Sapporo : 3Q (Online Meeting) Q&A(3.0MB)

Sapporo Holdings Limited

Medium-Term Management Plan (2023-2026)

and Q3 Financial Results Briefing for the Fiscal Year Ending December 2022

Event Summary

Presentation

Moderator: Hello, investors. Thank you for joining us today for the presentation of the new medium-term management plan and financial results for Q3 of FY2022 of Sapporo Holdings Limited. The time has arrived, and we will now begin.

Today's briefing will consist of two parts. The first part of the meeting will be a presentation on the new medium-term management plan. After an hour including Q&A, the second part of the meeting will be a presentation of financial results for Q3 of FY2022. This session is scheduled for 30 minutes including Q&A.

Attending the first part of the meeting are Mr. Masaki Oga, President and Representative Director, Sapporo Holdings Limited; Mr. Yoshitada Matsude, Managing Director; Ms. Rieko Shofu, Director; Mr. Tetsuya Shoji, Outside Director; Mr. Shuji Fukuda, Outside Director, Audit Committee Member; and Mr. Hiroyuki Nose, President & Representative Director of Sapporo Breweries Limited.

Attending the second part of the meeting will be Mr. Oga, Mr. Matsude, Ms. Shofu, and Mr. Nose.

Please have on hand the summary of financial results, supplementary information to the financial results, PowerPoint presentation material of the financial results, and explanatory material of the new medium-term management plan.

Mr. Oga will begin with a summary of today's events, and then Ms. Shofu will give an overview of the new medium-term management plan based on a PowerPoint presentation. Please go ahead.

Oga: Before I give my summary, I would like to talk about the year 2020, when the current medium-term plan began.

The year 2020 coincides with the start of the pandemic. As you know, the year ended disastrously, with a loss. In light of the results, we had some thoughts that it would be difficult to continue the current medium-term management plan for a long time, but we have been working on it, giving priority to promoting structural reform of the Company first.

Regarding the results, or glimpses of the results, we would like to give a presentation of the financial results after this. We take the loss very seriously and recognize that it is the mission of our management team to improve our corporate value, and that we would like to make a strong effort to increase profits for our shareholders and other stakeholders.

Since that time, we have had lively discussions with the outside directors on how we can improve the value of the Company. The plan was developed through a process that included interviews with operating companies conducted solely by outside directors, meetings of the Outside Directors Committee, and the making of recommendations based on the results of these meetings.

We have been discussing this issue intensively this year, but it has taken us a total of three years. It is also very important to start the new year with a fresh start in January, so we believe that today's financial results presentation is the best time to announce this.

Also, since there has been a lot in the press, I would like to address some of your concerns here. There has been a lot in the press over the past day or two about 3D Investment Partners Pte, Ltd. They are a shareholder of the Company, and we have received a letter from them. And it is also true that we are engaged in dialogues.

However, we would like to ask for your understanding that we will not disclose our interactions with individual shareholders.

We have prepared our medium-term management plan in this manner, reflecting the opinions and suggestions we have received from various shareholders through IR and SR activities, and at the same time, taking them seriously.

In that sense, there have been some statements or reports in the press that the outside directors do not fully understand the opinions and requests of shareholders, or that they consistently reject requests, but we believe that such statements are not true. We intend to engage in even more constructive dialogues with our shareholders.

I will now move on to the summary. Financial results will be explained later.

In that context, our strongest focus in our medium-term plan has been on improving capital efficiency. As a result, we have set a goal of achieving an ROE of 8% by 2026.

We have been building on efforts to increase the certainty of achieving our current medium-term plan.

The first major part of the efforts is that we have been thinking about and enhancing various measures in each of our businesses, including securing a manufacturing base such as Stone Brewing Co.in the US as well as in Japan.

Then we would like to clarify that we are once again committed to the real estate business as an important business. We hope to improve profitability and asset efficiency by diversifying our revenue structure.

The time frame for this real estate business is slightly different from other businesses, and we have to think over a long span of time. We would like to include not only rent centered on YGP, but also the development of larger projects. We are considering various measures, not everything on our own.

We have created this medium-term management plan with the belief that our community contributions and community development, including these three businesses, is what we are aiming for, and that it will lead to sustainable management.

We intend to enhance our corporate value by realizing both economic and social value.

That is all from me.

Moderator: Thank you for the explanation. Ms. Shofu will continue with an explanation. Please go ahead.

Shofu: I will now explain the medium-term management plan 2023 to 2026.

First, I would like to reiterate that the medium-term management plan that I am presenting today has been thoroughly discussed by internal and external directors, based on dialogues with investors and inputs from outside experts.

I will now proceed with the explanation according to the materials.

Page four. The basic policy of this medium-term business plan is "Beyond 150: Transforming the business structure for new growth."

The Sapporo Group will celebrate its 150th anniversary in 2026. In this medium-term plan, we plan to build a foundation for growth in order to keep demonstrating its exclusive value to society beyond this 150th anniversary milestone.

To this end, we have examined our past management policies and reviewed our business portfolio from multiple perspectives to ensure clear positioning. We intend to manage in line with this portfolio to increase capital efficiency and enhance corporate value.

The first thing to be addressed is structural reform. Businesses categorized as businesses subject to restructuring and divestment in the portfolio will be fundamentally reviewed by 2024.