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RNS Number:5646O
Kirin Brewery Co Ld
12 August 2003
PART 1
KIRIN BREWERY COMPANY, LIMITED August 8, 2003
SUMMARY OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF JUNE 30, 2003 (UNAUDITED)
(English Translation)
Fiscal year ended December 31, 2003
KIRIN BREWERY COMPANY, LIMITED
10-1, Shinkawa 2-chome, Chuo-ku, Tokyo, Japan (URL http://www.kirin.co.jp/english/)
Code No.: 2503
Shares Listed: Tokyo, Osaka, Nagoya, Fukuoka and Sapporo
Representative: Mr. Koichiro Aramaki, President
For further information, please contact: Mr. Hideo Mori, General Manager,
Communications Dept.
Telephone: 81- 3- 5540- 3450 from overseas
Date of the Board of Directors' Meeting for the semi-annual operation results: August 8, 2003
Whether US GAAP is applied: None
1. Business results and financial positions for the first half of the current fiscal year
(January 1, 2003 - June 30, 2003) (Unit: Japanese yen )
(1) Results of operations: (Fractions less than 1 million yen have been omitted.)
Sales Percentage Operating Percentage Income before Percentage
(millions yen ) change income change extraordinary items change
(%) (millions yen ) (%) (millions yen ) (%)
6 months ended June 30, 732,812 0.7 37,576 11.2 39,015 29.0
2003
6 months ended June 30, 727,889 (2.7) 33,799 (6.6) 30,252 (13.7)
2002
Year ended December 31, 1,583,248 89,789 84,443
2002
Net income Percentage Net income Net income
change per share per share
(millions yen ) primary diluted
(%) (yen) (yen)
6 months ended June 30, 13,931 35.0 14.42 -
2003
6 months ended June 30, 10,322 (27.4) 10.50 -
2002
Year ended December 31, 32,540 33.26 -
2002
Notes : 1. Equity in earnings of affiliates:
June 30, 2003 2,479 million yen
June 30, 2002 87 million yen
December 31, 2002 2,102 million yen
2. Average number of shares of common stock outstanding during the period(Consolidated):
June 30, 2003 966,404,828 shares
June 30, 2002 983,440,362 shares
December 31, 2002 978,318,065 shares
3. Change in accounting policies: Yes
4. Percentage change means the ratio of increase or decrease in each item of business results for the 6
months ended June 30,2003 to those for the 6 months ended June 30, 2002.
(2) Financial positions:
Total assets Shareholders' Ratio of shareholders' Shareholders'
(millions yen ) equity equity to total assets equity per share
(millions yen ) (%) (yen)
June 30, 2003 1,712,634 780,951 45.6 808.16
June 30, 2002 1,779,274 775,637 43.6 792.16
December 31, 2002 1,744,131 769,227 44.1 795.71
Notes : :Number of shares of common stock issued and outstanding (Consolidated):
June 30, 2003 966,337,168 shares
June 30, 2002 979,140,556 shares
December 31, 2002 966,713,386 shares
(3) Cash flows :
Cash flows Cash flows Cash flows Cash and
from operating from investing from financing cash equivalents
activities activities activities at end of period
(millions yen ) (millions yen ) (millions yen ) (millions yen )
6 months ended June 30, 2003 23,528 (35,737) (19,271) 74,136
6 months ended June 30, 2002 26,708 (133,621) 63,014 99,692
Year ended December 31, 2002 87,750 (175,377) 50,699 105,625
(4)Scope of consolidation and application of equity method :
Consolidated subsidiaries: 315 companies
Subsidiaries under equity method: -
Affiliates applied by the equity method: 14 companies
(5)Changes in scope of consolidation and application of equity method :
Consolidation: Increase 11companies, Decrease 1companies
Equity method: Increase - Decrease 3 companies
2. Forecast of business results for the current fiscal year (January 1, 2003-December 31, 2003)
Sales Income before Net income
(millions yen ) extraordinary items (millions yen )
(millions yen )
Year ending December 31, 2003 1,610,000 87,000 33,000
Note: Forecasted net income per share 34.15 yen
Forecasted operating income 90,000 million yen
Refer to Page 9 for the assumptions and other matters related to the above forecast.
MANAGEMENT POLICIES
---------------------------------------------------------------------------------
1. Basic Kirin Group Management Policies
Based on its philosophy of contributing to the health, happiness and comfort of people around the world, the Kirin Group
has established the following five management policies:
(1)Priority on Customers and Quality
(2)Open and Fair Behavior
(3)Respect for People
(4)Sound Management
(5)Contribution to Society
Based on the above policies, the Kirin Group aims to be a corporate group that creates value to enrich the lives of
customers.
2. Fundamental Company Policy on Distribution of Profits
At Kirin, providing appropriate returns on income to shareholders is a top management priority, so that the Company has
never failed to provide an annual dividend without fail since its establishment in 1907. In the future as well, while
giving due consideration to matters such as strengthening the quality of management and business development, Kirin
believes that providing stable dividends is the way to meet shareholder demands. Retained earnings will be earmarked for
investment in businesses for future business investment.
3. Position and Policy on Reduction of the Stock Trading Unit
Kirin places importance on increasing its corporate value, expanding its shareholder base and increasing the liquidity
of its stock. The Company will seriously consider reducing the trading unit, taking into account the overall costs and
benefits.
4. Targeted Management Indicators
A key management objective is improving EVA * (a performance indicator) in order to strengthen the profit structure. By
investing in growth fields and strategically allocating resources to maximize efficacy and efficiency, the Kirin Group
aims to achieve its sales targets despite the turbulent market environment and build a solid corporate structure that
continues to generate earnings.
*EVA (Economic Value Added) is a registered trademark of Stern Stewart & Co.
5. Medium- to Long-term Management Strategy
The KG 21 Action Plan, a medium-term business plan covering the years 2001 to 2003, was announced in September 2000.
This plan will serve as the basis for structural reform of the entire Kirin Group, with the aim of creating a solid
management foundation. In addition, the domestic alcohol beverage business, centered on low-alcohol beverages, will be
restructured; Kirin Group companies will work together to be a business group that creates value to enhance the lives of
customers; and steps will be taken to strengthen product and marketing capabilities while increasing quality and
productivity.
6. Issues for the Kirin Group
(1) Structural Reform of the Kirin Group and Stronger Cooperation among Group Companies
Reorganization of Businesses
To promote group management, increase the corporate value of the Kirin Group and boost profitability, Kirin's
previous five main business segments and 15 business fields have been restructured into Core Businesses,
Core-related Businesses and Diversified Businesses.
Reform of Corporate Structure
Based on the new arrangement of businesses, begun in 2001, the structure of the Kirin Group's structure was
reorganized into a holding company, with business companies and internal business units renamed "companies."
Kirin Brewery operates both as a business company managing the domestic alcohol business, and as a holding
company overseeing each business and strengthening group operations.
Reform of Corporate Management
In 2001, EVA was adopted throughout the Kirin Group as a new performance indicator to evaluate the results and
progress of each business company and internal company.
(2) Increasing Corporate Value by Strengthening Profitability, with Core Businesses as the Nucleus
Shifting to a Comprehensive Alcohol Beverage Company Centered on Low-Alcohol Beverages
Kirin is focusing less on business limited to specific alcohol categories in favor of developing a comprehensive
alcohol business emphasizing beer, happo-shu, chu-hi drinks and other low-alcohol beverages. This repositioning
allows Kirin to satisfy the diverse tastes of its customers while providing maximum value.
Structural Reforms to Strengthen Group Competitiveness
In marketing divisions, Kirin si aiming to strengthen sales capabilities by building a customer-oriented
marketing structure adaptable to change in the business environment. In production divisions, new product
development is being accelerated and more advanced technology introduced to support Kirin's shift to a
comprehensive alcohol beverage company. Simultaneously, we will promote the creation of a highly efficient
production system. In distribution divisions, structural reforms will be carried out for administrative
operations.
Develop Diversified Businesses Centered on the Pharmaceutical Business
In the pharmaceutical business, Kirin will further strengthen its domestic sales system. To enhance the product
pipeline, we will concentrate resources in research, speed up development, and introduce new drug candidates
through in-licensing. We will also take steps to strengthen the business platforms of the agribio and nutrient
food and feed businesses.
(3) Coexistence with Society
With society placing increasing demands on companies in the future to earn public trust, the Kirin Group will
meet its social responsibility by conduct business activities in conformity with compliance measures. Kirin will
also continue to reinforce environmental management and conducting educational activities to promote responsible
drinking.
7. Policies Concerning the Management Structure
As part of its management structure reform Kirin revised the makeup of the Board of Directors, introducing an
executive officer system to clarify the responsibilities of the decision-making and operating functions. Reducing
the number of Directors and the establishment of an advisory board will enhance the top-level decision-making
function of the Board of Directors. The establishment of an Appointment Advisory Committee and Compensation
Advisory Committee will help increase transparency in management, and the establishment of new meeting bodies
will create a structure to support prompt decision-making by the executive officers.
The Company's corporate governance structure is as follows:
RESULTS OF OPERATIONS AND FINANCIAL POSITION
---------------------------------------------------------------------------------
1. Review of Operations
The Japanese economy showed a slight improvement in terms of corporate earnings, but the period was marked by
increasingly tight employment conditions and slow consumer spending, the country being unable to shake off the mood of
recession.
In the beer and happo-shu market, along with the long-term decline in consumption, the rise in the tax levied on
happo-shu, implemented in May as part of the reform of the tax structure, had a significant effect, as total demand fell
markedly from the same period of the previous year. The market for chu-hi and other low-alcohol beverages, however, rose
sharply from the same period of the previous year. In the wine, spirits and shochu market, sales of whiskey fell well
below the same period of the previous year. Sales of wine, on which taxes were raised, were flat compared to the same
period of the previous year, but sales of shochu continued to grow due to the drink's lower price and a change in
consumer preferences. The soft drinks market also suffered from the effects of a slowdown in consumption, overall demand
ended the period on par with that of the same period of the previous year. In the pharmaceutical industry, there were
lingering effects from lowering of drug prices implemented in April 2002.
Amid this difficult operating environment, Kirin continued to make efforts to increase customer support and achieve the
goals outlined in this final year of the three-year, medium-term business plan begun in 2001 (KG 21 Action Plan).
