Financial Results
for the six months ended June 30, 2020 — Consolidated(Based on IFRS)
August 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

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

1. Consolidated Financial Results for the six months ended June 30, 2020
(January 1 – June 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%

Six months ended
June 30, 2020

199,983(12.4)(5,082)_(9,398)_(6,564)_Six months ended
June 30, 2019

228,207_(1,290)_136_(1,133)_

Profit attributable toowners of parent
million yen

Six months ended
June 30, 2020

(6,429)%Total comprehensive
incomemillion yen

_

(810)
_
Six months ended
June 30, 2019
Note: Profit before tax
Six months ended June 30, 2020: (9,929) million yen
Six months ended June 30, 2019: (335) million yen

Basic earnings
per share%

Diluted earnings
per share

Yen

yen

(14,627)_(82.53)(82.53)4,618_(10.41)(10.41)

Note: 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%

Six months ended
June 30, 2020

616,696

156,612156,336

25.4

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 six months ended June 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 Six months ended June 30, 2020: Yes－%

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):June 30, 2020: 78,794,298 shares
December 31, 2019: 78,794,298 shares
2) Number of shares held in treasury at end of period:
June 30, 2020: 895,910 shares
December 31, 2019: 898,162 shares
3) Average number of outstanding share during the period:
Six months ended June 30, 2020: 77,897,171 shares
Six months ended June 30, 2019: 77,887,873 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 (4) Consolidated Earnings Forecast” on page 8-9.

－ 3 －

1. Analysis of Operating Results and Financial Condition(1) Operating Results
In the first half of 2020 (January 1 – June 30, 2020), uncertainty in the global economy further
increased as the novel coronavirus outbreak and the rise in COVID-19 cases continued unabated.
The Japanese economy also continued to be weighed on by uncertainties as the Japanese
government's state of emergency declaration made in response to the domestic spread of the novel
coronavirus reduced consumption activity with people refraining from outings and many businesses
temporarily closing.
In this environment, the Sapporo Group saw sales of its commercial-use beer and soft drinks soldvia vending machines fall sharply year on year in April and May, particularly in Japan. In addition, theAlcoholic Beverages and Food & Soft Drinks segments’ results were negatively affected when nearly
all the restaurants they operate were forced to reduce operating hours or temporarily close while thestate of emergency remained in effect.
After the state of emergency was lifted, we began to see signs of a recovery in sales ofcommercial-use beer and vending machine beverages as restaurants and other businesses resumed
operations and corporate activity and personal consumption began to rebound. The Group’s
restaurants are resuming operations while thoroughly implementing the measures for infectious
disease prevention and hygiene management set forth in the government’s guidelines for restaurant
business continuity based on its Basic Policies for Novel Coronavirus Disease Control, and sales
have been recovering moderately since June.
As a result, consolidated revenues totaled ¥200.0 billion (down ¥28.2 billion or 12% year on year),and core operating loss* was ¥5.1 billion (compared with a loss of ¥1.3 billion a year earlier) andoperating loss was ¥9.4 billion (compared with a profit of ¥0.1 billion a year earlier). The net loss
attributable to owners of parent came to ¥6.4 billion (compared with a net loss of ¥0.8 billion a year
earlier).
*Core operating profit (loss) is the Company’s unique profit benchmark for measuring theperformance of its regular business and is calculated by deducting cost of sales, and selling, generaland 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-onyear comparisons, segment figures for the previous fiscal year have been adjusted to reflect thischange.
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 to be lower than revenue in the other quarters.
Alcoholic Beverages
Sapporo Breweries set forth its new vision for 2026 as “To be somebody’s first company, somebody’s
first shining star that enriches the lives of people from around the world, by bringing new and uniqueconnections to them with alcoholic beverages. Focus on two positions: Premium & Reasonablevalues. Have global vision & reach while respecting local perspectives”. Along with continuously
honing the quality of our premium value offerings that only we can provide, we aim to achieve growththrough continuous provision of reasonable value offerings by delivering high quality products for less.
(Japan & Asia)
In the beer markets in Japan and Asia, the commercial-use market is being significantly impacted by
the novel coronavirus outbreak. Total demand in Japan for beer and beer-type beverages has fallen
significantly since March, driving total demand in the six months to end-June down 10.0% year on－

