Financial Results
for the Year Ended December 31, 2020 — Consolidated(Based on IFRS)
February 10, 2021

Company name

Sapporo Holdings Limited

Security code
Listed on
URL

2501
Tokyo Stock Exchange (First Section); Sapporo Securities Exchange
https://www.sapporoholdings.jp/english/

Representative
Contact

Masaki Oga, President and Representative Director
Tatsuya Komatsu, Director of the Corporate Planning Department

Telephone
Scheduled dates:+81-3-5423-7407

Annual general meeting of shareholders

March 30, 2021

Filing of annual financial report

March 31, 2021

Commencement of dividend payments

March 31, 2021

Supplementary information to the year-end earnings results

Available

Year-end earnings results briefing heldYes(mainly targeted at institutional
investors and analysts)

1. Consolidated Financial Results for the Year Ended December 31, 2020
(January 1 – December 31, 2020)(Amounts in million yen rounded to the nearest million yen)

(1) Operating Results(Percentage figures represent year-over-year changes)
RevenueCore operating

Operating profit

ProfitprofitYear ended

million yen%

million yen%

million yen%

million yen

434,723(11.6)

4,261(63.7)

15,938_(16,605)%_

491,896(0.4)

11,724(22.7)

12,2085.3

3,820(50.5)

December 31, 2020
Year ended
December 31, 2019Year ended

Profit attributable toTotal comprehensive

owners of parent

incomeBasic earnings
per share

Diluted earnings
per share

million yen%

million yen%

yen(16,071)_(21,476)_(206.31)(206.31)

yen

4,356

(48.9)

15,915

_

55.92

52.74

December 31, 2020
Year ended
December 31, 20191

Ratio of profit toequity attributable toowners of parent

Ratio of profit
before tax to total
assetsCore
operating profit
margin

%

%

%

(9.9)

(3.1)

1.0

2.6

1.8

2.4

Year ended
December 31, 2020
Year ended
December 31, 2019

Note: Equity method investment gains:
Year ended December 31, 2020: 17 million yen
Year ended December 31, 2019: 18 million yen
Profit (loss) before tax:
Year ended December 31, 2020: (19,364) million yen
Year ended December 31, 2019: 11,588 million yen
Operating profit margin:
Year ended December 31, 2020: (3.7) %Year ended December 31, 2019: 2.5%

Note: Core operating profit is the Sapporo Group’s unique profit benchmark for measuring the performanceof its regular business and is calculated by deducting cost of sales, and selling, general and administrative
expenses, from revenue.
The profit and loss of the North American soft drinks business has been classified under discontinued
operations in 2019. Therefore, the amount of continuing operations excluding the amount of discontinued
operations from related items is shown.

(2) Financial Position
Total assets

Year ended

Total equity

Equityattributable toowners of parent

Ratio ofequity attributable toowners of parent tototal assets

Equity per share
attributable toowners of parent

million yen

million yen

million yen%

yen

616,349

149,551

149,78124.3

1,922.80

638,722

174,524

174,07127.3

2,234.65

December 31, 2020
Year ended
December 31, 20192

(3) Cash Flows
Cash flows fromoperatingactivities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at endof period

million yen

million yen

million yen

million yen

Year ended
December 31, 2020

16,466(16,000)

4,138

19,734

Year ended
December 31, 201936,069(24,930)(5,984)

15,215

2. Dividends
Dividend per share

Record date or period

Total

Payout ratio

Dividends to equity

dividends(consol.)

attributable topaid

owners of parent(full year)(consol.)

End
Q1

End
Q2

End
Q3

Year- Full year
end

yen

yen

yen

yen

yen

Year ended December
31, 2019

—

0.00

—

42.00

42.00

3,277

75.1

1.9

Year ended December
31, 2020

—

0.00

—

42.00

42.00

3,277

—

2.0

Year ending December
31, 2021 (forecast)

—

0.00

—

42.00

42.00

million yen

%

%

27.3

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2021
(January 1 – December 31, 2021)(Percentage figures represent year-over-year changes)
RevenueCore

Operating profit

Profitoperating profit

Profit attributable to

Basicowners of parent

earnings
per share

Year ending
December 31,
2021

million yen%

million yen%

million yen

468,200

7.7

9,000

111.2

18,000%

million yen_

12,000%_

million yen%%

12,000_154.05

Note: Earnings forecasts for the six months ending June 30, 2021 are omitted because the company
manages performance targets on a yearly basis.

