Sapporo Holdings Limited

Financial Results Briefing for the Fiscal Year Ended December 2023

February 15, 2024

Event Summary

[Company Name]

Sapporo Holdings Limited

[Company ID]


[Event Language]


[Event Type]

Earnings Announcement

[Event Name]

Financial Results Briefing for the Fiscal Year Ended December 2023

[Fiscal Period]

FY2023 Annual


February 15, 2024

[Number of Pages]



15:00 - 16:32

(Total: 92 minutes, Presentation: 43 minutes, Q&A: 49 minutes)



[Number of Speakers]


Masaki Oga

President and Representative Director

Yoshitada Matsude

Managing Director

Rieko Shofu


Hiroyuki Nose

President and Representative Director


Moderator: Hello, investors. Thank you very much for joining us today for the financial results briefing for the fiscal year ending December 2023 for Sapporo Holdings Limited. We will start the meeting now.

Mr. Masaki Oga, President and Representative Director of Sapporo Holdings Limited; Mr. Yoshitada Matsude, Managing Director; Mrs. Rieko Shofu, Director; Mr. Hiroyuki Nose, President and Representative Director of Sapporo Breweries Limited, are present today.

Oga, Shofu, and Matsude will explain the financial results based on the presentation materials for approximately 50 minutes, followed by a question-and-answer session. The entire meeting will last approximately 1.5 hours.

Let me begin with a summary from Oga, and then Shofu will explain the details of our medium- to long-term management policy. Thank you.

Oga: I will start with the summary on page three of the document.

The 2023 financial year is off to a good start as the first year of the medium-term management plan.

Steady implementation of beer strengthening and structural reforms led to increased sales and profit. We were able to achieve our plan at the beginning of the year. In terms of capital efficiency, we have promoted balance sheet reforms, including the sale of assets and cross-shareholdings, and based on profit growth, we have decided to raise the dividend by JPY2 from the most recent forecast to JPY47.

The financial results are written below, and the ROE was 5%.

On page six, results for 2023, major results of structural reforms and initiatives for future growth, the results section are described in detail.

From the left, cost structure reforms, such as the reorganization of the Sendai Plant, streamlining of sales promotion expenses, and the completion of the closure of unprofitable restaurants in the Restaurants business, can be cited as the results of structural reforms. Then, the initiatives for future growth are listed, with 9% growth in beer volume and 16% growth in RTDs.

Return to page three. Considering these circumstances, our plan for 2024 is positioned as a year in which we will set a goal for structural reform and solidify our foundation.

With plans to increase sales and profits, we will focus on structural reforms while executing brand and human resource investments for future growth. The annual dividend is expected to be JPY52, anticipating a further increase of JPY5. This is the second consecutive year of dividend increase, and the ROE plan for 2024 is 5.5%.

On page five, you will see our medium- and long-term management policies, which I will explain later, and our current medium-term management plan remains unchanged until 2026.

We have made a good start toward achieving 8% ROE by 2026, and we are on track for structural reforms in 2023 and 2024. We will certainly finish implementing them this year.

We also aim to achieve ROE of 8% and EBITDA of JPY50 billion as early as possible toward our 2026 plan, which we have left unchanged for now.

Based on the discussions at the Group Strategy Review Committee and the Board of Directors meetings held since last fall, we have formulated a management policy to enhance the value of the Group over the medium to long term and after the mid-term plan.

Shofu: Now, let me explain as I go along on the screen.

We recognize that the current mid-term plan, as we have just reported, is off to a good start. Since last year, the Group Strategy Review Committee and the Board of Directors have been holding discussions and deliberations with the aim of further enhancing corporate value. In this study, we have taken in a wide range of opinions from within the Company and also listened to those outside the Company, such as our business partners and investors.

In such an environment, we recognize that two major issues need to be addressed in order to improve our corporate value in the future. One is on the left side of the screen: low return on capital. The other is a weak commitment to performance.

The low profitability is considered to be a major issue in the current mid-term plan, and we are promoting improvement by concentrating on and selecting each business. However, when looking at the overall structure of the Group, we realized that having a business portfolio that includes alcoholic beverages, food and soft drinks, and real estate businesses at the same time would lead to a dispersion of management resources or competition within the Group for resources to invest in growth. We believe that a major review of this point is necessary if we are to look at further increasing corporate value.

Weakness in commitment to performance, which has been reflected in the low level of achievement in the past management plan, is due to factors such as organizational culture, diversity of human resources, and the degree to which results-oriented management is thoroughly implemented.

