Sapporo Holdings Limited · TSE:2501
Sapporo — H1 2021 Earnings Presentation
45 slides from Sapporo's earnings presentation, Aug 6, 2021
Slide 1: Sapporo Group Business Results Presentation for the Six Months Ended June 30, 2021
Sapporo Group Business Results Presentation for the Six Months Ended June 30, 2021 *In this document, the following company name abbreviations are used: August 6th 2021 SH: Sapporo Holdings Limited SB: Sapporo Breweries Ltd. SLN: Sapporo Lion, Inc. URL https://www.sapporoholdings.jp/en/ PS: Pokka Sa
Slide 2: Agenda
１． Summary ・・・P3~P4 ２． Business Results ・・・P5~P23 ３． Revision of Consolidated Earnings Forecasts ・・・P24~P29 ４． Appendix ・・・P30~P44 Copyright, 2021 SAPPORO HOLDINGS LTD. All rights reserved. 2/45
Slide 3: Summary: Business Results for 2021 2Q and Full-Year Earnings Forecast for 2021
Summary: Business Results for 2021 2Q and Full-Year Earnings Forecast for 2021 Business Results for 2021 2Q Revenue: 199.7 billion yen (down 0.3 billion yen YoY) Sales were at the same level YoY as commercial-use beer and restaurant sales in Japan declined due to the impact of COVID-19, while sales
Slide 4: Summary: Business Conditions in 2021 2Q and Future Outlook
Summary: Business Conditions in 2021 2Q and Future Outlook Our efforts are beginning to show results, while the groundwork for recovery in performance and achievement of the Medium-term management plan is being laid. We will ensure and accelerate growth strategies and structural reforms. Business se
Slide 5: Business Results
Business Results Copyright, 2021 SAPPORO HOLDINGS LTD. All rights reserved. 5/45
Slide 6: Review of the Six Months Ended June 30, 2021: Results
Review of the Six Months Ended June 30, 2021: Results Canned beer continued to see strong sales. RTD sales rose significantly, and lemon-based products and plant milk products maintained solid performance. In the U.S., sales of home-use products were strong, while sales of commercial-use products al
Slide 7: Review of the Six Months Ended June 30, 2021: Results (Structural Reforms)
Review of the Six Months Ended June 30, 2021: Results Progress of structural reforms ◆ Restaurant business initiatives to reform break-even point ◆ Liquidation of owned properties for 2021 2Q ➡ Built a profit structure that can achieve profitability with sales of approximately 70% of 2019 level thro
Slide 8: Review of the Six Months Ended June 30, 2021: Issues
Review of the Six Months Ended June 30, 2021: Issues Sales of commercial-use beer and sales in the restaurant business continued to suffer due to the impact of the COVID-19 pandemic. Office occupancy rate fell due to deterioration in market conditions. Restaurants Yebisu Garden Place Beer (bottles・k
Slide 9: Results Highlight
Results Highlight 2020 2Q 2021 2Q YoY changes YoY changes （billions of yen） Result Result (amount) (%) Revenue 200.0 (0.1%) Revenue（Excluding liquor tax） 151.6 151.1 (0.5) (0.3%) Overseas revenue 30.7 34.7 4.0 13.1% EBITDA 6.4 6.9 0.6 9.2% Core operating profit (5.1) - Core operating profit margin (
Slide 10: Results Highlights
Results Highlights Highlight Although restaurant-related business struggled, core operating profit is recovering due to growth in the home-use product market and cost structure reforms. Profit attributable to owners of parent soared due to sale of investment property. Revenue Core operating profit P
Slide 11: Results Highlight: Impact on Restaurant-Related Companies
Results Highlight: Impact on Restaurant-Related Companies Breakdown showing core operating profit for ➡ Loss for 1H was due to difficulties in the restaurants-related business and other businesses restaurant-related business (billions of yen) Consolidated: (1) + (2) 0.2 Persistent difficulties in re
Slide 12: Results Highlight
Results Highlight Balance of net debt Equity Capital expenditure (cash basis) 2020 2Q 2020 2Q End of 2020 End of 2020 2021 revised plan 225.8 221.5 156.6 149.6 161.9 2021 2Q 191.5 2021 2Q 22.4 10.2 (Progress: 45%) （billions of yen） 2021 2Q D/E ratio (net) Down 30% YoY （billions of yen） （billions of
