English Translation
August 5, 2020
Summary of Consolidated Financial Results | |
for the First Six Months of the Year Ending December 31, 2020 | |
(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: +81-3-3275-7022 (from overseas) |
Scheduled date to file quarterly securities report: | August 12, 2020 |
Scheduled date to commence dividend payments: | September 2, 2020 |
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 six months of the year ending December 31, 2020 (from January 1, 2020 to June 30, 2020)
(1) | Consolidated operating results | |||||||||
(Percentages indicate year-on-year changes) | ||||||||||
Revenue | Operating income | Profit before tax for the | Profit for the period | |||||||
period | ||||||||||
Six months ended | (Millions of yen) | (%) | (Millions of yen) | (%) | (Millions of yen) | (%) | (Millions of yen) | (%) | ||
June 30, 2020 | 552,529 | (12.0) | 35,712 | (29.8) | 35,113 | (29.7) | 26,558 | (28.8) | ||
June 30, 2019 | 627,770 | 2.3 | 50,900 | (9.7) | 49,922 | (10.4) | 37,296 | (18.0) | ||
Profit for the period | Comprehensive income | Basic earnings | Diluted earnings | |||||||
attributable to owners of | ||||||||||
for the period | per share | per share | ||||||||
the Company | ||||||||||
Six months ended | (Millions of yen) | (%) | (Millions of yen) | (%) | (Yen) | (Yen) | ||||
June 30, 2020 | 20,922 | (34.1) | 5,666 | (75.3) | 67.71 | - | ||||
June 30, 2019 | 31,770 | (23.1) | 22,919 | 30.3 | 102.82 | - | ||||
(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) | (%) | ||||||
June 30, 2020 | 1,603,147 | 828,887 | 746,446 | 46.6 | ||||||
December 31, 2019 | 1,567,299 | 837,565 | 756,568 | 48.3 | ||||||
(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 | |
Six months ended | (Millions of yen) | (Millions of yen) | (Millions of yen) | (Millions of yen) |
June 30, 2020 | 43,897 | (30,662) | 28,869 | 183,288 |
June 30, 2019 | 51,866 | (30,880) | (63,894) | 103,326 |
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, 2019 | ||||||
Year ending | - | 39.00 | ||||
December 31, 2020 | ||||||
Year ending | ||||||
December 31, 2020 | - | 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, 2020 (from January 1, 2020 to December 31, 2020)
(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 | - | - | - | - | - | - | - | - | - | - | - | |
December 31, 2020 | ||||||||||||
Note: | Revisions to the earnings forecast most recently announced: Yes |
The consolidated earnings forecast for the year ending December 31, 2020 has been withdrawn as the Company has judged that it is difficult to estimate financial results currently. Going forward, the Company will announce the forecast once it is formulated after considering the impacts of COVID-19 and other risk factors.
* Notes
- Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
- 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 |
- Number of issued shares (ordinary shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As at June 30, 2020 | 309,000,000 shares |
As at December 31, 2019 | 309,000,000 shares |
- Number of treasury shares at the end of the period
As at June 30, 2020 | 3 shares |
As at December 31, 2019 | 3 shares |
- Average number of outstanding shares during the period (cumulative from the beginning of the year)
Six months ended June 30, 2020 | 308,999,997 shares |
Six months ended June 30, 2019 | 309,000,000 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
Consolidated earnings forecast and other forward-looking statements ........................................... |
2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto
- 1 -
1. Qualitative Information Regarding Settlement of Accounts for the First Six Months
-
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.
However, the impact of the novel coronavirus disease (COVID-19) currently spreading globally has greatly changed the environment of each major country. The effect on businesses of the Group both in Japan and overseas became severe from March onwards. In particular, the effect of lockdowns and requests for voluntary business shutdowns issued by each major country from April through May pushed down revenue. Following the lifting of lockdowns and requests for voluntary business shutdowns in June, human activity increased and the Group's businesses are on a recovery track, but a growing number of infected cases is being reported again in some countries. We will keep an eye on the situation going forward. On the other hand, in terms of profit, we reduced costs, rescheduled investment in marketing expenses and engaged in other productivity initiatives, but profit decreased due to the impact of a decrease in sales.