On the other hand, we have also been confirming our strengths, which include the solid quality and brand power of our beer, our product development and production technology, and our unique points of contact with customers in the restaurant business, real estate, and brand experience. These have been highly evaluated both internally and externally, and we have confirmed that they will continue to be our unique strengths in the future.

These challenges, as well as the opportunities they present, have defined our medium- to long-term vision for the future. Simply put, we must concentrate on alcoholic beverages, where we have unique strengths. By

concentrating on alcoholic beverages, we can increase capital profitability while leveraging our unique strengths to create rich beer experiences, customer experiences, and markets around the world. We hope to grow as such a company.

The source of our value is our human resources, and we intend to diversify our human resources further and invest in human capital in accordance with our corporate image. We will review our personnel system and the governance structure of the entire group to strengthen our commitment to performance and contribute to society as a unified group.

The diagram shown now conceptually illustrates the transition to a structure that will realize growth in the alcoholic beverages business. The dotted circles represent the current or past status, and the solid circles represent what we aim for in the medium to long term. I would like to add that this is a conceptual chart and not an organizational structure chart.

The message here is that we have been and are currently a conglomeration of three businesses-alcoholic beverages, food and soft drinks, and real estate-but in the medium to long term, we will sublimate the total power of the Group to increase value through growth in alcoholic beverages. The message is that we want to transform our business structure this way.

Our strength lies in our beer. There is also a trend toward a return to beer in Japan. With our track record of steadily growing the Sapporo brand overseas, we have three main ideas for the next stage of our alcoholic beverage efforts.

The first is the pursuit of manufacturing products that are loved by true beer fans, mainly in Japan. It is also about creating new fans while respecting the history and culture of beer. In fact, our flagship product, Black Label, has grown 1.7 times over the past 10 years. In addition, support from the younger generation, especially those in their 20s, is increasing. With these long-loved brands at the core, we will develop our own unique stories at customer contact points and brand experiences.

The second is overseas. Although the scale of our business is still small, Sapporo has continued to grow as a brand characterized by high quality, security, and uniqueness. In the future, we intend to strengthen our

manufacturing and sales system and, in some regions, restructure our operations to increase brand recognition. By expanding and promoting M&A, we hope to grow our business to the same scale as our domestic business in the future. A specialized organization for this purpose will also be established within the Group.

Third, we will leverage our strengths in product development and production technology to create markets for RTD and non-alcoholic beverages. In this area, we will strengthen co-creation with external partners and promote the development of new businesses and services.

Next, in the food and soft drinks business, as shown in the chart, we would like to consider further synergies with alcoholic beverages, such as synergies in the RTD and non-alcoholic beverage areas, which we are still working on in part, as well as expanding sales synergies overseas in ASEAN countries. In the food and soft drinks category, we will fundamentally review the positioning of categories that cannot realize synergies with alcoholic beverages in the future.

Real estate is positioned as a place to provide brand and customer contact points for the alcoholic beverage business, and we intend to strengthen this initiative further. In order to increase the value of the alcoholic beverage business, we would like to flexibly respond to growth investments in the future, especially overseas. We intend to diversify our real estate holdings, including the introduction of capital from external strategic partners.

Next, I would like to explain our organizational management policy.

First, let us discuss the Group's organizational structure. We intend to change the structure of the Group's total power with the aim of increasing value through alcoholic beverages growth. We will consider the ideal organizational form from the perspective of what governance structure is necessary to achieve this and how we can further enhance synergy creation. We also have the option of transitioning to an operating holding company.

Next, I would like to add a supplementary note on human resources. Management human resource requirements will also be reviewed in line with the medium- and long-term policies presented today. In addition to supplementing our human resources with external human resources, including diversity, we will also redesign our internal human resources development system in line with the revised management human resources requirements.

Financial policy. In the mid-tolong-term, we aim to achieve an ROE of 10% or more. In the current medium- term management plan, ROIC has been set as one of the internal management indices with an awareness of capital efficiency, and we will continue to monitor our business using the ROIC tree thoroughly and to tighten the criteria for business continuity decisions.

In addition, we intend to utilize capital from outside sources to reduce debt and increase financial stability to create a structure allowing us to make flexible investments for growth in the alcoholic beverages business.

Today, I have provided an overview of the policy.

We will proceed with planning regarding the various points presented here. We will report back and inform you of the specifics of our efforts at an appropriate time later.

This is the end of my brief explanation.

Moderator: Thank you for your explanation. Next, Matsude will give an overview of the financial results for FY2023 and the management plan for FY2024. Please.


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Sapporo Holdings Limited published this content on 12 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 March 2024 09:47:03 UTC.