Japan: Sapporo Holdings reports surge in profits last year

Sapporo Holdings' renewed focus on beer is paying off as profits last year surged on the back of fresh domestic growth for its core lager brands.

Sales growth for Sapporo's Black Label (+3%) and Yebishu (+2%) beers outpaced a 2% decline in Japan's overall beer market, the company said in calendar-2016 results. Sapporo's total beer sales growth was up 4% compared to a 1% rise in the previous year.

It follows new investment in Sapporo's beer business as the company pivots towards a more beer-centric business model. Sapporo said 2016 was its "first year of a new period of growth in the beer business".

The company is also looking overseas for growth, and in November unveiled ambitious targets for 2020 that include doubling international profits.

Sapporo's beer growth helped deliver a strong full-year performance for the alcohol, soft drinks and snacks maker, with net profits up 54% to JPY9.4 bln and net sales climbing 15% to JPY541.8 bln. Operating profits surged 45% to JPY20.2 bln.

Other segments performed well, with spirits sales up 16% and the Japanese liquor business up 8% year-on-year. Sapporo's RTD sales jumped by 21% for the year.

The company's North American beer business, which includes Canada's Sleeman Breweries, posted record profits in 2016. Sleeman's sales climbed by 2%, while Sapporo USA sales increased by 1%. Sapporo's Vietnamese beer unit increased sales by 4% over the year.

Despite the sales growth, Sapporo's international unit posted a 7% net sales drop to JPY65.4bn as currency headwinds wiped JPY8 bln off the top line, the company said. Japanese alcoholic beverage sales increased by 2% to JPY279.4 bln.

Sapporo released its FY results ahead of rival Asahi, which delivered strong growth on the back of its alcohol and soft drinks brands' performances.

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