Sapporo Holdings Limited · TSE:2501

Sapporo — FY2013 Earnings Presentation

57 slides from Sapporo's earnings presentation, Feb 13, 2014

  1. Slide 1: Sapporo Group Business Results Presentation for 2013

    Sapporo Group Business Results Presentation for 2013 February 13, 2014 Sapporo Holdings Ltd. URL http://www.sapporoholdings.jp/english/ Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved. 1

  2. Slide 2: Contents

    Contents 1. Overview of 2013 - Overview of 2013 - Overview of Basic Strategy and Strategic Investment for 2013 2. Sapporo Group’s New Management Framework and Past Initiatives 3. Sapporo Group’s Medium-Term Management Plan 2014 - 2016 4. Overview of 2013 Results Reference 1. Sapporo Group’s New Mana

  3. Slide 3: 1. Overview of 2013

    1. Overview of 2013 Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved. 3

  4. Slide 4: Overview of 2013

    Overview of 2013 Overview of 2013  Sales increased by ¥17.3 billion, operating income by ¥0.9 billion and net income by ¥4.0 billion •Japanese Alcoholic Beverages: Sales increased by ¥4.9 billion, operating income by ¥2.3 billion Sales volume of beer exceeded the level of the previous year, as Yebi

  5. Slide 5: Overview of FY2013

    Overview of FY2013 Overview of 2013 •International Business: Sales increased by ¥12.0 billion, operating income by ¥1.2 billion Both sales and profits increased on the back of local currency-based growth in North America and Vietnam as well as the addition of Silver Spring Citrus, whose consolidatio

  6. Slide 6: Overview of 2013 Basic Strategies: North American Production

    Overview of 2013 Basic Strategies Creating new opportunities for growth  Restructuring of North American Production Facilities: International Business • Production of Sapporo brand products for the U.S. market was outsourced from SLEEMAN Breweries in Canada to City Brewing Company, a major contract

  7. Slide 7: Overview of 2013 Basic Strategies: Singapore Restaurants

    Overview of 2013 Basic Strategies Creating new opportunities for growth  Reorganization of restaurant business in Singapore: Restaurants Singapore Tonkichi •Transfer of the restaurant business in Singapore from POKKA Corporation (Singapore) Pte. Ltd. to Sapporo Lion Limited in January •Brought forw

  8. Slide 8: Overview of 2013 Basic Strategies: Real Estate

    Overview of 2013 Basic Strategies Carrying out growth measures  Activities to enhance the value of existing properties: Real Estate •In consideration of the recovery in rent levels, enhance the value of existing properties through renovation. •Enhancing the value of Yebisu Garden Place in preparati

  9. Slide 9: Overview of 2013 Basic Strategies: Vietnam

    Overview of 2013 Basic Strategies Carrying out growth measures  State of progress in Alcoholic Beverages Business in Vietnam: International Business •Steady progress with sales volume in Vietnam, where full-scale marketing began in April 2012, and exports to neighboring countries have also been pro

  10. Slide 10: Implementation Status of Strategic Investments

    Overview of 2013 Basic Strategies Implementation Status of Strategic Investments (Including Ordinary Capex) Credit Ratings <Capital expenditure (cash basis) and lease fees> <Credit rating by JCR> Consolidated total: Approx. ¥18.0bn  Property, plant and equipment, intangible assets, lease fees, etc.

