Sapporo Holdings Limited · TSE:2501

Sapporo — Q1 2018 Earnings Presentation

40 slides from Sapporo's earnings presentation, May 10, 2018

  1. Slide 1: Sapporo Group Business Results Presentation for the Three Months Ended March 31, 2018

    Sapporo Group Business Results Presentation for the Three Months Ended March 31, 2018 May 10, 2018 URL http://www.sapporoholdings.jp/english Copyright, 2018 SAPPORO HOLDINGS LTD. All rights reserved. 1/40

  2. Slide 2: First-Quarter 2018 Highlight

    2018 First-Quarter 2018 Highlight 1Q Main beer brands and structure reform in Vietnam have been smooth, while soft drinks were sluggish both in Japan and abroad. We aim to revamp the North American soft drinks business in the first half and produce results in the second half. (billions of yen) 0 Pro

  3. Slide 3: First-Quarter 2018 Highlight

    2018 First-Quarter 2018 Highlight 1Q (billions of yen) Balance of Net debt Equity Cash basis investment YoY 2017-end（IFRS） 2017-end （IFRS） change 2018 plan 2018 1Q（IFRS） 2018 1Q（IFRS） D/E ratio *See p.15 to 19 for the times details of the balance sheet *See p.14 for details Group Management Platform

  4. Slide 4: Revenue by Segment

    2018 Revenue by Segment 1Q Differences arising YoY changes YoY changes ①：2017 1Q ②：2017 1Q ③：2018 1Q % （IFRS） from transfer to （IFRS） amount (billions of yen) （J GAAP) IFRS②-① （③-②） （③-②） Consolidated Revenue 117.8 (3.2) (2.8) % Japanese Alcoholic Beverages* 55.0 (4.2) (0.0)% (Rebate deduction▲4.3)

  5. Slide 5: Main Factors Contributing to Changes in Revenue

    2018 Main Factors Contributing to Changes in Revenue 1Q : The main factors behind revenue decline are new genre and = Increase soft drinks business in Japan and abroad = Decrease (billions of yen) Japanese Alcoholic Food & Soft Real Beverages International Drinks Restaurants Estate 2017 1Q Decline i

  6. Slide 6: Operating Profit by Segment

    2018 Operating Profit by Segment 1Q Differences arising YoY changes ①：2017 1Q ②：2017 1Q ③：2018 1Q from transfer to （IFRS） amount (billions of yen) （J GAAP） （IFRS） IFRS②-① （③-②） Consolidated Operating Profit (1.5) (2.2) (Real-estate tax▲2.0) Japanese Alcoholic Beverages* (1.8) (0.4) International* (0

  7. Slide 7: Main Factors Contributing to Changes in Operating Profit

    2018 Main Factors Contributing to Changes in Operating Profit 1Q : Declined due to forward investment in RTD and sales decline in = Increase the soft drink business (Japan, abroad) = Decrease Smooth progress in the structure reforms in Vietnam Japanese Alcoholic Beverages International Food & Soft D

  8. Slide 8: Japanese Alcoholic Beverages

    Japanese Alcoholic Revenue YoY IFRS Operatin YoY 2018 change g Beverages profit change 1Q *YoY change is on an IFRS basis  Conspicuous impact of the “Continuation of <YoY changes in sales volume of Black Label brand products> Positive strengthening beer business” 115 *Cumulative → Sales volume of B

  9. Slide 9: International

    YoY IFRS YoY 2018 International Revenue change Operating profit change *YoY change is on an IFRS basis 1Q <Sleeman: Changes in sales in local currency (before elimination of inter-company transactions)> Positive  Sleeman’s brand was further strengthened and 110 J-GAAP (before liquor tax) IFRS (afte

  10. Slide 10: Food & Soft Drinks

    YoY IFRS YoY 2018 Food & Soft Drinks Revenue change Operating profit change *YoY change is on an IFRS basis 1Q <YoY change in sales volume of  Sales of lemon-based food products and tea lemon-based foods> *Cumulative Positive drinks remained strong, continuing from last year 115 → Sales volume of l

