Financial Results
for the six months ended June 30, 2019 — Consolidated(Based on IFRS)
August 6, 2019

Company name

Sapporo Holdings Limited

Security code
Listed on
URL

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

Representative
Contact

Masaki Oga, President and Representative Director
Yuru Kobayashi, Director of the Corporate Communications Department

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

Filing of quarterly financial reportAugust 13, 2019

Commencement of dividend payments-

Supplementary information to the quarterly earnings results

Available

Quarterly earnings results briefing heldYes(mainly targeted at institutional
investors and analysts)

1. Consolidated Financial Results for the six months ended June 30, 2019
(January 1 – June 30, 2019)(Amounts in million yen rounded to the nearest million yen)

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

Operating profit

Profit before tax%

million yen

million yen%

million yen

Six months ended
June 30, 2019242,903

0.5

(128)

_

(798)

_

(1,133)_Six months ended
June 30, 2018

241,740(3.6)(3,043)_(3,641)_(2,909)_Profit attribute to

Total comprehensive

owners of parent

incomemillion yen%%

Profitmillion yen

Basic earnings
per share

Diluted earnings
per shareyenmillion yen%

Yen

Six months ended
June 30, 2019

(810)

_

4,618

_

(10.41)(10.41)

Six months ended
June 30, 2018

(2,516)_(10,966)_(32.30)(32.30)1%

(2) Financial Position
Total assets

Total equity

Equity attributableto owners ofparentEquity ratio
attributable toowners of parent

million yen

million yen

million yen%

Six months ended
June 30, 2019

639,320

165,731

163,21025.5

December 31, 2018639,692

164,735

161,501

25.2

2. Dividends
Dividend per share
Record date or

End Q1End Q2End Q3Year-end

Full year

Yen

yen

yen

yen

yen

—

42.00

42.00

—

42.00

42.00

periodYear ended
December 31, 2018

—

0.00

Year ended
December 31, 2019

—

0.00

Year ending
December 31, 2019
(forecast)

Note: Changes were made to dividends forecasts in the six months ended June 30, 2019: None

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2019
(January 1 – December 31, 2019)(Percentage figures represent year-over-year changes)
Revenue

Operating profit

Profit before tax

Profit attribute to

Basic earnings

owners of parent

per share

million yen%

million yen%

million yen%

million yen%

Yen

548,800

5.2

12,60016.4

11,300

19.0

8,700

2.1

111.70Year ending
December 31,
2019
Note: Changes were made to earnings forecasts in the Six months ended June 30, 2019: None2

4. Other(1) Changes to scope of consolidation: Yes*Changes affecting the status of significant subsidiaries (scope of consolidation)
Newly consolidated: -Newly excluded: Sapporo International Inc.

(Note)
Sapporo International Inc. was dissolved in an absorption-type merger with Sapporo Breweries LTD. on January 1, 2019.

(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):June 30, 2019: 78,794,298 shares
December 31, 2018: 78,794,298 shares
2) Number of shares held in treasury at end of period:
June 30, 2019: 896,016 shares
December 31, 2018: 907,931 shares
3) Average number of outstanding share during the period:
Six months ended June 30, 2019: 77,887,873 shares
Six months ended June 30, 2018: 77,892,030 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 thoseexpressed or implied by forward-looking statements due to various factors.