Consolidated sales for the period under review increased 0.7% from the same period of the previous year to 732.8 billion
yen, owing to an increase in sales in the soft drinks business, which offset a decline in beer sales. In terms of
profitability, although negative effects were felt from the lowering of prices for happo-shu, reform of the profit
structure led to a 11.2% increase in consolidated operating income to 37.5 billion yen, a 29.0% increase in income
before extraordinary items to 39.0 billion yen, and a 35.0% increase in net income to 13.9 billion yen.
The interim dividend was 6 yen per share.
Results by Business Segment
Alcohol Beverage Business
Kirin continued to strengthen cooperation within the Group in order to develop a comprehensive alcohol business, while
making strategic investments in resources and bolstering marketing.
In the beer category, the Company developed new products around its key Kirin Lager and Kirin Ichiban Shibori brands
that offer added value and an individuality distinct from happo-shu. Kirin Lager's position as the Company's flagship
brand was bolstered by the limited release of Kirin Classic Lager in cans in the Chugoku and Shikoku areas, and the
launch of Kirin Lager Blue Label, with 50 percent less sugar, in response to a growing health consciousness. For Ichiban
Shibori, Kirin continued with its "food" series of commercials, aim of secure its position as the representative draft
beer brand. Kirin further strove to bring a new kind of fun to beer, by offering the Kirin Tarunama System, made
available through the Company's chilled distribution system to ensure quality, allowing consumers to enjoy authentic
draft beer at home. The sales area was increased for the unfiltered, live-yeast beer Maroyaka Kobo, which had been test
marketed the previous year, and a new product, Maroyaka Kobo Hana-kaori, featuring an even more opulent fragrance, was
launched on a limited basis.
In the happo-shu (low-malt beer) category, Kirin continued to strengthen its key Kirin Tanrei brand, as well as the
Tanrei Green Label and Gokunama brands, both launched last year. Other value-added happo-shu brands were also launched
to provide new value and respond to diversified customer needs, including Tanrei Alpha, which employs a newly-developed
technology to remove 90 percent (Kirin's comparison) of purine bodies, and the dark happo-shu Namakuro, a sister brand
of Gokunama. Kirin also launched on a limited basis a new happo-shu, Kirin Honey Brown, which delivers a new kind of
taste by using honey as one of its ingredients, in an aim to offer a new appeal for happo-shu.
In the beer taste sparkling beverage category, which has attracted much attention from customers since last year, Kirin
launched Malt Squash. This is not simply a substitute for beer, but a new kind of easy-drinking, refreshing and
unsweetened beverage. It is different from the traditional non-alcoholic beer scene, creating a new category of beer
taste sparkling beverage for adults.
In the chu-hi category, Kirin Chu-hi Hyoketsu continued to sell well. A new lime flavor was added to the lineup, and
Chardonnay Sparkling was launched as the first offering from the Premium Fruits series. By appealing with quality and
authenticity, and offering new value in the chu-hi drink category, Kirin is managing to include drinkers of wine and
cocktails in the class of chu-hi drinkers, and seeking to drastically change the image of chu-hi drinks. Brand freshness
was also improved though through aggressive promotions that included wide-scale sampling and other measures.
In the spirits and wine category, Kirin added to its lineup of everyday wines by importing and selling wine produced by
a subsidiary of Kirin Group company Lion Nathan Limited. Kirin also expanded its business foundation in February when it
acquired the Japan sales rights to Franzia, the world's top-selling wine brand*.
*Greatest sales volume for a single brand (Source: Impact Databank 2002 Edition)
In an effort to create a new kind of shochu (Japanese distilled liquor made from grain) market last year, Kirin widened
the sales area for Mugi Shochu Pure Blue, released on a trial basis in select areas, and for Hyoketsu 21o Straight.
Kirin also conducted aggressive promotional campaigns, including "KIRIN Loves Sports Campaign 'Kachi-T' Present," a
nationwide campaign designed to show Kirin as a supporter of sports.
In sales and marketing, Kirin Communication Stage Co., Ltd., which mainly handles in-store marketing for volume
retailers, widened its operational area to include the Kinki region in January, and began operating nationwide in April.
This subsidiary has been operating in the Tokyo area since its establishment last September. Kirin also continued with
effective investment of marketing funds and strategic allocation of resources in growth markets.
In the international beer business, Kirin Pure and Light, a new beer developed in cooperation with Lion Nathan's Chinese
subsidiary, Lion Nathan Beer & Beverages (Suzhou) Co., Ltd., and produced at its Suzhou Brewery, was launched in
Shanghai in January. In May a new Kirin brand of beer produced by Lion Nathan, KIRIN ICHIBAN-First Press Beer, was
launched in Australia and New Zealand.
As a result of the above, net sales of the alcohol beverage business totaled 476.9 billion yen, an decrease of 3.9%
compared with the same period of the previous year.
Soft Drinks Business
Kirin Beverage Corporation, which operates Kirin's soft drinks business, undertook efforts to expand the scope of its
business, strengthening the product portfolio of its key brands and concentrating its sales activities in growth
markets.
By product, the new premium brand Kirin Kuchidoke Namacha was added to the Kirin Namacha lineup, and aggressive measures
including Internet campaigns were employed to increase the freshness of the brand. Improved taste and packaging for
Gogono-kocha ("afternoon tea"), carried out in April, resulted in improved sales. A greater variety of packaging for
Kirin Amino Supli was also introduced, increasing the volume drunk at home. To enhance its position in the growing
market for mineral water, the Company began selling Volvic, the top brand of imported mineral water.
In marketing, Kirin stepped up sales efforts to volume retailer channels, the most important strategic market. In
production, the Company continued to focus on cutting production costs and enhancing product quality management.
In the China business, conducted through local joint ventures, Kirin is strengthening its operating base, following
Kirin Gogono-kocha and Kirin Namacha with the launch of Kirin Amino Supli and Kirin Kikicha, and steadily improving
performance.
As a result of the above, net sales of the soft drink business totaled 164.1 billion yen, an increase of 4.3% compared
with the same period of the previous year.
Pharmaceuticals Business
In the pharmaceutical business, Kirin continued to conduct information sharing activities with Sankyo Co., Ltd. for
ESPO, a genetically engineered hormone that regulates red blood cell production, and for GRAN, an agent that stimulates
white blood cell production, as well as focused on exclusive marketing efforts in Japan for Rocaltrol Injection, a
treatment for secondary hyperparathyroidism. Approval for the manufacture of ESPO pre-filled syringes was received in
October 2002, and the product was launched in April. Approval was received in January for the hyperphosphatemia agent
PHOSBLOCK Tablets, developed in cooperation with Chugai Pharmaceutical Co., Ltd., and launched in June.
Net sales in the pharmaceutical business, as a result of extention of Kirin's own marketing, totaled 24.0 billion yen,
an increase of 6.9% compared with the same period of the previous year.
Other Business
In agribio, Kirin began marketing the new color Blue in its Blue Wave series of petunia hybrid, which was awarded prizes
this year in two major international floriculture competitions. Kirin also developed an effective testing system that
uses DNA markers to identify chrysanthemum varieties resistant to White Rust (Albugo candida).
In nutrient food, Takeda-Kirin Foods Corporation began marketing their jointly developed beer yeast extract Komi,
strengthening its seasoning product lineup. Sales in the health food business were also strong.
Thus, net sales of other businesses totaled 67.6 billion yen, an increase of 31.3% compared with the same period of the
previous year.
2. Financial Position
Cash and cash equivalents ("cash") on a consolidated basis during the 2003 interim period was affected by capital
investment expenditures in the alcohol business and other acquisitions of property, plant and equipment, as well as
expenditures of cash for investing activities such as acquisition of shares in subsidiary companies following a change
in the scope of consolidation, but this was covered by available cash resources. As a result, cash decreased 31.4
billion yen from the previous fiscal year to 74.1 billion yen.
Consolidated cash flows are as follows:
Cash flow from operating activities
Although net income for the interim period before income taxes and minority interests increased by 8.6 billion yen, and
a 41.3 billion yen inflow of working capital due to increases and decreases in accounts receivable and inventories were
factors behind an increase in cash, there was an outflow of 39.7 billion yen in working capital due to changes in beer
taxes payable. As a result of these and other factors, net cash provided by operating activities decreased 3.1 billion
yen from the same period of the previous year to 23.5 billion yen.
Cash flow from investing activities
Payments for purchase of property, plant and equipment included capital investment in the domestic alcohol business,
declining by 10.6 billion yen from the same period of the previous year to 30.1 billion yen. An expenditure of 11.8
billion yen was also made for acquisition of shares in subsidiary companies, following a change in the scope of
consolidation. Proceeds from the sale and redemption of marketable securities and investments in securities, however,
totaled 3.5 billion yen. As a result of these and other factors, net cash used in investing activities declined by 97.8
billion yen from the same period of the previous year to 35.7 billion yen.
Cash flow from financing activities
Expenditures for cash dividends paid increased by 3.5 billion yen from the same period of the previous year to 11.5
billion yen. Expenditures for repayment of bank loans were 7.4 billion yen. As a result, net cash used in financing
activities was 19.2 billion yen, an increase of 82.2 yen billion over the same period of the previous year.
Trends in the Kirin Group's cash flow indicators are as follows:
2002 2003 2002
Interim Interim Year-end
Equity ratio (%) 43.6 45.6 44.1
Market capitalization ratio (%) 46.2 47.6 41.8
Debt redemption (years) - - 4.0
Interest coverage ratio 6.7 4.9 10.0
Notes
1. Equity ratio = Shareholders' equity / Total assets
2. Market capitalization ratio = Aggregate market value of shareholders' equity / Total assets
3. Debt redemption = Interest-bearing liabilities / Cash flow from operating activities (Not recorded for the interim
period)
4. Interest coverage ratio = Cash flow from operating activities / Interest payments
* Each indicator is calculated from consolidated financial data.
*. Market capitalization is calculated as the share price at the end of the fiscal period multiplied by the number of
shares issued (excluding treasury stock)
Cash flow from operating activities is taken from the cash flow from operating activities on the consolidated statement
of cash flows. Interest-bearing liabilities reflects all liabilities with interest payable recorded on the liabilities
section of the consolidated balance sheets. The figure for interest payments is taken from the interest payments
recorded in the consolidated statement of cash flows.