4. Other(1) Changes to scope of consolidation: Yes*Changes affecting the status of significant subsidiaries (scope of consolidation)
Newly excluded: SAPPORO ASIA PRIVATE LTD.
3

(2) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accounting policies required by IFRS: None
2) Changes other than 1) above: None
3) Changes in accounting estimates: None
(3) Number of shares issued and outstanding (common stock)1) Number of shares issued at end of period (treasury stock included):
December 31, 2020: 78,794,298 shares
December 31, 2019: 78,794,298 shares
2) Number of shares held in treasury at end of period:
December 31, 2020: 896,951 shares
December 31, 2019: 898,162 shares
3) Average number of outstanding share during the period:
December 31, 2020:
77,897,530 shares
December 31, 2019:
77,892,507 shares
Audit Status
The year-end financial results are outside the scope of audit procedures based on the Financial
Instruments and Exchange Act.
Appropriate Use of Earnings Forecasts and Other Important Information
This document contains projections and other forward-looking statements based on information
available to the Company as of the date of this document. Actual results may differ from thoseexpressed or implied by forward-looking statements due to various factors. For the assumptions
underlying the forecasts herein and other information on the use of earnings forecasts, refer to“Outlook for fiscal year ending December 31, 2021” on page 10.

4

1. Analysis of Operating Results and Financial Condition(1) Analysis of Operating Results(a) Review of the fiscal year ended December 31, 2020
Millions of yen, except percentages
RevenueYear ended
December 31, 2020
Year ended
December 31, 2019
Change (%)

Core operating
profitProfit attributable
Operating profit

to owners ofparent434,723

4,261(15,938)(16,071)

491,896

11,724

12,2084,356(11.6)(63.7)－－*Core operating profit is the Sapporo Group’s unique profit benchmark for measuring the performance of its
regular business and is calculated by deducting cost of sales, and selling, general and administrative expenses,
from revenue.

In 2020, the Sapporo Group was impacted by the novel coronavirus outbreak, with large
declines in sales mainly of commercial-use beer, sales at beer halls and restaurants,
including café chain outlets, as well as sales of soft drinks sold via vending machines.
Meanwhile, in the beer category, sales to the home-use market were strong. Sales volume
of canned Sapporo Draft Beer Black Label and Yebisu Beer increased year on year, while in
the new genre category, sales of Sapporo Gold Star, a new product launched in February
2020, significantly exceeded the initial sales forecast.
Also, demand for lemon-based products increased in association with recent changes topeople’s lifestyles and rising health consciousness, and shipments of both Pokka Lemon 100
and Kireto Lemon reached new record highs.
As a net result of the above, revenue and core operating profit declined year on year, but acertain amount of progress has been made with initiatives aimed at strengthening mainstay
brands.
Substantial operating loss and net loss attributable to owners of parent were recorded due
to temporary costs associated with the implementation of an early retirement incentive planand other initiatives in addition to an impairment loss on non-current assets booked by
POKKA SAPPORO Food & Beverage.

5

(b) Results by reportable segment
Millions of yen, except percentages
Revenue
Year

Year

ended

ended

Dec. 31, Dec. 31,
Alcoholic
Beverages
Food &
Soft Drinks
Real EstateCore operating profit
Change
(%)

Year

Year

ended

ended

Dec. 31, Dec. 31,
2019

Operating profit
Year

Year

Change

ended

ended

Change(%)

Dec. 31,

Dec. 31,

(%)

2019

2020

2019

2020

2020

330,178

285,427(13.6)

8,520

2,368

(72.2)

136,876

125,861

(8.0)

(470)

(2,621)

24,69023,262(5.8)

10,737

10,853

7,694(4,861)－－(1,151) (16,921)－

1.1

12,714

11,892(6.5)

Results by segment are outlined below. From 2020 the logistics business, which had been
included in “Other business”, is now included in the Alcoholic Beverages segment. To enable
year-on-year comparisons, segment figures for the previous fiscal year have been adjusted toreflect this change.
Alcoholic Beverages
We estimate that total domestic demand for beer and beer-type products was 9% lower
than the level in 2019. In the beer category, while commercial-use beer sales declined, ourmainstay canned Sapporo Draft Beer Black Label products have performed strongly, withsales increasing 6% year on year. In the new genre category, Sapporo Gold Star, a new
product launched in February 2020, has been well-received, helping drive total sales volumeof new genre products up 19% year on year. As a net result, total sales volume of beer andbeer-type beverages declined 8% year on year in 2020. In the RTD*1 category, sales of Otoko
Ume Sour were steady, but category revenue declined year on year partly due to sluggish
growth of the core Sapporo Chuhai 99.99 (Four Nine) brand products. In the Japanese liquor
business, there was a year-on-year increase in revenue with strong sales of our Kokuimo
brand, Japan's best-selling*2 blended imo shochu, as well as Koime no Lemon Sour no Moto.
In Vietnam, we worked to establish sales channels capable of generating sustainable profit
growth while the business faces tightened restrictions on alcoholic beverages and is impacted
by the novel coronavirus outbreak. In North America, we estimate that total beer demand fellslightly below the level of the previous year, both in the US and Canada. Among our overseas
beer brands, sales volume increased year on year, led by strong sales of Sleeman Breweries’
canned products, which have a high ratio of sales to the home-use market. For Sapporo
brand beers, sales volume declined year on year due to the stagnation in the commercial-use