3

1. Analysis of Operating Results and Financial Condition(1) Operating Results
In the first half of 2019 (January 1 – June 30, 2019), the Japanese economy held firm mainly on the back of favorable
employment and income conditions. However, the global economy remained clouded owing to heightened trade frictions
and other geopolitical risks.
In this economic environment, despite a year-on-year sales volume decline for happoshu and new genre categories in
the Alcoholic Beverages segment, the Sapporo Group recorded a year-on-year increase in revenue owing to brisk sales of
Sapporo Draft Beer Black Label, RTD*1 offerings, and the Sapporo brand in North America.
The Group’s operating loss contracted mainly due to cost controls in alcoholic beverages in Japan and Asia and thebooking of gains on the sale of investment property.
As a result, first-half 2019 consolidated revenue totaled ¥242.9 billion (up ¥1.2 billion, or less than 1% year on year). The
Group posted a first-half operating loss of ¥0.1 billion (compared to a ¥3.0 billion loss a year earlier), while loss attributableto owners of parent came to ¥0.8 billion (compared with a net loss of ¥2.5 billion a year earlier).
Results by segment are outlined below. From this year, in order to further strengthen management oversight of eachbusiness, the five reportable segments used up until now have been reorganized into three reportable segments. To enable
year-on-year comparisons, figures for the previous fiscal year have been adjusted to reflect the new reportable segments.
Seasonal Factors
The Group’s operating results are affected by substantial seasonal variation in demand in the Alcoholic Beverages and Food
& Soft Drinks businesses. As a result, revenue in the first quarter, which falls within the first half of the fiscal year, tends tobe lower than revenue in the other quarters.
Alcoholic Beverages(Japan & Asia)
We estimate that total domestic demand for beer and beer-type beverages fell 1% year on year in the first half of 2019.
In this environment, Sapporo Breweries continues to work towards realizing its corporate vision—Seek to be No.1 byaccumulating one-of-a-kind products—and achieving further growth by constantly providing unique, new value to customers.
In the beer category, based on our “beer revival declaration” business policy, sales of Sapporo Draft Beer Black Labelremain brisk. For the Yebisu brand, the new Yebisu Premium Ale has been well received with sales volume for cansincreasing year on year. However, total sales volume for beer and beer-type beverages decreased 4% year on year due toconsiderably lower sales in the new genre category mainly owing to increasingly intense competition and the impact of apullback in sales of new products launched last year.
In the RTD*1 category, revenue increased significantly year on year with consumers favorably receiving both Sapporo
Chuhai 99.99 (Four Nines), launched in August last year, and Sapporo - Lemon the Rich, which went on sale in April thisyear. These two items have become core RTD products alongside the likes of Otoko Ume Sour, Ai no Skal White Sour, andKireto Lemon Sour.
In the wine category, we stepped up marketing of our fine wines*2, including the imported wine Penfolds, Taittinger
champagne, and domestic Grande Polaire wines. However, weak sales of our everyday wines*2 led to a slight year-on-year
revenue decline in this category.
Our spirits business achieved year-on-year revenue growth, driven by strong sales of products from major overseas
brands, such as Bacardi and Dewars.
Our Japanese liquor business posted a year-on-year decline in revenue, despite solid sales of Kokuimo, Japan’s bestselling*3 blended imo shochu.
In Asia, in the Vietnam market we continued our efforts to establish sales channels capable of generating profit growth.
(North America)
We estimate that total demand in the North American beer market declined year on year in both the U.S. and Canada,
partially due to the impact of the record cold snap. In this environment, we worked to strengthen our mainstay brands,
primarily premium beer, and strengthen the portfolio of each brand.
In Canada, our subsidiary Sleeman Breweries continued to invest in the marketing of its core premium brands, but the4drop in total demand stemming from inclement weather resulted in a slight year-on-year decline in beer sales volume(excluding Sapporo brand beer).
In the U.S., Sapporo USA’s sales volume of Sapporo brand beers grew significantly year on year due to the company’ssales promotion activities for Sapporo brands targeting the general population as well as Asian Americans. Meanwhile,
Anchor Brewing Company worked to bolster sales synergies with Sapporo USA amid the challenging business environment
created by the continued decline in demand for craft beer in its home market in the San Francisco area.
(Restaurants)
Japan’s restaurant industry as a whole continues to enjoy year-on-year growth in revenues, but the operating environment
remained challenging in the first half of 2019, highlighted by rising hiring costs owing to labor shortages and increasing raw
material procurement prices.
In this environment, based on the philosophy of “Enhancing the Joy of Living,” Sapporo Lion worked to deliver safe andsound products to customers while also striving to create restaurants that deliver 100% satisfaction to customers.
In Japan, our existing restaurants performed well, posting year-on-year increases in revenue for the sixth straight monthsince the start of the year. In March we opened the third Sobaemon format restaurant in Kawasaki. It has earned rave
reviews from local customers and continues to perform well. In January we renovated and switched the format of the
Shinjuku store to reopen it as Kakoiya. Meanwhile, we closed 11 restaurants during the first two quarters due to the
expiration of contracts, unprofitability, and other factors. As a result, we had 185 outlets open for business as of the end ofJune. Going forward, we will continue to aggressively expand our restaurant chains, opening new stores, remodeling existing
stores, and changing formats when and where desirable.
In Singapore, we continue to promote the spread of beer hall culture.
As a result, revenue in the Alcoholic Beverages segment in the first half of 2019 came to ¥149.8 billion, down ¥1.2 billion,
or 1% year on year, while the segment posted an operating loss of ¥0.6 billion, compared to a loss of ¥2.7 billion a year
earlier.
*1) RTD, or ready-to-drink beverages, are pre-mixed, low-alcohol cocktail-like beverages that can be consumed as isimmediately after opening.
*2) Fine wines are wines priced in the mid-to-high price range (¥1,500 or more per bottle), while everyday wines are lowpriced wines (less than ¥1,500 per bottle).
*3) Based on Intage SRI market research on combined blended imo shochu sales in the supermarket, convenience
store, and direct sales channels from September 2017 to April 2019.
Food & Soft Drinks(Japan & Asia)
We estimate that overall demand for soft drinks in Japan declined by 1% year on year in the first half of 2019.
In this market environment, POKKA SAPPORO leveraged the strengths of each brand lineup and continued to provide
customers with value unique to the Sapporo Group.
In the domestic soft drinks business, we launched our new LEMON MADE brand with the aim of using lemon-based
drinks to spread lemonade culture. The first product in this series, Original Lemonade, was well received by consumers. We
continued to enhance our lineup of unique products in the TOCHI & CRAFT domestic unsweetened tea series with thelaunch of the new Hokkaido Yasashii Umacha. We also endeavored to strengthen our marketing activities by redesigning
the packaging on our Kireto Lemon and Kireto Lemon Sparkling drinks and revamping television commercials. However,total sales volume of soft drinks fell year on year owing to the impact of a decline in sales of coffee drinks.
In the domestic food business, sales of soup products were somewhat lackluster due to the impact of the mild winter inthe first quarter, but we are planning to aggressively ramp up soup operations in September after the scheduled completion,
within the grounds of the Sendai brewery of Sapporo Breweries, of a POKKA SAPPORO plant featuring cup-based soupproduction facilities, etc. Sales volume of lemon-based food products remained brisk at 112% year on year thanks to our
successful development of products that harness the value of lemons, including our mainstay Pokka Lemon 100. Moreover,
we made a start on realizing a fully integrated lemon business, from the upstream to downstream sectors, by launching ourown lemon-growing business in Hiroshima Prefecture in April. In the soy beans and chilled products business, with oursoymilk yogurt production plant coming online, we took steps to expand consumption of our SOYBIO brand products bylaunching an unsweetened type in large containers in April, as well as a SOYBIO drink product packaged in cups in June.
Revenue in the domestic restaurants business grew year on year with Pokka Create, the company that operates the Café5

