Sapporo Holdings Limited · TSE:2501

Sapporo — FY2015 Earnings Presentation

57 slides from Sapporo's earnings presentation, February 2016

  1. Slide 1: Sapporo Group Business Results Presentation for 2015

    Sapporo Group Business Results Presentation for 2015 February 2016 Sapporo Holdings Ltd. URL http://www.sapporoholdings.jp/english Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 1/57

  2. Slide 2: Contents

    Contents 1. Overview of 2015 and Policy for 2016 2. Review of New Management Framework and Toward Next Management Framework 3. 2015 Results Overview and 2016 Results Outlook Reference material: Appendix “Supplementary Information to the Earnings Report” Appendix: Collection of Data by Business Copyr

  3. Slide 3: 1. Overview of 2015 and Policy for 2016

    1. Overview of 2015 and Policy for 2016 Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 3/57

  4. Slide 4: 2015 Group Overview

    2015 Group Overview Consolidated earnings: operating income declines ¥0.7 billion y-o-y (billions of yen) 2014 2015 change Operating income’s main factor was a ¥1.5 billion decline Net sales 518.7 533.7 15.0 in the Japanese Alcoholic Beverages Business. Operating All businesses posted operating in

  5. Slide 5: 2016 Group Financial Targets

    2016 Group Financial Targets Management Plan 2015results 2016targets Consolidated net sales ¥533.7 bn ¥565.4 bn ※incl. liquor tax Consolidated operating income ¥18.1 bn ¥25.0 bn （before goodwill amortization） Consolidated ¥13.9 bn ¥21.1 bn operating income Consolidated ¥13.2 bn ¥20.2 bn ordinary inc

  6. Slide 6: Overview of 2015 and Policy for 2016: by Business segment

    Overview of 2015 and Policy for 2016: by Business segment Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 6/57

  7. Slide 7: Overview of 2015 Japanese Alcoholic Beverages

    Overview of 2015 Japanese Alcoholic Beverages Japanese Beer Business Sales volume of beer and beer-type beverages % Y-o-y change in beer sales volume down 5% y-o-y (total demand down 1%) <Beer> Up 1% y-o-y (total demand unchanged y-o-y)  Black Label‘s store coverage rate increases; canned products

  8. Slide 8: 2016 Key Points in Business Plan: Japanese Alcoholic Beverages

    2016 Key Points in Business Plan Japanese Alcoholic Beverages “Seek No.1 by accumulating one-of-a-kind products” Strengthen cultivation of brand in each field ■Beer and beer-type beverages ■ Wine ➤ The first year of strengthening beer: improve ➤Strengthen fine wine: expand profitability with brand v

  9. Slide 9: Overview of 2015 International

    Overview of 2015 International North American beer business performed well; Vietnamese beer business to enter the second stage following relaunch North American beer business Vietnamese beer business  Focus on premium market; both SLEEMAN and Domestic sales volume in Vietnam Y-o-y change in domest

  10. Slide 10: 2016 Key Points in Business Plan: International

    2016 Key Points in Business Plan International To become a company with strong presence in the premium markets in North America and Southeast Asia ■North America ■Southeast Asia Beer: SLEEMAN, Sapporo USA Sapporo Vietnam ➤ Strengthen the premium brands and sustain ➤ Maximize the impact of Sapporo Pr

  11. Slide 11: Overview of 2015 Food & Soft Drinks

    Overview of 2015 Food & Soft Drinks  Domestic soft drinks sales volume were up 2% y-o-y (total demand was up 1%); both domestic food and overseas soft drinks businesses were up y-o-y Domestic Food and Soft Drinks Lemon-based drinks, our strength, and soup led the business; net sales were up 5% y-o-

  12. Slide 12: 2016 Key Points in Business Plan: Food & Soft Drinks

    2016 Key Points in Business Plan Food & Soft Drinks Move on to the next stage through enhancement of core brand strengths with focus on lemon and soup and through earnings structure reform ■Domestic soft drinks ■ Overseas soft drinks ➤ Planning introduction of new products offering ➤ Singapore: Main