  11. Slide 11: 2. Sapporo Group's New Management Framework and Past Initiatives

    2. Sapporo Group’s New Management Framework and Past Initiatives Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved. 11

  12. Slide 12: Introduction

    Introduction ◆ The long-term management strategies under the New Management Framework, which has targets set for 2016, the year which marks the 140th anniversary of Sapporo Holdings, was formulated in 2007 and promotes measures aimed at improving corporate value. ◆ With three years remaining, includ

  13. Slide 13: Sapporo Group's Business Domains

    Sapporo Group’s Business Domains Sapporo Group Creating value in Food Creating comfortable surroundings International Restaurants Japanese Alcoholic Real Estate Food & Soft Drinks Beverages The business domain The core domain driving expected to the Group’s contribute stable profits dynamic growth b

  14. Slide 14: Sapporo Group's New Management Framework

    Sapporo Group’s New Management Framework Announced in 2007 Basic approach: Working steadily toward long-term goals while also boldly revising resource allocation, executing strategic investments, and enhancing competitiveness through aggressive management 2016, 140th anniversary of founding ◆Consoli

  15. Slide 15: Promoting diversification of business portfolio through M&As and alliances

    Changes to Sapporo Group Promoting diversification of business portfolio through M&As and alliances 2013 2012 Started operations of Acquired 15% POKKA Sapporo Food Initiatives 2008 stake in Sold 15% Yebisu Garden & Beverages thus far 2011 stake in Place Yebisu Garden Entered western Japan Place spir

  16. Slide 16: Profit Growth and Profit Management

    Profit Growth and Profit Management (Consolidated Operating Income) Impact of competitive Steady profit growth after sales promotions within the financial crisis the industry in reaction Billions of yen Target to the earthquake disaster achieved 20.0 20.0 18.8 Target 18.0 Target 18.0 16.8 achieved T

  17. Slide 17: 3. Sapporo Group's Medium-Term Management Plan 2014-2016

    3. Sapporo Group’s Medium-Term Management Plan 2014-2016 Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved. 17

  18. Slide 18: Sapporo Group Medium-Term Management Plan 2014-2016

    Sapporo Group Medium-Term Management Plan 2014-2016 As a “manufacturer of food products,” we will accelerate the four growth strategies of the New Management Framework to achieve the financial targets set for 2016 under the framework. Also, this three-year period is positioned as a period to launch

  19. Slide 19: Japanese Alcoholic Beverages: Key points in Management Plan

    2014-2016 Japanese Alcoholic Beverages “Seek No.1 by accumulating one-of-a-kind products” Continue creation of new value and brand strengthening Key points in Management Plan ■ Beer business ■ RTD business ➤ Create one-of-a-kind products and create ➤Secure core brand in volume zone distinct values ➤

  20. Slide 20: International Business: North America

    2014-2016 International Business Pursue brand development of Sapporo with focus on North America and Southeast Asia Key points in Management Plan ■North America SLEEMAN ➤ Achieve significant growth of the SLEEMAN brand (including Sapporo brand) ➤ Strengthen structure by pursuing efficiency across en

  21. Slide 21: International Business: Southeast Asia

    2014-2016 International Business Key points in Management Plan ■Southeast Asia Sapporo Vietnam: ➤Continue with investment in Ho Chi Minh city, Vietnam’s biggest market, to boost brand recognition ➤Start marketing in areas near Ho Chi Min City ➤Expand sales to the Japanese market in the country’s cap

  22. Slide 22: Food & Soft Drinks: Key points in Management Plan

    2014-2016 Food & Soft Drinks Recover business performance of the Japanese soft drinks business Move to a new stage of growth stage by expanding both the food and overseas soft drinks businesses Key points in Management Plan ■ Japanese soft drinks business ➤ “Establish core brands that only Pokka Sap

  23. Slide 23: Restaurants: Create No.1 enjoyable stores

    2014-2016 Restaurants Create “No.1 enjoyable stores,” continually loved by customers Accelerate expansion of core brands Key points in Management Plan ■ Expansion of core brands ➤Expand outlets mainly of the core brand Ginza Lion and YEBISU BAR primarily in Tokyo Metropolitan area ➤Develop new forma

  24. Slide 24: Real Estate: Enhance value of Yebisu Garden Place

    2014-2016 Real Estate Enhance value of Yebisu Garden Place Boost value of properties in Ebisu, Ginza and Sapporo Key points in Management Plan ■ Ebisu ➤Improve convenience and comfort to boost the value of Yebisu Garden Place, and increase profit ➤Complete construction of Sapporo Ebisu Building (ten