As a result of the above, for the operating results of the first six months of the year ending December 31, 2020, the Group reported consolidated revenue of ¥552.5 billion, down 12.0% year on year. Consolidated operating income was ¥35.7 billion, down 29.8% year on year. Profit for the period attributable to owners of the Company was ¥20.9 billion, down 34.1% year on year.
Results by segment are described below.
< Japan business >
The Group worked on strengthening core brands with a focus on water, coffee, and sugar-free tea categories, but sales volume dropped year on year, despite outperforming the overall beverage market, due to the effects of COVID-19. Sales volume for the Suntory Tennensui brand as a whole decreased only slightly year on year with growing demand for large formats for stockpiling at home and the renewal of Suntory Tennensui Sparkling Lemon being contributing factors. For the BOSS brand, despite an active rollout of marketing activities and our efforts to revitalize the market through the new launch of Craft BOSS LEMON TEA, sales volume for the BOSS brand as a whole was lower year on year. In the sugar-free tea category, we carried out the most significant renewal of the Iyemon brand since launch in April, with the aim of creating a bottled green tea that allows customers to enjoy "green tea that is like freshly brewed tea." As a result of this, sales volume for the brand as a whole increased year on year. The overall sales volume for the GREEN DAKARA brand increased year on year with Green DAKARA Yasashii Mugicha remaining strong.
In terms of profit, we undertook initiatives to reduce the cost of ingredients, carried out cost-cutting activities, and also worked to improve efficiency in the use of marketing expenses, but the decline in sales volume and the change of channel mix impacted negatively.
As a result, the Japan business reported revenue of ¥298.7 billion, down 11.1% year on year, and segment profit of ¥11.1 billion, down 51.2% year on year.
< Europe business >
In France, sales volume for the core brands Orangina and Oasis posted a year-on-year decline due to the impact of COVID-19 from March onwards. In the UK, the Lucozade Energy brand recorded a strong performance, but the self-restraint in relation to sporting activity had a significant impact, and Lucozade Sport brand sales volume declined year on year. In Spain, sales volume for the core Schweppes brand was firm in the off-premise channel, but down year on year in the on-premise
- 2 -
channel due to the significant impact of the lockdown.
In terms of profit, despite the contributions from working to improve efficiency in the use of marketing expenses and reducing the cost of ingredients, profit declined due to the impact of the decrease in sales.
As a result, the Europe business reported revenue of ¥87.7 billion, down 21.1% year on year, and segment profit of ¥10.5 billion, down 28.2% year on year.
< Asia business >
In the beverage business, sales slightly decreased year on year both in Vietnam and Thailand due to the impact of COVID-19, but currently are on a recovery track.
Regarding the health supplement business, the Group promoted its initiatives for mainstay product BRAND'S Essence of Chicken in Thailand, but sales of BRAND'S Bird's Nest struggled due to a decline in tourists from China, resulting in a year-on-year drop.
As a result, the Asia business reported revenue of ¥104.5 billion, down 9.3% year on year. Segment profit was ¥14.7 billion, up 15.5% year on year.
< Oceania business >
Regarding the beverage business, in addition to focusing efforts on strengthening marketing for energy drinks such as V, the Group worked on strengthening its core brands in the fresh coffee business. However, sales declined year on year due to the impact of COVID-19.
As a result, the Oceania business reported revenue of ¥23.1 billion, down 9.2% year on year, and segment profit of ¥1.9 billion, down 25.4% year on year.
< Americas business >
In addition to further strengthening sales of the core carbonated beverage brand products, the Group also focused on the growing non-carbonated beverage category, which included water and RTD coffee, but sales declined year on year due to the impact of COVID-19.
As a result, the Americas business reported revenue of ¥38.6 billion, down 3.4% year on year, and segment profit of ¥2.9 billion, down 22.1% year on year.
-
Financial position
Total assets as of June 30, 2020 stood at ¥1,603.1 billion, an increase of ¥35.8 billion compared to December 31, 2019. The main factors were increases in cash and cash equivalents, and trade and other receivables.
Total liabilities stood at ¥774.3 billion, an increase of ¥44.5 billion compared to December 31, 2019. This was due in part to an increase in bonds and borrowings.
Total equity stood at ¥828.9 billion, a decrease of ¥8.7 billion compared to December 31, 2019, due in part to a decrease in other components of equity. - Analysis of cash flows
Cash and cash equivalents as at June 30, 2020 amounted to ¥183.3 billion, an increase of ¥39.7 billion compared to December 31, 2019.