  13. Slide 13: Overview of 2015 Restaurants

    Overview of 2015 Restaurants  In the restaurants business in Japan, Lion maintained net sales at all outlets, while reducing the number of unprofitable restaurants Restaurants business in Japan Overseas restaurants business Billion Trends of net sales and number of yen Sapporo Lion outlets Outlets

  14. Slide 14: 2016 Key Points in Business Plan: Restaurants

    2016 Key Points in Business Plan Restaurants Aspire to be the world’s No. 1 Beer Hall chain by “offering Japan’s best draft beer” and “delivering 100% satisfaction to customers” ■ Japan ➤Open new outlets of Ginza Lion and Yebisu Bar starting with the reopening of the large-scale flagship outlet that

  15. Slide 15: Overview of 2015 Real Estate

    Overview of 2015 Real Estate Yebisu Garden Place improved office occupancy rate; Ginza 5-chome redevelopment plan is also progressing in line with the plan <Yebisu Garden Place> Yebisu Garden Place Glass Square  Leasing of the space occupied by major tenants has been completed, and we have been wo

  16. Slide 16: 2016 Key Points in Business Plan: Real Estate

    2016 Key Points in Business Plan Real Estate Contribute to enhancement of the group brand by enhancing the value of our properties ■Sustainable growth through urban renewal ➤ To work on retaining the high occupancy rates and improving rent levels at all properties ➤ Yebisu Garden Place MAP Enhance f

  17. Slide 17: 2016 R&D strategies

    2016 R&D strategies Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 17/57

  18. Slide 18: 2016 R&D Strategies

    2016 R&D Strategies Further evolve the group’s R&D structure and promote creation of new food values that will be a step to the future Product development Food product that gives shape to processing research the value of materials aimed at expanding application of food Group-wide R&D structure Sap

  19. Slide 19: 2015⇒2016 Strengthen Corporate Governance

    2015⇒2016 Strengthen Corporate Governance Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 19/57

  20. Slide 20: Strengthen Corporate Governance

    Strengthen Corporate Governance Sapporo Holdings’ Officer System 1997 Introduction of independent outside directors 2009 Change to the system of 3 independent outside directors *The 2015 officer system: directors (6 internal directors, 3 outside directors) auditors (2 internal auditors, 2 outside au

  21. Slide 21: 2. Review of New Management Framework and Toward Next Management Framework

    2.Review of New Management Framework and Toward Next Management Framework Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 21/57

  22. Slide 22: Review of New Management Framework

    Review of New Management Framework Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 22/57

  23. Slide 23: Changes in FY results and ROE

    Changes in FY results and ROE 2011Great 2014 8.9％ East Japan Additional liquor tax Earthquake paid:Gokuzero 6.5％ Net sales Income (¥ billion) (¥ billion) （Forecast） Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 23/57

  24. Slide 24: Trend of Overseas net sales (excluding liquor tax)

    Trend of Overseas net sales(excluding liquor tax) 2015 U.S. 2006 Canada 2011 2012 U.S. Made Country Business 2011 Vietnam Made SLEEMAN Made Silver Pure Foods into a into a subsidiary Beer plant integration Springs Citrus subsidiary with POKKA completed into a subsidiary Overseas net sales to total （

  25. Slide 25: Sales Breakdown by Geographic Area, Sales Breakdown by category

    Sales Breakdown by Geographic Area, Sales Breakdown by category Sales Breakdown by 2015 Geographic Area Overseas net sales ¥ 94.5billion Sales Breakdown 2010 Overseas Other by category net sales 7% ¥25.4 billion (Beer) Asia 22% North America 71% *Sales volume base North America: Canada, U.S. *Accoun

