Suntory Beverage & Food : Notification Concerning Content of Parent Company Financial as of December 31 2018

Suntory Holdings Limited

SUMMARY OF CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2018 [IFRS] (English Translation, UNAUDITED)

Company Name:	Suntory Holdings Limited
(URL:https://www.suntory.com/)
Representative:	Takeshi Niinami, President
Contact:	Toru Niwa, Head of Public Relations
Public Relations Office:	Tel:[phone]
Tel:[phone]

1. Consolidated operating results and financial positions for the fiscal year

(January 1, 2018 - December 31, 2018)

(1) Operating results

(% figures represent change from the same period of the previous fiscal year)

Fiscal year ended

Revenue (including Revenue (excluding excise taxes) excise taxes)

¥million

%

(Fractions of millions have been truncated)February 15, 2019

¥million

%Operating income ¥million

%Profit before income taxes ¥million

%Profit for the year ¥million

%

• December 31, 2018 2,517,258 4.0

  • 2,250,782 4.3

    • 250,859 (1.1)

      • 232,347 2.4

        • 181,387 (28.0)

• December 31, 2017 2,420,286 2.6

• 2,157,531 2.7

• 253,639 0.3

• 226,890 1.4

• 251,846 13.0

Reference:	Adjusted operating income for the fiscal year ending December 31, 2018	250,955million	(1.8) %
Adjusted operating income for the fiscal year ending December 31, 2017	255,445million	3.2 %

Adjusted operating income was calculated as operating income excluding non-recurring items.

Profit attributable to owners of the

Company ¥million %

• 140,151 (33.7)

• 211,448 13.9

(2) Financial positions

(3) Cash flows

2. Dividends

Fiscal year ended

December 31, 2018 December 31, 2017

Dividends per share

(Annual)Total cash dividends

(Annual)Dividend payout ratio

(Consolidated)Ratio of dividends to equity attributable to owner of the Company

13 .00

13 .00

Yen

Millions of yen

8,913

8,914

% 6.4 4.2

% 0.7 0.8

3. Consolidated earnings forecast for the fiscal year ending December 31, 2019

(January 1, 2019 - December 31, 2019)

Reference:

Adjusted operating income for the fiscal year ending December 31, 2019

254,000million

1.2 %

SUMMARY OF NON-CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2018 (English Translation, UNAUDITED)

(1) Operating results

(% figures represent change from the same period of the previous fiscal year)

(2) Financial positions

Total assets

As of

¥millionDecember 31, 2018 2,074,343

December 31, 2017 2,180,181

Net assets

Ratio of equity to total assets

Total equity per share

¥million 743,190 689,632

% 35.8 31.6

¥

1,083.75

1,005.80

Operating Results

1. Overview of the Twelve-Month Period Ended December 31, 2018

The Suntory Group has actively expanded business in each of three segments, "Non-Alcoholic Beverages and Food," "Alcoholic Beverages," and "Other Businesses," both domestically and abroad. In the fiscal year under review, revenue (excluding excise taxes) grew by 4.3% over the same period of the previous year to 2.2508 trillion yen, while revenue (including excise taxes) came to 2.5173 trillion yen, an increase of 4.0% from the same period of the previous year. Operating income fell by 1.1% to 250.9 billion yen, and profit attributable to owners of the Company was 140.2 billion yen (down 33.7% over the same period of the previous year).

Suntory Beverage & Food Limited focused on strengthening brands and creating new demand with the aim of proposing unique, high-quality products that capture the customer's tastes and needs to further enrich customer lifestyles, as well as improving product quality of the entire Group.

In Japan, the Company aimed to create new demand by offering products with new value and by strengthening core brands, mainly in the categories of water, coffee and sugar-free tea, resulting in sales volume exceeding the level of the same period of the previous year. Suntory Tennensui flagship mineral water products remained strong, while sales of Suntory Minami-Alps Tennensui Sparkling series also grew substantially, and operating volume for the brand as a whole significantly exceeded the level of the same period of the previous year. As a result, Tennensui became the number one brand*1 in the domestic soft drinks market in terms of annual sales volume in 2018. In the BOSS brand, we continued to actively expand marketing initiatives for canned coffee. Craft BOSS continued to be well-received by customers, and the annual sales volume for the brand as a whole surpassed 100 million cases. In the sugar-free tea category, overall sales of the Iyemon brand fell short of where they were the same period of the previous year due to the decline in Tokucha, but the Green DAKARA Yasashii Mugicha sales volume increased substantially.

In Europe, the Company aggressively invested in marketing, primarily for flagship brands. In France, in addition to year-on-year growth in sales volumes for Orangina and Oasis, MayTea sales were also strong. In the United Kingdom, the sales volume for Lucozade exceeded the level of the same period of the previous year. In Spain, the Company worked to expand the number of Schweppes consumer contact points, but sales volumes for the brand fell below thelevel of the same period of the previous year.

In Asia, the Company worked to expand sales of flagship brands in key areas. In the soft drinks business, sales exceeded the same period of the previous year in Vietnam owing to strong sales of Sting energy drink as well as growth recorded for TEA+, Aquafina bottled water, carbonated beverages, and others. Additionally, the joint venture with PepsiCo, Inc. in Thailand launched its business. In the health food business, sales fell short of where they were the same period of the previous year despite stronger marketing efforts in the core market of Thailand.

In Oceania, the Group worked primarily to strengthen flagship brands. In the Frucor Suntory Group, energy drinks such as V put in strong performances. In the fresh coffee business, the Company continued its efforts to strengthen flagship brands such as TOBY'S ESTATE, L'AFFARE and Mocopan.

In the United States, flagship carbonated beverage brands continued to struggle, but there were signs of recovery.

*1. Based on results of survey by the beverage research institute Inryo Soken

As a result of the above, revenue for the Non-Alcoholic Beverages and Food Segment increased 4.9% year on year to 1.2866 trillion yen, while operating income decreased by 2.5% to 135.3 billion yen.

The revenue figures for the Alcoholic Beverages Segment exclude excise taxes.

Full-year comparable revenue for Beam Suntory Inc. increased at a mid-single-digit rate, driven by share gains in the United States and Japan, the company's two largest markets. Full-year sales grew at a mid-single-digit rate in the United States and Oceania, a high-single-digit rate in Europe, and a double-digit rate in India, Southeast Asia and China. The company's Japan business (Suntory Spirits Limited) delivered 3% year-on-year sales growth.

Jim Beam bourbon continued its strong momentum with high-single-digit global volume growth, exceeding 10 million cases sold in 2018. Maker's Mark grew volume at a double-digit rate, surpassing two million cases sold for the first time. High-single-digit growth for Courvoisier cognac and Canadian Club whisky, plus double-digit gains for premium brands including Hornitos tequila, Basil Hayden's bourbon and Sipmsith gin added to the company's performance. ROKU Japanese Craft Gin, jointly developed in the United States and Japan, was rolled out to 31 countries and territories and inspired strong sales.

In Japan, whisky delivered strong growth, driven by strategic brands Kakubin, Jim Beam, Torys and Maker's Mark. RTD beverage sales volume grew by 10% year on year, owing to strong performance by -196ºC Strong Zero, which consumers are increasingly pairing with