Sapporo Group Long-Term Management Vision SPEED150 SAPPORO Eternal Expansion Design. November 2, 2016 Sapporo Holdings LTD.

Transcription

1 Sapporo Group Long-Term Management Vision SPEED150 SAPPORO Eternal Expansion Design November 2, 2016 Sapporo Holdings LTD. 1

2 Management Philosophy and Fundamental Management Policy Management Philosophy As an intrinsic part of people s lives, Sapporo will contribute to the evolution of creative, enriching and rewarding lifestyles. Fundamental Management Policy The Sapporo Group strives to maintain integrity in corporate conduct that reinforces stakeholder trust, and aims to achieve continuous growth in corporate value. 2

3 Agenda Sapporo Group Long-Term Management Vision SPEED150 ( ) 1.Review of the Past 10 Years and Awareness of Issues (1) New Management Framework (2) Results (3) Accomplishments and Issues 2.Long-Term Management Vision SPEED150 (1) Analysis of the Environment (2) Fundamental Policy (3) Management Platform (4) Roadmap (5) Relationships with Stakeholders 3

4 1.Review of the Past 10 Years and Awareness of Issues (1) 2007 New Management Framework Outline Fundamental Strategy Business Domains The Group has identified two businesses domains: the creation of value in food and the creation of comfortable surroundings. The Group plans to expand its business in these areas through the utilization of the assets and strengths at its disposal. Group Strategy Creating high-value-added products and services Promote international expansion Form strategic alliance Expand synergies among Group companies Quantitative Targets Consolidated net sales (including liquor) Consolidated operating billion 40.0 billion 4

5 1.Review of the Past 10 Years and Awareness of Issues (2) Results Qualitative Results for the Entire Group Expanded business domains with a view to growing into a food manufacturer through strategic alliances and international expansion Pushed ahead with enhancing the value of brand assets to guide the Group to future growth, by amassing experience in various challenging initiatives based on the themes of creating high-added-value and expanding synergies Main Initiatives Based on Group Strategies Promote international expansion Form strategic alliance Commenced operations in earnest at Sleeman Breweries Ltd. following the acquisition of shares (2006) Entered the beer business in Vietnam Formed a capital and business alliance with POKKA Integrated business with POKKA CORPORATION Creating high-value-added products and services Commenced operations in earnest at the Nasu Brewery Formed a business alliance with BACARDI JAPAN LIMITED Opened the YEBISU BAR Expand synergies among Group companies Established Sapporo Proassist Established Sapporo Group Management Ltd Acquired 51% of the shares of Silver Springs Citrus Inc. Opened GINZA LION BEER HALL in Singapore Acquired 51% of the shares of COUNTRY PURE FOODS, INC. Established a soft drinks joint venture in Indonesia Strengthened imported fine wines Commenced the soy milk and chilled products business Developed Goku Zero and Otoko Ume Sour The POKKA brand was ranked No.1 in the non-carbonated beverage category of a consumer trends survey in Singapore. Implemented valueadded renovation of YEBISU Garden Place Developed SAPPORO+ Opened the Group online shopping site Promoted Group-wide collaborative product development (Kireto Lemon -Sour, GREENSHOWER,etc.) Opened the GRANDE POLAIRE wine bar Completed construction of GINZAPLACE 5

6 1.Review of the Past 10 Years and Awareness of Issues (2)Results Quantitative Results for the Entire Group Established an earnings base that is able to generate steady operating income with low volatility. Achieved steady sales growth through an expansion in business fields, with net sales recovering to the billion level for the first time since Net sales have reached an all-time high since the shift to the holding company structure. Profits did not grow in line with the sales growth trend, and results fell significantly short of target. Billions of yen Achievement of target Operating income (after goodwill) / right scale Operating income (before goodwill) / right scale Net sales 〇 Sales growth Target Forecast 見込目標 From 2003 Transition to holding company 〇 Earnings base Profit growth New Management Framework