Net cash inflow from operating activities was ¥43.9 billion, a decrease of ¥8.0 billion compared to the same period of the previous year. This was mainly the result of an increase in trade and other receivables of ¥13.2 billion, and an increase in inventories of ¥10.4 billion, despite profit before tax for the period of ¥35.1 billion, and depreciation and amortization of ¥35.3 billion.
Net cash outflow from investing activities was ¥30.7 billion, a decrease of ¥0.2 billion compared to the same period of the previous year. This was mainly the result of the payments for property, plant and equipment and intangible assets of ¥31.1 billion.
Net cash inflow from financing activities was ¥28.9 billion, an increase of ¥92.8 billion compared to the same period of the previous year. This was mainly the result of an increase in short-term - 3 -
borrowings and commercial paper of ¥53.0 billion and proceeds from long-term borrowings of ¥30.0 billion.
-
Consolidated earnings forecast and other forward-looking statements
The impact of COVID-19 currently spreading globally has greatly changed the business environment of each major country, and the effect on businesses of the Group both in Japan and overseas became severe from March onwards.
Although business has been on a recovery trend, with increased human activity since June as a result of the lifting of lockdowns and of requests to refrain from business operations, we cannot rule out further impacts due to the risk of COVID-19, unfavorable weather and other uncertainties.
As a result, the consolidated earnings forecast for the year ending December 31, 2020 has been withdrawn as the Company has judged that it is difficult to estimate financial results currently. Going forward, the Company will announce the forecast once it is formulated after considering these impacts.
Revision to the consolidated earnings forecast for the year ending December 31, 2020 (from January 1, 2020 to December 31, 2020)
Profit for the | ||||||
Revenue | Operating | Profit before tax | Profit for the | year attributable | Basic earnings | |
income | year | to owners of the | per share | |||
Company | ||||||
(Millions of yen) | (Millions of yen) | (Millions of yen) | (Millions of yen) | (Millions of yen) | (Yen) | |
Previous forecast (A) | 1,338,000 | 117,000 | 115,500 | 83,000 | 70,000 | 226.54 |
Revised forecast (B) | - | - | - | - | - | - |
Change in amount | - | - | - | - | - | - |
(B-A) | ||||||
Change (%) | - | - | - | - | - | - |
(Reference) | ||||||
Actual results | 1,299,385 | 113,948 | 112,186 | 80,080 | 68,888 | 222.94 |
for the year ended | ||||||
December 31, 2019 | ||||||
- 4 -
2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto (Unaudited)
- Condensed quarterly consolidated statement of financial position
Millions of yen | |||
As at December 31, | As at June 30, | ||
2019 | 2020 | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | 143,564 | 183,288 | |
Trade and other receivables | 191,240 | 201,493 | |
Other financial assets | 6,200 | 1,814 | |
Inventories | 84,916 | 93,769 | |
Other current assets | 20,287 | 25,295 | |
Subtotal | 446,210 | 505,660 | |
Assets held for sale | 104 | 0 | |
Total current assets | 446,314 | 505,660 | |
Non-current assets: | |||
Property, plant and equipment | 372,036 | 364,076 | |
Right-of-use assets | 47,446 | 49,190 | |
Goodwill | 247,851 | 245,016 | |
Intangible assets | 411,374 | 393,424 | |
Investments accounted for using the equity method | 1,107 | 921 | |
Other financial assets | 17,162 | 17,000 | |
Deferred tax assets | 14,428 | 17,152 | |
Other non-current assets | 9,575 | 10,704 | |
Total non-current assets | 1,120,984 | 1,097,486 | |
Total assets | 1,567,299 | 1,603,147 |
- 5 -
Millions of yen | |||
As at December 31, | As at June 30, | ||
2019 | 2020 | ||
Liabilities and equity | |||
Liabilities | |||
Current liabilities: | |||
Bonds and borrowings | 74,652 | 108,525 | |
Trade and other payables | 322,455 | 319,333 | |
Other financial liabilities | 38,444 | 41,065 | |
