Financial Results
for the three months ended March 31, 2023 — Consolidated(Based on IFRS)

Company nameMay 11, 2023

Sapporo Holdings Limited

Security code
2501
Listed on
Tokyo Stock Exchange (First Section); Sapporo Securities Exchange
URL
https://www.sapporoholdings.jp/en/
Representative
Masaki Oga, President and Representative Director
Contact
Yosuke Nakamura, Director of the Corporate Planning Department
Telephone+81-3-5423-7407
Scheduled dates:
Filing of quarterly financial report
May 12, 2023
Commencement of dividend payments
Supplementary information to the quarterly earnings results
Quarterly earnings results briefing held

AvailableYes(mainly targeted at institutional
investors and analysts)

1. Consolidated Financial Results for the three months ended March 31, 2023
(January 1 – March 31, 2023)(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

Three months ended
March 31, 2023%

million yen

108,768

16.6(2,935)－(3,282)－(3,589)－Three months ended
March 31, 2022

93,246

3.7(6,400)－(4,508)－(3,990)－

Profit attributable toowners of parent

Total comprehensive
incomemillion yen

million yen

%

%

%

million yen%

Basic earnings
per share

Diluted earnings
per share

Yen

Yen

Three months ended
March 31, 2023

(3,596)

－

(913)

－

(46.16)(46.16)

Three months ended
March 31, 2022

(3,993)－58－(51.26)(51.26)

Note: Profit before tax
Three months ended March 31, 2023
(3,826) million yen
Three months ended March 31, 2022
(4,302) million yen*Core operating profit is a proprietary profit indicator that measures the performance consistency of ourbusiness. Core operating profit is calculated as Revenue – Cost of sales – SG&A expenses.

－ 1 －(2) Financial Position

Total assets

Total equity

Equityattributable toowners of parent

million yen

million yen

million yen

Ratio ofequity attributableto owners of parent
to total assets%

Three months ended
March 31, 2023

620,481

163,011

162,108

26.1

Year ended
December 31, 2022

639,118

167,201

166,31026.0

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, 2022—

Year ending December
31, 2023

—

0.00

—

Year ending December
0.00—
31, 2023 (forecast)
Note: Changes to the latest dividend forecast announced: None

42.00

42.00

45.00

45.00

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2023
(January 1 – December 31, 2023)(Percentage figures represent year-over-year changes)Core
operating profit

Revenuemillion yen
YearendingDecember% million yen

490,000 2.4

13,500OperatingprofitProfitattributabletoowners ofparentProfitBasicearnings
per
share

%

millionyen%

millionyen%

million
yen

%

yen

45.0

9,500

(6.0)

5,570

1.0

5,500

0.9

70.61

Note: Changes to the latest consolidated results forecast announced: None
*Earnings forecasts for the six months ending June 30, 2023 are omitted because the company manages performancetargets on a yearly basis.

－

2

－

4. Other(1) Changes to scope of consolidation: None
(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):
March 31, 2023: 78,794,298 shares
December 31, 2022: 78,794,298 shares
2) Number of shares held in treasury at end of period:
March 31, 2023: 896,942 shares
December 31, 2022: 896,678 shares
3) Average number of outstanding shares during the period:
Three months ended March 31, 2023: 77,897,356 shares
Three months ended March 31, 2022: 77,897,589 shares
Audit Status
The quarterly financial results are outside the scope of audit procedures based on the Financial Instruments
and Exchange Act.
Appropriate Use of Earnings Forecasts and Other Important Information
This document contains projections and other forward-looking statements based on information available to
the Company as of the date of this document. Actual results may differ from 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.
Seasonal factors
The Group’s operating results are affected by substantial seasonal variation in demand in the Alcoholic
Beverages and Food & Soft Drinks businesses. Revenues consequently tend to be lower in the first quarter
than in the other three quarters.