Slide 13: Revenue by Segment
Revenue by Segment 2020 2Q 2021 2Q YoY changes YoY changes （billions of yen） Result Result (amount) (%) Revenue by Segment 200.0 (0.1%) Alcoholic Beverages 130.4 0.1% Japanese 103.2 102.7 (0.5) (0.5%) Overseas 21.7 24.8 3.1 14.3% Restaurants 5.5 3.1 (2.4) (44.1%) Food & Soft Drinks 58.1 (0.2%) Real
Slide 14: Main Contributors to Changes in Revenue
Main Contributors to Changes in Revenue Revenue of RTD and overseas alcoholic beverages rose, but declined for restaurants and soft drinks despite a recovery trend, resulting in a slight decrease of billion yen year on year. YoY changes = Increase Alcoholic Beverages （billions of yen） Total １Q ２Q =
Slide 15: Core Operating Profit by Segment
Core Operating Profit by Segment 2020 2Q 2021 2Q YoY changes YoY changes （billions of yen） Result Result (amount) (%) Core Operating Profit by Segment (5.1) - Alcoholic Beverages (3.8) - Japanese (0.9) (0.3) 0.6 - Overseas (0.5) 0.2 0.7 - Restaurants (2.5) (2.9) (0.4) - Food & Soft Drinks (2.6) - Re
Slide 16: Main Contributors to Changes in Core Operating Profit
Main Contributors to Changes in Core Operating Profit While profit declined in new-genre beer, restaurants, and the Real Estate business, growth in RTD, recovery overseas, and cost control resulted in an increase of billion yen. YoY changes = Increase ➡ Covered reversal of 2.4 billion COVID-19 loss
Slide 17: Profit attributable to owners of parent
Profit attributable to owners of parent 2020 2Q 2021 2Q （billions of yen） （Details） （Details） Result Result Core operating Profit (5.1) Gain on sales of non-current Other operating assets: 23.2 billion yen income 0.6 24.5 COVID-19 related subsidies: 0.9 billion yen Coronavirus losses 3.4 Other opera
Slide 18: Alcoholic Beverages
Alcoholic Beverages Commercial-use beer and the restaurant business were sluggish due to COVID-19, which beer for home consumption and RTD products continued to post strong sales. Progress with cost structure reforms led to improvement in profit. <Revenue> Positive ➢ Sales of canned beer, RTD produc
Slide 19: Food & Soft Drinks
Food & Soft Drinks Sales of lemon-based products and plant-milk based products were strong while some vending machine locations struggled. Profit increased amid cost controls and a reduction in depreciation due to the previous year’s impairment. <Revenue> Down Positive (billions of yen) ➢ Continued
Slide 20: Real Estate
Real Estate Slight decline in revenue due to impact of some tenants leaving ➢ Tenants for the food and lifestyle floor of Yebisu Garden Place Tower <Revenue> (billions of yen) Down Positive (commercial wing) decided ahead of remodeling, and leasing is 14.0 progressing well in other areas. 12.0 *Rent
Slide 21: Changes in Balance Sheets
Changes in Balance Sheets Total assets decreased ¥35.4 billion year on year Cash and cash equivalents Total assets Total assets (billions of yen) Trade receivables 19.7 ➢ Impact of seasonal factors and bank holidays 12.6 84.5 Current assets Inventories 69.7 YoY change (27.0) 36.0 41.2 20.6 10.2 Othe
Slide 22: Changes in Balance Sheets
Changes in Balance Sheets Total liabilities declined ¥47.7 billion from year end, total equity increased ¥12.3 billion Total liabilities and Total liabilities and equity equity Trade payables (billions of yen) Short-term financial liabilities 31.9 ➢ Redemption of bonds 32.9 83.2 Current liabilities
Slide 23: Financial Status
Financial Status Investment on a cash basis was ¥ billion <Investment total (①+②+③)> ¥ billion <Consolidated cash flow (CF) statement> 2020 2021 ➀ Capital expenditure (cash basis) : ¥ billion (billions of yen) Change Change (%) 2Q results 2Q results (Property, plant and equipment, intangible assets,
Slide 24: Revision of Consolidated Earnings Forecasts
Revision of Consolidated Earnings Forecasts Copyright, 2021 SAPPORO HOLDINGS LTD. All rights reserved. 24/45