  25. Slide 25: Roles of Group Headquarters

    Roles of Group Headquarters Promote collaboration/cooperation between businesses Achieve group total optimum through management reform Japanese Alcoholic Beverages Business ➤Enhance research and Food & Soft International development function from the group perspective Drinks Business ➤Revitalize hum

  26. Slide 26: Medium-Term Management Plan 2014-2016: Quantitative Targets

    2014-2016 Financial Targets Medium-Term Management Plan 2014-2016: Quantitative Targets [Quantitative targets] ・ROE : 8% or higher in 2016 ・Dividends : ¥7 per share or more ◆ We will place the highest priority on achieving our ROE target to enhance the overall corporate strength of the Group by impr

  27. Slide 27: 2014-2016 Targets Based on Current Businesses

    2014-2016 Targets Based on Current Businesses Medium-Term Management Plan Reference 2016 New 2006 results 2013 results 2014 targets 2015 targets 2016 targets Management Framework Consolidated net sales ¥435.0 bn ¥509.8 bn ¥537.7 bn ¥563.0 bn ¥595.0 bn ¥600.0 bn *incl. liquor tax (excl. liquor tax) ¥

  28. Slide 28: 2014-2016 Targets Based on Current Businesses by Segment

    2014-2016 Targets Based on Current Businesses by Segment Medium-Term Management Plan Reference 2013 results 2014 targets 2015 targets 2016 targets Japanese Alcoholic Beverages ¥274.9 bn ¥284.3 bn ¥292.4 bn ¥305.2 bn International Business ¥48.2 bn ¥57.2 bn ¥61.6 bn ¥68.0 bn Net sales Food & Soft Dri

  29. Slide 29: 4. Overview of 2013 Results

    4. Overview of 2013 Results Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved. 29

  30. Slide 30: Overview of 2013 Results: Special Factors

    Overview of 2013 Results: Special Factors Breakdown of special factors (net increase, etc.) that prevent meaningful year-on-year comparisons between net sales and operating income in 2012 and 2013 are shown below. See the Supplementary Information to the Earnings Report for factors behind changes re

  31. Slide 31: Overview of 2013 Results: Management Indices, Real Estate Leasing Asset Prices

    Overview of 2013 Results: Management Indices, Disclosure of Real Estate Leasing Asset Prices Management Indices vs. Targets and Previous Year Results vs. Targets 2012 vs. 2013 Results 2013 2013 2012 2013 Change Change Target Results Results Results Operating margin (excl. liquor taxes, 4.8％ 4.9％ 0.1

  32. Slide 32: Overview of 2013 Results

    Overview of 2013 Results YoY changes (billions of yen) 2012 results 2013 results  Net sales: up YoY (amount, %) 4 consecutive years of sales increase Japanese Alcoholic 269.9 274.9 4.9 1.8% In addition to the special factors mentioned earlier: Beverages ・Japanese Alcoholic Beverages: sales increase

  33. Slide 33: Overview of 2013 Results: Targets vs. Results

    Overview of 2013 Results: Targets vs. Results 2013 vs. target (billions of yen) 2013 results  Net sales: target unachieved targets (amount, %) ・International: Sales exceeded the target, partly Japanese Alcoholic 275.2 274.9 (0.2) (0.1)% due to the weaker yen Beverages International 43.3 48.2 4.9 11

  34. Slide 34: Reference 1: New Management Framework and Past Initiatives (Supplement)

    Reference 1: Sapporo Group’s New Management Framework and Past Initiatives (Supplement) Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved. 34