4 －year.
In the beer category, while commercial-use beer sales declined, sales of canned Sapporo Draft
Beer Black Label have been strong, expanding 7% year on year, based on our “beer revival
declaration” business policy. In the new genre category, Sapporo Gold Star, a new product launchedin February, has been well-received, helping drive total sales volume of new genre products up 36%
year on year. Overall, total sales of beer and beer-type beverages decreased 7% year on year in thefirst half, as strong sales of home-use products could not fill the void created by the decline in sales in
the commercial-use beer market.
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 Nines) brand products.
In the wine category, we stepped up marketing of fine wines*2, including the imported wine
Penfolds, Taittinger champagne, and our domestic Grande Polaire wines. However, weak sales of oureveryday wines*2 and sluggish growth in demand for commercial-use products led to revenue for thewine category being below that of the previous year.
Our spirits business also saw revenue fall below the previous year’s level, as sales of core brands,
such as Dewar’s, were depressed by weak demand from the commercial-use market.
Our Japanese liquor business, however, posted a year-on-year increase in revenue with solid salesof Kokuimo brand, Japan's best-selling*3 blended imo shochu, as well as Koime no Lemon Sour noMoto, which was launched in October 2019.
In Asia, in the Vietnam market we are continuing our efforts to establish sales channels capable ofgenerating 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
markedly year on year in both the US and Canada.
In this environment, our North American alcoholic beverages business worked to strengthen its
mainstay brands, primarily premium beer brands, and enhance the portfolio for each brand.
In Canada, although weakness in the commercial-use market had an impact, our subsidiary
Sleeman Breweries saw sales of its medium- and low-priced canned beers increase in the home-use
market. Overall, Sleeman’s beer sales volume (excluding Sapporo brand beer) increased slightly year
on year.
In the US, Sapporo USA continued with its sales promotion activities for Sapporo brands targeting
the general population as well as Asian Americans, but US sales of Sapporo brand beers fell sharply
owing to the severe impact on the commercial-use market caused by the closure of restaurants in the
US. Meanwhile, Anchor Brewing Company worked to bolster sales synergies with Sapporo USA and
implemented structural reforms in an effort to overcome the challenging business environment
created by the continued decline in demand for craft beer in its home market in the San Francisco
area and the contraction of the commercial-use market.
(Restaurants)
In Japan’s domestic restaurant market, the spread of the novel coronavirus and the resulting state of
emergency declarations by the national and local governments has created an extremely severebusiness environment. Forced to shorten their business hours or temporarily close their premises,and dealing with a slow rebound in customer traffic since the lifting of the emergency declarations,many restaurant operators and outlets have adapted their business models, including the offering of
take-out meals.
In this environment, Sapporo Lion was forced to temporarily close nearly all of its stores during thestate of emergency in April and May. The operating environment has remained difficult even after－ 5 －restaurants reopened, as corporations’ shift to remote work and pursue the establishment of a “newnormal” and other factors have resulted in a smaller-than-expected rebound in people dining out.
Sales at our restaurants are down sharply since the resumption of business owing to the deteriorationin consumer sentiment caused by the ongoing spread of novel coronavirus infections, especially inthe heavily populated urban areas where our outlets are concentrated. Since the lifting of the state of
emergency, our restaurant operations have prioritized safety and security measures as we seek toprevent the infection of our customers and employees. In addition to revamping menus at each outlet
to enhance take-out and delivery offerings, our effort to accommodate the “new normal” has included
offering an all-you-can-drink course for individual customers. We also stepped up efforts to thoroughly
reduce costs, including revising store hours and store holidays and negotiating rent reductions withlandlords. Meanwhile, during the first half of 2020 we opened three new stores and two renovatedoutlets, while also closing nine locations based on the expiration of lease contracts, unprofitability,
and other factors. As a result, our domestic restaurant business had 189 outlets open for business at
the end of June.
To support our new take-out and delivery business, we completed construction and started
operations at a backup kitchen in June. We plan to further expand this new aspect of our restaurant
business.
As a result of the above factors, revenue in the Alcoholic Beverages segment in the first half of2020 came to ¥130.4 billion (down ¥22.3 billion or 15% year on year), while the segment posted acore operating loss of ¥3.8 billion (compared with a loss of ¥0.6 billion in the first half of 2019) and an
operating loss of ¥7.8 billion (compared with a loss of ¥0.8 billion a year earlier).
*1) RTD, or ready-to-drink beverages, are pre-mixed, low-alcohol cocktail-like beverages that canbe consumed as is immediately after opening.
*2) Fine wines are wines priced in the mid- to high-price range of ¥1,500 or more per bottle, while
everyday wines are those priced at 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 October 2018 to June 2020.
Food & Soft Drinks
In the Japanese domestic food and soft drinks market, commercial-use market demand and vending
machine sales declined in the first half of 2020 owing to the impact of the novel coronavirus outbreak.
We estimate that overall demand for soft drinks in Japan fell 8% year on year in the first six months ofthe year.
In this difficult market environment, POKKA SAPPORO posted favorable sales of Kireto Lemon
Muto Sparkling, a new product launched during the first half in response to the growing demand forsugar-free beverages in Japan in recent years. Meanwhile, sales of Pokka Sapporo’s mainstay Kireto
Lemon and other lemon-based drinks continued to perform well, supported by Japanese consumers’heightened health consciousness. However, these positive trends were offset by weak sales throughthe vending machine channel, and as a result Pokka Sapporo’s total soft drink sales volume waslargely in line with total market demand.
In the domestic food business, we launched the first chilled Western-style cup-based soup from the
Jikkuri Kotokoto brand, thereby expanding our lineup of nutritious chilled soups that are easy toconsume during the hot summer months. Supported by the stay-at-home demand, sales volumes ofour box- and cup-based soups were solid, expanding 8% year on year during the first six months of2020. Among our lemon-based food products, Pokka Lemon 100 fared well, supported by a diverse
customer base. Our lemon-based cocktail mixes also enjoyed significant year-on-year sales growth.
In May, we launched Lemon Museum, a website that provides comprehensive and easy-tounderstand information about lemons and their benefits that we have accumulated over the years aswell as our lemon-related activities. Such initiatives have resulted in a 15% year-on-year increase insales volume for our lemon-based food products. In the soy beans and chilled products category, we
endeavored to win new users of our soymilk yogurt by launching a sales campaign in April thatoffered full refunds to customers who found our soymilk yogurt less than delicious. The campaign also－