  11. Slide 11: Restaurants

    YoY IFRS YoY 2018 Restaurants Revenue change Operating profit change *YoY change is on an IFRS basis 1Q Positive  The Yebisu Bar Hakata 1 Bangai restaurant opened (March 26) (The first outlet in Kyushu) → All new restaurants have been performing strongly  While steep rise in ingredient prices and

  12. Slide 12: Real Estate

    YoY IFRS YoY 2018 Real Estate Revenue change Operating profit change *YoY change is on an IFRS basis 1Q Positive  Mainstay properties maintained stable occupancy rate Occupancy Occupancy rate rate 100 % 100 % *Contract basis, rounded off to the nearest whole number <Operating profit of the real est

  13. Slide 13: Special Factors in the Business Results

    2018 Special Factors in the Business Results 1Q  Impact of exchange rates on operating profit is negligible <Special factors in business results (YoY)> Business segment Details Impact on revenue ANCHOR BREWING COMPANY, LLC Approx. International Consolidation began in October 2017 ¥0.7 billion <Impa

  14. Slide 14: Financial Status

    2018 Financial Status 1Q  Investment on a cash basis was ¥4.8 billion ①<Capital expenditure> (billions of yen) <Changes in amount of investment (cash basis)> about ¥ billion in consolidated total 45.0 (tangibles, intangibles) Cash flow from 40.0 investment activities: <Major items> ・“Alcoholic Beve

  15. Slide 15: Impact of Voluntary IFRS Application on Balance Sheets

    2018 Impact of Voluntary IFRS Application on Balance Sheets 1Q  Balance sheet as of the end of the previous year changed due to shift to IFRS Balance sheet as of the end of 2017 Balance sheet as of the end of 2017 Balance sheet as of the end of 2018 1Q (J-GAAP) (IFRS) (IFRAS) Liabilities Applicatio

  16. Slide 16: Impact of Voluntary IFRS Application on Balance Sheets: Assets

    2018 Impact of Voluntary IFRS Application on Balance Sheets 1Q : Total assets increased ¥34.1 billion due to the application of IFRS Total assets (billions of yen) Cash and cash equivalents Total assets 12.5 Trade receivables 12.7 Current assets 98.3 98.6 Inventories 37.9 38.3 16.0 19.2 Other curren

  17. Slide 17: Impact of Voluntary IFRS Application on Balance Sheets: Liabilities

    2018 Impact of Voluntary IFRS Application on Balance Sheets 1Q ：Total liabilities increased ¥36.1 billion due to the application of IFRS and total equity decreased ¥2.0 billion Total liabilities and (billions of yen) Total liabilities and equity Trade payables equity Short-term financial liabilities

  18. Slide 18: Changes in Balance Sheets: Assets

    2018 Changes in Balance Sheets 1Q : Total assets declined ¥34.5 billion compared with the end of the previous year Total assets Cash and cash equivalents Total assets (billions of yen) 12.5 Trade receivables 9.3 →Impact of seasonal factors and bank 98.3 73.6 Current assets holidays Inventories 37.9

  19. Slide 19: Changes in Balance Sheets: Liabilities and Equity

    2018 Changes in Balance Sheets 1Q : Total liabilities declined ¥18.5 billion compared with the end of the previous year, total equity declined ¥16.0 billion Total liabilities and Trade payables equity Total liabilities and (billions of yen) equity Short-term financial liabilities 36.5 34.4 80.7 Othe

  20. Slide 20: Transformation of the Group Management Platform

    2018 Transformation of the Group Management Platform 1Q Health creation Research of management hop Work Style Improvement  Received the 2018 JSBBA Award for Achievement in Technological Research*1 from Japan Society for Bioscience, Biotechnology, and Agrochemistry (JSBBA).  Certified as “2018 Exce

  21. Slide 21: Appendix: Reference Materials

    Appendix: Reference Materials Copyright, 2018 SAPPORO HOLDINGS LTD. All rights reserved. 21/40

  22. Slide 22: Appendix: Japanese Alcoholic Beverages

    Appendix Japanese Alcoholic Beverages Copyright, 2018 SAPPORO HOLDINGS LTD. All rights reserved. 22/40