6market, which was impacted by the novel coronavirus pandemic.
In the restaurant business, the operating environment remained difficult even after theJapanese government lifted the state of emergency, as the shift to remote work and a “newnormal” in people’s lifestyles have resulted in a smaller-than-expected recovery in the numberof people dining out. We responded by working to thoroughly reduce costs, including closing
down unprofitable restaurants and negotiating rent reductions. Despite these efforts,
restaurant sales and profits fell significantly from the previous year’s levels. As of the end of
December 2020, our domestic restaurant business had 173 outlets.
As a result of the above, revenue in the Alcoholic Beverages segment in 2020 came to¥285.4 billion (down ¥44.8 billion, or 14% year on year), while the segment posted a core
operating profit of ¥2.4 billion (down ¥6.2 billion, or 72% year on year), and an operating lossof ¥4.9 billion (compared with an operating profit of ¥7.7 billion in the previous fiscal year).
*1) RTD, or ready-to-drink beverages, are pre-mixed, low-alcohol cocktail-like beverages thatcan be consumed as is immediately after opening.
*2) Based on Intage SRI market research on combined blended imo shochu sales in the
supermarket, convenience store, and direct sales channels from February 2019 to November
2020.
Food & Soft Drinks
In the Japanese domestic soft drinks market, we estimate that total demand fell 7% year
on year in 2020. In our domestic soft drinks business, sales of Kireto Lemon were strong,
supported by customers’ heightened health consciousness. However, this did not make up forthe decline in sales through vending machines, resulting in a year-on-year decline in total softdrink sales volume.
In our domestic food business, soup sales volume expanded year on year, supported by
the pandemic-induced stay-at-home demand for our box- and cup-based soups. Lemonbased food product sales volume increased significantly year on year, supported by strong
sales of Pokka Lemon 100 and our lemon-based cocktail mixes. Sales volume of plant-based
milk products was also up year on year, supported by sales of our soymilk yogurt.
Pokka Create, which operates the Café de Crié coffee shop chain, saw its revenue decline
year on year as it was forced to temporarily close some shops or reduce operating hours,
especially at its outlets in urban areas, during the state of emergency declared by theJapanese government.
As a result of the above factors, revenue in the Food & Soft Drinks segment in 2020 cameto ¥125.9 billion (down ¥11.0 billion or 8% year on year). The segment posted a core
operating loss of ¥2.6 billion (compared with a loss of ¥0.5 billion in the previous fiscal year)
and an operating loss of ¥16.9 billion (compared with a loss of ¥1.2 billion in the previous
7fiscal year).
Real Estate
In the Greater Tokyo office leasing market, both occupancy rates and average rent levels
are trending downward. In this market environment, Sapporo Real Estate Co., Ltd. has been
keeping office rents steady at high levels while maintaining high occupancy rates at its
properties, especially in the Greater Tokyo Area, including Yebisu Garden Place Tower, thebusiness’s core source of earnings. However, the novel coronavirus outbreak has led to a
decline in revenue from commercial facilities.
To further improve the profitability of our Real Estate business, we continued to
strategically review and revise our property portfolio from a long-term perspective, and madegrowth investments by acquiring rental properties in the Ebisu area and enhancing the valueof those properties, as well as by making equity investments in private-placement funds,along with other measures.
As a result of the efforts outlined above, revenue in the Real Estate business came to¥23.3 billion (down ¥1.4 billion, or 6% year on year), while the segment’s core operating profit
was ¥10.9 billion (up ¥0.1 billion, or 1% year on year) and operating profit was ¥11.9 billion(down ¥0.8 billion or 6% year on year).
(2) Consolidated Financial Condition
Consolidated assets as of December 31, 2020, totaled ¥616.3 billion, down ¥22.4 billion
from the end of the previous fiscal year (December 31, 2019). The decline primarily reflects
decreases in property, plant and equipment, trade and other receivables, and other financial
assets (non-current), which offset an increase in income taxes receivable and Cash and cash
equivalents.
Consolidated liabilities totaled ¥466.8 billion, up ¥2.6 billion from December 31, 2019.
The increase primarily reflects the new issuance of bonds in anticipation of the tightening of
the fund procurement environment due to the novel coronavirus outbreak, which offset
decreases in other current liabilities, lease liabilities (non-current), trade and other payables,
and other factors.
Consolidated equity totaled ¥149.6 billion, down ¥25.0 billion from December 31, 2019.
This decline was due to the posting of a net loss attributable to owners of parent, payment ofyear-end dividends, and a decline in other components of equity.
(3) Consolidated Cash Flows
Cash and cash equivalents (collectively “cash”) totaled ¥19.7 billion as of December 31,
2020, ¥4.5 billion or 30% more than a year earlier.
8

