Financial Results
for the nine months ended September 30, 2020 — Consolidated(Based on IFRS)
November 6, 2020

Company name

Sapporo Holdings Limited

Security code
Listed on
URL
Representative
Contact
Telephone
Scheduled dates:

2501
Tokyo Stock Exchange (First Section); Sapporo Securities Exchange
https://www.sapporoholdings.jp/en/
Masaki Oga, President and Representative Director
Tatsuya Komatsu, Director of the Corporate Planning Department+81-3-5423-7407

Filing of quarterly financial report
Commencement of dividend payments
Supplementary information to the quarterly earnings results
Quarterly earnings results briefing held

November 13, 2020
AvailableYes(mainly targeted at institutional
investors and analysts)

1. Consolidated Financial Results for the nine months ended September 30, 2020
(January 1 – September 30, 2020)(Amounts in million yen rounded to the nearest million yen)

(1) Operating Results(Percentage figures represent year-over-year changes)
Core operating
Operating profit
ProfitprofitRevenuemillion yen%

million yen%

million yen%

million yen%

Nine months ended
September 30, 2020

315,346(12.7)

1,173(81.7)(2,041)_(1,162)_Nine months ended
September 30, 2019

361,015

_

6,401

_

7,769

_

4,214

_

Profit attributable toowners of parent
million yen

Yen

yen

(11.87)(11.87)

4,560_
10,933Nine months ended
September 30, 2019
Note: Profit before tax
Nine months ended September 30, 2020: (2,850) million yen
Nine months ended September 30, 2019: 7,000 million yen

_

58.55

55.14

_

%

Diluted earnings
per share

_

(925)

million yen

Basic earnings
per share(8,084)

Nine months ended
September 30, 2020%

Total comprehensive
incomeNote: Core Operating Profit is a proprietary profit indicator that measures the performance consistency of our business.
Core operating profit is calculated as Revenue – Cost of sales – SG&A expenses.
Note: The profit and loss of the North American soft drinks business has been classified under discontinued operations
because all of the shares in Country Pure Foods, Inc. since previous consolidated fiscal year.
The periods half quarter consolidated cumulative have also been rearranged in the same manner, these year-on-yearchanges are not stated.
－ 1 －(2) Financial Position
Total assets

Total equity

Equity attributableto owners ofparentEquity ratio
attributable toowners of parent

million yen

million yen

million yen%

Nine months ended
September 30, 2020

643,696

163,145

162,972

25.3

December 31, 2019

638,722

174,524

174,071

27.3

2. Dividends
Dividend per share
Record date or period

End Q1End Q2End Q3Year-end

Full year

Yen

yen

yen

yen

yen

Year ended December
31, 2019

—

0.00

—

Year ended December
31, 2020

—

0.00

__

42.00

42.00

42.00
42.00
Year ending December
31, 2020 (forecast)
Note: Changes were made to dividends forecasts in the nine months ended September 30, 2020: None

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2020
(January 1 – December 31, 2020)(Percentage figures represent year-over-year changes)
Revenuemillion yen

Core operating
profit%million yen%

Operatingprofitmillion yen

Profitmillion yen

%

Yen

_

(83.44)2－

million yen%

Basic earnings
per share

444,500(9.6)
1,000(91.5)(7,900)_(6,500)_(6,500)Year ending
December31, 2020
Note: Changes were made to earnings forecasts in the nine months ended September 30, 2020: None－%

Profit attribute toowners of parent

4. Other(1) Changes to scope of consolidation: None
*Changes affecting the status of significant subsidiaries (scope of consolidation)
Newly consolidated: Newly excluded: (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):
September 30, 2020: 78,794,298 shares
December 31, 2019: 78,794,298 shares
2) Number of shares held in treasury at end of period:
September 30, 2020: 896,223 shares
December 31, 2019: 898,162 shares
3) Average number of outstanding share during the period:
Nine months ended September 30, 2020: 77,897,518 shares
Nine months ended September 30, 2019: 77,891,207 shares*Quarterly review status
The quarterly financial results are not subject to quarterly reviews pursuant to 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 those expressed or implied byforward-looking statements due to various factors. For the assumptions underlying the forecasts herein andother information on the use of earnings forecasts, refer to “1. Analysis of Operating Results and Financial
Condition (3) Consolidated Earnings Forecast” on page 6.