－ 3 －1. Analysis of Operating Results and Financial Condition(1) Operating Results
In this quarterly consolidated accounting period (January 1 - March 31, 2023), lifestyle patterns of living with COVID19 penetrated society and the impacts of the COVID-19 pandemic were also limited in nature. On the other hand, theoutlook remains uncertain, with concerns over rising prices due to factors such as the situation in Ukraine, thedepreciation of the yen, and inflation from surging prices of raw materials and energy will lead to consumers becoming
more cautious with their spending.
Under these circumstances, the Sapporo Group will decisively implement structural reforms, aiming to realize ourgrowth strategy in the first year of our “Medium-Term Management Plan (2023-2026).”
Consolidated revenue overall increased compared to the previous first quarter. This was because of the recovery ofon-trade beer sales and dining out demand for beer halls in Alcoholic Beverages, along with the inclusion of STONEBREWING CO., LLC (Stone) as a consolidated subsidiary at the end of August 2022, and the effects of opening
Center Plaza in November 2022 in Real Estate, which both counteracted decreased revenue following the transfer ofthe cafe business in April 2022 and the liquidation of a vending machine operator subsidiary in November 2022
intended to shift management resources of Food & Soft Drinks to growth areas. Furthermore, factors behind increased
revenue include the impacts of the reactive increase because of quasi-emergency measures against COVID-19
implemented in the same period of the previous year.
Consolidated core operating profit increased year on year amid the effects of increased revenue in the Alcoholic
Beverages business and structural reforms in the Restaurants business.
Summary in key figures
RevenueThree months ended
March 31, 2023
Three months ended
March 31, 2022

Core operating profit

Millions of yen, except percentages
Profit attributable toOperating profit
owners of parent

108,768(2,935)(3,282)(3,596)

93,246(6,400)(4,508)(3,993)

16.6

－

－

－

Change (%)*Core operating profit is the Sapporo Group’s unique profit benchmark for measuring the performance of its regularbusiness and is calculated by deducting cost of sales, and selling, general and administrative expenses, from revenue.
Results by segment are outlined below.
Alcoholic Beverages
Revenue increased year-on-year thanks to price revisions, strong sales in North America, and the addition of Stone
Brewing Co., LLC to the Group at the end of August 2022, in addition to the reactive increase from quasi-emergency
measures against COVID-19 implemented in the same period of the previous year.
Core operating profit and operating profit both increased year-on-year, despite increased variable costs due tofactors such as increased raw material prices. This was thanks to the effects of increased revenue from the recovery inthe on-trade market as well as the effects of structural reforms of the Restaurants business.
■Revenue: ¥76.6 billion (up ¥16.0 billion, or 26.5% year on year)■Core operating profit: ¥(0.5) billion (compared with a loss of ¥3.9 billion a year earlier)■Operating profit: ¥(0.8) billion (compared with a loss of ¥2.4 billion a year earlier)
Details of Alcoholic Beverages (Japan and Overseas) and Restaurants in the Alcoholic Beverages business were as
follows.
Japan
Dining out demand switched to recovery mode following the reactive increase because of quasi-emergency
measures against COVID-19 implemented in the same period of the previous year. As a result, total domestic－