  35. Slide 35: Creation of High-value-added Products and Services: Goku Zero, Yebisu

    1. Creation of High-value-added Products and Services Goku Zero- First such concept in the world Launched Jun 2013 ・The world’s first zero purine, zero carbohydrate beer-type beverage ・Sales plan 2.2 million cases ➤ Result 3.58 million cases (outperformed plan by 63%) *Cases of large bottles 2014 ta

  36. Slide 36: Proposing products that can be enjoyed with ease

    1. Creation of High-value-added Products and Services Proposing products that can be enjoyed with ease ・Sparkling wine in barrel, Polestar, the first by a major liquor manufacturer 2012: Limited sale in Tokyo Metropolitan area 2013: Offered by about 4,000 restaurants following the nation-wide launch

  37. Slide 37: Collaborative contract farming

    1. Creation of High-value-added Products and Services One and only in the world: Insisting on collaborative contract farming ・100% collaborative contract farming of malt and hop, the only such initiative of its kind in the world, was highly acclaimed and received the golden “Bundesehrenpreis (federa

  38. Slide 38: Strong brands in lemon category; soup category

    1. Creation of High-value-added Products and Services Strong brands in lemon category ・No. 1 in lemon products (flavorings) category* (Market share: 86％) ・Kireto Lemon Sparkling is highly acclaimed among lemon juice-based soft drinks ・2013: Key brands grew POKKA Lemon 100: 1% YoY increase Kireto Lem

  39. Slide 39: Yebisu Garden Place, pioneer in integrated urban development

    1. Creation of High-value-added Products and Services Yebisu Garden Place, pioneer in integrated urban development ・20th anniversary this year ・About 12 million people visit every year, 260 million people in total since its opening ・The office tower had 98%* occupancy rate in 2013 ・Implementing meas

  40. Slide 40: A major alliance leading to Pokka Sapporo Food & Beverages Ltd.

    2. Formation of Strategic Alliances A major alliance leading to Pokka Sapporo Food & Beverages Ltd. Sep 2009: Capital/business alliance with POKKA Corporation Mar 2011: Management integration with POKKA Corporation Jan 2013: Pokka Sapporo Food & Beverages starts operation Copyright, 2014 SAPPORO HOL

  41. Slide 41: Alliance with Bacardi Japan

    2. Formation of Strategic Alliances = world’s No. 1 brand Alliance with Bacardi Japan ・Started selling beverages such as offerings from Bacardi, the world’s No. 1 rum brand*1 ・Started selling 90 items of 29 brands, mainly western spirits, in Oct 2011 ・Nurturing these offerings into a stable source o

  42. Slide 42: Aggressive expansion of overseas hard water brands

    2. Implementation of Strategic Alliances Business alliance with Established Azumino Food Co., Ltd. Maeil Dairies Co., Ltd. ・A joint venture with Marudai Food Co., Ltd. ・South Korea’s No. 3 dairy Foray into the yogurt/chilled dessert manufacturer business ・Started full-scale beer marketing in the cou

  43. Slide 43: Sapporo Group's Overseas Strategy

    3. Promotion of International Expansion: Sapporo Group’s Overseas Strategy North America (U.S., Canada) Population: 340 million North America Southeast Asia Southeast Asia（ASEAN） Population: approx. 600 million Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved. 43

  44. Slide 44: Business Expansion in North America

    3. Promotion of International Expansion: Business Expansion in North America Canada: SLEEMAN (beer) ・7th straight year of sales increase after M&A ・Exceeded 19 million cases per year (2013 result; 1 case = 355 ml×24 bottles) ・Sales volume 1.5 times (2013 result; compared with 2006) U.S.: Sapporo USA

  45. Slide 45: Business Expansion in Southeast Asia: Vietnam

    3. Promotion of International Expansion: Business Expansion in Southeast Asia Sapporo Vietnam (beer) Implementing thorough marketing and sales activities with focus on Ho Chi Minh 2013 Exporting to results in Vietnam 12 countries mainly in 96％ YoY increase ASEAN Copyright, 2014 SAPPORO HOLDINGS LTD.

