Issue of Annual Report 2010

Summary of Management Plan 2010–2011
Question 1
In 2010, the aim of the Management Plan was to help the Sapporo Group to transition
from a phase for strengthening the earnings base to one of growth. Initiating growth
strategies and strengthening existing businesses were two core strategies of this plan,
were your measures for these strategies this year ultimately successful?
Operating Income and EBITDA
(¥ Billion)
50
40
30
20
10
0
12.9
36.5
■ Operating Income
■ EBITDA
15.4
39.1
18.0
47.2
09 10 11
(Forecast)
Answer 1
Strengthening Existing Businesses
In each business we sought to build competitive advantages by concentrating
our management resources on our strong brands and enhancing our ability to
adapt to environmental changes.
In our core businesses, Alcoholic Beverages (Japan), we conducted marketing
activities focused on our main beer products. As a result, sales volume outstripped
that of the previous year despite a contraction in the domestic market, meaning
that we boosted our market share. In Alcoholic Beverages (International), we
reported earnings growth across all operations, with the exception of losses in
Vietnam due to upfront investment to support expansion in this market. SLEEMAN
BREWERIES LTD., for example, posted year-on-year growth in sales volume for a
fourth consecutive year, while Sapporo U.S.A., Inc. recorded double-digit growth.
Our D/E ratio also improved through efforts to minimize financial liabilities; in addition,
our capital strength was bolstered by earnings growth. All told, these outcomes
have given the Sapporo Group greater earnings power and a more robust
financial base for promoting future growth strategies.
Initiating Growth Strategies
To make the prospects of medium- and long-term improvement in value
for the Group more certain, we enacted initiatives to pave the way for
future growth.
Turning to business in Vietnam, where we announced our plans for expanding in
December 2009, we began construction of a brewery in July and conducted testmarketing
ahead of our full-scale market entry. Along with these steps, we are
developing strategies and building a distribution network in the country. In South
Korea, we made a business alliance with Maeil Dairies Co., Ltd. in November and
began beer sales there. Also in November, we entered a capital and business alliance
with Kyodo Milk Industry Co., Ltd. for a project that will see both companies
cooperate around production technology, R&D, raw material procurement and logistics.
These measures will support both sales expansion and cost reductions going
forward.
Another accomplishment this term was the sale of Sapporo Breweries’ former
Osaka Plant site and the Keiyo Physical Distribution Center, which generated ¥23.4
billion in new investment resources. In parallel, we invested ¥10.0 billion in the acquisition
and development of new properties in the Real Estate segment to secure future
resources to support growth.
SAPPORO HOLDINGS LIMITED
Annual Report 2010
07