6 －

helped promote a better understanding of soymilk yogurt to a wider customer base. A renewed
Almond Breeze also contributed to sales, boosting category sales volume above the previous year’slevel.
Pokka Create, which operates the Café de Crié coffee shop chain, saw its revenue decline year on
year as the coronavirus pandemic forced it to temporarily close some shops or reduce operating
hours, especially at its outlets in urban areas.
Meanwhile, Yasuma Co., Ltd., which operates a spice and herb business recorded growth in sales
volume and revenue after becoming a consolidated subsidiary in February 2019.
As a result of the above factors, revenue in the Food & Soft Drink segment in the first half of 2020
came to ¥58.1 billion (down ¥5.4 billion or 9% year on year). The segment posted a core operating
loss of ¥2.6 billion (compared with a loss of ¥1.6 billion in the first half of 2019) and an operating lossof ¥2.9 billion (compared with a loss of ¥1.9 billion a year earlier).
Real Estate
Japan's real estate industry also was impacted by the spread of the novel coronavirus, with vacancy
rates in the Greater Tokyo office leasing market rising slightly from June onward. However, vacancy
rates in newer office buildings remain at a low level. As a result, rents remained on a moderate
upward trend.
In this environment, Sapporo Real Estate Co., Ltd maintained high occupancy rates at its properties
in the Greater Tokyo Area, including Yebisu Garden Place Tower, the business’ core source of
earnings. However, the novel coronavirus outbreak has led to a decline in revenue from commercial
facilities.
We continue to enhance the asset value of Yebisu Garden Place commercial complex—a landmark
in the Ebisu district of Tokyo, which is marking its 25th anniversary—by enhancing convenience andstrengthening the property's brand appeal. We maintained our constant efforts to provide tenants andvisitors with enjoyable experiences in comfortable, pleasant, and sophisticated surroundings, while
also responding to recent changes in society and people’s values in the “new normal”.
At the Sapporo Factory commercial complex, the number of visitors decreased significantly due torequests from the governments of Hokkaido Prefecture and Sapporo City for people to refrain fromoutings on weekends, and the national government’s declaration of a state of emergency. Hotel
Clubby Sapporo experienced a decline in business and tourist guest numbers for the same reason.
Although revenue declined year on year as a result, the real estate development business proceededwith the renovation of the Sapporo Factory commercial complex as part of Sapporo City's urban
redevelopment program focused on the area on the east side of the Sosei River. Amid the changing
environs surrounding the complex, we are contributing to the development of the area by proposing
new lifestyles and enhanced convenience.
To enhance the overall value of our Real Estate business, we will also 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 raising the value of properties in the area.
We also are making equity investments in private-placement funds.
As a result of efforts outlined above, revenue in the Real Estate business came to ¥11.5 billion(down ¥0.6 billion or 5% year on year), while the segment’s core operating profit was ¥4.6 billion (up¥0.2 billion or 3%) and operating profit was ¥4.3 billion (down ¥2.1 billion or 33%).