Following is an explanation of consolidated cash flows by category in 2020 and the factorsthat affected cash flows in each category.
(Cash flows from operating activities)
Operating activities in 2020 provided net cash of ¥16.5 billion, ¥19.6 billion or 54% lessthan in 2019. The main cash outflow was payment of ¥5.8 billion in income tax and otherexpenses. The main inflows were ¥26.2 billion from depreciation and amortization and a¥14.2 billion loss on impairment of property, plant and equipment.
(Cash flows from investing activities)
Investing activities in 2020 used net cash of ¥16.0 billion, ¥8.9 billion or 36% less than in
2019. The major investment outflows were ¥10.2 billion for purchase of property, plant andequipment and ¥3.6 billion for purchases of investment properties. The major inflow frominvesting activities was ¥2.1 billion yen in proceeds from sales of property, plant andequipment.
(Cash flows from financing activities)
Financing activities in 2020 provided net cash of ¥4.1 billion, compared with ¥6.0 billion
used in 2019. The main inflows were ¥30.0 billion in proceeds from the new issuance ofbonds in anticipation of the tightening of the fund procurement environment due to the novel
coronavirus outbreak and ¥20.8 billion in proceeds from long-term bank loans. The main
outflow was ¥20.0 billion for redemption of bonds and ¥17.3 billion for repayments of longterm bank loans.
Cash Flow Indicators
December 31,
2019

2020

27.3

24.3

31.5

25.2

Cash flow to interest-bearing debt (years)

8.0

18.2

Interest coverage ratio (times)

17.2

9.9

Ratio of equity attributable to owners of parent tototal assets (%)
Ratio of equity attributable to owners of parent tototal assets based on market capitalization (%)

Ratio of equity attributable to owners of parent to total assets: Equity attributable to owners ofparent to total assets / Total assets
Ratio of equity attributable to owners of parent to total assets based on market capitalization:
Market capitalization / Total assets
Cash flow to interest-bearing debt: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest expense
9Notes:1. Market capitalization is calculated based on the number of shares issued and outstanding,excluding treasury stock.
2. “Cash flow” is operating cash flow.
3. Of the debt carried on the consolidated balance sheet, interest-bearing debt is total debt on
which interest is currently payable.
(4) Outlook for fiscal year ending December 31, 2021(a) Overall outlook
Millions of yen, except percentages
RevenueCore operating
profitOperating profit

Profit attributable toowners of parent

2021 forecast

468,200

9,000

18,00012,0002020 results

434,723

4,261(15,938)(16,071)

7.7

111.2

－

－

Projected change (%)

In 2021, progress with the rollout of novel coronavirus vaccines is anticipated, and themarket environment is expected to gradually recover. Meanwhile, the recovery in demand fordining out and commercial-use products will likely be limited due to the impacts of state of
emergency declarations, national and local government requests for people to refrain fromoutings and for restaurants to shorten business hours, and changes to people’s lifestyles as
the “new normal” become increasingly established amid the pandemic. As such, demand forhome-use products is expected to remain robust.
Amid this environment, the Sapporo Group will continue to focus on strengthening its core
brands and advance initiatives targeting growth, with focus on home-use products. In
addition, we will continue working to implement structural reforms centered on cost
reductions, shrink losses in the restaurant business, and return to profitability in the Food &Soft Drinks business, as we strive to enhance the profitability of the Sapporo Group as awhole.
Through the above efforts, we are forecasting an increase in both revenue and core
operating profit versus 2020 levels.
We are also expecting significant year-on-year increases in both operating profit and profit
attributable to owners of parent.