de Crié coffee shop chain, continuing to introduce new menu items reflecting the seasons and latest trends.
In our overseas soft drinks business, although the export business from Singapore was somewhat lackluster, sales
remained firm in Singapore, a market in which we maintain the leading share* in the tea drinks category, including a roughly
70% share in the green tea category.
(North America)
In the U.S. soft drinks market, the business environment remained challenging due to the decline in demand for juices owing
to the rise of health-conscious consumers. Amid this environment, a management integration of Country Pure Foods andSilver Springs Citrus was carried out in the previous fiscal year in an effort to improve profitability. As a result, total revenue
for the two companies increased year on year.
Overall, revenue in the Food & Soft Drinks segment came to ¥78.2 billion, up ¥2.4 billion, or 3% year on year, while thesegment posted an operating loss of ¥2.2 billion, compared with a loss of ¥1.7 billion a year earlier.
*Based on data from Nielsen Singapore MarketTrack October 2018 (Copyright 2018, The Nielsen Company)
Real Estate
Japan’s real estate industry remains concerned about a sharp increase in supply of new office space negatively affecting
conditions in the Greater Tokyo office leasing market, but for now vacancy rates remain low as strong corporate earnings
support demand for office space. As a result, rents remain on a moderate upward trend.
In this environment, our real estate leasing business is maintaining high occupancy rates at its properties in the Greater
Tokyo area, including Yebisu Garden Place Tower, the business’ core source of earnings. In addition, the high occupancy
rates provide a solid platform for more assertive efforts to increase rents of existing tenants.
Meanwhile we continue to enhance the asset value of our Yebisu Garden Place commercial complex—a landmark in thestylish and sophisticated Ebisu district of Tokyo—through constant efforts to provide tenants and visitors with enjoyable
experiences in comfortable and pleasant surroundings by enhancing convenience and strengthening the property’s brandappeal. In around autumn 2019, one section of Glass Square will be transformed into a multi-use area with co-working
spaces. This is expected to create opportunities for people working there to interact with visitors to Yebisu Garden Place.
At the GINZA PLACE commercial complex, we are enhancing the facility’s capacity for communicating information in linewith its concept as a “base for information dissemination and exchange”. In addition to enhancing the property’s brand value,
this is expected to boost customer footfall and make the Ginza district an even more dynamic and bustling urban center. In
July we will refurbish the basement level 1 and open the Sapporo Draft Beer Black Label–THE BAR.
The real estate development business is proceeding with the renovation of the Sapporo Factory commercial complex aspart of Sapporo City’s urban redevelopment program focused on the nearby area on the east side of the Sosei River. We
will continue our efforts to make the new complex an attractive urban space.
To further enhance the value of our real estate business as a whole, we will continue to carry out a strategic restructuringof our property portfolio and pursue urban redevelopment based on a long-term perspective.
As a result of the efforts outlined above, revenue in the Real Estate business came to ¥12.0 billion, down less than ¥1billion, or less than 1% year on year, while operating profit came to ¥6.3 billion, up ¥1.8 billion, or 39%.