－ 7 －(2) Consolidated Financial Condition
Consolidated assets as of June 30, 2020, totaled ¥616.7 billion, ¥22.0 billion less than at the end of
the previous fiscal year (December 31, 2019). The decline is mainly due to decreases in trade andother receivables, and other financial assets (non-current), which more than offset an increase in
cash and cash equivalents made in anticipation of the tightening of the fund procurement
environment due to the novel coronavirus outbreak.
Consolidated total liabilities totaled ¥460.1 billion, ¥4.1 billion less than on December 31, 2019,
primarily owing to decreases in other current liabilities, bonds and borrowings (noncurrent), anddeferred tax liabilities, which helped to offset the increase in bonds and borrowings (current) resulting
from additional issuance of commercial papers in anticipation of the tightening of the fundprocurement environment due to the novel coronavirus outbreak.
Consolidated total equity totaled ¥156.6 billion, down ¥17.9 billion from December 31, 2019. Thisdecline is due to the posting of a net loss attributable to owners of parent, the payment of year-end
dividends, and a decline in other components of equity.
(3) Consolidated Cash Flows
Cash and cash equivalents (collectively “cash”) totaled ¥23.8 billion as of June 30, 2020, ¥8.6 billion
or 56% more than at the end of the previous fiscal year (December 31, 2019).
Consolidated cash flows for the six months ended June 30, 2020, and the main factors affecting
those flows were as follows.
(Cash flows from operating activities)
Operating activities provided net cash of ¥4.3 billion, ¥9.3 billion or 68% less than in the first half ofthe previous fiscal year. The main positive contributors to inflows were a ¥24.8 billion decrease intrade and other receivables and ¥13.3 billion from depreciation and amortization. These were partially
offset by a ¥13.6 billion decrease in liquor taxes payable.
(Cash flows from investing activities)
Investing activities used net cash of ¥11.8 billion, ¥3.0 billion or 20% less than in the first half of theprevious fiscal year. The main outflows were ¥6.3 billion for purchases of property, plant andequipment and ¥3.2 billion for purchases of investment property.
(Cash flows from financing activities)
Financing activities provided net cash of ¥15.5 billion, compared with ¥0.1 billion in the first half of theprevious fiscal year. The main inflows were from financing procured in anticipation of tightening of thefund procurement environment due to the novel coronavirus outbreak. This included ¥18.5 billion inproceeds from long-term bank loans and an ¥18.0 billion increase in commercial paper. These werepartially offset by ¥13.8 billion for repayment of long-term bank loans.
(4) Consolidated Earnings Forecast
The Company opted earlier in the year to omit the full-year consolidated earnings forecast owing to
the difficulty in making a reasonable assessment of the impact from the novel coronavirus pandemic.
However, we have now calculated and released forecast figures based on information and forecasts
currently available, taking into consideration the recent business environment and trends seen since
the lifting of Japan’s state of emergency and the resumption of economic activities in other countries.
Although our business activities and performance have been recovering since June 2020 after
bottoming out in April and May owing to the impact from the coronavirus pandemic, concerns about
the impact from a second wave of infections continue to cloud the outlook for the economy andconsumer spending. Accordingly, the Company’s forecast for the year ending December 31, 2020, as
shown below, was determined based on the assumption that the pandemic will continue to impact
earnings, primarily in the Alcoholic Beverages and the Food & Soft Drinks businesses.
－

8 －Revision of consolidated full-year earnings forecast for the fiscal year ended December 31, 2020
(January 1 to December 31, 2020)(millions of yen, except percentages and per-share data)