Accrued income taxes | 18,815 | 16,292 | |
Provisions | 1,511 | 1,690 | |
Other current liabilities | 6,026 | 7,579 | |
Total current liabilities | 461,905 | 494,486 | |
Non-current liabilities: | |||
Bonds and borrowings | 132,716 | 144,090 | |
Other financial liabilities | 45,752 | 48,071 | |
Post-employment benefit liabilities | 15,405 | 15,846 | |
Provisions | 2,557 | 2,210 | |
Deferred tax liabilities | 65,835 | 64,007 | |
Other non-current liabilities | 5,561 | 5,547 | |
Total non-current liabilities | 267,828 | 279,773 | |
Total liabilities | 729,733 | 774,260 | |
Equity | |||
Share capital | 168,384 | 168,384 | |
Share premium | 182,349 | 182,431 | |
Retained earnings | 464,705 | 473,573 | |
Treasury shares | (0) | (0) | |
Other components of equity | (58,870) | (77,942) | |
Total equity attributable to owners of the Company | 756,568 | 746,446 | |
Non-controlling interests | 80,997 | 82,440 | |
Total equity | 837,565 | 828,887 | |
Total liabilities and equity | 1,567,299 | 1,603,147 |
- 6 -
(2) Condensed quarterly consolidated statement of profit or loss
Millions of yen
Six months ended | Six months ended | |||
June 30, 2019 | June 30, 2020 | |||
Revenue | 627,770 | 552,529 | ||
Cost of sales | (368,589) | (327,330) | ||
Gross profit | 259,180 | 225,199 | ||
Selling, general and administrative expenses | (206,778) | (188,639) | ||
Gain on investments accounted for using the equity method | (7) | (83) | ||
Other income | 876 | 1,520 | ||
Other expenses | (2,370) | (2,284) | ||
Operating income | 50,900 | 35,712 | ||
Finance income | 738 | 587 | ||
Finance costs | (1,716) | (1,186) | ||
Profit before tax for the period | 49,922 | 35,113 | ||
Income tax expense | (12,625) | (8,555) | ||
Profit for the period | 37,296 | 26,558 | ||
Attributable to: | ||||
Owners of the Company | 31,770 | 20,922 | ||
Non-controlling interests | 5,525 | 5,635 | ||
Profit for the period | 37,296 | 26,558 | ||
Earnings per share (Yen) | 102.82 | 67.71 |
- 7 -
- Condensed quarterly consolidated statement of comprehensive income Millions of yen
Six months ended | Six months ended | |||
June 30, 2019 | June 30, 2020 | |||
Profit for the period | 37,296 | 26,558 | ||
Other comprehensive income | ||||
Items that will not be reclassified to profit or loss: | ||||
Changes in the fair value of financial assets | 219 | (691) | ||
Remeasurement of post-employment benefit plans | (478) | (81) | ||
Total | (259) | (773) | ||
Items that may be reclassified to profit or loss: | ||||
Translation adjustments of foreign operations | (13,886) | (19,906) | ||
Changes in the fair value of cash flow hedges | (219) | (161) | ||
Changes in comprehensive income of investments | (11) | (51) | ||
accounted for using the equity method | ||||
Total | (14,117) | (20,118) | ||
Other comprehensive income for the period, net of tax | (14,376) | (20,891) | ||
Comprehensive income for the period | 22,919 | 5,666 | ||
Attributable to: | ||||
Owners of the Company | 18,438 | 1,846 | ||
Non-controlling interests | 4,481 | 3,819 | ||
Comprehensive income for the period | 22,919 | 5,666 | ||
- 8 -
- Condensed quarterly consolidated statement of changes in equity Six months ended June 30, 2019
Millions of yen
Attributable to owners of the Company
Balance at December 31, 2018 Cumulative effect of adopting new accounting standards
Balance at January 1, 2019 Profit for the period
Other comprehensive income Total comprehensive income for the period
Dividends
Transactions with non-controlling interests
Reclassification to retained earnings
Total transactions with owners of the Company
Balance at June 30, 2019
Other | Non- | Total | ||||||||||||
Share | Share | Retained | Treasury | compo- | Total | controlling | equity | |||||||
capital | premium | earnings | shares | nents of | ||||||||||
interests | ||||||||||||||
equity | ||||||||||||||
168,384 | 182,349 | 420,638 | - | (56,548) | 714,823 | 84,054 | 798,877 | |||||||
(710) | (710) | (165) | (876) | |||||||||||