(2) Consolidated Financial Condition
Consolidated assets as of June 30, 2019, totaled ¥639.3 billion, ¥0.4 billion less than at the end of the previous fiscal year
(December 31, 2018). The decline owes mainly to a decrease in trade and other receivables, which more than offset anincrease in investment property.
Consolidated total liabilities totaled ¥473.6 billion, ¥1.4 billion less than on December 31, 2018, primarily owing to thedecrease in other current liabilities, which helped offset an increase in bonds and borrowings (current).
Consolidated total equity came to ¥165.7 billion, up ¥1.0 billion from December 31, 2018. This increase was due to a risein other components of equity, despite the payment of year-end dividends and other factors.

6(3) Consolidated Cash Flows
Cash and cash equivalents (hereafter, “cash”) as of June 30, 2019, totaled ¥8.7 billion, a decline of ¥1.2 billion or 12% from
December 31, 2018.
Consolidated cash flows for the six months ended June 30, 2019, and the main factors affecting those flows were as follows.
Cash flows from operating activities
Operating activities provided net cash of ¥13.6 billion, ¥2.6 billion or 23% more than in the first half of the previous fiscal
year. The main positive contributors to inflows were depreciation and amortization totaling ¥14.0 billion and a ¥12.1 billion
decrease in trade and other receivables. These were offset by outflow related to a ¥3.5 billion increase in inventories.
Cash flows from investing activities
Investing activities used net cash of ¥14.9 billion, ¥3.4 billion or 29% more than in the first half of the previous fiscal year.
The main outflows were ¥12.4 billion for purchases of investment property and ¥6.5 billion for purchases of property, plant,
and equipment, which outweighed inflow of ¥8.6 billion from the sale of trust beneficiary rights (investment property).
Cash flows from financing activities
Financing activities provided net cash of ¥0.1 billion compared to ¥2.1 billion net cash used in the first half of the previous
fiscal year. The main inflows were proceeds of ¥15.0 billion from long-term borrowings and a ¥6.5 billion increase incommercial papers, which outweighed outflow of ¥16.3 billion for the repayment of long-term borrowings.
(4) Consolidated Earnings Forecast
The consolidated earnings forecast for the full fiscal year ending December 31, 2019, is unchanged from the forecast
announced by Sapporo Holdings on February 13, 2019.

