Commencement of Discussions on Operational Integration of the SAPPORO Group and POKKA Group

Transcription

1 Commencement of Discussions on Operational Integration of the SAPPORO Group and POKKA Group SAPPORO HOLDINGS LTD. POKKA CORPORATION February 10,

2 Contents Background to Commencement of Integration Discussions Steps to Integration New Post-Integration Structure Future Plans 2

3 Background to Commencement of Integration Discussions Synergies Derived from 2009 Capital and Business Alliance Upon Upon formation of of the the capital capital and and business alliance, the the efforts effortsof of both both companies generated synergies in in various areas areas Optimization of of production systems and and use use of of joint joint procurement Reciprocal stocking of of vending machines Cross-merchandising of of alcoholic and and food food products International expansion through POKKA Singapore s sales sales routes routes Generated around 500mn worth of synergies *Synergies realized in 2010 To To further enhance their corporate value, both companies agreed to to take their alliance to to the next stage (operational integration) 3

4 Steps to Integration Toward Launch of the New Organizational Structure in in April 2012 The The companies companies will will now now promptly promptly establish establish an an integration integration committee committee and and commence commence discussions discussions on on reorganization reorganization of of both both groups groups businesses businesses and and organizational organizational structure, structure, the the holding holding company s company s s management management structure structure and and name, name, etc. etc. *End-March 2011 Acquisition of POKKA shares (21.4% 85.5%) April April 2012: 2012: Launch Launch of of newly newly structured Food Food Value Value Creation Group Group Integrated holding company (currently SAPPORO Holdings) Toward a food value creation group with competitive strength in the alcoholic beverage, soft drink, food, and restaurant sectors in Japan and abroad *The integration committee will discuss all relevant matters including the group s organizational structure and the holding company s name *The integration committee will discuss all relevant matters including the group s organizational structure and the holding company s name 4

5 New Post-Integration Structure Generating Group Growth and Building a Well-balanced Business Portfolio The newly consolidated group will have annual sales exceeding 500 billion We will evolve into a group with firmly established soft drinks and food businesses and a good balance between revenues from alcoholic beverages and real estate Post-consolidation net sales (billions of yen, incl. liquor taxes) 389.2bn Real Estate, 23.5 Restaurants, 27.0 Food & Other, 0.5 Soft Drinks, 33.9 International Alcoholic Beverages, 25.3 Japanese Alcoholic Beverages, bn Real Estate, 24.7 Restaurants, 26.3 Food & Other, 2.0 POKKA, Soft Drinks, 39.8 International Alcoholic Beverages, 32.2 Japanese Alcoholic Beverages, 年 年 Soft Drinks & Food 145.7bn Alcoholic Beverages 322.8bn *The 2012 figure for POKKA is POKKA s operating income forecast for the year to March *Figures for 2012 do not include new synergistic effects generated in the future. Post-consolidation operating income before goodwill amortization (billions of yen) Real Estate, 8.0 Total: 24.0bn Soft Drinks, Japanese Alcoholic Beverages, 9.3 International Alcoholic Beverages, 1.6 Restaurants, Real Estate, 9.0 Restaurants, 0.6 International Alcoholic Beverages, 1.4 Total: 16.5bn Soft Drinks / POKKA Total operating income: 6.0bn Soft Drinks, 1.8 POKKA, 4.2 Japanese Alcoholic Beverages,

6 New Post-Integration Structure Building a Food Value Creation Group Based on Complementary Businesses We will harness the complementary aspects of each company s various business to generate synergies and build a food value creation group with even more robust foundations. Key Key Themes Enhancing complementary aspects of of the the soft soft drinks, food, and and restaurants businesses Accelerating international expansion Combing R&D and and technological innovations to to create new new value 6

7 New Post-Integration Structure Enhancing Enhancing Complementary Complementary Aspects Aspects of of Soft Soft Drink Drink Operations Operations Combining each company s strengths in the household, commercial-use, vending machine, and other markets to expand sales Enhance product lineups to reach a broader range of customer segments POKKA SAPPORO Beverage Core products Distinctive products Distinctive products 7

8 New Post-Integration Structure Expanding the Food Business Market unique brands in the distinctive food sector Offer products that provide value by contributing to customers health and abundant lifestyles Expand the commercial-use market by using beer sales routes Lemon-based products No. 1 share in household market Soup products No. 2 market share Functional potato chips Non-fried potato chips One pack contains only 138Kcal Commercial-use products New health-oriented product categories 8

9 New Post-Integration Structure Expanding the Restaurants Business Combine alcohol-selling format (nighttime) knowhow with cafe format (daytime) knowhow to develop new formats and menus Nighttime Number of locations Total Hokkaido Tohoku Kanto Chubu Kansai & Chugoku Kyushu New formats SAPPORO Lion Cafe de Crie Menu development Daytime 9

10 New Post-Integration Structure Accelerating International Expansion Accelerate expansion into Asia, an area of strength for both companies Boost proportion of total sales from overseas POKKA Hong Kong Restaurants Net sales: 3.5bn Operating income: 200mn (2010 outlook) Overseas sales ( bn) and their ratio to total sales (%) % Combined POKKA, total: 39.6bn 14.2 SAPPORO, % Combined total: 49.1bn POKKA, 16.9 SAPPORO, Ratio of overseas sales to total to rise above 12% in % 12% 10% 8% 6% 4% 2% 0% POKKA Singapore Soft Drinks & Restaurants Net sales: 10.8bn Operating income: 250mn (2010 outlook) SAPPORO Vietnam Ltd. Net sales: $128mn (2019 target) 10

11 New Post-Integration Structure Combing R&D and Technological Innovations to Create New Value Insight born of a selective approach to ingredients since our inception Tap into new value markets Insight accumulated from the coffee, lemon-based products, and soups businesses 11

12 Future Plans Forming an Integration Committee Integration committee overview We We will will set set up up the the committee as as soon soon as as possible Both Both companies presidents will will provide provide leadership The The committee will will discuss matters such such as as organization structure and and name name changes in in the the aim aim of of forming a Food Food Value Value Creation Group Group with with competitive strength and and distinctive characteristics in in the the alcoholic beverage, soft soft drink, drink, food, food, and and restaurant sectors sectors in in Japan Japan and and abroad abroad We will overcome barriers presented by by SAPPORO s and POKKA s differing cultures and join forces to to launch a Food Value Creation Group 12

13 These materials contain forward-looking statements regarding but not limited to future earnings and future actions, circumstances, and occurrences. These statements are based on information available when these materials were prepared and are subject to risks and uncertainties. Actual results and financial performance may therefore differ materially from those expressed or implied by forward-looking statements in these materials because of changes in various factors. 13