  23. Slide 23: Japanese Alcoholic Beverages: Sales Volume

    【Beer】（sales volume） ＜Y-o-y change in sales volume of Jan-Mar up ％ y-o-y （total demand down 2％） 3 core brands>  Black Label Brand total up ％ y-o-y 105 （Sales of the canned version：up ％ y-o-y）  Yebisu Brand total down ％ y-o-y 95 (Reverse effect of Yebisu Hana Miyabi, launched in March 2017. Yebisu

  24. Slide 24: Japanese Alcoholic Beverages: Core Brands

    ＜3 core brand Jan- Mar Sales volume change＞*Sales base (10,000 cases) 400 ＜Beer lineup (Jan – Mar breakdown＞ 300 13% Appendix Japanese Alcoholic Beverages 200 25% 62% 100 Black label Yebisu Other 0 2012 2013 2014 2015 2016 2017 2018 Black label brand total Yebisu brand total Mugi to Hop brand total

  25. Slide 25: Japanese Alcoholic Beverages: Net Sales by Category

    4.0 (billions of yen) ＜Jan- Mar Net Sales＞ (billions of yen) 3.0 ※incl. liquor tax *before rebate deduction 60 2.0 1.7 1.6 1.4 1.5 1.6 1.7 1.6 50 1.0 1.1 1.1 1.4 1.2 1.1 1.1 1.1 0.0 40 19.3 13.8 14.4 13.9 12.7 11.7 2012 2013 2014 2015 2016 2017 2018 14.9 30 Japanese wine Imported wine 2.0 20 1.5 28.

  26. Slide 26: 2018 Jan-Mar Major New Products

    ＜2018 Jan-Mar Major new products＞ Beer, Happoshu, New genre and RTD *incl. improved products “YEBISU Hanamiyabi” “YEBISU with “Goku zero YEBISU “Mugi to Hop” Joel Robuchon” Sokai zero” Sakura designed can (improved product) Appendix Japanese Alcoholic Beverages “PEACH BELG” Special Edition can Speci

  27. Slide 27: 2018 Jan-Mar Major New Products: Wine, Spirits and Japanese Liquor

    ＜2018 Jan-Mar Major new products> Wine, Spirits and Japanese liquor *incl. improved products Appendix Japanese Alcoholic Champagne “TAITTINGER Brut Reserve GRANDE POLAIRE Beverages FIFA bottle 2018” France wine Emma MYTHIQUE Italian wine Plum liquor Tenuta Carretta series Umeshu series Plum flavor l

  28. Slide 28: Wine Awards

    Penfolds Bin 8 Shiraz Cabernet 2016 wins the Diamond Trophy! “SAKURA” Japan Women’s Wine Awards 2018  Penfolds Bin 8 Shiraz Cabernet 2016, a fine wine marketed by Sapporo Breweries Ltd., won the Diamond Trophy at the “SAKURA” Japan Women’s Wine Awards 2018.  The trophy is given to the wine that is

  29. Slide 29: Opening of Grande Polaire Hokkaido Hokuto Vineyard

    Opening of Grande Polaire Hokkaido Hokuto Vineyard Appendix  We will open Grande Polaire Hokkaido Hokuto Vineyard (tentative name) in June 2018 to secure high-quality grapes and improve brand power of Japanese wine Grande Polaire.  We will prepare the soil of the vast 25.4 ha land within 2018, sta

  30. Slide 30: International: Overseas Brands and U.S. Soft Drinks

    【Overseas Brand】 【U.S. soft drinks business】 (Products of Sleeman and Anchor)  Jan- Mar down ％ y-o-y  Jan- Mar up ％ y-o-y *sales volume ＊sales revenue ＜Ｕ.S. soft drinks business Net Sales in Local Currency (Jan- Mar)＞ 【Sapporo Brand】 * before elimination of inter- company transactions  Jan- Mar u

  31. Slide 31: International: Sleeman and Sapporo Brand Sales

    ＜SLEEMAN：Net Sales in Local Currency (Jan- Mar) Sapporo brand sales volume *before elimination of inter- company transactions breakdown by geographic area 120 IFRS 9% J GAAP （Excluded liquor tax） （Included liquor tax） 100 7% 39% 80 1.49 103 106 1.11 60 million 28% （※） （※） million 40 71 75 cases 63 6