3. Outlook
In the final year of the KG 21 Action Plan, Kirin is further strengthening coordination and cooperation among the Group
companies in order to achieve the goals of this plan. Additional efforts to reform the cost structure are being
undertaken to this end, based on the results of similar efforts made mainly in the domestic alcohol business in 2002,
aiming to forge a strong corporate structure where stable earnings can be maintained.
In the domestic alcohol business, strategic investments were made in growth categories such as happo-shu, chu-hi drinks,
shochu and wine, further strengthening the base of the comprehensive alcohol business, and providing customers with new,
attractive levels of value. Kirin will also streamline its distribution network and marketing structure and step up
sales efforts in response to the rise in the tax on happo-shu, liberalization of alcohol sales regulations, and other
changes in the market environment.
Product initiatives include further strengthening of the Lager, Ichiban Shibori and Tanrei brands, and providing
customers with new levels of added value. The Company will also strive to enhance its ability to offer a full line-up of
alcohol products, by further developing the Hyoketsu series and strengthening the spirits, wine and shochu businesses.
Sales measures will focus on achieving sales targets and protecting margins, which will be accomplished through further
strengthening of sales effectiveness and strategic distribution of resources into growth markets.
In production, Kirin has begun its renewal of the Fukuoka plant, aiming to build a more efficient production structure.
In the distribution division, Kirin will continue its efforts to improve the efficiency of distribution throughout the
Group.
In the soft drinks business, Kirin will pursue greater streamlining and efficiency throughout its operations,
strengthening its mainstay brands Kirin Namacha, and Kirin Gogono-kocha ("afternoon tea"), and entering a marketing
alliance for vending machines with Yakult Honsha Co., Ltd.
In the pharmaceutical business, Kirin will strengthen sales of existing products beginning with ESPO and GRAN, a
genetically engineered hormone that regulates red blood cell production and work to further increase the products in its
development pipeline. It will also continue to focus on R&D for human antibody and cell treatments.
In the agribio business, business will be expanded in the key fields of chrysanthemums and carnations, and further
enhancements to the operational base made both in Japan and overseas. In the nutrient food business, Kirin will pursue
development of high-value added products that use beer yeast.
As a result of the above, for the year ending December 31, 2003, Kirin projects consolidated sales of 1,610.0 billion
yen (a year-on-year increase of 1.7%), income before extraordinary items of 87.0 billion yen (a year-on-year increase of
3.0%), and net income of 33.0 billion yen (a year-on-year increase of 1.4%).
Cash dividends for 2003 are expected to total 12 yen per share, consisting of interim and year-end dividends of 6 yen
per share each.
4. Note Concerning Results Projections
The statements concerning future performance that are presented in this document are based on judgments using
information available to Kirin and the Kirin Group at the time of publication. Certain risks and uncertainties could
cause the results of Kirin and the Kirin Group to differ materially from any projections presented herein. These risks
and uncertainties include, but are not limited to, the economic circumstances surrounding the Company's businesses,
market trends, and exchange rates.
CONSOLIDATED BALANCE SHEETS (millions yen)
ASSETS (Note) At At Increase At
June 30, 2003 June 30, 2002 (Decrease) December 31, 2002
Amount Percentage Percentage Amount Percentage
over total Amount over total Amount over total
assets assets assets
Current Assets % % %
Cash (*2) 76,679 102,395 (25,716) 108,148
Notes and accounts receivable (*2) 243,219 266,379 (23,160) 269,106
Marketable securities 1,071 6,399 (5,328) 2,017
Inventories (*2) 109,063 101,535 7,528 83,949
Other 56,670 60,931 (4,261) 65,820
Allowance for doubtful accounts (4,074) (3,793) (281) (5,456)
Total current assets 482,630 28.2 533,847 30.0 (51,217) 523,585 30.0
Fixed Assets
Property, Plant and Equipment (*1)
Buildings and structures (*2) 189,744 190,862 (1,118) 189,050
Machinery, equipment and vehicles (*2) 189,157 191,648 (2,491) 190,687
Land (*2,4) 167,867 159,115 8,752 166,393
Construction in progress 21,358 18,493 2,865 13,290
Other (*2) 50,007 54,126 (4,119) 49,961
Total 618,135 36.1 614,246 34.5 3,889 609,382 35.0
Intangible Assets
Consolidation differences 47,457 46,871 586 45,513
Other (*2) 109,508 107,325 2,183 106,608
Total 156,966 9.1 154,196 8.7 2,770 152,122 8.7
Investments and Other Assets
Investment securities (*2) 328,566 354,998 (26,432) 330,905
Life insurance investments 35,194 33,946 1,248 35,093
Other (*2) 95,833 91,129 4,704 96,955
Allowance for doubtful accounts (4,691) (3,091) (1,600) (3,913)
Total 454,902 26.6 476,983 26.8 (22,081) 459,041 26.3
Total fixed assets 1,230,004 71.8 1,245,426 70.0 (15,422) 1,220,546 70.0
TOTAL ASSETS 1,712,634 100.0 1,779,274 100.0 (66,640) 1,744,131 100.0
(millions yen)
LIABILITIES, MINORITY INTERESTS AND (Note) At At Increase AT
SHAREHOLDERS' EQUITY June 30, 2003 June 30, 2002 (Decrease) December 31, 2002
Amount Percentage Amount Percentage Amount Percentage
over total over total Amount over total
assets assets assets
Current Liabilities % % %
Notes and accounts payable 108,568 116,752 (8,184) 98,649
Short-term loans payable (*2) 30,375 30,749 (374) 47,824
Liquor taxes payable 78,890 123,797 (44,907) 113,660
Income taxes payable 20,206 16,339 3,867 15,599
Accrued expenses 62,301 71,550 (9,249) 59,573
Deposits received 55,013 58,516 (3,503) 61,227
Other 43,824 54,764 (10,940) 64,619
Total current liabilities 399,180 23.3 472,470 26.6 (73,290) 461,154 26.4
Long-term Liabilities
Bonds 131,632 131,247 385 129,948
Long-term debt (*2) 118,036 121,742 (3,706) 105,148
Pension and retirement benefits 94,712 96,518 (1,806) 95,414
Other reserves 8,939 9,585 (646) 8,607
Deposits received (*2) 75,537 79,166 (3,629) 78,567
Other 29,266 19,451 9,815 21,633
Total long-term liabilities 458,125 26.8 457,711 25.7 414 439,318 25.2
TOTAL LIABILITIES 857,306 50.1 930,182 52.3 (72,876) 900,473 51.6
MINORITY INTERESTS 74,377 4.3 73,454 4.1 923 74,431 4.3
Common Stock - - 102,045 5.7 (102,045) 102,045 5.8
Additional Paid-In Capital - - 70,868 4.0 (70,868) 70,868 4.1
Revaluation variance for Land (*4) - - (1,625) (0.1) 1,625 (1,627) (0.1)
Retained Earnings - - 611,237 34.4 (611,237) 630,744 36.2
Net unrealized holding gains on - - 20,124 1.1 (20,124) 6,132 0.4
securities
Foreign currency translation - - (22,388) (1.2) 22,388 (25,308) (1.5)
adjustments
Total - - 780,262 43.9 (780,262) 782,855 44.9
Treasury Stock - - (4,625) (0.3) 4,625 (13,628) (0.8)
TOTAL SHAREHOLDERS' EQUITY - - 775,637 43.6 (775,637) 769,227 44.1
Common stock 102,045 6.0 - - 102,045 - -
Capital reserve 70,868 4.1 - - 70,868 - -
Retained earnings 638,415 37.3 - - 638,415 - -
Revaluation variance for Land (*4) (1,666) (0.1) - - (1,666) - -
Net unrealized holding gains on 9,075 0.5 - - 9,075 - -
securities
Foreign currency translation (23,815) (1.4) - - (23,815) - -
adjustments
Treasury stock (13,971) (0.8) - - (13,971) - -
TOTAL SHAREHOLDERS' EQUITY 780,951 45.6 - - 780,951 - -
TOTAL LIABILTIES, MINORITY INTERESTS 1,712,634 100.0 1,779,274 100.0 (66,640) 1,744,131 100.0
AND SHAREHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF INCOME (millions yen)
(Note) 6 months ended 6 months ended Increase Year ended December 31,
June 30, 2003 June 30, 2002 (Decrease) 2002
Amount Percentage Amount Percentage Amount Amount Percentage
over sales over sales over sales
% % %
Sales 732,812 100.0 727,889 100.0 4,923 1,583,248 100.0
Cost of Sales 453,198 61.8 458,489 63.0 (5,291) 1,000,199 63.2
Gross Profit 279,614 38.2 269,399 37.0 10,215 583,048 36.8
Selling, General and Administrative (*1) 242,037 33.0 235,600 32.4 6,437 493,259 31.2
Expenses
Operating Income 37,576 5.1 33,799 4.6 3,777 89,789 5.7
Non-operating Income
Interest income 347 561 (214) 1,147
Return on funds in trust - 210 (210) 210
Dividend income 2,087 1,724 363 2,614
Equity in earnings of affiliates 2,479 87 2,392 2,102
Gain on transactions related to gift (*2) 1,974 - 1,974 453
coupon
Other 2,239 2,044 195 3,689
Total 9,127 1.2 4,627 0.6 4,500 10,217 0.6
Non-operating Expenses
Interest expense 4,786 4,214 572 8,955
Other 2,901 3,959 (1,058) 6,607
Total 7,688 1.0 8,173 1.1 (485) 15,562 1.0
Income before Extraordinary Items and 39,015 5.3 30,252 4.2 8,763 84,443 5.3
Income Taxes
Extraordinary Income
Gain on sales of fixed assets (*3) 705 1,936 (1,231) 3,401
Gain on sales of investment securities 68 397 (329) 420
Reversal of allowance for doubtful 1,560 - 1,560 -
accounts
Reversal of allowance for furnace - - - 700
overhaul
Total 2,334 0.3 2,333 0.3 1 4,521 0.3
Extraordinary Expenses
Loss on disposal of fixed assets (*4) 1,180 2,243 (1,063) 6,715
Loss on sales of fixed assets (*5) 95 164 (69) 379
Loss on revaluation of investment - - - 2,236
securities
Loss on sales of investment securities 10 5 5 7
Business restructuring costs (*6) 1,245 - 1,245 -
Loss on devaluation of real estate in - - - 3,352
trust