Slide 25: Revisions to Earnings Forecasts
Revisions to Earnings Forecasts Sales forecast (YoY) Downward revision of sales mainly in the restaurant-related business, based on the progress of the plan up to the second quarter and the impact of the emergency declaration, etc. Sales Volume & Net Sales (YoY) Full year 1H 2H Main factors Initial
Slide 26: Revisions to Revenue Forecast by Segment
Revisions to Revenue Forecast by Segment 2021 2021 Revised 2019 Change （billions of yen） Initial Revised Details of main revisions Amount Result Amount Plan Plan Revenue by Segment 468.2 447.2 (21.0) 434.7 12.5 Alcoholic Beverages 310.9 295.4 (15.5) 285.4 10.0 While canned beer and RTD products show
Slide 27: Revisions to Core Operating Profit Forecast by Segment
Revisions to Core Operating Profit Forecast by Segment 2021 2021 Revised 2019 Change （billions of yen） Initial Revised Details of main revisions Amount Result Amount Plan Plan Revenue by Segment 9.0 6.7 (2.3) 4.3 2.4 Alcoholic Beverages 7.3 4.6 (2.7) 2.4 2.2 Japanese 7.2 7.2 0.0 Cost controls will c
Slide 28: Revisions to Core Operating Profit Forecast: Impact on Restaurant-Related Companies
Revisions to Core Operating Profit Forecast: Impact on Restaurant-Related Companies Breakdown showing core operating profit for ➡ Forecast revised downward, mainly due to restaurants-related business and other businesses struggling restaurant-related companies Revised Amount (billions of yen) 12 Con
Slide 29: Profit attributable to owners of parent target
Profit attributable to owners of parent target Operating profit and the profit categories below it were unchanged from the initial plan. 2021 2021 Revised 2019 Change （billions of yen） Revised Details First Plan Amount Result Amount Plan Core operating Profit 9.0 6.7 (2.3) 4.3 2.4 Other operating in
Slide 30: Appendix
Appendix Copyright, 2021 SAPPORO HOLDINGS LTD. All rights reserved. 30/45
Slide 31: Appendix: Major sales volume & sale
Appendix： Major sales volume & sale Sales:Beer (Japan) *including liquor tax (billions of yen) Sales Volume:Beer (Japan) ※1 (10,000 cases) Jan. 1 - Jan. 1 - YoY Jan. 1 - Jan. 1 - YoY Jun.30, 2020 Jun.30, 2021 Change(%) Jun.30, 2020 Jun.30, 2021 Change(%) Beer 58.4 55.7 (4.6%) Sapporo Draft Beer Blac
Slide 32: 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> beverages by genre> (Jan – Jun) （％） (cumulative for each month) [Beer and beer-type beverages total] down % YoY 100 ✓ Beer: down ％ y-o-
Slide 33: Appendix: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) ＜Main brand Jan- Jun Sales volume change＞ ＜ Beer lineup (Jan- Jun break down) ＞ (10,000 cases) 900 800 22% 700 600 500 26% 400 300 52% 200 100 Black Lable Yebisu Others 0 2015 2016 2017 2018 2019 2020 2021 Black Lable brand total Yebisu brand total Mugi to Hop br
Slide 34: Appendix: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) ＜ Jan- Jun sales revenue ＞ ＜ Jan- Jun sales breakdown by category ＞ ※Incl. liquor tax (billions of yen) 100 10% 1% Beer 90 28.9 51% 38.4 33.3 31.8 25.2 21.0 7% 80 Happoshu & New genre 70 26.6 Wine & Spirits 26.0 7% 60 Japanese liquor 50 RTD 40 76.3 72.1 71.5 74.4
Slide 35: Appendix: Alcoholic Beverages (Japan)
Appendix：Alcoholic Beverages (Japan) ＜ Jan- Jun sales revenue ＞ (billions of yen) *From 2021, Hyosai Sour and 99.99 keg are reclassified from Spirits to RTD. 0.5 0.9 All-time 0.7 high 1H sales 3.4 3.6 3.7 3.5 3.6 2.8 2.7 10.2 0.8 7.9 0.7 7.6 0.6 0.6 2.5 2.4 2.4 2.3 2.1 3.1 3.9 1.7 1.6 2.0 2.4 2015 2
Slide 36: New Products for New Values: WATER SOUR and The DRAFTY
Appendix: Alcoholic Beverage (Japan) New Products for New Values 1. A Hard Seltzer from Japan 2. More freedom for beer lovers WATER SOUR The DRAFTY A new-generation RTD unsweetened seltzer with 3% alcohol. A low-alcohol, beer-like drink that beer aficionados will love. Released on August 24, 2021 Al
Slide 37: New Products for New Values: What Is Hard Seltzer?