  46. Slide 46: Business Expansion in Southeast Asia: POKKA Singapore

    3. Promotion of International Expansion: Business Expansion in Southeast Asia POKKA Singapore (soft drinks) With 37 years of history in Singapore, the POKKA brand has made inroads into the market ・No. 1 brand in the non- carbonated beverage category Selected as No. 1 brand in the non- carbonated bev

  47. Slide 47: Toward further creation of cost synergies within the group

    4. Expansion of Group Synergies Toward further creation of cost synergies within the group ◆2008 Established Sapporo Pro Assist Co., Ltd. ・Consolidation of personnel, accounting and administration operations ・Promotion of shared service ◆2011 Reorganized Sapporo Pro Assist into Sapporo Group Managem

  48. Slide 48: Sapporo Group Online Shop Launched

    4. Expansion of Group Synergies Sapporo Group Online Shop Launched Integrated Sapporo Group’s online shopping business ・Launched at the end of Nov 2013 ・2016:Aiming for sales of 1.3 billion yen with 150,000 members Product development through collaboration between group companies ・With the success o

  49. Slide 49: Reference 2: Supplementary Information to 2013 Results (Business Summary)

    Reference 2: Supplementary Information to 2013 Results (Business Summary) For information on the profitability of each business, please see the Supplementary Information to our Earnings Report. Copyright, 2014 SAPPORO HOLDINGS LTD. All rights reserved. 49

  50. Slide 50: Japanese Alcoholic Beverages

    Japanese Alcoholic Beverages (billions of yen) YoY change Results highlights 2012 2013 Amount % *Incl. liquor taxes Net sales increased year over year and total sales volumes for beer and beer-type beverages exceeded the previous year’s level, as Net sales* 269.9 274.9 4.9 1.8% sales volume of beer

  51. Slide 51: International Business

    International Business (billions of yen) YoY change Results highlights 2012 2013 Amount % Net sales increased 33.5% year over year as a result of local Net sales 36.1 48.2 12.0 33.5% currency-based growth, mainly in North America, the impact of yen depreciation, and the addition of the Jan-March res

  52. Slide 52: Food & Soft Drinks (1)

    Food & Soft Drinks (1) (billions of yen) YoY change Results highlights 2012 2013 Amount % While domestic beverages sales declined due to the impact of integration preparations and the reduction in the number of Net sales 129.0 130.6 1.6 1.3% product items, overall sales increased with a net increase

  53. Slide 53: Food & Soft Drinks (2)

    Food & Soft Drinks (2) Key points in business plan: implementation status ■ Soft Drinks (International): POKKA Corporation (Singapore) Pte Ltd 1. Expand into countries neighboring Singapore ■ Restaurants (Domestic): POKKA CREATE Co., Ltd.  Market activation and production capacity expansion measure

  54. Slide 54: Restaurants

    Restaurants (billions of yen) Results highlights While net sales increased as cumulative sales at existing outlets YoY change exceeded the previous year’s level by 1%, operating income was at the same level as the previous year due to the significant impact of profit 2012 2013 Amount % decline in Se

  55. Slide 55: Real Estate (1)

    Real Estate (1) (billions of yen) YoY change Results highlights 2012 2013 Amount % A stable revenue structure was maintained amid weakening of rent levels in the Tokyo metropolitan area office leasing market. Net sales 23.2 22.7 (0.4) (1.9)% Key points in business plan: implementation status Operati

  56. Slide 56: Real Estate (2)

    Real Estate (2) Overview of Real Estate Business  The majority of operating income from the Real Estate business is from real estate leasing. – The property portfolio largely comprises properties in Tokyo (5 central wards: see previous page). – Unrealized gain on real estate for lease was ¥127.7 bi

  57. Slide 57: 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

Sapporo Holdings — FY2013 Earnings Presentation on 6ix