Premium on retirement benefits - - - 1,755
Total 2,531 0.3 2,414 0.3 117 14,447 0.9
Income before Income Taxes and Minority 38,818 5.3 30,171 4.1 8,647 74,517 4.7
Interests
Income Taxes 21,679 3.0 16,791 2.3 4,888 36,214 2.2
Minority Interests 3,207 0.4 3,056 0.4 151 5,762 0.4
Net Income 13,931 1.9 10,322 1.4 3,609 32,540 2.1
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (millions yen)
6 months 6 months Increase Year ended
ended ended (Decrease) December 31,
June 30, June 30, 2002
2003 2002
Retained earnings at beginning of period Increase in retained earnings - 608,603 (608,603) 608,603
Foreign currency translation adjustments of foreign subsidiaries and - - - 1,167
affiliates
Increase due to revaluation of property, plant and equipment of foreign - - - 1,338
subsidiaries and affiliates
Reversal of revaluation variance for land - - - 1
Total - - - 2,507
Decrease in retained earnings
Cash dividends paid - 5,906 (5,906) 11,781
Bonuses paid to directors and corporate auditors - 205 (205) 205
(corporate auditors' portion included above - 29 (29) 31)
Decrease resulting from newly consolidated subsidiaries - 409 (409) 409
Decrease due to exclusion of subsidiaries from the consolidation scope - 511 (511) 511
Foreign currency translation adjustments of foreign subsidiaries and - 656 (656) -
affiliates
Total - 7,689 (7,689) 12,907
Net income - 10,322 (10,322) 32,540
Retained earnings at end of period - 611,237 (611,237) 630,744
(Capital reserve)
Capital reserve at beginning of period
Additional paid-in capital at beginning of period 70,868 - 70,868 -
Capital reserve at end of period 70,868 - 70,868 -
(Retained earnings)
Retained earnings at beginning of period
Retained earnings at beginning of period 630,744 - 630,744 -
Increase in retained earnings
Net income 13,931 - 13,931 -
Increase resulting from newly consolidated subsidiaries 2 - 2 -
Foreign currency translation adjustments of foreign subsidiaries and 330 - 330 -
affiliates
Total 14,264 - 14,264 -
Decrease in retained earnings
Cash dividends paid 5,800 - 5,800 -
Bonuses paid to directors and corporate auditors 268 - 268 -
(corporate auditors'portion included above 34 - 34 -)
Decrease due to exclusion of subsidiaries from the consolidation scope 94 - 94 -
Decrease due to revaluation of property, plant and equipment of foreign 430 - 430 -
subsidiaries
Total 6,593 - 6,593 -
Retained earnings at end of period 638,415 - 638,415 -
CONSOLIDATED STATEMENTS OF CASH FLOWS (millions yen)
6 months 6 months Increase Year ended December
ended June ended June (Decrease) 31, 2002
30, 2003 30, 2002
Cash flows from operating activities
Income before income taxes and minority interests 38,818 30,171 8,647 74,517
Depreciation 36,770 35,837 933 75,206
Amortization of consolidation differences 1,592 1,525 67 3,034
Increase (decrease) in pension and retirement benefits (2,548) (3,391) 843 (4,227)
Interest and dividend income and return on funds in trust (2,434) (2,495) 61 (3,972)
Interest expense 4,786 4,214 572 8,955
Gain on sales of fixed assets (705) (1,936) 1,231 (3,401)
Gain on sales of marketable securities and investment (68) (397) 329 (420)
securities
Loss on disposal or sales of fixed assets 1,275 2,408 (1,133) 7,094
Decrease (increase) in notes and accounts receivable 27,904 (2,448) 30,352 (6,164)
Decrease (increase) in inventories (17,148) (28,142) 10,994 (11,131)
Increase (decrease) in notes and accounts payable 6,067 5,376 691 (11,265)
Increase (decrease) in liquor taxes payable (35,862) 3,898 (39,760) (6,107)
Other (15,396) 2,442 (17,838) 8,647
Sub-total 43,052 47,062 (4,010) 130,766
Interest, dividend and return on funds in trust received 3,924 3,629 295 6,227
Interest paid (4,827) (3,957) (870) (8,785)
Income taxes paid (18,620) (20,026) 1,406 (40,457)
Net cash provided by operating activities 23,528 26,708 (3,180) 87,750
Cash flows from investing activities
Payments for purchases of property, plant, equipment and (30,163) (40,849) 10,686 (85,492)
intangible assets
Proceeds from sales of property, plant and equipment 2,424 3,907 (1,483) 5,278
Payments for purchases of marketable securities and (2,815) (102,050) 99,235 (103,832)
Investment securities
Proceeds from sales and redemption of marketable 3,557 6,279 (2,722) 11,075
securities and investment securities
Proceeds from termination of funds in trust - 17,411 (17,411) 17,411
Proceeds from termination of life insurance investment - 588 (588) -
Payments for acquisition of shares of newly consolidated (11,803) (9,845) (1,958) (12,674)
subsidiaries
Other 3,062 (9,063) 12,125 (7,144)
Net cash used in investing activities (35,737) (133,621) 97,884 (175,377)
Cash flows from financing activities
Increase (decrease) in short-term loans payable (5,256) (3,075) (2,181) 4,331
Proceeds from long-term debt 11,848 49,411 (37,563) 67,977
Repayments of long-term debt (14,020) (10,826) (3,194) (34,327)
Proceeds from issue of bonds - 40,000 (40,000) 40,000
Payments for purchase of treasury stock (145) (4,539) 4,394 (13,542)
Cash dividends paid (5,795) (5,906) 111 (11,777)
Cash dividends paid to minority shareholders (5,756) (2,048) (3,708) (2,203)
Other (146) 0 (146) 239
Net cash provided by (used in) financing activities (19,271) 63,014 (82,285) 50,699
Effect of exchange rate fluctuation on cash and cash 494 (244) 738 (1,282)
equivalents
Net increase (decrease) in cash and cash equivalents (30,985) (44,143) 13,158 (38,209)
Cash and cash equivalents at beginning of period 105,625 144,331 (38,706) 144,331
Cash and cash equivalents of newly consolidated subsidiaries (503) (495) (8) (495)
at beginning of period
Cash and cash equivalents at end of period 74,136 99,692 (25,556) 105,625
SIGNIFICANT ACCOUNTING POLICIES FOR CONSOLIDATION
------------------------------------------------------------------------------------------------------------------------
The following is the table of scope of consolidation and application of equity method.
Classification Number of companies
Consolidated subsidiaries (Note 1) 315
Unconsolidated subsidiaries applied by the equity method (Note 2) -
Affiliated companies applied by the equity method (Note 3) 14
(Consolidation)
Note 1:
(1) The names of main consolidated subsidiaries are KIRIN BEVERAGE CORPORATION and LION NATHAN LTD.
(2) The changes of the scope of consolidation are as follows:
(a) KIRIN DISTILLERY CO., LTD. and 8 other companies became consolidated subsidiaries due to acquisition of
additional shares.
(b) One company became a consolidated subsidiary due to new establishment.
(c) SHANGHAI JINJIANG KIRIN BEVERAGE & FOOD CO., LTD. became a consolidated subsidiary due to the increase in
importance on the consolidated financial statements.
(d) Kirin Yamamura Container CO., LTD. was excluded from the consolidation scope due to liquidation.
(3) Subsidiaries including KIRIN AGRIBIO USA, INC. are excluded from the consolidation scope because the effect of
their sales, net income or losses, total assets and retained earnings on the accompanying consolidated financial
statements are immaterial.
(4) The following are the names of consolidated subsidiaries whose interim accounting period-ends are different from
that of the Company.
Name of subsidiary Interim accounting period-end
LION NATHAN LTD. and its subsidiaries March 31, 2003 (*)
TWYFORD INTERNATIONAL INC. March 31, 2003 (*)
and its subsidiaries
JAPAN POTATO CORPORATION March 31, 2003 (*)
Kirin-Asupro Corporation May 31, 2003 (*)
KIRIN FEED LIMITED May 31, 2003 (*)
KIRIN-ASUPRO SALES CORPORATION May 31, 2003 (*)
EI SHO GEN CO., LTD. September 30, 2002 (**)
Takeda-Kirin Foods Corporation September 30, 2002 (***)
(*) Interim financial statements of the consolidated subsidiaries listed above as of their interim accounting period
ends and for the 6 months then ended are used.
(**) The company's adjusted financial statements as of June 30, 2003 and for the 6 months then ended are used for the
purpose of consolidation and necessary adjustments are made for the purpose of consolidation.
(***) The company's financial statements as of March 31, 2003 and for the 6 months then ended are used and necessary
adjustments are made for the purpose of consolidation.
(Equity Method)
Note 2
(1) SHANGHAI JINJIANG KIRIN BEVERAGE & FOOD CO., LTD. became a consolidated subsidiary due to the increase in
importance on the consolidated financial statements.
Note 3:
(1) The names of main affiliated companies under the equity method are KINKI COCA-COLA BOTTOLING CO., LTD., YONEKYU
CORPORATION and SAN MIGUEL CORPORATION.
(2) The changes of the scope of application of the equity method is as follows:
(a) KIRIN DISTELLERY CO., LTD. and another company were no longer accounted for using the equity method, due to
acquisition of additional shares and therefore becoming consolidated subsidiaries.
(3) Certain investments in unconsolidated subsidiaries including KIRIN AGRIBIO USA, INC. and affiliates including
Diamond Sports Club Co., Ltd. are not accounted for using the equity method, and are stated at cost because the
effect of their net income or losses and retained earnings on the accompanying consolidated financial statements
are immaterial.
(4) Although the Company holds voting interest greater than 20% yet less than 50% in SOCIETE IMMOBILIERE ET FINANCIERE
POUR L'ALIMENTATION, the Company does not have significant influence over this entity. Therefore the investment is
not accounted for using the equity method.
