Suntory Beverage & Food : Summary of Consolidated Financial Results for Q1 2021

English Translation

May 12, 2021

Summary of Consolidated Financial Results

for the First Three Months of the Year Ending December 31, 2021

(UNAUDITED)

Company name:	Suntory Beverage & Food Limited
Shares listed:	First Section, Tokyo Stock Exchange
Securities code:	2587
URL:	https://www.suntory.com/sbf/
Representative:	Kazuhiro Saito, Chief Executive Officer
Inquiries:	Takayuki Sanno, Chief Financial Officer, Corporate Strategy Division
	TEL: [phone] (from overseas)

Scheduled date to file quarterly securities report:	May 13, 2021
Scheduled date to commence dividend payments:	-
Attachment of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results briefing meeting (for institutional investors and analysts):	Yes

(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated financial results for the first three months of the year ending December 31, 2021 (from January 1, 2021 to March 31, 2021)

(1) Consolidated operating results

(Percentages indicate year-on-year changes)

		Revenue		Operating income	Profit before tax for the	Profit for the period
			period
	Three months ended	(Millions of yen)	(%)	(Millions of yen)	(%)	(Millions of yen)	(%)	(Millions of yen)	(%)
	March 31, 2021	269,791	(2.7)	19,804	(0.2)	19,532	(1.1)	14,546	(7.0)
	March 31, 2020	277,244	(3.0)	19,843	11.6	19,757	13.0	15,642	17.8
		Profit for the period	Comprehensive income	Basic earnings	Diluted earnings
		attributable to owners of
		for the period	per share		per share
		the Company
	Three months ended	(Millions of yen)	(%)	(Millions of yen)	(%)		(Yen)		(Yen)
	March 31, 2021	10,668	(16.2)	44,415	-		34.53		-
	March 31, 2020	12,726	18.8	(14,255)	-		41.18		-
(2) Consolidated financial position
								Ratio of equity attributable
		Total assets		Total equity	Equity attributable to	to owners of
			owners of the Company	the Company
								to total assets
	As at	(Millions of yen)	(Millions of yen)	(Millions of yen)		(%)
	March 31, 2021	1,628,175		891,906		806,237		49.5
	December 31, 2020	1,574,251		859,556		781,755		49.7

(3) Consolidated cash flows

	Net cash inflow (outflow)	Net cash inflow (outflow)	Net cash inflow (outflow)	Cash and cash equivalents
	from operating activities	from investing activities	from financing activities	at the end of the period
Three months ended	(Millions of yen)	(Millions of yen)	(Millions of yen)	(Millions of yen)
March 31, 2021	34,636	(13,570)	(15,111)	176,387
March 31, 2020	14,240	(16,583)	(6,743)	130,004

2. Dividends

				Annual cash dividends
		First quarter-end	Second quarter-end	Third quarter-end	Year-end	Total
		(Yen)	(Yen)	(Yen)	(Yen)	(Yen)
Year ended	-	39.00	-	39.00	78.00
December 31, 2020
Year ending	-
December 31, 2021
Year ending
December 31, 2021		39.00	-	39.00	78.00
(Forecast)
Note:	Revisions to the forecast of dividends most recently announced: None

3. Consolidated earnings forecast for the year ending December 31, 2021 (from January 1, 2021 to December 31, 2021)

(Percentages indicate year-on-year changes)

Profit for the year

Revenue

Operating income

Profit before tax

Profit for the year

attributable to

Basic earnings

owners of

per share

the Company

(Millions of

(%)

(Millions of

(%)

(Millions of

(%)

(Millions of

(%)

(Millions of

(%)

(Yen)

yen)

yen)

yen)

yen)

yen)

Year ending

1,260,000

6.9

105,000

9.2

103,500

9.9

73,500

14.3

60,500

15.9

195.79

December 31, 2021

Note:

Revisions to the earnings forecast most recently announced: None

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates

a.	Changes in accounting policies required by IFRS:	None
b.	Changes in accounting policies due to other reasons:	None
c.	Changes in accounting estimates:	None

1. Number of issued shares (ordinary shares)
   a. Total number of issued shares at the end of the period (including treasury shares)

As at March 31, 2021	309,000,000 shares
As at December 31, 2020	309,000,000 shares

1. Number of treasury shares at the end of the period

As at March 31, 2021	3 shares
As at December 31, 2020	3 shares

1. Average number of outstanding shares during the period (cumulative from the beginning of the year)

Three months ended March 31, 2021	308,999,997 shares
Three months ended March 31, 2020	308,999,997 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecast, and other special matters

The earnings forecast contained in these materials are based on our judgment attributable to information available to the Company and the Group as of the date of announcement of these materials, and include certain risks and uncertainties. These statements are not intended as a promise by the Company to achieve such results. Actual business results may differ substantially due to various factors such as economic situation surrounding the Company and the Group, market trend, exchange rates and other factors.