10(b) Outlook by reportable segment
Millions of yen, except percentages

Year
ended
Dec. 31,2020
Alcoholic
Beverages
Food &
Soft Drinks
Real
EstateRevenueCore operating profit

Year

Year

endingDec. 31,2021

Change(%)

Year end

endingDec. 31, Dec. 31,
2020

2021

(forecast)

Operating profit
Year

Changeended(%)

Dec. 31,2020(forecast)Year
endingDec. 31,

Change2021(%)(forecast)

285,427

310,900

8.9

2,368

7,300

208.2

(4,861)

6,500－

125,861

133,800

6.3(2,621)

1,000－(16,921)600－

23,262

23,3000.2

10,8538,600(20.8)

11,89221,80083.3

Alcoholic Beverages
In the Japanese Alcoholic Beverages business, we will continue to place top priority on
strengthening the beer category, targeting growth of Sapporo Draft Beer Black Label and reestablishing growth for Yebisu Beer. In the new genre category, we will advance a two-pillar
flavor-focused strategy pairing Sapporo Gold Star and Sapporo Mugi to Hop. In the
RTD/RTS*1 category, we will accelerate the growth of products related to Koime no Lemon
Sour and Otoko Ume Sour by linking commercial-use and home-use products.
In the overseas alcoholic beverages business, we will work to ensure market penetrationof Sapporo Premium Beer and our premium brands, and implement strategies that take into
account the special characteristics of each geographical area. In the US market, we will work
to significantly improve the earnings structure through initiatives such as introducing newlydesigned packaging and launching new products for the Anchor brand. In Canada, we will
pursue continued growth in revenue and profit at Sleeman Breweries by strengthening thebeer and RTD categories and implementing cost structure reforms.
In the restaurant business, we will continue to work on structural reforms targeting
thorough cost reductions and enhanced earnings power. These reforms include closing down
unprofitable restaurants, negotiating reduced rent for restaurants, and curbing personnel
11costs through more efficient work styles and workforce optimization. In addition, to respond tochanges in societal needs, we will speed up our efforts to develop and roll out new businessformats that offer high earning efficiency.
*1) RTS, or ready-to-serve beverages, are alcoholic beverages that can be enjoyed simply byadding ice or by mixing the beverage with still or carbonated water.
Food & Soft Drinks
In the Japanese domestic soft drinks business, we will focus efforts on our strong
brands, such as the “Tochi to Craft” series of unsweetened teas made with domesticallyproduced ingredients. In lemon-based foods and soft drinks category, we will aim to further
grow sales of Pokka Lemon 100 and Kireto Lemon by making more suggestions concerning
the use of lemons and providing information regarding the health benefits of lemon
consumption. In the processed foods category, we will make suggestions that are responsive
to recent changes in people’s lifestyles, and offer new food styles other than soups. In theplant-based milks category, we will continue to work on boosting consumer awareness of soy
milk yogurt and expand contact points with customers.
Real Estate
Our real estate leasing business will continue to enhance the competitiveness of its
properties and related services as it seeks to raise occupancy rates and rent levels. At thebusiness’s flagship property, Yebisu Garden Place, and the Sapporo Factory commercial
complex, we will continue to enhance convenience to cater to diversifying lifestyles andchanging work styles, and offer new functions and added-value to continue to maintain andenhance earnings and raise the brand value of the surrounding areas. To enhance the overallvalue of our Real Estate business we will continue to promote urban development in Sapporo
City and Tokyo’s Ebisu district and through measures such as the strategic review andrevision of our property portfolio, while also continuing to work on securing profits in new
business fields, including making equity investments in private-placement funds.
(NOTE) The outlook for 2021 presented above contains forward-looking statements that are
based on information available when the materials were prepared and are subject to risks
and uncertainties. Actual performance may differ materially from the future outlook describedfor various reasons.
(5) Dividend Policy and Dividends for 2020 and 2021
The Company considers the appropriate return of profits to its shareholders as a fundamental
aspect of management policy and has adopted a basic policy to undertake stable dividend
12payments taking into consideration the Company’s performance and financial condition.
With regard to the level of dividends going forward, the Company will take into account thedividend payout ratio and DOE* while working to enhance its corporate value under the“Group Management Plan 2024”, announced in February 2020.
However, if profit attributable to owners of parent changes significantly because of an
extraordinary profit or loss stemming from special factors, the impact may be taken into
consideration when deciding the dividend.
Given the above policy and taking into consideration the operating results for the current
term and the management environment etc. going forward, the Company plans to pay a
dividend of ¥42 per share for 2020. The Company’s Articles of Incorporation stipulate thatinterim dividends may also be distributed, but we currently are distributing an annual dividend
once a year. Decisions regarding the payment of dividends from surplus profits are, in thecase of the year-end distribution, approved at the general meeting of shareholders, while theinterim dividend, if any, is determined at the sole discretion of the Board of Directors.
We plan to pay an annual per-share dividend of ¥42 in 2021.
* DOE (dividend on equity) = Amount of dividends / Amount of equity (i.e., total equity
attributable to owners of parent)

2. Basic Approach to Selecting Accounting Standards
The Sapporo Group has voluntarily applied the International Financial Reporting Standards(IFRS) to its consolidated accounts from the first quarter of 2018. This change in accounting
standard is aimed at facilitating international comparisons of Group financial information in
the capital markets.