(5) Where accounting periods of the affiliated companies under the equity method are different from that of the
Company, the Company used their financial statements for the most recent accounting periods without any
adjustments for applying the equity method.
Where the difference between an affiliate's period-end and that of the Company is more than 6 months, the Company
used the affiliate's latest financial statements and necessary adjustments are made for applying the equity
method.
1. Valuation of securities
Debt securities intended to be held to maturity are valued by the amortized cost method.
Available-for-sale securities with fair market values are stated at fair market value as of the balance sheet date.
Unrealized gains and losses on these securities are reported, net of applicable income taxes, as a separate component of
shareholders' equity. Realized gains and losses on sale of such securities are computed using the moving-average method.
Other securities without market value are stated at cost determined by moving-average method.
2. Valuation of derivative financial instruments
Derivative financial instruments are stated at fair values.
3. Valuation of Inventories
Merchandise, finished goods and semi-finished goods are mainly stated at cost determined by the average method.
Raw materials and supplies are mainly stated at cost determined by the moving average method.
Construction in process is stated at cost determined by the specific identification method.
4. Depreciation of property, plant and equipment
Depreciation of property, plant and equipment is calculated on the declining balance method, except for buildings
(excluding building fixtures) acquired on and after April 1, 1998, where depreciation is calculated on the straight-line
method. Leased assets are depreciated over each lease term based on the straight-line method with the estimated residual
value at the end of the lease term. Consolidated foreign subsidiaries adopt the straight-line method.
5. Amortization of intangible assets
Amortization of intangible assets is calculated on the straight-line method over estimated useful lives. Consolidated
foreign subsidiaries mainly adopt the straight-line method over 20 years.
6. Allowance for doubtful accounts
Allowance for doubtful accounts is provided in an amount sufficient to cover probable losses on collection. It consists
of the estimated uncollectible amount with respect to certain identified doubtful receivables and an amount calculated
using the actual percentage of collection losses.
7. Pension and retirement benefits
The Company and its consolidated subsidiaries provide allowance for employees' pension and retirement benefits at the
balance sheet date based on the estimated amounts of projected benefit obligation and the fair value of the plan assets
at the end of current fiscal year. Actuarial differences are amortized by the straight-line method over the average
estimated service period, which is 15 years, beginning from the following fiscal year.
8. Leases
Finance leases, except for those leases under which the ownership of the leased assets is considered to be transferred
to the lessee, are accounted for in the same manner as operating leases.
Consolidated foreign subsidiaries mainly capitalize finance leases.
9. Hedge accounting
If derivative financial instruments are used as hedges and meet certain hedging criteria, the Company and its
consolidated subsidiaries defer recognition of gains or losses resulting from the changes in fair value of derivative
financial instruments until the related losses or gains on the hedged items are recognized.
However, in cases where forward foreign exchange contracts and currency swap contracts are used as hedges and meet
certain hedging criteria, foreign currency receivables or payables are recorded at the contracted rates.
Also, if interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or
received under the interest rate swap contracts is added to or deducted from the interest on the assets or liabilities
for which the swap contract was executed.
The Company and its consolidated subsidiaries use derivative financial instruments only for the purpose of mitigating
future risks of fluctuation of foreign currency exchange rates with respect to foreign currency receivable and payable,
interest rate fluctuation with respect to loans receivable and payable, and mitigating future risks of fluctuation of
commodity prices for raw materials such as aluminum.
The following summarizes hedging derivative financial instruments used by the Company and its consolidated subsidiaries
and items hedged:
Hedging instruments Hedged items
Forward foreign exchange contracts and currency Foreign currency receivables and payables, future transactions
swap contracts etc. in foreign currencies
Interest rate swap contracts etc. Loans receivable and loans payable
Commodity swap contracts etc. Commodity price
The Company and its consolidated subsidiaries evaluate the effectiveness of hedging activities semi-annually by
comparing the cumulative changes in cash flows from or the changes in fair value of hedged items and the corresponding
changes in the hedging derivative instruments.
10. Consumption tax
Consumption tax is excluded from the revenue and expense accounts, which are subject to such tax.
11. Cash and cash equivalents
In preparing the consolidated statements of cash flows, cash on hand, readily available deposits and short-time highly
liquid investments with negligible risk of changes in value and maturities not exceeding 3 months at the time of
purchase are considered to be cash and cash equivalents.
CHANGE IN PRESENTATION:
(Consolidated Statements of Income)
Gain on transactions related to gift coupon was presented separately because the amount exceeded 10% of total
non-operating income. It was losses of 45 million yen and was included in "other" of non-operating expenses for the 6
months ended June 30, 2002.
(Consolidated Statements of Cash Flows)
Proceeds from termination of life insurance investment of 544 million yen for the 6 months ended June 30,2003, which
was separately presented in cash flows from investing activities for the 6 months ended June 30, 2002, was included in
"other" of cash flows from investing activities due to immateriality of its amount.
ADDITIONAL INFORMATION:
(Accounting for treasury stock and reversal of statutory reserve)
Effective from current interim accounting period, the Company and its subsidiaries totally adopted the new accounting
standard for treasury stock and reversal of statutory reserves (Accounting Standards Board Statement No.1,"Accounting
Standard for Treasury Stock and Reduction of Statutory Reserves", issued by the Accounting Standard Board of Japan on
February 21, 2002). The adoption of the new accounting standard had no impact on the accompanying consolidated
statements of income for the 6 months ended June 30, 2003. As a result of adopting this new accounting standard and
application of the related revised disclosure requirements, shareholders' equity accounts in the accompanying
consolidated balance sheets as of June 30, 2003 and consolidated statements of retained earnings for the 6 months
ended June 30, 2003 are presented differently from prior fiscal year.
NOTES TO:
(CONSOLIDATED BALANCE SHEETS) (millions yen )
*1 Accumulated depreciation
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Accumulated depreciation 785,546 745,919 753,504
*2 Detail of collateral (millions yen )
(1) Collateral
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Cash - - 0
Notes and accounts receivable 296 1,447 359
Inventories 2,762 2,396 3,031
Buildings and structures 2,745 1,380 1,822
Machinery, equipment and vehicles 1,955 1,362 2,007
Land 2,753 931 950
Other of property , plant and Equipment 20 10 27
(Fixtures) 148 210 149
Other of intangible fixed assets
Investments securities 152 174 29
Total 10,834 7,914 8,379
Following assets, which are included 1,226 284 273
above, are pledged as factory foundation
collateral
Buildings and structures
Machinery, equipment and vehicles - 33 33
Land 2,058 383 383
Total 3,284 701 690
(2) Secured borrowing (millions yen )
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Short-term loans payable 3,322 4,095 3,963
Long-term debt 2,024 2,166 2,267
(include current maturities of long-term loans)
Deposits received 3,408 3,408 3,408
Postage charge (facility limit) 11 29 13
Total 8,766 9,701 9,653
Following borrowings, which are included above, 1,600 2,200 2,100
are guaranteed by factory foundation collateral
Short-term loans payable
Note: Factory foundation collateral consists of the Headquarters factory and Matsumoto factory of Nagano Tomato
Corporation.
3 Contingent liabilities (millions yen , Foreign currency: thousands)
(1) Guarantees for unconsolidated subsidiaries and affiliated companies
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Koiwai Dairy Products Co.,Ltd. 700 1,500 800
Other 1,015 1,153 1,025
(Number 3 5 3)
Foreign currencies included above - 96 -
HKD 6,300
(2) Guarantees for employee's housing loan from banks (millions yen )
At At At
June 30, 2003 June 30, 2002 December 31, 2002
11,609 12,844 11,609
(3) Guarantees for bank loans of customers (millions yen , Foreign currency: thousands)
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Southeastern Container, Inc. 1,330 1,326 1,331
(USD 11,102) (USD 11,102) (USD 11,102)
Other 979 1,146 924
(Number 68 62 61)
Foreign currencies included above 847 742 780
AUD 11,725 AUD 10,458 AUD 11,704
NZD 5 NZD 5
Total contingent liabilities 15,634 17,971 15,691
(Including agreements similar to guarantees) (1,015) (1,019) (1,025)
*4 Revaluation of land
KIRIN BEVERAGE CORPORATION, a consolidated subsidiary, revalued land used for business on December 31, 2001, pursuant
tothe Law Concerning Land Revaluation (effective March 31, 1998) (the "Law") and related revision of the Law (effective
March 31,2001).
Due to revaluation of land in assets, the revaluation difference, net of tax, is accounted for as revaluation variance
for land inshareholders' equity, and tax portion is accounted for as deferred income taxes included in "other" of
investments and other assets.
Revaluation was performed by adjusting the road rating pursuant to Article 2, Paragraph 4 of the Enforcement Ordinance
for the LawConcerning Land Revaluation effective March 31, 1998.
Where the road rating is not provided, adjustment was made to the valuation of real estate tax prescribed in the Article
2, Paragraph 3of the Law.
(CONSOLIDATED STATEMENTS OF INCOME)
*1 Major elements of selling , general and administrative expenses (millions yen )
6 months ended 6 months ended Year ended
June 30, 2003 June 30, 2002 December 31, 2002
Sales promotion 63,601 62,134 136,364
Freight 20,733 20,944 45,023
Advertising 32,669 32,974 56,626
Pension and retirement benefit costs 6,454 5,136 10,290
Employee's compensation 43,966 42,003 88,378
Research and development 9,640 10,069 22,771
Depreciation 11,873 11,367 24,143
*2 Gain on transactions related to gift coupon
Gain on transactions related to gift coupon includes expenses on issuance and collection and gain on reversal of
deposits received which had been remained outstanding for a certain period.
*3 Gain on sales of fixed assets (millions yen )
6 months ended 6 months ended Year ended
June 30, 2003 June 30, 2002 December 31, 2002
Buildings and structures 416 - -
Land 252 1,912 3,157
Other 35 24 243
Total 705 1,936 3,401
*4 Loss on disposal of fixed assets (millions yen )
6 months ended 6 months ended Year ended
June 30, 2003 June 30, 2002 December 31, 2002
Buildings and structures 273 691 3,323
Machinery, equipment and vehicles 782 1,441 3,114
Other 124 110 277
Total 1,180 2,243 6,715
*5 Loss on sales of fixed assets (millions yen )
6 months ended 6 months ended Year ended
June 30, 2003 June 30, 2002 December 31, 2002
Buildings and structures 41 - 80
Machinery, equipment and vehicles 38 23 197
Other 15 141 101
Total 95 164 379
*6 Business restructuring costs
Business restructuring costs incurred at a consolidated subsidiary, which consist of premium on retirement benefits
for early retirement, and loss resulting from recalculation of pension and retirement benefit obligation due to
retirement of significant number of employees.
