Sapporo : 4Q Financial Results Presentation Material(3.1MB)

Sapporo Group Business Results for 2023

Management Plan for 2024

*In this document, the name abbreviations are used:

SH: Sapporo Holdings Limited SB: Sapporo Breweries Ltd. SLN: Sapporo Lion Limited.

PS: Pokka Sapporo Food & Beverage Ltd. SRE: Sapporo Real Estate Co., Ltd.

SPB：SAPPORO PREMIUM BEER

YGP：Yebisu Garden Place

PVS：Public Vending Service company

February 14th 2024

URL https://www.sapporoholdings.jp/en/

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１. Summary

２. Progress of the Medium-Term Management Plan

３. Medium- and Long- Term Management Policies for Increasing Group-wide Corporate Value

４. Financial results for fiscal year 2023

５. Management plan for fiscal year 2024

６. Appendix

・・・ P.3

・・・ P.4~6

・・・ P.7~P.13

・・・ P.14~P.19

・・・ P.20~P.42

・・・ P.43~P.57

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Summary

2023 financial results: Off to a good start in the first year of the Medium-Term Management Plan

• Steady implementation of beer strengthening and structural reforms, increased revenue and profit, and achievement of the plan for the year
• With regard to capital efficiency, promotion of balance sheet reform, including the sale of assets held and cross-shareholdings
• Decision based on profit growth to increase dividend by 2 yen (from 45 yen to 47 yen) from the most recent dividend forecast

2024 plan: A year to set a structural reform goals and solidify the foundation

• Plan to increase sales and profit, while focusing on structural reforms and investing in brands and human resources for future growth
• Annual expected dividend is set at 52 yen, an increase of 5 yen and the second consecutive increase

Financial results for fiscal year 2023	2022	2023	YoY	YoY
（billions of yen）	changes	changes
Result	Result
	(amount)	(%)
Revenue	478.4	518.6	40.2	8.4%
Core operating profit	9.3	15.6	6.3	67.9%
Operating profit	10.1	11.8	1.7	17.0%
Profit attributable to owners of parent	5.4	8.7	3.3	60.1%
ROE	3.3%	5.0%	-	-

Management plan for fiscal year 2024	2023	2024	YoY	YoY
（billions of yen）	changes	changes
Result	Plan
	(amount)	(%)
Revenue	518.6	523.5	4.9	0.9%
Core operating profit	15.6	19.0	3.4	21.5%
Operating profit	11.8	17.6	5.8	48.9%
Profit attributable to owners of parent	8.7	10.0	1.3	14.6%
ROE	5.0%	5.5%	-	-

Formulation of medium- to long-term management policies

• Formulation of medium- to long-term management policies to enhance Group value based on discussions within the Group Strategy Review Committee and the Board of Directors

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Progress of the Medium-Term Management Plan

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Progress of the Medium-Term Management Plan -Achieving the Plan by 2026-

Steady start to achieve ROE of 8% by 2026

To transform the business structure and achieve new growth, 2024 is the year to set structural reform goals and solidify the foundation

2023

Work toward future growth while

steadily implementing structural

reforms

(Specific results mentioned P6.)

2024

Set structural reform goals and invest in human resources, brands, etc. to achieve the 2026 Plan

ROE

5.0%

ROE

5.5%

EBITDA

¥40.7billion

ROE

8.0%

EBITDA

¥50.0billion

ROE

3.3%

EBITDA

¥29.9billion

Core

operating

profit

¥9.3 billion

EBITDA

¥36.0billion

	Core
Core	operating
operating	profit
profit	¥19.0 billion
¥15.6 billion

Although financial targets and targets for

core operating profit for 2026 remain

unchanged from the original plan, Japan

alcoholic beverages and restaurant business are making steady progress. We aim to achieve the 2026 targets for Japan alcoholic beverages as soon as possible and maintain the 2024 profit level for restaurants. Overseas alcoholic beverages are slightly behind due notably to the impact of inflation, and we are working

toward recovery.