4－

demand for beer and beer-type beverages was estimated to have been about 102% year-on-year.
In this fiscal year, we are focusing more on strengthening (*) beer and RTD in anticipation of the liquor tax revisionin October 2023.
In this context, the Group’s total domestic sales volumes of beer and beer-like beverages was 106% of theprevious year’s level thanks to an increase of on-trade products. Additionally, sales of canned RTDs remained
strong, at 103% of the previous year's level.
Overseas
Economic activities resumed from COVID-19 countermeasures and on-trade market demand was in recovery
mode, and while total demand for beer and beer-type beverages in Canada exceeded that of the previous year, in
the United States, demand is expected to fall below the previous year’s level due to the impacts of record-breaking
torrential rainfall and cold snap on the West Coast and other factors.
In this context, sales volume of overseas beer brands exceeded that of the previous year thanks to a recovery of
the on-trade market in Canada and after including the sales of Stone in the United States. Additionally, sales volumeof Sapporo brand beer in the focus market of North America was strong at 111% of the previous first quarter’s level.
Restaurants
Dining out demand switched to recovery mode following the reactive increase because of quasi-emergency
measures against COVID-19 which had been implemented in the same period of the previous year.
Amid this, the Sapporo Group’s Restaurants business recorded same-store sales at 98.9% of 2019, recovering
to roughly the same level as before the outbreak of the COVID-19 pandemic.
*: RTD, or ready-to-drink beverages, are pre-mixed, low-alcohol cocktail-like beverages that can be consumed as isimmediately after opening.
Food & Soft Drinks
・Revenue declined year-on-year due to the impacts of reduced units in operations following the liquidation of avending machine operator subsidiary and divestment of the cafe business in April 2022. This was despite pricerevisions.
・Core operating profit and operating profit both increased compared to the same period of the previous fiscal year,
despite increased raw material costs. This was thanks to the contribution of improved profits due to profit structure
improvements and price revisions.
■Revenue: ¥26.8 billion (down ¥0.9 billion, or 3.1% year on year)■Core operating profit: ¥(0.3) billion (compared with a loss of ¥1.0 billion a year earlier)■Operating profit: ¥(0.3) billion (compared with a loss of ¥0.4 billion a year earlier)
Food & Soft Drinks (Japan)
・Although demand in the on-trade market and vending machines has been impacted by the "life of coping with
COVID-19" becoming more prevalent, overall domestic beverage demand is estimated to be around 99% that of theprevious year because of the recovery following the easing of pandemic restrictions.
In this context, overall sales volume of soft drinks was 92% of the previous year’s level due to the reduction in
operating units after the liquidation of a vending machine operator subsidiary, but sales of no-sugar-added tea madewith selected domestic ingredients were brisk at 106% year-on-year.
Overseas Beverage
・Domestic revenue in Singapore was 103% year-on-year amid robust sales primarily in the off-trade channel.
In addition, revenue in Malaysia, a focus area, was 114% year-on-year because we made progress withstrengthening our sales structure. Export sales mainly to the Middle East were also brisk, at 107% year-on-year.
Real Estate
Revenues increased year-on-year thanks to the effects of the opening of the remodeled Center Plaza at Yebisu－ 5 －Garden Place, a large multi-purpose complex, in November 2022.
Core operating profit declined year-on-year, despite the effects of increased revenue. This was because of adeclining office occupancy rate of Yebisu Garden Place caused by a downturn in market conditions and work to update
the HVAC facilities of the office tower started in 2022.
Operating profit increased year-on-year owing to reduced loss on disposal of property, plant and equipment
compared to the previous first three months.
■Revenue: ¥5.3 billion (up ¥0.4 billion, or 7.1% year on year)■Operating profit: ¥(0.0) billion (compared with a profit of ¥0.1 billion a year earlier)■Operating profit: ¥(0.1) billion (compared with a loss of ¥0.2 billion a year earlier)
The office leasing market in the Greater Tokyo area has yet to see a recovery in occupancy rates and average rent
levels since the beginning of the year.
Amid this, the Group’s Real Estate business saw the office occupancy rate of Yebisu Garden Place decline. On theother hand, there was a steady increase in total sales of Sapporo Factory amid rising demand for outdoor products
owing to in-bound tourism traffic and strong results of hosted events.

－

6

－

(2) Consolidated Financial Condition

As of the end of this Q1 consolidated accounting period, the following were the operative factors in the condition ofassets, liabilities and capital.
(Millions of yen)
Category

As of December 31, 2022

As of March 31, 2023

ChangeCurrent assets

179,431

153,559(25,872)

Non-current assets

459,687

466,921

7,234

Total assets

639,118

620,481(18,638)

Current Liabilities

219,515

198,208(21,307)

Non-current liabilities

252,402259,262

6,860

Total liabilities

471,917457,470(14,447)

Total equity

167,201

163,011(4,191)

Total liabilities andequity639,118

620,481(18,638)

In end-Q1, assets declined by ¥18.6 billion to ¥620.5 billion relative to the previous fiscal yearend, due to the decline
in trade and other receivables resulting from seasonal factors and decline in other financial assets (current) due to theredemption of investment securities, which offset an increase in other financial assets (non-current) due to the purchaseof investment securities.
Consolidated total liabilities came to ¥457.5 billion, which was a decrease of ¥14.4 billion as compared to the end of
the previous fiscal year, because of the decrease due to decrease in corporate bonds and borrowings (current) andother current liabilities resulting from seasonal factors notwithstanding an increase in corporate bonds and borrowings(non-current).
On the same comparative basis, capital declined by ¥4.2 billion to ¥163.0 billion. Although other capital components
measured in fair value through other comprehensive income increased, the decline stemmed from posting of quarterly
losses attributable to parent company owners and the decline in retained earnings from the payment of end-period
dividends.

－ 7 －(3) Consolidated Cash FlowsAt end-Q1, cash and equivalents (hereinafter “cash”) declined by ¥1.3 billion (8%) to ¥14.1 billion, relative to theprevious consolidated fiscal year-end.
The components of Q1’s cash flow categories were as follows.
(Millions of yen)
As of March 31,
As of March 31,
Category
Change2022
2023

Cash flows from operating activities(801)

13,49914,300Cash flows from investing activities(3,599)(2,812)

787

Free cash flow

(4,400)10,68715,087

Cash flows from financing activities

11,613(13,335)(24,947)

Effect of exchange rate change on cash and cash
equivalents

1,481

1,377

(104)

Net increase (decrease) in cash and cash equivalents

8,694(1,271)(9,965)

Cash and cash equivalents at beginning of period

17,36815,380(1,988)Cash and cash equivalents included in assets ofdisposal groups classified as holdings for sale