Appendix: Alcoholic Beverage (Japan) New Products for New Values What Is Hard Seltzer? A Shift in Thinking about Alcohol Content Carbonated water with alcohol (RTD) A growing need for low-alcohol products In the US, low-alcohol beverages have been popular among health-minded young people since aroun
Slide 38: Appendix: Changes in liquor tax per 350 ml
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, 2021 SAPPORO HOLDINGS LTD. All rights reserved. 38/45
Slide 39: Appendix: Alcoholic Beverages (Overseas)
Appendix：Alcoholic Beverages (Overseas) ＜Overseas beer : YoY change in sales volume＞ ＜ Overseas sales volume by brand(Jan-Jun) ＞ （10,000cases） (Jan – Jun) 【North America Total up % y-o-y 900 ✓ Overseas brand 750 209 257 %* YoY down ％ y-o-y 600 450 300 649 635 ✓ Sapporo brand 2020 2021 150 In Canada,
Slide 40: Acquired Canada's Aware Beverages
Appendix：Alcoholic Beverage (Overseas) ■ Product: SoCIAL LITE Acquired Canada’s Award Beverages → No artificial sweeteners, only natural flavoring. A refreshing low-calorie, gluten-free drink. Company Overview ・ Company name: Aware Beverages Inc. ・ Location: Ontario, Canada ・ Founded: 2013 ・ Product
Slide 41: Appendix: Alcoholic Beverages (Restaurants)
Appendix：Alcoholic Beverages (Restaurants) ＜ Sales revenue and number of Sapporo Lion Outlets ＞ ＜Sapporo Lion outlets As of Jun 30, 2021 ＞ (Billions of yen) ※before rebate deduction （Jan- Jun） 200 12.0 174 173 174 170 11 180 8 9.0 159 155 Tokyo Metroporitan 160 11 Kanto (excl. Tokyo) 6.0 11.8 11.5 1
Slide 42: Appendix: Food & Soft Drinks
Appendix：Food & Soft Drinks ＜ Japanese soft drinks ＜ Japanese soft drinks POKKA SAPPORO Food & Beverage ＞ POKKA SAPPORO Food & Beverage ＞ Sales volume & Sales by genre(Jan- Jun) Sales composition by sales channel (Jan- Jun) 【Lemon based-drinks】 【Lemon-based food products】 40% ✓ up ％ y-o-y ✓ up ％ y-o
Slide 43: Appendix: Food & Soft Drinks
Appendix：Food & Soft Drinks ＜ Food & Soft Drinks segment Revenue break down by geographic area ＞ 【 Pokka Create Co., Ltd .】 ✓ Jan- Jun Sales revenue billion 84% up % y-o-y ＜ Number of outlets as of June 30, 2021> 16% 109 55 East Japan 200 outlets Central Japan West Japan Japan Overseas ＜Japanese sof
Slide 44: Appendix: Real Estate
Appendix：Real Estate (3): Already transferred as of June 30, 2021 ＜ Information about ＜ Major rental properties & occupancy rates：（Averages for 2021 2Q )> Investment property ＞ (billions of yen) Occupa 400.0 Site area Floor area ncy rate No. of floors （㎡） （㎡） （%） 300.0 40 floors above ground, Yebisu
Slide 45: Closing statement and disclaimer
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