－ 3 －1. Analysis of Operating Results and Financial Condition(1) Operating Results
In the first nine months of 2020 (January 1 – September 30, 2020), the Sapporo Group was
impacted by the novel coronavirus outbreak, with sales of mainly commercial-use beer and softdrinks sold via vending machines, and sales at beer halls and restaurants, including café chain
outlets falling sharply.
As a result, revenue and core operating profit were down year on year in all segments except
the Real Estate business, operating profit was down in all segments, and profit attributable toowners of parent also declined year on year.
Revenue¥315.3 billion (down ¥45.7 billion or 13% year on year)
Core operating profit (*)¥1.2 billion (down ¥5.2 billion or 82% year on year)
Operating loss
¥2.0 billion (profit of ¥7.8 billion a year earlier)
Net loss attributable to owners of parent ¥0.9 billion (profit of ¥4.6 billion a year earlier)*Core operating profit is the Sapporo Group’s unique profit benchmark for measuring theperformance of its regular business and is calculated by deducting cost of sales, and selling,
general and administrative expenses from revenue.
Results by segment are outlined below. From this fiscal year, the logistics business, which used to
be 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(Japan & Asia)
The commercial-use beer market in Japan and Asia has been significantly impacted by the novel
coronavirus outbreak. Reflecting this adverse impact, total demand in Japan for beer and beertype beverages in the first nine months of 2020 was 9% lower than in the previous year.
In the beer category, while commercial-use beer sales declined sharply, sales of our mainstay
canned Sapporo Draft Beer Black Label have been strong, increasing 4% year on year. In the new
genre category, Sapporo Gold Star, a new product launched in February, has been well-received,
helping drive total sales volume of new genre products up 31% year on year. Overall, strong sales
to the home-use market could not compensate for the large drop in shipments to the commercialuse market, and total sales of beer and beer-type beverages products fell 8% year on year in thefirst three quarters of 2020.
In the RTD*1 category, sales of core collaborative RTD product Otoko Ume Sour were strong,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 wine and spirits categories, weak demand in the commercial-use market led to a year-onyear decline in category revenues.
The Japanese liquor business, however, posted a year-on-year increase in revenue with solid
sales of our Kokuimo brand, Japan's best-selling*2 blended imo shochu, as well as Koime no
Lemon Sour no Moto, which was launched in October 2019.
In Asia, in the Vietnam market we are continuing our efforts to establish sales channels capableof generating profit growth while the business faces tightened restrictions against alcoholic
beverages and the impact of the novel coronavirus outbreak.
(North America)
In the North American beer market, demand in the commercial-use market has been affectedsignificantly by the novel coronavirus outbreak. We estimate that total beer demand declined year
on year in both the US and Canada.
Among our overseas beer brands, Sleeman Breweries led with sales volume up year on year,－4－reflecting Sleeman’s relatively large ratio of sales to the home-use market.
Sales of Sapporo brand beers were down year on year, primarily owing to the impact on thecommercial-use market caused by the closure of restaurants in the US.
(Restaurants)
The restaurant industry has suffered greatly from the spread of the novel coronavirus.
The restaurant business operating environment has remained difficult even after the Japanese
government lifted the state of emergency, as the shift to remote work and a “new normal” inpeople’s lifestyles have resulted in a smaller-than-expected recovery in the number of people
dining out. Our restaurants have responded to the difficult operating environment by revising meals
and menus and strengthening the lineup of take-out and delivery offerings, proposing new all-youcan-drink courses for individual customers, and thoroughly reducing costs by revising store hours
and store holidays as well as negotiating rent reductions with landlords. Despite these efforts,
restaurant sales and profits fell significantly from the previous year’s levels.
As of the end of September, our domestic restaurant business had 185 outlets open for business.
