Blue Seal, Ltd. Seal, Ltd. Manufacture/sale Manufacture/sale of of Blue Blue Seal Seal ice ice cream cream "Born "Born in in America America and and raised raised in in Okinawa" Okinawa" POKKA Logistics Co. Co.,, Ltd. Transportation/warehousing Transportation/warehousing ma