7

2. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(millions of yen)
December 31, 2018

June 30, 2019

AmountAmountAssetsI Current assets
1 Cash and cash equivalents
2 Trade and other receivables
3 Inventories
4 Other financial assets
5 Other current assets
Total current assets

9,989
93,34037,1094,790
8,316
153,544

8,746
82,493
41,781
3,879
9,276
146,175

II Non-current assets
1 Property, plant and equipment
2 Investment property
3 Goodwill
4 Intangible assets
5 Investments accounted for using equity method
6 Other financial assets
7 Other non-current assets
8 Deferred tax assets
Total non-current assets
Total assets

152,676
215,522
21,22912,056410
70,2058,526
5,523
486,148
639,692

154,272
220,210
21,888
11,780422
73,7797,799
2,995
493,145639,320

December 31, 2018

June 30, 2019

AmountAmountLiabilities and equity
Liabilities
I Current liabilities
1 Trade and other payables
2 Bonds and borrowings
3 Lease liabilities
4 Income tax payable
5 Other financial liabilities
6 Other current liabilities
Total current liabilities

35,29273,863
6,743
1,527
33,90563,260214,591

36,012
83,722
6,920
1,087
34,37956,899219,019

II Non-current liabilities
1 Bonds and borrowings
2 Lease liabilities
3 Other financial liabilities
4 Retirement benefit liability
5 Other non-current liabilities
6 Deferred tax liabilities
Total non-current liabilities
Total liabilities

154,483
24,49545,733
11,715
2,991
20,950260,367
474,957

153,009
25,161
46,115
6,523
2,890
20,872
254,570
473,588

Equity1 Share capital
2 Capital surplus
3 Treasury shares
4 Retained earnings
5 Other components of equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

53,88740,998(1,822)
46,06522,373
161,501
3,234
164,735
639,692

53,88740,950(1,786)45,96824,191
163,210
2,522
165,731639,3208

(2) Consolidated Statement of Profit or Loss and Comprehensive Income
Consolidated Statement of Profit or Loss(millions of yen)Six months ended
June 30, 2018
Amount241,740
169,827
71,913Six months ended
June 30, 2019
Amount242,903
171,663
71,241

Selling, general and administrative expenses
Other operating income

74,303516

72,792
2,872

Other operating expenses
Operating profit (loss)

1,169(3,043)

1,448
(128)

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

656
1,263
10
(3,641)

681
1,364
12
(798)

Income tax expense
Profit (loss)(731)(2,909)335(1,133)

Owners of parent
Non-controlling interests
Total(2,516)(394)(2,909)

(810)
(322)
(1,133)

Basic earnings per share (JPY)
Diluted earnings per share(JPY)(32.30)(32.30)(10.41)(10.41)

Six months ended
June 30, 2018
Amount(2,909)Six months ended
June 30, 2019
Amount(1,133)

Revenue
Cost of sales
Gross profit

Profit (loss) attributable toConsolidated Statement of Comprehensive Income

Profit (loss)
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
Exchange differences on translation of foreign operations
Effective portion of net change in fair value of cash flow hedges
Total of items that may be reclassified to profit or loss
Other comprehensive income, net of tax
Comprehensive income(4,677)(1,200)(5,876)

1,987
3,983
5,970

(2,317)137(2,180)(8,057)(10,966)

(106)
(113)
(219)
5,751
4,618

Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income(10,462)(505)(10,966)

4,999
(381)
4,618

9

(3)Consolidated Statement of Changes in Equity(millions of yen)

Other components of equity

Share capital

Balance as of January 1, 2018

Capital surplus

53,887Retainedearnings

Treasury shares

40,825(1,807)

Exchange differenceson translation offoreign operations
44,491

Effective portion of
net change in fair value ofcash flow hedges

1,137

(191)

(2,516)

Profit (loss)
Other comprehensive income
Total comprehensive income

-

-

-

(2,516)(2,184)113(2,184)113(4)Purchase of treasury shares
0

Disposal of treasury shares
Issuance of convertible bonds with shareacquisition rights
Dividends