  26. Slide 26: Changes in EBITDA and Investment

    Changes in EBITDA and Investment 2011 2012 2006 Canada Business Acquired 15% Made SLEEMAN integration stake in Yebisu （¥ billion） into a subsidiary with POKKA Garden Place *1 Operating income + Depreciation and amortization + Goodwill amortization （Forecast） *2 (Cash flow from investments) – Proceed

  27. Slide 27: Toward Next Management Framework

    Toward Next Management Framework Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 27/57

  28. Slide 28: Toward Next Management Framework

    Toward Next Management Framework What Sapporo Group aspires to be in 2026 (150th anniversary) The SAPPORO Group will be a group of companies that is essential for customers to enjoy rich lives throughout the world by continuing the creation and supply new products and services that become No. 1 in t

  29. Slide 29: Policy Regarding Return of Profits to Shareholders

    Policy Regarding Return of Profits to Shareholders Copyright, 2015 SAPPORO HOLDINGS LTD. All rights reserved. 29/57

  30. Slide 30: Policy Regarding Return of Profits to Shareholders

    Policy Regarding Return of Profits to Shareholders Providing appropriate returns to shareholders is a key management policy of the Company. Our basic policy is to pay stable dividends, taking our operating performance and financial condition into account. Concerning our internal reserves, we will ap

  31. Slide 31: 3. 2015 Results Overview and 2016 Results Outlook

    3.2015 Results Overview and 2016 Results Outlook * For information on the profitability of each business, please see the Supplementary Information to our Earnings Report. Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 31/57

  32. Slide 32: Overview of 2015 Results

    Overview of 2015 Results Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 32/57

  33. Slide 33: 2015 Results Highlight

    2015 Results Highlight (billions of yen) Consolidated financial YoY changes 2014 2015 results (amount, %) Net sales(incl. liquor tax) 518.7 533.7 15.0 2.9% Net sales（excl. liquor tax) 401.8 418.3 16.5 4.1% Overseas net sales to total 19.2 ％ 22.6 ％ 3.4 ー (excl. liquor tax) Operating income 14.7 13.9

  34. Slide 34: Overview of 2015 (1) Special factors

    Overview of 2015(1) Special factors ＜Special factors in the business results 2015(no change in items from 3Q)> Operating Segment Factors Net sales impact income impact Change in reportable segment: New Sanko Inc. Japanese Alcoholic Changed from Japanese Alcoholic Beverages to Restaurants minor minor

  35. Slide 35: Major Sales and Sales Volume (YoY)

    Major Sales and Sales Volume (YoY) Alcoholic Beverage (Japan) (10,000 cases) Beer (International) (10,000 cases) Fiscal 2014 Fiscal 2015 YoY Fiscal 2014 Fiscal 2015 YoY SLEEMAN BREWERIES LTD.（*2） 1,237 1,262 102% Sapporo Draft Beer Black Label 1,615 1,618 100% Sapporo brand 488 550 113% *2 ：Excludes

  36. Slide 36: Overview of 2015 (2) Net Sales by Segment

    Overview of 2015(2) Net Sales by Segment YoY change （billion of yen） 2014 2015 Notes （amount,%） Consolidated 518.7 533.7 15.0 2.9％ net sales Japanese Alcoholic 281.0 273.6 (7.3) (2.6)％ Beverages Foreign exchange rates (average rate of 2015) International 49.6 70.5 20.8 41.9% US$1=¥121.11 Business CA

  37. Slide 37: Overview of 2015 (3) Changes in Net Sales

    Overview of 2015(3) Changes in Net Sales <Factors Contributing to Change in Net Sales> Foreign FY2015 exchange Sales Consolidated 0.6 increase: Net Sales 11 YGP and (billions of yen) Increase Decrease Overseas Ebisu First 533.7 (5.3) Square Soft ＋15.0 drinks 1.6 (2.2) 6.1 Sales ＳＳＣ Foreign increase