13

3. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(Millions of yen)
December 31, 2019

December 31, 2020

AssetsCurrent assets
Cash and cash equivalents

15,215

19,734

Trade and other receivables

92,52984,475Inventories

36,52836,001Other financial assets

5,403

5,459

Income taxes receivable

88

8,755

6,002

6,128

155,765

160,551

Assets held for sale－278

Total current assets

155,765

160,829

Property, plant and equipment

147,014

126,650

Investment property

219,589

218,574

Goodwill

18,35817,920Intangible assets

8,844

9,023

428

446

Other financial assets

78,72869,969Other non-current assets

7,445

6,108

Deferred tax assets

2,551

6,831

Total non-current assets

482,957

455,520

Total assets

638,722616,349

Other current assets
Subtotal

Non-current assets

Investments accounted for using equity
method14

(Millions of yen)
December 31, 2019

December 31, 2020

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables

34,47531,927

Bonds and borrowings

72,121

83,177

Lease liabilities

6,538

5,836

Income taxes payable

2,414

727

Other financial liabilities

33,021

38,120

Other current liabilities

61,90356,456

Total current liabilities

210,472

216,243

Bonds and borrowings

155,220

158,091

Lease liabilities

23,921

21,046

Other financial liabilities

46,62445,344Retirement benefit liability

5,007

3,965

Other non-current liabilities

2,828

2,832

Deferred tax liabilities

20,125

19,277

Total non-current liabilities

253,725

250,555

Total liabilities

464,197

466,798

Share capital

53,88753,887

Capital surplus

40,95840,853

Treasury shares(1,792)(1,787)Retained earnings

51,52133,459Other components of equity

29,497

23,370Total equity attributable to owners of parent

174,071

149,781

454

(231)

Total equity

174,524

149,551

Total liabilities and equity

638,722616,349

Non-current liabilities

EquityNon-controlling interests15(2) Consolidated Statement of Profit or Loss and Comprehensive Income
Consolidated Statement of Profit or Loss
(Millions of yen)
Year ended

Year ended

December 31, 2019

December 31, 2020

Continuing operations
Revenue

491,896434,723

Cost of sales

336,682

302,593

Gross profit

155,213132,130

143,490

127,869

Other operating income

3,528

3,656

Other operating expenses

3,044

23,855

Operating profit (loss)

12,208(15,938)

Finance income

1,227

982

Finance costs

1,864

4,425

18

17

Profit (loss) before tax

11,588(19,364)

Income tax expense

4,259(2,759)Profit (loss) from continuing operations

7,329(16,605)

Loss from discontinued operations(3,509)－Profit (loss)

3,820(16,605)

Owners of parent

4,356(16,071)

Non-controlling interests

(536)

(533)

Profit (loss)

3,820(16,605)

Selling, general and administrative
expenses

Share of profit of investments accounted forusing equity method

Discontinued operations

Profit attributable to16

(Millions of yen)
Year ended

Year ended

December 31, 2019

December 31, 2020

Continuing operations

99.39(206.31)

Discontinued operations(43.46)－

Basic earnings (loss) per share

55.92(206.31)

Continuing operations

93.55(206.31)

Discontinued operations(40.81)－

Diluted earnings (loss) per share

52.74(206.31)

Diluted earnings (loss) per share17

(3) Consolidated Statement of Comprehensive Income(Millions of yen)
Year ended

Year ended

December 31, 2019

December 31, 2020

Profit3,820(16,605)

6,411(5,051)

4,595

1,124

11,006(3,927)

885

(973)

204

29

1,090

(944)

12,095(4,872)

15,915(21,476)

16,104(20,913)

Non-controlling interests

(188)

(563)

Comprehensive income

15,915(21,476)

Other comprehensive income
Items that will not be reclassified to profit orloss
Net change in fair value of equity
instruments designated as measured at fairvalue through other comprehensive income
Remeasurements of defined benefit plans
Total of items that will not be reclassified to
profit or loss
Items that may be reclassified to profit orloss
Exchange differences on translation offoreign operations
Effective portion of cash flow hedges
Total of items that may be reclassified to
profit or loss
Total other comprehensive income, net oftax
Comprehensive income
Comprehensive income attributable to
Owners of parent

18

(4) Consolidated Statement of Changes in Equity(Millions of yen)
Other components of equity
Share