  32. Slide 32: Food & Soft Drinks: Sales by Product

    【Lemon-based drinks】 【Lemon-based food products】 *sales volume *sales volume  Jan- Mar down ％ y-o-y  Jan- Mar up ％ y-o-y 【Unsweetened tea drinks】 【Soups】 *sales volume *sales volume  Jan- Mar down ％ y-o-y  Jan- Mar up ％ y-o-y 【Coffee drinks】 *sales volume 【Soy milk, chilled products】 *sales volu

  33. Slide 33: Food & Soft Drinks: Net Sales

    ＜Food & Soft Drinks segment Net sales> ＜Food & Soft Drinks segment (billions of Yen) (Jan- Mar) Net sales break down by geographic area＞ 35 ＊April 2011 Consolidation of POKKA CORPORATION * before elimination of inter- company transactions ※IFRS 30 25 83% 20 ※30.4 15 28.1 27.6 29.8 29.3 30.2 ※27.8 10

  34. Slide 34: Pokka Create Co., Ltd.

    【Pokka Create CO., Ltd.】  Jan- Mar Net sales billion down ％ y-o-y ＜New & refurbish outlets ＞ <Number of outlets as of March 31, 2017 : 200> 110 Appendix 53 200 East Japan Central Japan Food & Soft Drinks outlets West Japan 37 105 200 Directory operated 95 outlets FC Copyright, 2018 SAPPORO HOLDINGS

  35. Slide 35: 2018 Major New Products: Food & Soft Drinks

    ＜2018 Major new products> *incl. improved products Plum flavor sparking Hita pear favor juice Left: JELEETS coffee jelly “Kishu no ume Sparking” “Hita no nashi” Tsugaru apple flavor juice Right: JELEETS Uji maccha jelly “Tsugaru no Ringo” Appendix Food & Soft Drinks Left: Gabunomi Milk coffee “Hokka

  36. Slide 36: 2018 Major New Products: Soups and Foods

    ＜2018 Major new products> *incl. improved products Risorante Jikkuri Kotokoto Kongari Pan PREMIUM Cup-based risotto “Gekikara Tonkotsu soup” soup series Cold soups series Appendix Food & Soft Drinks Jikkuri Kotokoto Kongari Pan soup Sozaiya soup “Jikkuri Kotokoto Gohobi Dinning cold soup” SOYBIO Soy

  37. Slide 37: Restaurants: Sapporo Lion Outlets

    Trends of net sales and number of ＜Sapporo Lion outlets ＞ (billions Sapporo Lion Outlets *before rebate deduction As of Mar 31, 2018 of yen) 8.0 192 200 7.0 186 188 179 190 8 9 6.0 170 174 170 180 14 Tokyo Metroporitan 170 5.0 160 4 Kanto (excl.Tokyo) 4.0 150 Hokkaido 3.0 140 170 Tohoku 5.4 5.5 5.4

  38. Slide 38: Major Rental Properties and Occupancy Rates

    ＜Major rental properties & occupancy rates： ＜Information about （Averages of Jan-Mar, 2018) Real Estate for lease＞ (billions of yen) Occupancy Site area Floor area 400 rate No. of floors （㎡） （㎡） （%） 350 40 floors above 300 Yebisu Garden Place（1） 56,943 298,007 100 ground, 5 below 250 12 floors above

  39. Slide 39: Various Initiatives by the Sapporo Group

    Various Initiatives by the Sapporo Group Photo 1 <Awards（initiatives for preserving environment）>  Agriculture, Forestry and Fisheries Minister’s Award of the 27th Global Environment Award -In recognition of biomass energy technology development applying brewing technology- (Photo 1) http://www.sap

  40. Slide 40: Sapporo will contribute to the evolution of creative, enriching and rewarding lifestyles

    As an intrinsic part of people's lives, Sapporo will contribute to the evolution of creative, enriching and rewarding lifestyles. Copyright, 2018 SAPPORO HOLDINGS LTD. All rights reserved. 40/40

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