7 Presentation of Income Taxes
The Company adopted simplified accounting method for income tax effect accounting in the consolidated interim
financial statements.Accordingly, deferred income taxes are not presented separately and are included in Income Taxes
in current interim consolidated statements of income.
(CONSOLIDATED STATEMENTS OF CASH FLOWS)
Reconciliation of cash in the consolidated balance sheets and cash and cash equivalents in the consolidated statements
of cash flows is as follows;
(millions yen )
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Cash 76,679 102,395 108,148
Add : Marketable securities 1,071 6,399 2,017
Less : Fixed term deposit with maturities (2,542) (2,960) (2,522)
exceeding 3 months
Less: Marketable securities with maturities (1,071) (6,142) (2,071)
exceeding 3 months
Cash and cash equivalents 74,136 99,692 105,625
(LEASE TRANSACTIONS)
Lessee lease
(Finance lease transactions without ownership transfer to lessee)
(1) Purchase price equivalent, accumulated depreciation equivalent and book value equivalent of leased properties
(millions yen )
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Machinery, equipment and vehicles
Purchase price equivalent 2,418 2,825 2,468
Accumulated depreciation equivalent 1,329 1,682 1,279
Book value equivalent 1,088 1,143 1,188
Property, plant and equipment, other (Tools)
Purchase price equivalent 2,834 3,381 2,953
Accumulated depreciation equivalent 1,621 1,979 1,585
Book value equivalent 1,213 1,401 1,368
Total
Purchase price equivalent 5,252 6,207 5,422
Accumulated depreciation equivalent 2,950 3,662 2,864
Book value equivalent 2,301 2,544 2,557
(2) Lease commitments
(millions yen )
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Due within one year 907 997 960
Due over one year 1,464 1,614 1,657
Total 2,371 2,612 2,617
(3) Lease expenses, depreciation equivalent and interest expense equivalent
(millions yen )
6months ended 6months ended Year ended
June 30, 2003 June 30, 2002 December 31, 2002
Lease expenses 590 700 1,350
Depreciation equivalent 524 618 1,197
Interest expense equivalent 31 39 72
(4) Calculation method of depreciation equivalent
Depreciation equivalent is computed on the straight-line method over the lease terms without residual
value.
(5) Allocation of interest expense equivalent
Differences between total lease expenses and acquisition costs of the leased property comprise interest
expense equivalent and insurance, maintenance and certain other operating costs.
Interest expense equivalent is allocated using the interest method over the lease terms.
(Operating lease transactions)
Lease commitments (millions yen )
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Due within one year 1,959 2,282 2,147
Due over one year 7,760 7,768 6,421
Total 9,720 10,051 8,568
Lessee lease
(Finance lease transactions without ownership transfer to lessee)
(1) Purchase price, accumulated depreciation and book (millions yen )
value of leased properties
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Property, plant and equipment, other (Leased
assets)
Purchase price 17,115 19,503 18,313
Accumulated depreciation 10,720 12,056 11,498
Book value 6,394 7,446 6,815
Intangible assets, other (Leased assets)
Purchase price - - -
Accumulated depreciation - - -
Book value 786 691 739
Total
Purchase price 17,115 19,503 18,313
Accumulated depreciation 10,720 12,056 11,498
Book value 7,180 8,137 7,554
(2) Lease commitments (millions yen )
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Due within one year 1,961 2,063 2,024
Due over one year 5,529 6,281 5,813
Total 7,491 8,344 7,838
(3) Lease revenue, depreciation and interest revenue (millions yen )
equivalentt
6months ended 6months ended Year ended
June 30, 2003 June 30, 2002 December 31, 2002
Lease revenue 1,443 1,400 2,860
Depreciation 1,212 1,224 2,448
Interest revenue equivalent 177 191 381
(4) Allocation of interest equivalent
Interest revenue equivalent is allocated using the interest method over the lease terms.
(Securities)
At June 30,2003
1. Held-to-maturity debt securities with available fair values (millions yen )
Book value Fair value Difference
(1)Governmental/municipal bonds 1,547 1,568 20
(2)Corporate bonds 1,140 1,150 9
(3)Other - - -
Total 2,688 2,718 29
2. Available-for-sale securities with available fair values (millions yen )
Acquisition cost Book value Difference
(1)Shares 136,289 151,617 15,327
(2)Bonds
Governmental/municipal bonds 49 53 3
Corporate bonds - - -
Other - - -
(3)Other 68 68 -
Total 136,408 151,739 15,331
3. Descriptions and book value of securities with no available fair values are as follows:
Available-for-sale securities
Unlisted securities 45,561 million yen
4. Impairment loss of securities
Impairment losses of 578 million yen were recognized for available-for-sale securities for the 6 months
ended June 30, 2003. Where the fair values of available-for-sale securities have declined by more than 30%
from their acquisition costs, the values of those securities are considered to have "substantially declined
" and the impairment losses are recorded on those securities, unless the values are considered recoverable.
For available-for-sale securities without available fair value, when the substantive values of those
securities have declined by more than 50% from their acquisition costs, the values of those securities are
considered to have "substantially declined" and the impairment losses are recorded on those securities,
except for the cases where the recoverability of the values of those securities in the future is supported
by a reasonable ground.
At June 30,2002
1. Held-to-maturity debt securities with available fair values (millions yen )
Book value Fair value Difference
(1)Governmental/municipal bonds 1,248 1,278 29
(2)Corporate bonds 1,643 1,666 22
(3)Other - - -
Total 2,891 2,944 52
2. Available-for-sale securities with available fair values (millions yen )
Acquisition cost Book value Difference
(1)Shares 137,703 172,302 34,598
(2)Bonds
Governmental/municipal bonds 49 55 5
Corporate bonds 13 14 1
Other 3,499 3,517 17
(3)Other 4,376 4,402 25
Total 145,642 180,292 34,649
3. Descriptions and book value of securities with no available fair values are as follows:
Available-for-sale securities
Unlisted securities 42,006 million yen
4. Impairment loss of securities
Impairment losses of 795 million yen were recognized for available-for-sale securities for the 6 months ended June 30,
2002. Where the fair values of available-for-sale securities have declined by more than 30% from their acquisition
costs, the values of those securities are considered to have "substantially declined" and the impairment losses are
recorded on those securities, unless the values are considered recoverable. For available-for-sale securities without
available fair value, when the substantive values of those securities have declined by more than 50% from their
acquisition costs, the values of those securities are considered to have "substantially declined" and the impairment
losses are recorded on those securities, except for the cases where the recoverability of the values of those
securities in the future is supported by a reasonable ground.
At December 31, 2002
1. Held-to-maturity debt securities with available fair values (millions yen )
Book value Fair value Difference
(1)Governmental/municipal bonds 1,398 1,424 26
(2)Corporate bonds 1,341 1,357 15
(3)Other - - -
Total 2,739 2,781 41
2. Available-for-sale securities with available fair values (millions yen )
Acquisition cost Book value Difference
(1)Shares 136,526 147,127 10,601
(2)Bonds
Governmental/municipal bonds 49 54 4
Corporate bonds 13 14 1
Other 999 1,001 1
(3)Other 2,113 2,106 (6)
Total 139,702 150,305 10,602
3. Descriptions and book value of securities with no available fair values are as follows:
Available-for-sale securities
Unlisted securities 43,209 million yen
4. Impairment loss of securitie
Impairment losses of 2,236 million yen were recognized for available-for-sale securities for the year ended December
31, 2002. Where the fair values of available-for-sale securities have declined by more than 30% from their acquisition
costs, the values of those securities are considered to have "substantially declined" and the impairment losses are
recorded on those securities, unless the values are considered recoverable. For available-for-sale securities without
available fair value, when the substantive values of those securities have declined by more than 50% from their
acquisition costs, the values of those securities are considered to have "substantially declined" and the impairment
losses are recorded on those securities, except for the cases where the recoverability of the values of those
securities in the future is supported by a reasonable ground.
(DERIVATIVE TRANSACTIONS)
At June 30, 2003
Disclosure of derivative transactions is omitted, because hedge accounting applies to all of the derivative contracts
utilized by the Company and its consolidated subsidiaries.
At June 30, 2002
Disclosure of derivative transactions is omitted, because hedge accounting applies to all of the derivative contracts
utilized by the Company and its consolidated subsidiaries.
At December 31, 2002
Disclosure of derivative transactions is omitted, because hedge accounting applies to all of the derivative contracts
utilized by the Company and its consolidated subsidiaries.
(SEGMENT INFORMATION)
1. Business Segment Information (millions yen )
6 months ended June 30,2003
Alcoholic Soft drinks Pharma- Other Total Eliminations Consolidated
beverages ceuticals
Sales
1 Unaffiliated customers 476,940 164,148 24,081 67,642 732,812 - 732,812
2 Intersegment 1,094 398 - 38,767 40,260 (40,260) -
Total sales 478,035 164,546 24,081 106,409 773,073 (40,260) 732,812
Operating expenses 451,858 160,536 18,110 103,779 734,285 (39,048) 695,236
Operating income 26,176 4,010 5,970 2,630 38,787 (1,211) 37,576
(millions yen )
6 months ended June 30, 2002
Alcoholic Soft drinks Other Total Eliminations Consolidated
beverages
Sales
1 Unaffiliated customers 496,541 157,314 74,033 727,889 - 727,889
2 Intersegment 1,624 516 43,557 45,698 (45,698) -
Total sales 498,166 157,830 117,590 773,587 (45,698) 727,889
Operating expenses 474,615 151,304 112,394 738,315 (44,224) 694,090
Operating income 23,550 6,526 5,195 35,272 (1,473) 33,799
(millions yen )
Year ended December 31, 2002
Alcoholic Soft drinks Other Total Eliminations Consolidated
beverages
Sales
1 Unaffiliated customers 1,069,521 342,946 170,780 1,583,248 - 1,583,248
2 Intersegment 2,941 955 109,173 133,070 (113,070) -
Total sales 1,072,463 343,901 279,954 1,696,319 (113,070) 1,583,248
Operating expenses 1,013,342 324,954 265,031 1,603,328 (109,869) 1,493,459
Operating income 59,120 18,946 14,923 92,991 (3,201) 89,789
Notes: 1. Business segments are classified based on type and nature of products.