(340)

－

340

25,722

14,109(11,613)

Cash and cash equivalents at end of period(Cash flows from operating activities)
Cash provided by operating activities was ¥13.5 billion (compared to ¥0.8 billion used in the previous fiscal year).
This was mainly attributable to a ¥10.9 billion change in alcohol tax and a ¥3.8 billion decrease in loss before income
taxes, which offset the change in trade and other receivables of ¥23.1 billion and depreciation of ¥5.1 billion.
(Cash flows from investing activities)
Cash used in investing activities was ¥2.8 billion (lower by ¥0.8 billion year-on-year). Although there was income of¥4.0 billion from the redemption of investment securities, the decline was due to outlays of ¥2.7 billion for acquisitionof investment real estate, outlays of 2.3 billion yen for the acquisition of investment securities, and of ¥2.1 billion for
acquisition of tangible fixed assets.
(Cash flows from financing activities)
Cash used for financing activities was ¥13.3 billion (year-ago income of ¥11.6 billion). This was mainly due to a
¥20 billion decrease in commercial paper, compared to income from long-term borrowings of ¥10 billion.

(4) Consolidated Earnings Forecast

The consolidated earnings forecast for the full fiscal year to December 31, 2023, is unchanged from the forecast
announced by the Company on February 15, 2023.

－

8

－

2. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(Millions of yen)
As of December 31, 2022
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Income taxes receivable
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Investment property
Goodwill
Intangible assets
Investments accounted for using equity
methodOther financial assets
Retirement benefit asset
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets－ 9 －As of March 31, 2023

15,38096,59347,525
8,454
5,691
5,788
179,431

14,10973,62548,310
3,617
9,261
4,638
153,559

129,102
209,628
33,783
9,328

131,070
210,554
33,906
9,095

1,370

1,363

68,616
1,353
3,938
2,569
459,687
639,118

72,089
2,502
3,850
2,492
466,921620,481(Millions of yen)
As of December 31, 2022
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Bonds and borrowings
Lease liabilities
Income taxes payable
Other financial liabilities
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Bonds and borrowings
Lease liabilities
Other financial liabilities
Retirement benefit liability
Provisions
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 of parent
Non-controlling interests
Total equity
Total liabilities and equity

－

10

－

As of March 31, 2023

35,73086,524
3,825
890
32,9997,485
52,060219,515

31,962
72,1783,858
588
39,966
9,297
40,358198,208

155,369
17,47851,859
3,471
1,941
278
22,007
252,402471,917160,869
17,32552,692
3,426
1,885
279
22,787259,262
457,470

53,88740,645(1,785)43,39230,171
166,310891
167,201
639,118

53,88740,645(1,786)37,49331,869162,108903
163,011
620,481(2) Consolidated Statement of Profit or Loss
(Millions of yen)Three months ended
March 31, 2022

Three months ended
March 31, 2023

Revenue
Cost of sales
Gross profit

93,246
68,27924,967

108,768
78,80329,965

Selling, general and administrative expenses
Other operating income
Other operating expenses
Operating loss

31,3682,517
624(4,508)32,900168
516(3,282)

556
369

214
768

Finance income
Finance costs
Share of profit of investments accounted forusing equity method
Loss before tax

19

11(4,302)(3,826)

Income tax expense
Loss

(312)
(3,990)(236)(3,589)Loss attributable to
Owners of parent
Non-controlling interestsLoss(3,993)3(3,990)(3,596)
6(3,589)Basic loss per share
Diluted loss per share(51.26)(51.26)(46.16)(46.16)－ 11 －

(3) Consolidated Statement of Comprehensive Income(Millions of yen)Three months ended
March 31, 2022
Loss
Other comprehensive income
Items that will not be reclassified to profit or loss
Net change in fair value of equity instruments
designated as measured at fair value throughother 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 or loss
Exchange differences on translation of foreign
operations
Effective portion of cash flow hedges
Total of items that may be reclassified to profit
or loss
Total other comprehensive income, net of tax
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

－

12

－

Three months ended
March 31, 2023

(3,990)(3,589)

1,468

1,287

(333)

808

1,135

2,095

2,888

571

24

11

2,912

582

4,047
58

2,677
(913)

12
46
58

(924)
12
(913)

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

Balance as of January 1,
2022

Share
capitalCapitalsurplusTreasurysharesRetainedearnings

53,88740,596(1,785)44,791

Loss

Exchange differenceson translation offoreign operations

Effective portion of
cash flow hedges

1,782

(15)