4

182(3,122)(1,274)

Transfer to retained earnings
Total transactions with owners

-

182

(0)

(4,396)--

Balance as of June 30, 2018

53,88741,007(1,807)

37,579(1,046)(77)

Other components of equity
Financial assets measured at
Remeasurements of defined
fair value through otherbenefit planscomprehensive income
33,712-

Total other components ofequityBalance as of January 1, 2018
Profit (loss)
Other comprehensive income,net of taxes
Total comprehensive income

Total equity attributable toowners of parent

Non-controllinginterests

Total equity

34,659172,055

3,655-(2,516)(394)

175,710(2,909)(4,676)(1,200)(7,946)(7,946)(111)(8,057)(4,676)(1,200)(7,946)(10,462)(505)(10,966)

Purchase of treasury shares
Issuance of convertible bonds with shareacquisition rights

-

(4)

-

(4)

-

4

-

4

Disposal of treasury shares

-

182

-

182
(3,130)-(3,122)(9)Transfer to retained earnings

Dividends
74

1,200

1,274

-

-

-

Total transactions with owners

74

1,200

1,274

(2,940)(9)(2,948)

Balance as of June 30, 201829,111-

27,987

158,653

3,142

161,79610

(millions of yen)
Other components of equity

Share capital

Balance as of January 1, 2019
Profit (loss)
Other comprehensive income
Total comprehensive income
Purchase of treasury shares

Capital surplus

Balance as of January 1, 2019
Profit (loss)
Other comprehensive income
Total comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Disposal of subsidiaries
Share-based payment transactions

Exchange differenceson translation offoreign operations

53,88740,998(1,822)

46,065
(810)

-

-

(3)

(810)

0

39

Disposal of treasury shares
Dividends
Disposal of subsidiaries
Share-based payment transactions
Transfer to retained earnings
Total transactions with owners
Balance as of June 30, 2019

Retainedearnings

Treasury shares

Effective portion ofneti change in fair value ofcash flow hedges(1,485)

(188)

(89)
(89)

(73)
(73)

(1,573)(261)(3,277)(48)
53,887(48)
40,950

Other components of equity
Financial assets measured at
Remeasurements of defined
fair value through otherbenefit planscomprehensive income
24,046-36(1,786)

Total other components ofequity22,373
5,809
5,809
-

3,991
714
45,968

Total equity attributable toowners of parent

Non-controllinginterests

161,501
(810)
5,809
4,999
(3)
39
(3,277)(48)

Total equity
3,234
(322)
(58)
(381)
(12)
(320)
-

164,735(1,133)
5,751
4,618
(3)
39
(3,289)
(320)
(48)

1,987
1,987

3,983
3,983

Transfer to retained earnings(8)(3,983)(3,991)---

Total transactions with owners
Balance as of June 30, 2019(8)
26,025(3,983)-(3,991)
24,191(3,290)163,210

(332)
2,522

(3,622)
165,73111

(4) Consolidated Statement of Cash Flows(millions of yen)Six months ended
June 30, 2019
AmountSix months ended
June 30, 2018
AmountI Cash flows from operating activities
1 Profit (loss) before taxes
2 Depreciation and amortization
3 Impairment losses
4 Interest and dividend income
5 Interest expenses
6 Share of loss (profit) of investments accounted for using equity method(3,641)
14,266
557
(641)
1,188
(10)

(798)
13,968
179
(678)
1,148
(12)

286
16,251(2,806)(361)(5,244)(830)
19,015692(1,102)(7,541)
11,064(1,711)
12,059(3,473)(295)(2,659)(2,310)15,419705(1,089)(1,410)13,624(5,961)
1,692(2,699)(1,202)(6,339)109(6,521)
206(12,366)(1,951)(1,104)324-(1,305)(46)
4,016(1,076)(11,505)

(504)
8,586
(35)
67
(284)
(14,889)

1,897
3,000
7,000
(17,300)
20,021(10,062)(3,129)(3,503)(0)(2,076)

1,632
6,500
15,000(16,348)(7)(3,285)(3,401)
36
127

(217)

(105)

