2011 Presentation On Consolidated Earnings Forecast

2011Presentation on Consolidated Earnings ForecastJune 30, 2011Sapporo Holdings Ltd.URL http://www.sapporoholdings.jpCopyright, 2011SAPPORO HOLDINGS LTD. All rights reserved.1/16

Contents1. 2011 Consolidated Earnings Forecast (vs. Initial Outlook)2. Supplementary Information on Earnings Forecast Revision (vs. InitialOutlook)For Reference: 2011 Consolidated Earnings Forecast (vs. 2010)Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.2/16

tlook)Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.3/16

2011 Consolidated Earnings Forecast (vs. Initial Outlook)We expect revenues in the Japanese Alcoholic Beverages and Restaurants businesses to belower than our initial outlook, primarily because of the Great East Japan Earthquake.Our operating income forecast remains unchanged, owing to increased earnings from the SoftDrinks business and the POKKA Group combined with cost controls in the Japanese AlcoholicBeverages business.We lowered out net income forecast by 3.3bn versus initial outlook, primarily to factor in 5.0bnin anticipated extraordinary losses due to the disaster.*Additional POKKA CORPORATION shares acquired on March 29, 2011.Income statement items consolidated from Q2.(billions of yen)2011Initial outlook2011Revised forecastVs. initial outlookChangeChange (%)Consolidated g income18.018.00.00.0%Consolidatedordinary income15.515.50.00.0%Consolidated netincome6.02.7(3.3)(55.0)%Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.4/16

2011 Consolidated Earnings Forecast (vs. Initial Outlook)Operating Income – By SegmentConsolidated operating income forecast remains unchanged – we expect lower profits from Restaurants and Real Estate butanticipate profit growth from Soft Drinks and the POKKA Group. Owing to operating/work stoppages due to the disaster, we expectto book a total of 1.4bn in fixed costs as extraordinary losses, including 1.2bn from Japanese Alcoholic Beverages.OperatingOperatingincomeincome(billions of yen)2011Initial outlookJapanese Alcoholic Beverages2011Revised forecastVs. initial outlookChangeChange %0.0%0.0%Soft Drinks0.71.00.342.9%POKKA al l corporate(3.2)(3.0)0.2―Consolidated operating income18.018.00.00.0%International Alcoholic BeveragesN. America, otherVietnamCopyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.5/16

2011 Earnings Forecast – Earthquake’s ImpactBreakdownBreakdownofof 5.0bn uding 1.9bn 1.9bntakentakeninin1Q)1Q)¾ Fixed asset disposals and inventory losses (including 0.9bn taken in 1Q) 1.2bn¾ Cost of restoring fixed assets to pre-quake conditions (none booked in 1Q) 2.0bn¾ Fixed costs incurred during work stoppages (including 0.8bn taken in 1Q) 1.4bn¾ Other quake-related expenses (including 0.1bn taken in 1Q) itiesRestoration status¾ Sapporo Breweries’ Sendai Brewery¾ Sapporo Breweries’ Chiba Brewery Packaging line resumed partial operation on May 2 Packaging line resumed partial operation on Brewing processes completely reinstated by May 19March 28 Brewing process completely reinstated on April 25We expect to achieve supply capabilities, including throughincreased production, sufficient to meet peak-seasondemand without incident, despite lingering uncertainty aboutthe electric power situation and demand trends.Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.6/16

ts for International Alcoholic Beverages and the Other segmentremain unchanged from out initial outlook.*Also refer to the separately issued “Supplementary Information on ConsolidatedEarnings Forecast” for full-year earnings forecasts by segment.Copyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.7/16

Earnings Forecast Revision (vs. Initial Outlook)Japanese Alcoholic Beverages (1)(billions of lightsHighlightsEarthquake’s impact reduced salesFacility expenditure and other cost cutsOperating income unchanged from � 1.5bn– nts1. Revised YoY outlook for total beer-flavored beverage demand2011 initial revised Jun. 30Total beer-type beverages demand YoY¾ Beer: –4%¾ Beer: –5%¾ Happoshu: –12%¾ Happoshu: –18%¾ New genre: 5%¾ New genre: 4%¾ Total: –2%¾ Total: –4%¾ Non-alcoholic: 20%¾ Non-alcoholic: 20%Net salesOperatingincomeVs. initial 286.7271.7(15.0)(5.2)%9.89.80.00.0%Change (%)3. YoY sales outlook with quake-affected breweries(Sendai, Chiba) back in operationYoY domestic beer sales outlook based on revisedMay–Dec. outlook¾ Beer: –5% (Jan.–Apr. actual: –9%)¾ Happoshu: –23% (Jan.–Apr. actual: –24%)¾ New genre: 3% (Jan.–Apr. actual: –4%)¾ Total: –3% (Jan.–Apr. actual: –8%)2. Changes to YoY sales volume outlook2011 initial revised Jun. 30Domestic beer sales volume (large bottle equivalent) YoY¾ Beer: 31mn cases –1%¾ Beer: 29.43mn cases –6%¾ Happoshu: 1.55mn cases –34%¾ Happoshu: 1.8mn cases –23%¾ New genre: 23.8mn cases 12%¾ New genre: 21.57mn cases 1%¾ Total: 56.35mn cases 2%¾ Total: 52.8mn cases –4%¾ Premium alcohol free (non-alcoholic): 0.6mn cases ¾ Premium alcohol free (non-alcoholic): 1.2mn casesCopyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.8/16