As a result of the above factors, revenue in the Alcoholic Beverages segment in the first threequarters of 2020 came to ¥206.8 billion (down ¥36.0 billion or 15% year on year). The segment
posted a core operating profit of ¥0.3 billion (down ¥4.4 billion or 93% year on year) and an
operating loss of ¥3.7 billion (compared with a profit of ¥4.4 billion a year earlier).
*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 December 2018 to September
2020.
Food & Soft Drinks
In the Japanese domestic food and soft drinks market, demand in the commercial-use and vending
machine sales markets was severely impacted by the novel coronavirus outbreak during the firstnine months of the fiscal year. We estimate that overall demand for soft drinks in Japan fell 6%
year on year during this period.
In our domestic soft drinks business, sales of lemon-based drinks continued to do well,
supported by consumers’ heightened health consciousness. However, weak sales of our softdrinks sold through the vending machine channel weighed on overall sales, resulting in a year-onyear decline in sales of the domestic soft drinks business in the first nine months of the fiscal year.
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. Lemon-based foodproduct sales volume also increased year on year, supported by strong growth in sales for 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 it to temporarily close some shops or reduce operating hours, especially at
its outlets in urban areas, during the state of emergency declared by the Japanese government.
As a result of the above factors, revenue in the Food & Soft Drinks segment in the first threequarters of 2020 came to ¥91.0 billion (down ¥8.8 billion or 9% year on year). The segment posted
a core operating loss of ¥2.3 billion (compared with a loss of ¥1.0 billion a year earlier) and an
operating loss of ¥2.5 billion (compared with a loss of ¥1.2 billion a year earlier).
Real Estate
The novel coronavirus pandemic has also affected Japan’s real estate industry, with vacancy rates
in the Greater Tokyo office leasing market remaining on an upward trend. Average rent levels havebeen trending downward.
－ 5 －In this market environment, Sapporo Real Estate Co., Ltd., has been able to hold office rents
steady while maintaining high occupancy rates at its properties in the Greater Tokyo Area,
including Yebisu Garden Place Tower, the business’s core source of earnings. However, the novel
coronavirus outbreak has led to a decline in revenue from commercial facilities and going forward
is expected to have an impact on office rental income.
To further improve the profitability of our Real Estate business, we will continue to strategicallyreview and revise our property portfolio from a long-term perspective. We continue to invest for
growth by acquiring rental properties in the Ebisu area and enhancing the value of properties in thearea. We are also making equity investments in private-placement funds.
As a result of efforts outlined above, revenue in the Real Estate business came to ¥17.5 billion(down ¥0.9 billion or 5% year on year), while the segment’s core operating profit was ¥8.0 billion(up ¥0.2 billion or 2%) and operating profit was ¥8.6 billion (down ¥1.1 billion or 12%).
(2) Consolidated Financial Condition
Consolidated assets as of September 30, 2020, totaled ¥643.7 billion, ¥5.0 billion more than at theend of the previous fiscal year (December 31, 2019). The increase is mainly due to an increase in
cash and cash equivalents made in anticipation of the tightening of the fund procurement
environment due to the novel coronavirus outbreak, which offset decreases in trade and otherreceivables and in other financial assets (non-current).
Consolidated total liabilities totaled ¥480.6 billion, ¥16.4 billion more than on December 31, 2019.
The increase primarily reflects the new issuance of bonds and commercial paper in anticipation of
the tightening of the fund procurement environment due to the novel coronavirus outbreak, which
offset decreases in other current liabilities, other financial assets (non-current), and deferred tax
liabilities.
Consolidated total equity totaled ¥163.1 billion, down ¥11.4 billion from December 31, 2019. Thisdecline was due to the posting of a net loss attributable to owners of parent, the payment of yearend dividends, and a decline in other components of equity.
(3) Consolidated Earnings Forecast
The consolidated earnings forecast for the full fiscal year to December 31, 2020, is unchanged
from the forecast announced by the Company on August 6, 2020.