CapitalTreasury

Retained

Exchange differences

capitalsurplussharesearnings

on translation of foreign

Effective portion of cash
flow hedges
operations

Balance as of January 1, 2019

53,88740,998(1,822)

Profit (loss)

46,065

(188)

622

120

622

120

4,356

Other comprehensive income
Comprehensive income(1,485)--Purchase of treasury shares

-

4,356

(9)

Disposal of treasury shares

039

Dividends(3,277)

Changes due to sale of(245)
consolidated subsidiaries
Share-based payment(41)
transactions
Transfer to retained earnings
Total transactions with owners

4,623
-

(41)

30

1,100

-

-

53,88740,958(1,792)

51,521

(863)

(68)

Balance as of December 31,
2019

19

Other components of equity

Total equity

Financial assets

Non-attributablemeasured at fair

Remeasurements

Total othervalue through otherof defined benefit

components

comprehensiveplans

of equity

Total
controllingto owners

equityinterestsof parent

incomeBalance as of January 1, 2019

24,046-

22,373

Profit (loss)

161,501

3,234

164,735

4,356

(536)

3,820

Other comprehensive income

6,411

4,595

11,748

11,748348

12,095Comprehensive income

6,411

4,595

11,748

16,104(188)

15,915Purchase of treasury shares

-

(9)

-

(9)

Disposal of treasury shares

-

39

-

39

Dividends-(3,277)(12)(3,289)-(245)(2,580)(2,826)

-

(41)

-

(41)

Changes due to sale ofconsolidated subsidiaries
Share-based paymenttransactions
Transfer to retained earnings(28)(4,595)(4,623)---

Total transactions with owners(28)(4,595)(4,623)(3,534)(2,592)(6,126)30,428-29,497174,071454

174,524

Balance as of December 31,
2019

20

(Millions of yen)
Other components of equity
Share

CapitalTreasury

Retained

Exchange differences oncapitalsurplussharesearnings

translation of foreign

Effective portion of cash
flow hedges
operations

Balance as of January 1, 2020

53,88740,958(1,792)

Profit (loss)

51,521

(68)

(943)

29

(943)

29

(16,071)

Other comprehensive income
Comprehensive income

(863)

-

-

Purchase of treasury shares-(16,071)(5)

Disposal of treasury shares

010Dividends(3,277)

Changes in ownership interest(92)-

in subsidiaries
Share-based payment(12)transactions
Transfer to retained earnings
Total transactions with owners

1,286
-

(104)

5

(1,991)--53,88740,853(1,787)33,459(1,806)(40)

Balance as of December 31,
2020

21

Other components of equity

Total equity

Financial assets

Non-attributablemeasured at fair

Remeasurements

Total othervalue through otherof defined benefit

components

comprehensiveplans

of equity

Total
controllingto owners

equityinterestsof parent

incomeBalance as of January 1, 2020

30,428-29,497

Profit (loss)

174,071454

174,524(16,071)(533)(16,605)

Other comprehensive income(5,051)

1,124(4,842)(4,842)(30)(4,872)Comprehensive income(5,051)

1,124(4,842)(20,913)(563)(21,476)

Purchase of treasury shares

-

(5)

-

(5)

Disposal of treasury shares

-

10

-

10

Dividends-(3,277)(10)(3,287)

-

(92)

(111)

(203)

-

(12)

-

(12)

Changes in ownershipinterest in subsidiaries
Share-based paymenttransactions
Transfer to retained earnings(162)(1,124)(1,286)---

Total transactions with owners(162)(1,124)(1,286)(3,377)(121)(3,498)25,215-23,370149,781(231)

149,551

Balance as of December 31,
2020

22

(5) Consolidated Statement of Cash Flows(Millions of yen)
Year ended

Year ended

December 31, 2019

December 31, 2020

Profit (loss) before tax

11,588(19,364)

Profit (loss) before tax from discontinued operations(5,102)－

Depreciation and amortization

28,242

26,202

Impairment losses

1,342

14,161

Loss on sale of discontinued operations

4,886

－

Interest and dividend income(1,185)(973)

Interest expenses

2,248

1,792

(18)

(17)

(1,599)(896)

Decrease (increase) in trade and other receivables

849

9,628

Decrease (increase) in inventories

(210)

132

Increase (decrease) in trade and other payables(754)(2,005)(1,414)(3,353)274(2,393)

Subtotal

39,14922,914

Interest and dividends received

1,188

979

Interest paid

(2,101)(1,664)

Income taxes paid

(2,167)(5,763)

Net cash provided by (used in) operating activities

36,06916,466(14,995)(10,199)