444,500-

Core
operatingprofit1,000-

491,896

11,724

Revenue
Previous forecast (A)Current forecast (B)Change (B-A)
Percent change
For reference:
Results for the fiscal
year ended December
31, 2019(7,900)-(6,500)-

Profitattributableto owners ofparent(6,500)-12,208

3,820

4,356

Operatingprofit－ 9 －ProfitBasicearnings pershare(83.44)-55.92

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

－

10 －

June 30, 2020

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

23,801
67,14639,892
4,445
9,169
144,454

147,014219,589
18,3588,844

143,096
219,469
18,260
9,238

428

436

78,7287,445
2,551
482,957
638,72270,8736,332
4,539
472,242616,696(Millions of yen)
December 31, 2019

June 30, 2020

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

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

32,130110,092
6,271
1,008
35,35041,303
226,153

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

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

139,550
23,19446,2606,761
2,787
15,379233,931460,084

53,88740,958(1,792)
51,521
29,49753,88740,944(1,785)40,43722,854

174,071

156,336454
174,524
638,722276
156,612616,696

EquityShare capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to ownersof parent
Non-controlling interests
Total equity
Total liabilities and equity－ 11 －

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

Six months ended
June 30, 2020

228,207
157,733
70,475

199,983
140,340
59,643

71,76564,725

2,857
1,431
136

647
4,963
(9,398)Finance income
Finance costs
Share of profit of investments accounted
for using equity method
Loss before tax

681
1,164

630
1,169

12

8

(335)

(9,929)

Income tax expense
Loss from continuing operations

435
(771)

(3,365)(6,564)

Discontinued operations
Loss from discontinued operations

(362)

－

(1,133)(6,564)

Loss attributable to
Owners of parent
Non-controlling interests
Loss

(810)
(322)
(1,133)(6,429)(134)(6,564)

Basic earnings (loss) per share
Continuing operations
Discontinued operations
Basic loss per share(8.28)(2.12)(10.41)(82.53)－(82.53)

Diluted earnings (loss) per share
Continuing operations
Discontinued operations
Diluted loss per share(8.28)(2.12)(10.41)(82.53)－(82.53)

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

Loss

－

12 －

(3) Consolidated Statement of Comprehensive Income(Millions of yen)Six months ended
June 30, 2019
Loss
Other comprehensive income
Items that will not be reclassified to
profit or loss
Financial assets measured at fairvalue through othercomprehensive income
Remeasurements of defined
benefit plans
Total of items that will not bereclassified to profit or loss
Items that may be reclassified to
profit or loss
Exchange differences ontranslation of foreign operations
Effective portion of net change infair value of cash flow hedges
Total of items that may bereclassified to profit or loss
Other comprehensive income,net of tax
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income－ 13 －

Six months ended
June 30, 2020

(1,133)(6,564)

1,987(5,615)

3,983(1,029)5,970(6,644)(106)(1,367)

(113)

(52)

(219)

(1,419)5,751(8,063)

4,618(14,627)

4,999
(381)
4,618

(14,451)(176)(14,627)

(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

Exchange differenceson translation offoreign operations

Effective portion of
cash flow hedges(1,485)

(188)

(810)

Loss
Other comprehensive
income

-

-

-

-

(89)

(73)

Comprehensive income

-

-

-

(810)

(89)

(73)

3,991

-

-

Purchase of treasury
shares
Disposal of treasury
shares(3)0

39(3,277)

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

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

-

(48)

36

714

-

-

53,88740,950(1,786)45,968(1,573)(261)

Other components of equity

Balance as of January 1,
2019

Total equity
attributableto ownersof parent

Noncontrollinginterests

Total
equity22,373

161,501

3,234

164,735

-

(810)

(322)

(1,133)Financial assets measured
at fair value through othercomprehensive income

Remeasurementsof defined benefit
plans

Total othercomponentsof equity

24,046-Loss
Other comprehensive
income

1,987

3,983

5,809

5,809

(58)

5,751

Comprehensive income

1,987

3,983

5,809

4,999

(381)

4,618

-

(3)

-

(3)

-

39

-

39

-

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

-

-

(320)

(320)

-

(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 June 30,
2019

(8)

(3,983)(3,991)

-

-

-

(8)

(3,983)(3,991)(3,290)(332)(3,622)