－

6

－

2. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(Millions of yen)
December 31, 2019
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Investment property
Goodwill
Intangible assets
Investments accounted for using
equity method
Other financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets－ 7 －September 30, 2020

15,21592,52936,5285,403
6,090
155,765

52,477
66,706
38,634
5,122
9,936
172,874

147,014219,589
18,358
8,844

141,480
218,745
18,263
9,029

428

442

78,7287,445
2,551
482,957
638,722

72,6346,027
4,202
470,822643,696(Millions of yen)
December 31, 2019

September 30, 2020

34,475
72,121
6,538
2,414
33,021
61,903
210,472

31,394
103,957
6,181
655
38,18744,427
224,803

155,220
23,921
46,624
5,007
2,828
20,125
253,725
464,197

161,923
22,21045,5996,369
2,790
16,857
255,749
480,551

53,88740,958(1,792)
51,521
29,49753,88740,944(1,786)
46,77023,158174,071

162,972454
174,524
638,722172
163,145643,696

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Bonds and borrowings
Lease liabilities
Income taxes payable
Other financial liabilities
Other current liabilities
Total current liabilities
Non-current liabilities
Bonds and borrowings
Lease liabilities
Other financial liabilities
Retirement benefit liability
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
EquityShare capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners ofparentNon-controlling interests
Total equity
Total liabilities and equity

－

8

－

(2) Consolidated Statement of Profit or Loss and Comprehensive Income
Consolidated Statement of Profit or Loss
(Millions of yen)
Nine months ended
September 30, 2019
Continuing operations
Revenue
Cost of sales
Gross profit (loss)

Nine months ended
September 30, 2020

361,015
246,213
114,802

315,346
219,059
96,287

Selling, general and administrative expenses
Other operating income
Other operating expenses
Operating profit (loss)

108,402
3,127
1,758
7,769

95,1142,670
5,884(2,041)

Finance income
Finance costs
Share of profit of investments accounted forusing equity method
Profit (loss) before tax

759
1,543

734
1,557

14

14

7,000

(2,850)

Income tax expense
Profit (loss) from continuing operations

2,538
4,462

(1,688)(1,162)

(248)

－

4,214

(1,162)

Profit (loss) attributable to
Owners of parent
Non-controlling interests
Profit (loss)

4,560
(346)
4,214

(925)
(237)
(1,162)

Basic earnings (loss) per share
Continuing operations
Discontinued operations
Basic earnings (loss) per share

59.83(1.29)
58.55(11.87)－(11.87)

Diluted earnings (loss) per share
Continuing operations
Discontinued operations
Diluted earnings (loss) per share

56.35(1.21)
55.14(11.87)－(11.87)

Discontinued operations
Loss from discontinued operations
Profit (loss)－ 9 －(3) Consolidated Statement of Comprehensive Income(Millions of yen)
Nine months ended
September 30, 2019
Profit (loss)

Nine months ended
September 30, 2020

4,214

(1,162)

3,297(4,947)

3,961

(646)

7,258

(5,593)(374)(1,351)

(166)

22

(540)

(1,329)Other comprehensive income
Items that will not be reclassified to profit
or loss
Financial assets measured at fair value
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 net change in fairvalue of cash flow hedges
Total of items that may be reclassified to
profit or loss
Total other comprehensive income, net oftax
Comprehensive income

6,718(6,922)

10,933(8,084)Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

11,375(443)
10,933(7,813)(270)(8,084)－10－

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

Balance as of January 1,
2019

Share
capitalCapitalsurplusTreasurysharesRetainedearnings

53,88740,998(1,822)

46,065

Profit (loss)

Exchange differenceson translation offoreign operations(1,485)

(188)

(353)

(90)

(353)

(90)

3,701

-

-

4,560

Other comprehensive
incomeComprehensive income-

Purchase of treasury
shares
Disposal of treasury
shares

-

-

4,560

(5)
0

39

Dividends(3,277)

Changes due to sale ofconsolidated subsidiaries
Share-based
remunerationtransactions(48)

Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance as of September
30, 2019

-

(48)

34

424

-

-

53,88740,950(1,788)51,049(1,838)(278)

Other components of equity

Balance as of January 1,
2019

Effective portion of
cash flow hedges

Total equity
attributableto ownersof parent

Noncontrollinginterests

Total
equity22,373

161,501

3,234

164,735

-

4,560

(346)

4,214

Financial assets measured
at fair value through othercomprehensive income

Remeasurementsof defined benefit
plans

Total othercomponentsof equity

24,046-

Profit (loss)
Other comprehensive
income

3,297

3,961

6,815

6,815

(97)

6,718

Comprehensive income

3,297

3,961

6,815

11,375(443)

10,933

-

(5)