2. Main products of sales by segment are as follows;
Business segments Main products
Alcoholic beverages Beer, Sparkling malt liquor (Happoshu), Whiskey, Spirits, Wine etc.
Soft drinks Soft drinks, Other drinks
Pharmaceuticals Pharmaceutical products
Others Engineering, Logistics, Floriculture etc.
3. Unallocable operating expenses included in Eliminations mainly consist of the Company's costs for new business
development and costs for research and development of new basic technologies.
6 months ended June 30,2003 1,950 million yen
6 months ended June 30,2002 1,855 million yen
Year ended December 31,2002 3,583 million yen
(Changes in classification of business segments and method of allocation of operating expenses)
In consideration of the recent increase in importance of the Pharmaceuticals business, the Company reviewed its
segmentation and made the change in classifications in order to more clearly report the business segment information. As
a result, the business segment information, which was previously presented by three segments (Alcoholic Beverages, Soft
Drinks and Others), was classified into four segments (Alcoholic Beverages, Soft Drinks, Pharmaceuticals and Others) for
the 6 months ended June 30, 2003
Following the change described above, the Company considered more rational standard of allocation for companywide
operating expenses which better reflects the size of operations of each segment, as the Company promoted efficiency in
domestic alcoholic beverage business by downsizing its workforce. And, accordingly, the Company changed the method of
allocation for those expenses from the previous standard of proportional allocation based on numbers of employees for
each segment to the new standard of proportional allocation based on sales amount of each segment, in order to more
accurately reflect in segment information the actual conditions under which such expenses are incurred.
Because of the change, in comparison with the previous presentation, operating expenses of the Alcoholic Beverages
segment increased by 2,302 million yen , operating expenses of the Soft Drinks segment increased by 6 million yen ,
operating expenses of the Pharmaceuticals segment decreased by 2,231 million yen , and operating expenses of the Others
segment decreased by 78 million yen for the 6 months ended June 30, 2003.
Business segment information for the 6 months ended June 30, 2002 and for the year ended December 31, 2002, restated to
conform with the change of classifications for business segment information and the method of allocation of operating
expenses adopted for the 6 months ended June 30, 2003, was as follows.
( millions yen )
6 months ended June 30,2002
Alcoholic Soft drinks Pharma- Others Total Eliminations Consolidated
beverages ceuticals
Sales
1 Unaffiliated customers 496,541 157,314 22,523 51,510 727,889 - 727,889
2 Intersegment 1,624 516 - 43,557 45,698 (45,698) -
Total sales 498,166 157,830 22,523 95,067 773,587 (45,698) 727,889
Operating expenses 476,803 151,315 17,074 93,121 738,315 (44,224) 694,090
Operating income 21,363 6,514 5,448 1,945 35,272 (1,473) 33,799
( millions yen )
Year ended December 31,2002
Alcoholic Soft drinks Pharma- Others Total Eliminations Consolidated
beverages ceuticals
Sales
1 Unaffiliated customers 1,069,521 342,946 49,617 121,163 1,583,248 - 1,583,248
2 Intersegment 2,941 955 - 109,173 113,070 (113,070) -
Total sales 1,072,463 343,901 49,617 230,337 1,696,319 (113,070) 1,583,248
Operating expenses 1,017,683 325,024 38,114 222,505 1,603,328 (109,869) 1,493,459
Operating income 54,779 18,876 11,502 7,832 92,991 (3,201) 89,789
2. Geographical Segment Information
( millions yen )
6 months ended June 30, 2003
Japan Asia, Others Total Eliminations Consolidated
Oceania
Sales
1 Unaffiliated customers 633,251 67,948 31,612 732,812 - 732,812
2 Intersegment 1,018 589 954 2,563 (2,563) -
Total sales 634,270 68,538 32,567 735,376 (2,563) 732,812
Operating expenses 608,959 57,082 29,813 695,855 (619) 695,236
Operating income 25,311 11,455 2,753 39,521 (1,944) 37,576
( millions yen )
6 months ended June 30, 2002
Japan Asia, Others Total Eliminations Consolidated
Oceania
Sales
1 Unaffiliated customers 636,651 61,573 29,664 727,889 - 727,889
2 Intersegment 1,065 613 741 2,419 (2,419) -
Total sales 637,716 62,186 30,405 730,309 (2,419) 727,889
Operating expenses 614,754 51,844 28,085 694,683 (593) 694,090
Operating income 22,962 10,342 2,320 35,625 (1,826) 33,799
( millions yen )
Year ended December 31, 2002
Japan Asia, Others Total Eliminations Consolidated
Oceania
Sales
1 Unaffiliated customers 1,404,629 121,769 56,849 1,583,248 - 1,583,248
2 Intersegment 2,035 1,223 1,518 4,777 (4,777) -
Total sales 1,406,665 122,993 58,368 1,588,026 (4,777) 1,583,248
Operating expenses 1,333,980 106,905 53,790 1,494,676 (1,216) 1,493,459
Operating income 72,684 16,087 4,578 93,350 (3,561) 89,789
3. Overseas sales
( millions yen )
6 months ended June 30, 2003
Asia, Oceania Other Total
I Overseas sales 68,889 32,520 101,410
II Consolidated sales - - 732,812
III Percentage of overseas sales over 9.4 4.4 13.8
consolidated sales(%)
( millions yen )
6 months ended June 30, 2002
Asia, Oceania Other Total
I Overseas sales 61,702 29,848 91,550
II Consolidated sales - - 727,889
III Percentage of overseas sales over 8.5 4.1 12.6
consolidated sales(%)
( millions yen )
Year ended December 31, 2002
Asia, Oceania Other Total
I Overseas sales 122,982 58,073 181,056
II Consolidated sales - - 1,583,248
III Percentage of overseas sales over 7.8 3.7 11.4
consolidated sales(%)
Notes: 1. Geographical distances are considered in classification of country or area.
2. Major countries or areas included in each segment are as follows;
Asia, Oceania East Asia, Southeast Asia, Oceania
Other USA, Europe
3. Overseas sales represent those of the Company and consolidated subsidiaries to countries and areas outside of
Japan.
(PRODUCTION, ORDERS RECEIVED AND SALES)
(1) PRODUCTION PERFORMANCE
Production performance for the 6 months ended June 30, 2003 classified by the type of business segment is as
follows:
Business Segment 6 Months ended June 30,2003 Percentage change (%)
Alcoholic beverages 466,834 (Millions yen) (4.3)
Soft drinks 58,690 (Millions yen) 3.0
Pharmaceuticals 27,773 (Millions yen) 8.4
Other 23,138 (Millions yen) 20.3
Total 576,436 (Millions yen) (2.3)
Notes: The amounts are calculated based on sales price without consumption taxes.
(2) ORDERS RECEIVED
Orders received for the 6 months ended June 30, 2003 classified by the type of business segment is as follows:
The Company and its subsidiaries manufacture their products based on their projection for market demand except for
contract manufacture in "alcoholic beverages" and "soft drinks" segments and inspection machines and others in "
other" segment.
Business Segment Orders received during Percentage change Backlog Percentage change
the period (%) (%)
Alcoholic beverages 384 (millions yen ) 247.2 - -
Soft drinks 1,321 (millions yen ) 85.7 - -
Pharmaceuticals - (millions yen ) - - -
Other 3,661 (millions yen ) (13.2) 1,338 (millions yen ) 6.9
Total 5,366 (millions yen ) 6.5 1,338 (millions yen ) 6.9
Notes: The amounts are calculated based on sales price without consumption taxes.
(3) SALES PERFORMANCE
Sales performance for the 6 months ended June 30, 2003 classified by the type of business segment is as follows:
Business Segment Months ended June 30,2003 Percentage change (%)
Alcoholic beverages 476,940 (Millions yen) (3.9)
Soft drinks 164,148 (Millions yen) 4.3
Pharmaceuticals 24,018 ( Millions yen ) 6.9
Other 67,642 (Millions yen) 31.3
Total 732,812 (Millions yen) 0.7
Notes: The amounts do not include the related consumption taxes, etc.
Percentage change means the ratio of increase or decrease in each item for the 6 months ended June 30, 2003 to those for
the 6 months ended June 30, 2002.
For purposes of comparison, figures for the 6 months ended June 30, 2002 have been restated to conform with the change
of classifications for business segments in the 6 months ended June 30, 2003.
(Per share information)
( yen )
At At At
June 30, 2003 June 30, 2002 December 31, 2002
Shareholders' equity per share 808.16 792.16 795.71
Net income per share primary 14.42 10.50 33.26
Net income per share diluted - - -
(ADDITIONAL INFORMATION)
Effective from current interim accounting period, the Company and its subsidiaries adopted the new accounting standard
for net income per share (Accounting Standards Board Statement No. 2, "Accounting Standard for Net Income per Share" and
Guidance for Adopting the Accounting Standards Board Statement No. 4, "Guidance for Adopting the Accounting Standard for
Net Income per Share", both issued by the Accounting Standards Board of Japan on September 25, 2002).
Per share information for 6 months ended June 30, 2002 and for the year ended December 31, 2002, restated to the conform
with the new accounting standard, was as follows.
( yen )
At At
June 30, 2002 December 31, 2002
Shareholders' equity per share 792.14 795.43
Net income per share primary 10.50 32.99
Net income per share diluted - -
Notes: (a) Diluted net income per share is not presented because the Company has no dilutive potential of common
stock.
(b) Calculation basis of net income per share is as follows :
( millions yen )
6 months ended 6 months ended Year ended
June 30, 2003 June 30, 2002 December 31, 2002
Net income 13,931 - -
Less: Amount not attributable to - - -
shareholders included in net income
Balance: Net income attributable to 13,931 - -
common stock
Average number of shares of common 966,404 - -
stock outstanding during the period
(thousands of shares)
Description of dilutive potential common - - -
stock excluded from the calculation of
diluted net income per share because
it is antidilutive.