168,384 | 182,349 | 419,927 | - | (56,548) | 714,112 | 83,888 | 798,000 | |||||||
31,770 | 31,770 | 5,525 | 37,296 | |||||||||||
(13,332) | (13,332) | (1,044) | (14,376) | |||||||||||
- | - | 31,770 | - | (13,332) | 18,438 | 4,481 | 22,919 | |||||||
(12,051) | (12,051) | (2,818) | (14,869) | |||||||||||
- | (2) | (2) | ||||||||||||
(12) | 12 | - | - | |||||||||||
- | - | (12,063) | - | 12 | (12,051) | (2,821) | (14,872) | |||||||
168,384 | 182,349 | 439,634 | - | (69,868) | 720,499 | 85,548 | 806,048 | |||||||
Six months ended June 30, 2020
Millions of yen
Attributable to owners of the Company
Balance at January 1, 2020 Profit for the period
Other comprehensive income Total comprehensive income for the period
Dividends
Transactions with non-controlling interests
Reclassification to retained earnings
Total transactions with owners of the Company
Balance at June 30, 2020
Other | Non- | Total | ||||||||||||
Share | Share | Retained | Treasury | compo- | Total | controlling | equity | |||||||
capital | premium | earnings | shares | nents of | ||||||||||
interests | ||||||||||||||
equity | ||||||||||||||
168,384 | 182,349 | 464,705 | (0) | (58,870) | 756,568 | 80,997 | 837,565 | |||||||
20,922 | 20,922 | 5,635 | 26,558 | |||||||||||
(19,075) | (19,075) | (1,816) | (20,891) | |||||||||||
- | - | 20,922 | - | (19,075) | 1,846 | 3,819 | 5,666 | |||||||
(12,050) | (12,050) | (2,320) | (14,371) | |||||||||||
82 | 82 | (54) | 27 | |||||||||||
(3) | 3 | - | - | |||||||||||
- | 82 | (12,054) | - | 3 | (11,968) | (2,375) | (14,344) | |||||||
168,384 | 182,431 | 473,573 | (0) | (77,942) | 746,446 | 82,440 | 828,887 | |||||||
- 9 -
(5) Condensed quarterly consolidated statement of cash flows
Millions of yen
Six months ended | Six months ended |
June 30, 2019 | June 30, 2020 |
Cash flows from operating activities Profit before tax for the period
Depreciation and amortization
Impairment losses (reversal of impairment losses) Interest and dividends income
Interest expense
Loss (gain) on investments accounted for using the equity method
Decrease (increase) in inventories
Decrease (increase) in trade and other receivables Increase (decrease) in trade and other payables Other
Subtotal
Interest and dividends received Interest paid
Income tax paid
Net cash inflow (outflow) from operating activities
Cash flows from investing activities
Payments for property, plant and equipment and intangible assets
Proceeds on sale of property, plant and equipment and intangible assets
Payments for purchase of shares of subsidiaries Other
Net cash inflow (outflow) from investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings and commercial papers
Proceeds from long-term borrowings Repayments of long-term borrowings Redemption of bonds
Payments of lease liabilities
Dividends paid to owners of the Company Dividends paid to non-controlling interests Other
Net cash inflow (outflow) from financing activities
Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period
49,922 | 35,113 | |
35,605 | 35,311 | |
(6) | 170 | |
(695) | (576) | |
1,345 | 1,127 | |
7 | 83 | |
(14,006) | (10,420) | |
(39,921) | (13,231) | |
36,603 | 6,730 | |
(2,392) | 2,565 | |
66,461 | 56,874 | |
650 | 633 | |
(1,270) | (1,311) | |
(13,974) | (12,297) | |
51,866 | 43,897 | |
(29,803) | (31,138) | |
55 | 154 | |
(900) | - | |
(232) | 321 | |
(30,880) | (30,662) | |
11,011 | 52,959 | |
- | 30,000 | |
(27,331) | (32,194) | |
(25,000) | - | |
(7,568) | (6,864) | |
(12,051) | (12,050) | |
(2,818) | (2,979) | |
(136) | - | |
(63,894) | 28,869 | |
(42,908) | 42,104 | |
146,535 | 143,564 | |
(300) | (2,381) | |
103,326 | 183,288 | |
- 10 -
- Notes to condensed quarterly consolidated financial statements (Going concern)
The condensed quarterly consolidated financial statements are prepared on going concern basis.
- 11 -
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Disclaimer
Suntory Beverage & Food Limited published this content on 05 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2020 06:06:11 UTC