V Net increase (decrease) in cash and cash equivalents(2,734)(1,243)

VI Cash and cash equivalents at beginning of period
Ⅶ Cash and cash equivalents at end of period

12,537
9,803

9,989
8,746

7 Loss(gain) on sale and retirement of property, plant and equipment, andintangible assets
8 (Increase) decrease in trade and other receivables
9 (Increase) decrease in inventories
10 Increase (decrease) in trade and other payables
11 Increase (decrease) in accured alcohol tax
12 Other
Sub total
13 Interest and dividends received
14 Interest paid
15 Income taxes paid
Net cash provided by (used in) operating activities
II Cash flows from investing activities
1 Purchases of property, plant and equipment
2 Proceeds from sales of property, plant and equipment
3 Purchase of investment property
4 Purchases of intangible assets
5 Purchases of investment securities
6 Proceeds from sale of investment securities
7 Purchase of investments in subsidiaries resulting in change in scope of
consolidation
8 Payments for sales of subsidiaries' shares resulting in change in scope of
consolidation
9 Proceeds from sale of trust beneficiary right (investment property)
10 Payments for loans receivable
11 Collection of loans receivable
12 OtherNet cash provided by (used in) investing activities
III Cash flows from financing activities
1 Net increase (decrease) in short-term borrowings
2 Net increase (decrease) in commercial papers
3 Proceeds from long-term borrowings
4 Repayment of long-term borrowings
5 Proceeds from issuance of bonds
6 Redemption of bonds
7 Dividends paid
8 Repayment of lease liabilities
9 Other
Net cash provided by (used in) financing activities

IV Effect of exchange rate changes on cash and cash equivalents

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 isavailable. 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 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 of Group 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 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
Based on the revised management structure launched in January 2017 and in line with The First Medium-Term
Management Plan of the Long-Term Management Vision SPEED150 announced in November 2016, the Company has
determined to strategically reallocate managerial resources to promote continuous group growth, and to implement
structural reforms and promote segment management in an effort to strengthen platform functions.
In the Company’s efforts to maintain steady growth by growing and strengthening its brands, the five previous businesssegments have recently been reorganized into three new segments to better develop international operations as a corebusiness by enhancing Company management. From the first quarter of 2019, the five previous business segments ofJapanese Alcoholic Beverages, International, Food & Soft Drinks, Restaurants, and Real Estate have been reorganized
into the three new segments of Alcoholic Beverages, Food & Soft Drinks, and Real Estate.
In conjunction with these changes, the former International segment was split and incorporated into the Alcoholic
Beverages and Food & Soft Drinks segments, respectively. In addition, the former Restaurants segment has been
incorporated into the Alcoholic Beverages segment, and the food business which was part of the former Other segment
has been incorporated into the Food & Soft Drinks segment.
Segment information for the first half of 2019 has been prepared based on the new reportable segments following thechanges.

13

2. Revenue, profit (or loss)(millions of yen)Six months ended June 30, 2018 (January 1, 2018 – June 30, 2018)
Alcoholic
Beverages

Food &
Soft Drinks

Real Estate

Other *1

Total

Consolidated
total

Adjustment

Revenue
To outside customers

151,00875,757

12,066

2,909

241,740-

Inter-segment revenue

216

117

1,354

9,991

11,678(11,678)-

151,22475,874

13,42012,900253,419(11,678)

241,740(2,700)(1,733)

4,553

14

134

(3,177)(3,043)

Total
Operating profit (loss)

241,740(millions of yen)Six months ended June 30, 2019 (January 1, 2019 – June 30, 2019)
Alcoholic
Beverages

Food &
Soft Drinks

Real Estate

Other *1

Total

Consolidated
total

Adjustment

Revenue
To outside customers

149,820

78,164

12,0392,881

242,903-

Inter-segment revenue

300

122

1,333

10,26912,023(12,023)-

150,119

78,286

13,371

13,150254,926(12,023)

242,903(619)(2,196)

6,348

(169)

3,365

(3,493)

(128)

Total
Operating profit (loss)(1) "Other" comprises businesses, such as logistics businesses, that are not included in reportable segments.

14242,903