Issue of Annual Report 2010

I’d like to take this opportunity to report this year’s increase
in sales and income, and to report that we have shifted to a
new management framework to ensure the progress of our
management plan.
Business Climate and Strategies in Fiscal 2010
During 2010 the soft drinks market saw a surge in demand
spurred by one of the hottest summers on record. Alcohol and
restaurant markets, however, were heavily affected by a slump
in consumer spending and demand growth in these sectors was
below expectations. In the real estate industry, the occupancy
rates in the Tokyo office rental market bottomed out in the latter
half of the year, but rents continued to fall throughout the year.
Under these conditions the Sapporo Group tackled the key
themes of its Sapporo Group Management Plan 2010–2011:
We launched growth strategies to pave the way to future growth,
and we strengthened our existing businesses by concentrating
management resources on our core brands in each business.
Specifically, we started construction work on a new plant in
Vietnam, where we have entered the beer business, formed a
capital and business alliance with Kyodo Milk Industry Co., Ltd.,
and made a business alliance with South Korean Maeil Dairies
Co., Ltd. for a beer business in the South Korea. These steps
will be followed by a management integration with POKKA
CORPORATION scheduled for April 2011.
Vietnam were excluded from Alcoholic Beverages (International).
Moreover, with the contribution from gain on the sale of our
Osaka Plant site, net income was ¥10.8 billion, up by a hefty
¥6.2 billion, or 138% from the previous year, boosting ROE
considerably to 8.9% from 3.9% in the previous year.
Policy on Dividends
Returning an appropriate level of earnings to our shareholders
in view of our operating results and financial position is an
important management policy for Sapporo Holdings, and our
basic policy is to maintain a stable dividend. We plan to use
retained earnings to maximize our corporate value by strategically
investing it in growth areas and using it to strengthen our
financial base, in line with our management plan.
Enhancing Corporate Governance
Strengthening and enhancing corporate governance is a key
management priority for the Sapporo Group. To improve transparency
and strengthen oversight functions for management, we
have three outside directors. Outside board members serve as
chairpersons for various committees. For more information about
these committees, please see the Corporate Governance section
of this report starting on page 23.
Increased Sales and Income from All
Revenue Sources
The Alcoholic Beverages (Japan) business saw year-on-year
sales volumes increase for the first time in six years. The
Alcoholic Beverages (International) business and the Soft Drinks
business both recorded significant year-on-year increases in
sales, with the Alcoholic Beverages (International) business
supported by continued brisk sales in North America. There was
good news from the Real Estate business too, where sales
were also up. As a result, consolidated net sales were ¥389.2
billion, up ¥1.7 billion, or 0% from the previous year. Operating
income was ¥15.4 billion, an increase of ¥2.5 billion, or 19%
from the previous year. Operating income increased in all business
segments when investment costs of expanding into
TAKAO MURAKAMI
Chairman and Representative Director
SAPPORO HOLDINGS LIMITED
Annual Report 2010
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