  38. Slide 38: Overview of 2015 (4) Operating Income by Segment

    Overview of 2015(4) Operating Income by Segment （billion of yen） 2014 2015 Change Notes Consolidated Operating income 14.7 13.9 (0.7) Japanese Alcoholic Beverages 10.1 8.6 (1.5) Beer and related product 7.4 5.6 (1.8) Marginal profit-3.0,Fixed cost and other+1.2 Wine and spirits 2.2 2.2 (0.0) Other 0

  39. Slide 39: Overview of 2015 (5) Changes in Operating Income

    Overview of 2015(5) Changes in Operating Income (billions of yen) <Factors Contributing to Change in Operating Income> FY2015 Consolidated FY2014 Sales Operating Consolidated increase: Operating income YGP and Income Increase Decrease Production 増加 減少 costs Ebisu First 13.9 14.7 increase Square （0.7

  40. Slide 40: Overview of 2015 (6) Extraordinary Gains and Losses / Cash Flows

    Overview of 2015(6) Changes in Extra Ordinary Gains and Losses / Over view of Cash Flows Consolidated Statements of Income （billion of yen） 2014 2015 Change Primary Reasons Net sales 518.7 533.7 15.0 Operating income 14.7 13.9 (0.7) Financial income(expense)+0.4,Equity in income (losses) Ordinary in

  41. Slide 41: Overview of 2015 (7) Consolidated Balance Sheets

    Overview of 2015(7) Consolidated Balance Sheets Condensed Consolidated Balance Sheets (billions of yen) December 31, 2014 December 31, 2015 Change Primary Reasons Current assets 156.3 156.3 (0.0) Cash and cash equivalents 9.7 10.4 0.6 Notes and accounts receivable - trade 89.2 92.3 3.0 Inventories 3

  42. Slide 42: Overview of 2015 (8) Implementation Status of Strategic Investment

    Overview of 2015(8) Implementation Status of Strategic Investment Implementation Status of Strategic Investments (including Direction of Long-Term Strategic Investment ordinary capex, on a cash bases) ① <Capital expenditure and lease fees>  We will continue to actively carry out strategic investmen

  43. Slide 43: 2016 Results Outlook

    2016 Results Outlook Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 43/57

  44. Slide 44: 2016 Results Outlook Highlight

    2016 Results Outlook Highlight (billions of yen) YoY changes Consolidated forecast 2015 2016 (amount, %) Net sales(incl. liquor tax) 533.7 565.4 31.6 5.9% Net sales（excl. liquor tax) 418.3 445.2 26.8 6.4% Overseas net sales to total (excl. liquor tax) 22.6 ％ 23.5 ％ 0.9 ー Operating income 13.9 21.1 7

  45. Slide 45: Major Sales and Sales Volume (YoY)

    Major Sales and Sales Volume (YoY) Alcoholic Beverage (Japan) (10,000 cases) Beer (International) (10,000 cases) Full-year Full-year Fiscal 2015 estimate for YoY Fiscal 2015 estimate for YoY fiscal 2016 fiscal 2016 SLEEMAN BREWERIES LTD.（*2） 1,262 1,310 104% Sapporo Draft Beer Black Label 1,618 1,67

  46. Slide 46: 2016 Results Outlook (1) Net Sales by Segment

    2016 Results Outlook (1) Net Sales by Segment YoY change (billions of yen) 2015 2016 Notes （amount,%） Consolidated net sales 533.7 565.4 31.6 5.9％ Japanese Alcoholic Beverages 273.6 288.0 14.3 5.2％ Foreign exchange rates(forecast average rate of 2016) International US$1=¥126.00 Business 70.5 77.8 7.