7 1.Review of the Past 10 Years and Awareness of Issues (2)Results Quantitative Results by Segment Japanese Alcoholic Beverages and Real Estate helped to establish a steady earnings base for the entire Group. The expansion of fields in International and Food & Soft Drinks helped sales growth, but did not lead to growth in profits. The main reason for the shortfalls against target was the lack of growth in profits from the expanded fields. Expanded fields lacking growth in profits = International business (Vietnam, North American soft drinks), Food & Soft Drinks business (POKKA SAPPORO) Net sales Operating income (before amortization of goodwill) Billions of yen Japanese Alcoholic Beverages International Food & Soft Drinks Restaurants Real Estate Achievement of target Billions of yen 40.0 Japanese Alcoholic Beverages International Food & Soft Drinks Achievement of target Others 30.0 Restaurants Real Estate Others Corporate 〇 Sales growth 10.0 Profit growth 〇 Earnings base Target 目標 Target 目標 Forecast 7

8 1.Review of the Past 10 Years and Awareness of Issues (3)Accomplishments and Issues Accomplishments and Issues Management Financial Business Accomplishments Steady growth in businesses acquired through M&As Solid track record in nurturing acquired businesses such as the shochu business and Sleeman Breweries Strengthened group management structure Established governance structure, promoted streamlining of Head Office functions Achieved sales growth Steadily increased sales through such means as M&As and alliances Established an earnings base The Japanese Alcoholic Beverages and Real Estate segments generated steady operating income Reaffirmed and bolstered the strengths of each business Selectively concentrated on products and services where the Group has differentiable strengths Expanded business fields Expanded fields in the International and Food & Soft Drinks segments Issues Demonstrate the ability to deliver on commitments Leadership needed to guide the Group to achievement of Group plans M&A execution process reforms Establish global management platform Establish a Group management structure optimal for further growth Expand profitability Strengthen profitability leveraging the strengths of existing businesses Producing results in the investment as early as possible Strengthen stability Work to reduce interest-bearing liabilities Achieve continuous growth in existing businesses Deliver steady growth based on brands Drive growth and globalization in the Alcoholic Beverages, Food and Soft Drinks fields Capture growth opportunities Create opportunities that drive new growth as early as possible 8

9 Japan Overseas 2.Long-Term Management Vision SPEED150 (1)Analysis of the Environment Market Environment Aggregate demand has been decreasing due to Japan s declining population along with diversifying consumer needs due to changing lifestyles. In this environment, it will be increasingly crucial to carefully identify growth fields in the process of creating value. Meanwhile, companies will work harder to find growth opportunities overseas. Further aging with fewer children and a declining population Widespread adoption of diversity management Increase in natural disasters Instant dissemination of information due to advances in IT and diversified modes of transportation Further diversification of needs and polarization of consumption patterns in line with changing lifestyles Stagnation in the Chinese economy Population growth, economic development, and the rise of a massive new middle income class in emerging countries in Africa, Asia and elsewhere Geopolitical instability reflecting politics, religion and other factors Supply of products and services on a global scale due to the expansion of the IT market Corporate realignment on a global scale and further M&A activity by Japanese companies 9

10 2.Long-Term Management Vision SPEED150 (2)Fundamental Policy Source of the Sapporo Group s Growth The Sapporo Group s brand assets, which have been long cultivated by the Group with the support of customers, are our source of growth. The Sapporo Group will achieve robust growth by reaffirming those assets and honing the individuality of its brands in tandem with expanding its contact points with customers. SAPPORO, YEBISU, SLEEMAN, POKKA, GINZA LION BEER HALL, YEBISU GARDEN PLACE and others Brand assets = Source of growth Innovation Quality Providing new value through innovation and scaling new heights by pursuit of quality are strengths that the Group has exerted since it was founded. Various corporate business activities undertaken over 140 years Human resources 10

11 2.Long-Term Management Vision SPEED150 (2)Fundamental Policy The Group s Core Businesses The Sapporo Group has positioned Alcoholic Beverages, Food and Soft Drinks as its three core business fields and will work to nurture and strengthen its brands. Alcoholic Beverages Food Soft Drinks 11