Attached Materials

Index

1.	Qualitative Information Regarding Settlement of Accounts for the First Three Months.................	2
(1)	Operating results ..............................................................................................................................	2
(2)	Financial position.............................................................................................................................	3
(3)	Analysis of cash flows .....................................................................................................................	4
(4)	Consolidated earnings forecast and other forward-looking statements ...........................................	4

2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto

(Unaudited)..................................................................................................................................................	5
(1)	Condensed quarterly consolidated statement of financial position..................................................	5
(2)	Condensed quarterly consolidated statement of profit or loss .........................................................	7
(3)	Condensed quarterly consolidated statement of comprehensive income.........................................	8
(4)	Condensed quarterly consolidated statement of changes in equity..................................................	9
(5)	Condensed quarterly consolidated statement of cash flows...........................................................	10
(6)	Notes to condensed quarterly consolidated financial statements ...................................................	11
	(Going concern) .............................................................................................................................	11

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1. Qualitative Information Regarding Settlement of Accounts for the First Three Months

1. Operating results
   Suntory Beverage & Food Limited Group (the Group), based on the philosophy of enriching consumers' lives by proposing premium and unique products that match the tastes and needs of consumers, put effort into brand reinforcement and new demand creation, and worked to improve the quality of products. In addition, the Group worked to strengthen profitability in each area.
   Whereas the novel coronavirus disease (COVID-19) pandemic has continued to affect respective countries since the end of last year, there has been a marked return in human activity since March as authorities ease restrictions particularly with respect to lockdowns and requests for voluntary business shutdowns mainly in Japan and Europe. As such, we achieved progress beyond our expectations in the first quarter amid a situation where the Company's business has been on a steady recovery trend underpinned by this external environment.
   As a result of the above, for the operating results of the first three months of the year ending December 31, 2021, the Group reported consolidated revenue of ¥269.8 billion, down 2.7% year on year. Consolidated operating income was ¥19.8 billion, down 0.2% year on year. Furthermore, profit for the period attributable to owners of the Company was ¥10.7 billion, down 16.2% year on year.
   Results by segment are described below.
   The Company implemented changes to its organization on January 1, 2021, to achieve dramatic growth in key markets in the Asia and Oceania regions. As a result of this restructuring, the reportable segments, which until now comprised "Japan business," "Europe business," "Asia business," "Oceania business," and "Americas business," effective from the first three months of the year ending December 31, 2021, comprise "Japan business," "Asia Pacific business," "Europe business," and "Americas business." To present comparisons with the previous corresponding periods, the figures for the first three months of the year ended December 31, 2020, have been reclassified into the reportable segments after the change.

< Japan business >

Performance of the overall beverage market presumably underperformed that of the same period of the previous fiscal year largely due to effects of restrictions imposed on human activity as a result of the government having prolonged its state of emergency declaration. Although the Company's sales volume also dropped year on year, its market share increased amid initiatives to strengthen its core brands with a focus on the water, coffee, and sugar-free tea categories.

Sales volume for the Suntory Tennensui brand as a whole decreased slightly year on year as a result of sales of large PET bottle format product lapping higher stock piling demand for such products in March 2020, but sales of the Suntory Tennensui Sparkling series increased substantially as a result of our having tapped in-home demand. For the BOSS brand, although sales of the brand as a whole were lower year on year, there was a substantial increase in sales of the Craft BOSS series, which was renewed in March. In the sugar-free tea category, overall sales volume of the Iyemon brand greatly exceeded that of the same period of the previous year due to renewal of the Iyemon brand and contribution of Iyemon Koi Aji, which was newly released in February.

In terms of profit, we carried out cost reduction activities, and also worked to improve efficiency in the use of sales promotion and advertising costs, but the decline in sales volume and the change of channel mix continued to have a negative impact.

As a result, the Japan business reported revenue of ¥134.2 billion, down 8.6% year on year, and segment profit of ¥4.0 billion, down 44.0% year on year.

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