26,025-24,191

163,210

2,522

165,731－

14 －(Millions of yen)
Other components of equity

Balance as of January 1,
2020

Share
capitalCapitalsurplusTreasurysharesRetainedearnings

53,88740,958(1,792)

51,521

Exchange differenceson translation offoreign operations

Effective portion of
cash flow hedges

(863)

(68)

(6,429)Loss
Other comprehensive
income----(1,325)(52)

Comprehensive income

-

-

-

(6,429)(1,325)(52)(1,378)--Purchase of treasury
shares
Disposal of treasury
shares(1)08(3,277)

Dividends
Changes in ownershipinterest in subsidiaries
Share-based
remunerationtransactions

(2)
(12)

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

-

(14)

7

(4,655)--53,88740,944(1,785)40,437(2,188)(120)

Other components of equity

Balance as of January 1,
2020

Total equity
attributableto ownersof parent

Noncontrollinginterests

Total equity

29,497174,071454

174,524-(6,429)(134)(6,564)

Financial assets measured
at fair value through othercomprehensive income

Remeasurementsof defined benefit
plans

Total othercomponentsof equity

30,428-Loss
Other comprehensive
income(5,615)(1,029)(8,021)(8,021)(42)(8,063)Comprehensive income(5,615)(1,029)(8,021)(14,451)(176)(14,627)

-

(1)

-

(1)

-

8

-

8

-

(3,277)-(3,277)

(2)

(1)

(3)

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 June 30,
2020

(12)

(12)

348

1,029

1,378

-

-

-

348

1,029

1,378

(3,285)(1)(3,286)25,162-22,854

156,336276

156,612－ 15 －

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

Cash flows from operating activities
Loss before tax
Loss before tax from discontinued operations
Depreciation and amortization
Impairment losses
Interest and dividend income
Interest expenses
Share of loss (profit) of investments accounted forusing equity method
Loss (gain) on sale and retirement of property, plantand equipment, and intangible assets
Decrease (increase) in trade and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Increase (decrease) in accrued alcohol tax
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of investment property
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of investments in subsidiaries resulting
in change in scope of consolidation
Payment for sale of shares of subsidiary resulting inchange in scope of consolidation
Proceeds from sale of trust beneficiary right(investment property)
Payments for loans receivableCollection of loans receivable
Other
Net cash provided by (used in) investing activities

－

16 －

Six months ended
June 30, 2019

Six months ended
June 30, 2020

(335)
(463)
13,968
179
(678)
1,148

(9,929)－13,315
97
(622)
909

(12)

(8)

(1,711)129

12,059(3,473)(295)(2,659)(2,310)15,419705(1,089)(1,410)13,624

24,840(3,798)(1,784)(13,645)
(552)
8,952
647
(852)
(4,424)
4,323(6,521)
206(12,366)(1,951)(1,104)324(6,334)106(3,191)(1,077)(532)
133(1,305)

－

(504)

－

8,586

－

(35)
67
(284)
(14,889)

(61)
14
(902)
(11,843)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Net increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Dividends paid
Repayments of lease liabilities
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents－ 17 －

Six months ended
June 30, 2019

(Millions of yen)Six months ended
June 30, 2020

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

(634)
18,00018,500(13,782)(7)(3,268)(3,283)
7
15,532(105)574(1,243)
9,989
8,746

8,586
15,21523,801

(6) Notes on the Going-concern Assumption
Not applicable(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 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)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

152,629

63,46812,03972

228,207-228,207

Inter-segment revenue

4,633

122

1,333

0

6,088

(6,088)-157,262

63,59013,371

72

234,295(6,088)228,207(790)(1,932)

6,348

3

3,629

(3,493)136

Total
Operating profit (loss)(millions of yen)Six months ended June 30, 2020 (January 1, 2020 – June 30, 2020)
Alcoholic
Beverages

Food &
Soft Drinks

Real Estate

58,05911,469Other *1

Total

Consolidated
total

Adjustment

Revenue
To outside customers
Inter-segment revenue
Total
Operating profit (loss)

130,37580

199,983-

199,983

5,457

252

1,275

0

6,984

(6,984)-

135,832

58,31012,744

81

206,967(6,984)

199,983(7,771)(2,896)

4,262

(4)

(6,409)(2,989)(9,398)*1: "Other" comprises businesses, such as health food business, etc., that are not included in reportable segments.
－

18 －