12 2.Long-Term Management Vision SPEED150 (2)Fundamental Policy 2026 Group Vision 2026 Group Vision The Sapporo Group will be a company with highly unique brands in the fields of "Alcoholic Beverages", "Food", and "Soft Drinks" around the world. Action Guidelines 1. Make customers lifestyle around world more fulfill by creating new value through the pursuit of innovation and quality. 2. Strive to provide products and services and to nurture brands that foster communication among customers. 3. Practice efficient management in tandem with addressing changes in the environment. 12

13 2.Long-Term Management Vision SPEED150 (2)Fundamental Policy Growth Strategy Theme Along with measures to achieve continuous growth in existing businesses, the company decide the three major strategic themes that will lead the Group s growth. 1Establish Robust Profitability in the Japanese Alcoholic Beverages and Soft Drinks Businesses In the Japanese Alcoholic Beverages business, the Group will strengthen brands in the beer business and nurture the wine business. In the Soft Drinks business, the Group will strategically shift to a profitable structure and expand overseas business. Through these measures, robust profitability will be established to drive the growth of the entire Group. Net sales Operating income 年 2026 年 forecast 2Accelerate growth in the Food field Broadly increase the presence of the Sapporo Group in the Food field by strengthening existing businesses and entering new businesses through the provision of delicious taste, enjoyment and fulfillment to all dining settings. 3Promote Global Business Expansion Increase the Group s presence globally by strengthening the global management platform as the Group s growth driver and promoting the growth of existing businesses and new business development initiatives such as M&A activity. Europe (London Representative Office) Southeast Asia North America 13

14 2.Long-Term Management Vision SPEED150 (3)Management Platform Management Platform R&D, human resources, and finance, which form the Group s management platform, will strive to lay a strong groundwork for the Group to promote its business strategies, with a view to building stronger brands. R&D Pursue innovative food value creation Enhance R&D competitiveness by promoting Group collaboration and groundbreaking open innovation through the establishment of a new Group research and development framework and strategic intensive investment. While strengthening the ability to promote commercialization, the Group will vigorously push ahead with the creation of new value in Alcoholic Beverages, Food and Soft Drinks, thereby guiding the Group to growth. HR Develop Go Beyond Boundaries personnel Nurture human resources who Go Beyond Boundaries personnel those who can deliver new value and inspiration while facing many different customers, thereby spurring the Group s growth. To achieve this vision, build a Group-wide environment that enables personnel to improve themselves in a healthy, optimistic and positive manner. Finance Enhance cash generation capabilities Enhance cash generation capabilities by improving profitability and push ahead with proactive investment in growth fields to increase corporate value. 14

15 2.Long-Term Management Vision SPEED150 (4)Roadmap Long-term Vision Roadmap SPEED150 First Medium-Term Management Plan ( ) Transform with unprecedented speed Second Medium-Term Management Plan ( ) Proactively invest and produce results Third Medium-Term Management Plan ( ) Tackle the challenge of creating Transformation of the Group management platform continuous growth in existing businesses Producing results in the investment Capturing growth opportunities Proactively invest in growth Achieve continuous growth Produce results to realize the vision Strengthen brands Achieve the vision Proactive initiatives to reach the next stage 15

16 2.Long-Term Management Vision SPEED150 (5) Relationships with Stakeholders Enhancing Corporate Communication The Sapporo Group seeks to ensure transparency and fairness in management by enhancing corporate governance in conjunction with maintaining integrity in corporate conduct based on the Sapporo Group s Basic CSR Policy. Through these measures, the Group will strive to disclose information proactively and appropriately and foster interactive communication, thereby deepening its relationships of trust with all stakeholders. Employees Diversity, Health promotion Build a culture that encourages employees to tackle challenges Customers Provide valuable products and services that are trusted Shareholders Compliance with the Corporate Governance Code, appropriate shareholder returns Nurturing and food education for the next generation, regional vitalization, environmental preservation leveraging business characteristics Communities and society Procurement in consideration of human rights and the environment Suppliers 16

17 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 materially from forecasts due to changes in various underlying factors.