387

2,060

Purchase of investment property(13,211)(3,639)Purchase of intangible assets(2,917)(2,318)Purchase of investment securities(1,710)(2,546)

Proceeds from sale of investment securities

1,045

1,517

(1,633)－

Cash flows from operating activities

Share of loss (profit) of investments accounted forusing equity method
Loss (gain) on sale and retirement of property, plantand equipment, and intangible assets

Increase (decrease) in accrued alcohol tax
Other

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment

Payments for acquisition of subsidiaries due tochange in scope of consolidation

23

(Millions of yen)
Year ended

Year ended

December 31, 2019

December 31, 2020

(491)

－

1,798

－

8,586

－

Payments for loans receivable

(182)

(75)

Collection of loans receivable

129

77

Other

(1,735)(877)

Net cash provided by (used in) investing activities(24,930)(16,000)

920

422

Net increase (decrease) in commercial papers(6,500)－

Proceeds from long-term borrowings

21,37020,800

Repayments of long-term borrowings(21,486)(17,322)

Proceeds from issuance of bonds

20,00030,000

Redemption of bonds(10,013)(20,013)

Dividends paid

(3,290)(3,287)

Repayments of lease liabilities(7,016)(6,466)

Purchase of treasury shares

(9)

(5)

Other

39

10

(5,984)

4,138

71

(86)

Net increase (decrease) in cash and cash equivalents

5,226

4,519

Cash and cash equivalents at beginning of period

9,989

15,215

Cash and cash equivalents at end of period

15,215

19,734

Payment for sale of shares of subsidiary due tochange in scope of consolidation
Proceeds from sale of discontinued operations
Proceeds from sale of trust beneficiary right(investment property)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents(6) Notes on the Going-concern Assumption
Not applicable24(7) Segment Information
1. Overview of reportable segments
The Company’s reportable segments are components of the Sapporo Group about which
separate financial information is available. These segments are subject to periodic
examinations to enable the Company’s board of directors to decide how to allocate resources
and assess performance.
Under the Company, which is a pure holding company, Group companies carry out businessactivities and formulate strategies for the products and services they offer and for the sales
markets they cover.
The Group’s businesses are segmented mainly based on the products, services and sales
markets of Group companies and their affiliate companies. The Company’s three reportablesegments are Alcoholic Beverages, Food & Soft Drinks, and Real Estate.
The Alcoholic Beverages segment produces and sells alcoholic beverages and operates
restaurants of various styles.
The Food & Soft Drinks segment produces and sells foods and soft drinks.
The Real Estate segment’s activities include leasing and development of real estate.
Changes to Reportable Segments
From this year, the logistics business, which used to be listed under “other business,” isclassified under “Alcoholic Beverages.” To enable year-on-year comparisons, figures for theprevious fiscal year have been adjusted to reflect the new reportable segments.
The profit and loss of the North American soft drinks business has been classified underdiscontinued operations because all of the shares in Country Pure Foods, Inc. (the company
managing the North American soft drinks business, which falls under Food & Soft Drinks)
held by the Sapporo Group were transferred to BPCP CPF Holdings Inc. in 2019.
Consequently, the profit and loss of the North American Soft Drinks business are classified
under discontinued operations and is therefore not included in segment information.

25

2. Revenue, profit (or loss)
2. Revenue, profit (or loss)(millions of yen)
Years ended December 30, 2019 (January 1, 2019 – December 31, 2019)
Alcoholic
Beverages

Food &
Soft Drinks

Real Estate

Other *1

Total

Consolidated
total

Adjustment

Revenue
To outside customers

330,178

136,876

24,690152

491,896-

Inter-segment revenue

10,137

295

2,704

0

13,136(13,136)-

340,315

137,171

27,393

153

505,032(13,136)

491,896

7,694(1,151)

12,71414

19,273(7,065)

12,208

Total
Operating profit (loss)

491,896(millions of yen)
Years ended December 30, 2020 (January 1, 2020 – December 31, 2020)
Alcoholic
Beverages

Food &
Soft Drinks

Real Estate

Other *1

Total

Consolidated
total

Adjustment

Revenue
To outside customers

285,427

125,861

23,262

172

434,723-

Inter-segment revenue

12,361

755

2,642

1

15,758(15,758)-

297,788

126,616

25,904173

450,481(15,758)434,723(4,861)(16,921)

11,892(0)(9,890)(6,048)(15,938)

Total
Operating profit (loss)

434,723"Other" comprises businesses, such as health food business, etc., that are not included inreportable segments. Adjustment included General corporate and intercompany eliminations.
General corporation are general administrative expenses that do not belong to the reporting
segment.
(Subsequent Events)
None26