-

(5)

-

39

-

39

-

(3,277)(12)(3,289)

-

-

(273)

(273)

-

(48)

-

(48)

Purchase of treasury
shares
Disposal of treasury
sharesDividends
Changes due to sale ofconsolidated subsidiaries
Share-based
remunerationtransactions
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance as of September
30, 2019

259(3,961)(3,701)

-

-

-

259

(3,961)(3,701)(3,292)(285)(3,576)

27,603-25,487

169,585

2,507

172,091－ 11 －

(Millions of yen)
Other components of equity

Balance as of January 1,
2020

Share
capitalCapitalsurplusTreasurysharesRetainedearnings

53,88740,958(1,792)

51,521

Profit (loss)

Exchange differenceson translation offoreign operations

(863)

(68)

(1,318)22(1,318)

22

(549)

-

-

(925)

Other comprehensive
incomeComprehensive income-

Purchase of treasury
shares
Disposal of treasury
shares

-

-

(925)

(3)
0

9

Dividends(3,277)

Changes in ownershipinterest in subsidiaries
Share-based
remunerationtransactions

(2)
(12)

Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance as of September
30, 2020

-

(14)

6

(3,826)--53,88740,944(1,786)

46,770(2,180)(46)

Other components of equity

Balance as of January 1,
2020

Effective portion of
cash flow hedges

Total equity
attributableto ownersof parent

Noncontrollinginterests

Total equity

29,497174,071454

174,524

-

(925)

(237)

(1,162)Financial assets measured
at fair value through othercomprehensive income

Remeasurementsof defined benefit
plans

Total othercomponentsof equity

30,428-

Profit (loss)
Other comprehensive
income(4,947)(646)(6,889)(6,889)(33)(6,922)Comprehensive income(4,947)(646)(6,889)(7,813)(270)(8,084)

-

(3)

-

(3)

-

9

-

9

-

(3,277)(10)(3,287)

-

(2)

(1)

(3)

-

(12)

-

(12)

Purchase of treasury
shares
Disposal of treasury
sharesDividends
Changes in ownershipinterest in subsidiaries
Share-based
remunerationtransactions
Transfer from othercomponents of equity toretained earnings
Total transactions withownersBalance as of September
30, 2020

(97)

646

549

-

-

-

(97)

646

549

(3,285)(11)(3,296)25,384-

23,158

162,972

172

163,145－12－

(5) Notes on the Going-concern Assumption
Not applicable(6) 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 theCompany’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 business activities
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 ofGroup companies and their affiliate companies. The Company’s three reportable segments are Alcoholic
Beverages, Food & Soft Drinks, and Real Estate.
The Alcoholic Beverages segment produces and sells alcoholic beverages and operates restaurants ofvarious 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,” is classified under“Alcoholic Beverages.” To enable year-on-year comparisons, figures for the previous fiscal year havebeen adjusted to reflect the new reportable segments.
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. Revenue, profit (or loss)(millions of yen)
Nine months ended September 30, 2019 (January 1, 2019 – September 30, 2019)
Alcoholic
Beverages

Food &
Soft Drinks

Real Estate

Other *1

Total

Consolidated
total

Adjustment

Revenue
To outside customers

242,769

99,81318,324

109

361,015-Inter-segment revenue

7,396

194

2,031

0

9,621

(9,621)-

250,165

100,007

20,355

109

370,637(9,621)

361,015

4,382(1,244)9,731

1012,880(5,110)

7,769

Total
Operating profit (loss)

361,015(millions of yen)
Nine months ended September 30, 2020 (January 1, 2020 – September 30, 2020)
Alcoholic
Beverages

Food &
Soft Drinks

Real Estate

Other *1

Total

Consolidated
total

Adjustment

Revenue
To outside customers

206,797

90,966

17,459123

315,346-

315,346

Inter-segment revenue

8,849

497

1,959

1

11,305(11,305)-

215,646

91,463

19,418

123

326,650(11,305)

315,346(3,655)(2,469)

8,609

(4)

2,480

(4,521)(2,041)

Total
Operating profit (loss)*1: "Other" comprises businesses, such as health food business, etc., that are not included in reportable segments.
(Subsequent Events)
None－ 13 －