Core

operating

profit

¥25.0

billion*

*Approximation for achieving

financial targets

2022	2023	2024	2026
(Result)	(Result)	(Forecast)	(Forecast)
		Core operating profit trend

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Progress of the Medium-Term Management Plan -2023 Results-

In 2023, we worked toward future growth while steadily implementing initiatives for structural reforms

Main results of structural reforms

Alcoholic Beverages	Food & Soft Drinks	(Asset reduction)
Restaurants	(Business portfolio)
（Japan）	（Japan）

Cost-related structural	Improvements in store profitability	Cost-related structural	Reshuffling of business		Balance sheet reforms
	reforms	Reduce unprofitable restaurants		reforms		portfolio		(Asset-light initiatives)
¥	billion	¥	billion	¥	billion	¥	billion	¥	billion
	(P/L basis)		(P/L basis)		(P/L basis)		(P/L basis)		(B/S basis)
Reorganization of Sendai factory	Closures of unprofitable restaurants	Waste reduction due to SKU reduction	Resolution to dissolve Anchor		Reduce cross-shareholdings
Streamlining promotional expenses	completed 30% reduction compared	Decrease in vending machine costs	Liquidation of subsidiary of PS		Sales of assets held
		to pre-COVID-19 levels

Initiatives for future growth

Alcoholic Beverages	Alcoholic Beverages	Alcoholic Beverages
（Japan）	（Japan）	（Overseas）
Increase beer sales	Increase RTD sales	SPB growth

%	%	%
(volume basis)	(volume basis)	(volume basis)
Beer growth	Record-high sales achieved	U.S.-centered growth
focused on Black Label	through growth of key brands	Record-high sales volume in the U.S.

Alcoholic Beverages

Overseas Soft Drinks

（Overseas）

Creation of synergies	Sales increase in Malaysia
in the U.S.

$	M						%
(amount basis)		(SGD basis)
Steady progress made with	Growth in Malaysia, our focus region
function integration
(Singapore +6%)
Start of SPB manufacturing in
the U.S.
in December 2023
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Medium- and Long- Term Management Policies

for Increasing Group-wide Corporate Value

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Recognition of challenges and Strengths

Challenges

Low capital profitability

• The diversified business portfolio has caused scattered resources and issues of intra-group competition relating to growth investments.

Lack of strong commitment to the performance

• organizational culture
• human resource diversity
• thoroughness of performance-based evaluations

Strengths

• High quality and brand power of beer
• Product development and production technology
• Consumer contact points and brand experience venues that are created by restaurants business and real estate business

Based on the above-mentioned intrinsic challenges and strengths, the Company has formulated its

vision for the future and management policies over the medium to long term.

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Sapporo group's vision for the future

The Company will further concentrate its management resources to focus on beer businesses with competitive advantages and businesses in which synergies with those competitive businesses can be created.

• Concentrate resources on beer business
• Expand consumer contact points
• Strengthen RTD

• Specialize in Sapporo brand
• Expand export business

	Japan Alcoholic
	Beverages
Coordinate product
development for	Food &
RTD, etc.	Real Estate
	Soft Drinks

Food &

Soft Drinks

Coordinate overseas sales channels

• Reform and reorganize unprofitable

	divisions	Previous form
➢	Strengthen lemon business

Overseas

Alcoholic

Beverages

Overseas Beverages

To be utilized as a venue for consumer contact points and brand experiences

Future form

Invest capital for expansion of growth investment

Real Estate

• Improve property value

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Management policy of the alcoholic beverages business

The Company develops its market-creation capabilities in alcoholic beverages, which has been the

Company's DNA since its foundation and grows our beer business.

Alcoholic beverages business

Japanese beer business

• Investment in our core brands such as
  "Sapporo Beer called Black Label" and "Yebisu Beer"
• Expanding direct consumer contact points

Overseas beer business

• Investment in Sapporo brand
• M&A execution
• Form a special task team

New markets

• Strengthening cooperation with other business units within the group
• Create new markets in RTD and non- alcoholic fields
• Co-creationwith external partners

The company that pursues the creation of

products loved by true beer fans and cherishes

the history and culture of beer

The company that tries making new value creation

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