2,845

24

2,845

24

(3,993)

Other comprehensive
incomeComprehensive income-

Purchase of treasury
shares
Disposal of treasury
shares--(3,993)(1)
0

0Dividends
Share-based paymenttransactions
Transfer to retained
earnings
Total transactions withownersBalance as of March 31,
2022(3,277)
10
(59)
-

10

(1)

(3,336)--53,88740,606(1,785)37,463

4,627

9

Other components of equity

Balance as of January 1,
2022

Total equity
attributable toowners ofparentNoncontrollinginterests

Total equity

Financial assets
measured at fair value
through othercomprehensive income

Remeasurementsof defined benefit
plans

Total othercomponentsof equity

23,313-25,080

162,570

757

163,327-(3,993)3(3,990)Loss
Other comprehensive
income

1,468

(333)

4,004

4,004

43

4,047

Comprehensive income

1,468

(333)

4,004

12

46

58

-

(1)

-

(1)

-

0

-

0

-

(3,277)-(3,277)

-

10

-

10

Purchase of treasury
shares
Disposal of treasury
sharesDividends
Share-based paymenttransactions
Transfer to retained
earnings
Total transactions withownersBalance as of March 31,
2022

(274)

333

59

-

-

-

(274)

333

59

(3,268)-(3,268)24,507-

29,143

159,314803

160,117－ 13 －

(Millions of yen)
Other components of equity

Balance as of January 1, 2023

SharecapitalCapitalsurplusTreasurysharesRetainedearnings

53,88740,645(1,785)43,392Loss

Exchange differenceson translation offoreign operations
4,714

10

565

11

565

11

(3,596)

Other comprehensive income
Comprehensive income

Effective portion of
cash flow hedges

-

-

-

Purchase of treasury shares(3,596)(1)

Dividends(3,277)

Transfer to retained earnings

973

Total transactions with owners

-

-

(1)

(2,304)--

Balance as of March 31, 2023

53,88740,645(1,786)37,493

5,280

21

Total equity
attributable toowners of parent

Noncontrollinginterests

Total equity

30,171

166,310891

167,201-(3,596)

6(3,589)Other components of equity
Financial assets
measured at fair value
Remeasurements ofthrough otherdefined benefit planscomprehensive
incomeBalance as of January 1, 2023

25,446-

Loss

Total othercomponentsof equity

Other comprehensive income

1,287

808

2,671

2,671

5

2,677

Comprehensive income

1,287

808

2,671

(924)

12

(913)

Purchase of treasury shares

-

(1)

-

(1)

Dividends-(3,277)-(3,277)

Transfer to retained earnings

(166)

(808)

(973)

-

-

-

Total transactions with owners

(166)

(808)

(973)

(3,278)-(3,278)

Balance as of March 31, 2023

26,568-31,869162,108903

163,011－14－

(5) Consolidated Statement of Cash Flows(Millions of yen)Three months ended
March 31, 2022
Cash flows from operating activities
loss before tax
Depreciation and amortization
Impairment losses
Interest and dividend income
Interest expenses
Share of loss (profit) of investments accounted for using
equity method
Loss (gain) on sale and retirement of property, plant andequipment, 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
Increase or decrease in retirement benefit asset or liability
Other
SubtotalInterest and dividends received
Interest paid
Income taxes refund (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
Proceeds from redemption of investment securities
Payments for loans receivableCollection of loans receivable
Other
Net cash provided by (used in) investing activities－ 15 －

Three months ended
March 31, 2023

(4,302)
5,168
248
(202)
367

(3,826)
5,085
194
(127)
689

(19)

(11)

(1,245)173

28,438(1,989)(2,505)(14,603)(4,153)
(822)
4,383
252
(459)
(4,977)(801)

23,097(630)(3,666)(10,882)
(342)
4,865
14,620
158
(764)
(515)
13,499(1,391)
2,704(3,543)(434)(1,225)
566
－
(24)
25
(278)
(3,599)(2,121)19(2,676)(600)(2,262)
475
4,000
(19)
6
367
(2,812)

(Millions of yen)Three months ended
March 31, 2022
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 included in assets of disposalgroups classified as held for sale
Cash and cash equivalents at end of period

－

16

－

Three months ended
March 31, 2023

2,340
15,0002,500(5,018)(26)(3,117)(1,493)
1,427
11,613
1,481
8,694
17,3681,059(20,000)
10,000(1)－(3,143)(1,225)(24)(13,335)
1,377(1,271)
15,380(340)－

25,722

14,109(6) Notes on the Going-concern Assumption
Not applicable－ 17 －