Earnings Forecast Revision (vs. Initial Outlook)Japanese Alcoholic Beverages Keypointspoints1. Beer and related products marginal profit outlook downby 6.7bn¾ Sales volume down: – 6.0bn(beer –2.8, happoshu 0.4, new genre –3.6)¾ Product mix: – 0.2bn¾ Increase in transport costs etc.: – 0.5bn2. Beer and related products – Changes toforecast for fixed-costs etc. 5.6bn¾ Sales promotion: 2.6bn (i.e., lower costs)¾ Equipment: 1.6bn (lower depreciation and repair costs)¾ Transfer to extraordinary disaster losses: 1.2bn(transfers of personnel, equipment, advertising, etc. expenses)¾ Other: 0.2bn (i.e., lower costs)3. Other – Change to forecast 1.1bn¾ Premium alcohol free sales volume and otherfactors: 1.1bn Revised up from initial: 0.6mn ion efforts (full-year earnings forecasts)¾ Sendai Brewery operations halted: Fully resumed May 19¾ Chiba Brewery operations halted: Fully resumed April 25¾ Supply capacity shortages forced us to narrow our focus to a fewbrands and delayed new product launches Priority on supplying Yebisu Beer, Sapporo Draft BeerBlack Label, and Mugi to Hop Triangle Ginger Highball launch postponed till May 11 Limited-quantity happoshu product Hop-Batake-noKaori launched May 18, achieved target of 0.3mn cases Sales of some products were suspended. They will bebrought back as the supply chain stabilizes¾ Full-year earnings forecast: 4.6bn in disaster losses(including 1.5bn already booked in 1Q)Includes fixed assets, inventory losses, restoration costs,fixed costs during work xpandingexpandingareasareas¾ Entered into sales agreement with major S. Korean foods makerCJ (Cheil Jedang)Will launch CJ Makkoli in the commercial-use market on July 13 Not factored into revised full-year forecast¾ Entered into alliance with Bacardi Japan for world’s No. 1 rumbrand and other productsWill launch sales of Bacardi, Bombay Sapphire (gin), etc. on Oct. 1 Not factored into revised full-year forecastCopyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.9/16

Earnings Forecast Revision (vs. Initial Outlook)Soft ghlightsHighlightsAchieved large YoY sales increase over Jan–May, despiteimpact of earthquake and flat industrywide demand.Operating income raised 0.3bn, reflecting factorsincluding our upwardly revised full-year sales volumeoutlook.NetNetsalessalesforecast:forecast: 0.4bn ntsYoY soft drinks sales outlook based on revisedforecast¾ 21.2mn cases, 4%¾ 20.5mn cases, 1%(billions of yen)2011Initial outlookVs. initial outlook2011RevisedforecastChangeChange (%)Net From 2011, the Food Business moved from the Soft Drinks segment to Other.*Operating income is after goodwill amortization (goodwill amortization of 0.6bn*YoY change in Jan–May total demand: 2% Sapporo actual: 12% remains orecast: 0.3bn nts1. Marginal profit – Forecast unchanged¾ Increase in sales volume: 0.3bn¾ Product mix and other factors: – 0.3bn2. Fixed costs etc. – Forecast 0.3bn¾ Reductions in advertising expenses etc.: 0.3bn(i.e., lower on efforts (full-year earnings forecasts)¾ Full-year earnings forecast: 0.09bn in disaster losses( 0.15bn booked in 1Q; new forecast corrects cost of inventory losses)Includes inventory losses, asset removal costs, and fixedcosts during work stoppages¾ Supply capacity shortages forced us to narrow our focus to a fewbrands and delayed new product launches Products will resume as raw material supply stabilizes¾ Expanding demand for mineral water and unsweetenedbeveragesCopyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.10/16

Earnings Forecast Revision (vs. Initial Outlook)POKKA hlightsHighlightsNet sales forecast changed to due to elimination of intraGroup transactions, etc., after consolidation of POKKA.Operating income raised 0.2bn due to reduction ingoodwill amortization.(billions of yen)NetNetsalessalesforecast:forecast:– 3.0bn– ntsElimination of intra-Group sales¾ The outlook for intra-Group transactions was initiallyuncertain, so we simply added forecasts together. Theyhave been eliminated this time because we now have aclearer picture of intra-Group t:forecast: 0.2bn ntsGoodwill amortization – Forecast 0.2bn (i.e., loweramortization)¾ 1.0bn¾ Initial goodwill amort. 1.2bnPOKKAPOKKA CorporationCorporation SingaporeSingaporeNet salesOperating incomeVs. initial al POKKA CORPORATION shares acquired on March 29, 2011.Income statement items consolidated from Q2.*Operating income is after goodwill amortization ( 1.0bn; was initially ionefforts(full-yearearningsforecasts)restoration efforts (full-year earnings forecasts)¾ Full-year earnings forecast: 0.05bn in disaster losses(None booked in 1Q)Comprises other disaster-related expensesCopyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.11/16

Earnings Forecast Revision (vs. Initial look)––HighlightsHighlightsComparable store sales are in recovery, but the disasterheavily impacted Mar–May sales. We accordingly havelowered net sales by 1.8bn and operating income by 0.4bnfrom our initial outlook.NetNetsalessalesforecastforecastdowndown 1.8bn ntsComparable store sales – Forecast – 1.8bn(billions of yen)Net salesOperating incomeVs. initial 25.523.7(1.8)(7.1)%0.40.0(0.4)(100.0)%Change (%)¾ Initial comparable store sales outlook: –3% YoY¾ cast:– 0.4bn– ntsDecrease due to change in comparable store salesforecast: – 0.4bnGinza YEBISU ngsearningsforecasts)forecasts)¾ Only one store remains out of operation, all othershave reopened All stores reopened expect store at Nattori City CulturalCenter (still being used as evacuation shelter)¾ Full-year earnings forecast: 0.07bn in disaster losses( 0.06bn already booked in 1Q)Includes inventory losses, restoration costs, fixed costsduring work stoppagesCopyright, 2011 SAPPORO HOLDINGS LTD. All rights reserved.12/16