  47. Slide 47: 2016 Results Outlook (2) Operating Income by Segment

    2016 Results Outlook (2) Operating Income by Segment （billion of yen） 2015 2016 Change Notes Consolidated Operating income 13.9 21.1 7.1 Japanese Alcoholic Beverages 8.6 11.1 2.4 Beer and related product 5.6 7.7 2.1 Marginal profit4.1,Fixed cost and other-2.0 Wine and spirits 2.2 2.7 0.5 Other 0.8 0

  48. Slide 48: 2016 Results Outlook (3) Changes in Operating Income

    2016 Results Outlook (3) Changes in Operating Income FY2016 ＜Factors Contributing to Change in Operating Income＞ Target (billions of yen) 21.1(Up 7.1) FY2015 Production Sales Increase Decrease Costs increase: Consolidated YGP and <North increase Operating America Food& (0.5) GINZA PLACE Income Beer>

  49. Slide 49: 2016 Results Outlook (4) Extraordinary Gains and Losses / Cash Flows

    2016 Results Outlook (4) Changes in Extra Ordinary Gains and Losses / Over view of Cash Flows Consolidated forecast （billion of yen） 2015 2016 Change Primary Reasons Net sales 533.7 565.4 31.6 Operating income 13.9 21.1 7.1 Operating income7.1 Ordinary income 13.2 20.2 6.9 Financial income(expense)-

  50. Slide 50: Reference Material: Collection of Data by Business

    Reference Material ： Collection of Data by Business Copyright, 2016 SAPPORO HOLDINGS LTD. All rights reserved. 50/57

  51. Slide 51: Reference Material (1) Japanese Alcoholic Beverages Beer Category Data

    Reference Material(1) Japanese Alcoholic Beverages ～Beer Category Data～ ＜Beer and beer-type beverages sales volume change (Jan-Dec)＞ ＜Core brand sales volume Y-o-Y change (Jan-Dec)＞ 1,000 cases 1,000 cases ＜3 core brand sales volume change (Jan-Dec)＞ ＜Jan-Dec beer sales breakdown by brand> (1)Sappor

  52. Slide 52: Reference Material (2) Japanese Alcoholic Beverages Multilayers

    Reference Material(2) Japanese Alcoholic Beverages ～Multilayers ～ ＜Jan〜Dec Net sales＞ Wine Beer + Beer type beverages (incl. liquor tax) Billions of yen Spirits Promoting diversification of product offerings Japanese liquor ＜Japanese Alcoholic Beverage Business Jan-Dec sales breakdown by category> J

  53. Slide 53: Reference Material (3) International Business Data

    Reference Material(3) International Business ～Data ～ ＜Trend of overseas sales volume of SAPPORO brand products (Jan-Dec)> SLEEMAN Net Sales in Local Currency (Jan-Dec) (before elimination of inter-company transactions) （1,000 cases) Sapporo USA Net Sales in Local Currency (Jan-Dec) (before eliminati

  54. Slide 54: Reference Material (4) Food & Soft Drinks Data

    Reference Material(4) Food & Soft Drinks ～ Data ～ Japanese soft drinks sales <Soft Drinks (Japan): POKKA SAPPORO Food & Beverage Ltd.> composition by sales channel Japanese soft drinks sales (Jan–Dec) POKKA SAPPORO Food & volume composition by genre Beverage sales composition ＜Lemon-based (Jan-Dec)

  55. Slide 55: Reference Material (5) Restaurants Data

    Reference Material(5) Restaurants ～ Data ～ ＜Sapporo Lion outlets＞ ＜New Sanko Outlets＞ 170 Outlets ８outlets located in Hokkaido (Sapporo, Otaru) ※2 ＜Outlet expansion in Singapore＞ 14 outlets ・ Ginza Lion (beer hall): 2 outlets ※1 ・ Tonkichi (pork cutlet): 4 outlets ・ Rive Gauche (patisserie): ８ outle

  56. Slide 56: Reference Material (6) Real Estate Data

    Reference Material(6) Real Estate ～ Data ～ Major rental properties & occupancy rates * Information about real estate for lease (*Annual averages for 2015 (contract basis) Balance sheet value at December 31, 2015 : approx. ¥197.7 billion Major rental properties in Occupancy rate Site area (m2) Floor

  57. Slide 57: Forward-looking statements closing slide

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

Sapporo Holdings — FY2015 Earnings Presentation on 6ix