CONSOLIDATED FINANCIAL RESULTS for
THE HALF YEAR ended JUNE 30, 2003
SUPPLEMENTARY COMMENTS
---------------------------------------------------------------------------------
Consolidated
Results of Operations
(Billions yen)
2003 2003 2002 2002
The 1st half Forecast The 1st half Actual
Actual Actual
Sales 732.8 1,610.0 727.8 1,583.2
Operating Income 37.5 90.0 33.7 89.7
Income before Extraordinary Items and Income 39.0 87.0 30.2 84.4
Taxes
Net Income 13.9 33.0 10.3 32.5
Scope of consolidation and application of equity method
(Number of companies)
2003 2003 2002 2002
The 1st half Forecast The 1st half Actual
Actual Actual
Consolidated subsidiaries 315 314 297 305
Unconsolidated subsidiaries applied by the - - 1 1
equity method
Affiliated companies applied by the equity 14 14 16 16
method
Sales Details
(Billions yen)
2003 2003 2002 2002
The 1st half actual Forecast The 1st half actual Actual
Sales volume
Alcoholic beverages thousand Increase thousand Increase thousand Increase thousand Increase
KL (Decrease) KL (Decrease) KL (Decrease) KL (Decrease)
Beer and Happo-shu 1,619 (4.9%) 3,438 (4.4%) 1,702 (5.2%) 3,595 (0.8%)
million million million million
cases cases cases cases
Soft drinks 95 8.4% 211 9.2% 88 3.0% 193 3.0%
Sales by business segments 732.8 0.7% 1,610.0 1.7% 727.8 (2.7%) 1,583.2 1.4%
Total
Alcoholic beverages 476.9 (3.9%) 1,048.0 (2.0%) 496.5 (5.0%) 1,069.5 (0.8%)
Beer and Happo-shu 430.2 (7.2%) 942.0 (4.6%) 463.4 (7.7%) 987.5 (3.8%)
Whiskey, spirits, wines and 46.6 40.9% 106.0 29.4% 33.0 61.9% 81.9 60.4%
chuhai etc.
Soft drinks 164.1 4.3% 376.0 9.6% 157.3 3.6% 342.9 3.0%
Pharmaceutical 24.0 6.9% 56.0 12.9% 22.5 (0.8%) 49.6 1.1%
Other business 67.6 31.3% 136.0 12.2% 51.5 1.5% 121.1 18.9%
Agribio 14.0 25.8% 26.0 41.9% 11.1 32.6% 18.3 41.1%
Nutrient Food & Feed 17.8 206.9% 37.5 41.6% 5.8 23.4% 26.4 143.0%
Other 35.7 3.5% 72.5 (5.0%) 34.4 (8.2%) 76.3 (2.1%)
SUPPLEMENTARY COMMENTS
---------------------------------------------------------------------------------
2003 Actual:Consolidated
PROFIT CHANGE FROM PRIOR YEAR
(billions yen)
Item 2003 2002 Increase Reference
The 1st half The 1st half (Decrease)
Actual Actual
Sales 732.8 727.8 5.0
Increase in Parent's 5.4
operating income
Increase in other consolidated 0.7 LION NATHAN LTD.:
subsidiaries' operating income 1.4,etc.
Decrease in KIRIN BEVERAGE's (2.3)
operating income
Increase in 35.7 33.7 3.8
Operating Income
Increase in Parent's non-operating 6.2
income, net
Increase in equity in earnings 2.3 KIRIN-AMGEN, INC. :
of affiliates 1.3, etc.
Increase in KIRIN BEVERAGE's 0.1
non-operating income, net
Decrease in other consolidated (3.6) Elimination of dividend
subsidiaries' non-operating income:
income, net etc. (3.2), etc.
Increase in Income Before 39.0 30.2 8.8
Extraordinary Items and Income Taxes
Increase in KIRIN BEVERAGE's 0.6
special income, net
Increase in minority interests (0.1)
Decrease in other consolidated (1.7) KIRIN DISTILLERY Co.,
subsidiaries' extraordinary income, net Ltd.:(1.2)
Decrease in Parent's (4.0)
extraordinary income, net
Increase in Net Income 13.9 10.3 3.6
2003 Forecast:Consolidated
PROFIT CHANGE FROM PRIOR YEAR
(billions yen)
Item 2003 2002 Increase Reference
Forecast Actual (Decrease)
Sales 1,610.0 1,583.2 26.8
Increase in Parent's 4.0
operating income
Decrease in other consolidated (2.6) Kirin Logistics
subsidiaries' operating income Co.,Ltd.:(1.9),etc
Decrease in KIRIN BEVERAGE's (1.1)
operating income
Increase in 90.0 89.7 0.3
Operating Income
Increase in Parent's non- 6.2
operating income, net
Increase in equity in earnings 1.2 KIRIN-AMGEN, INC. :
of affiliates 1.0, etc.
Increase in KIRIN BEVERAGE's 0.4
non-operating income, net
Decrease in other consolidated (5.5) Elimination of dividend
subsidiaries' non-operating income :
income, net, etc. (3.4), etc.
Increase in Income Before 87.0 84.4 2.6
Extraordinary Items and Income Taxes
Increase in other consolidated 2.4 Kirin Logistics
subsidiaries' extraordinary Co.,Ltd. : 1.4,etc
income, net
Decrease in minority interests 0.3
Decrease in KIRIN BEVERAGE's (1.3)
extraordinary income, net
Decrease in Parent's (3.5)
extraordinary income, net
Increase in Net Income 33.0 32.5 0.5
Consolidated
Major Expenditures etc.
(billions yen)
2003 2003 2002 2002
The 1st half Forecast The 1st half Actual
actual actual
Sales promotion 63.6 206.0 62.1 136.3
Advertising 32.6 32.9 56.6
R&D 9.7 23.5 10.1 23.0
Depreciation 36.7 71.0 35.8 75.2
Financial profit, net (2.3) (4.5) (1.7) (4.9)
Capital Expenditures 30.1 69.0 40.8 85.4
Cash flows (31.4) 3.5 (44.6) (38.2)
Operating activities 23.5 108.0 26.7 87.7
Investing activities (35.7) (70.0) (133.6) (175.3)
Financing activities (19.2) (34.0) 63.0 50.6
Major Changes in Assets and Liabilities
(billions yen)
2003 2002 Increase Reference
The 1st half The 1st half (Decrease)
Actual Actual
Cash 76.6 102.3 (25.7) Kirin Brewery Company, Limited, Kirin Lease
Co., Ltd., Takeda-Kirin Foods Corporation,
etc.
Notes and accounts receivable 243.2 266.3 (23.1) Influence of the fact that the prior balance
sheet date was a bank holiday and decrease in
sales compared to the prior fiscal year.
Investment securities 328.5 354.9 (26.4) Decrement on revaluation of securities as a
result of drop of market value, etc.
Liquor taxes payable 78.8 123.7 (44.9) Influence of the fact that the prior balance
sheet date was a bank holiday and decrease in
sales compared to the prior fiscal year.
Consolidated
Analysis of operating income by business segment
Fluctuation between the 1st half of 2003 Actual and the 1st half of 2002 Actual (billions yen)
Alcoholic Soft drinks Pharma- Others Eliminations Total
beverages ceuticals
Operating income 21.3 6.5 5.4 1.9 (1.4) 33.7
- The 1st half of 2002 Actual
Increase (Decrease) in gross (1.0) 6.7 0.8 2.4 1.2 10.2
profit
Decrease (Increase) in selling, 5.8 (9.2) (0.3) (1.7) (1.0) (6.4)
general and administrative
expenses
Increase (Decrease) in operating 4.8 (2.5) 0.5 0.7 0.2 3.8
income
Operating income 26.1 4.0 5.9 2.6 (1.2) 37.5
- The 1st half of 2003 Actual
Fluctuation between 2003 Forecast and 2002 Actual (billions yen)
Alcoholic Soft drinks Pharma- Others Eliminations Total
beverages ceuticals
Operating income - 2002 Actual 54.7 18.8 11.5 7.8 (3.2) 89.7
Increase (Decrease) in gross 1.1 19.0 4.0 1.6 - 25.7
profit
Decrease (Increase) in selling, 1.2 (20.3) (3.1) (1.9) (1.3) (25.4)
general and administrative
expenses
Increase (Decrease) in operating 2.3 (1.3) 0.9 (0.3) (1.3) 0.3
income
Operating income - 2003 Forecast 57.0 17.5 12.4 7.5 (4.5) 90.0
Consolidated
Changes in Sales and Operating Income of Major Companies
Sales (billions yen)
2003 2002 Increase
The 1st half Actual The 1st half Actual (Decrease)
Kirin brewery Company,Limited 432.3 459.4 (27.1)
(Subsidiaries)
Kirin Beverage Corporation 158.4 146.1 12.3
LION NATHAN LTD. 63.0 56.4 6.6
Kirin Logistics Co.,Ltd. 37.4 36.9 0.5
Kirin Engineering Co,.Ltd. 6.9 5.6 1.3
Takeda-Kirin Foods Corporation 13.0 - 13.0
(Affiliates)
Kinki Coca-Cola Bottling Co.,Ltd. 86.0 86.7 (0.7)
YONEKYU CORPORATION 46.6 43.3 3.3
SAN MIGUEL CORPORATION 160.9 167.2 (6.3)
Operating Income (billions yen)
2003 2002 Increase
The 1st half Actual The 1st half Actual (Decrease)
Kirin brewery Company,Limited 18.3 12.9 5.4
(Subsidiaries)
Kirin Beverage Corporation 2.7 5.0 (2.3)
LION NATHAN LTD. 14.8 13.4 1.4
Kirin Logistics Co.,Ltd. 1.2 1.9 (0.7)
Kirin Engineering Co,.Ltd. 0.3 0.3 0.0
Takeda-Kirin Foods Corporation 0.4 - 0.4
(Affiliates)
Kinki Coca-Cola Bottling Co.,Ltd. 1.7 2.1 (0.4)
YONEKYU CORPORATION 1.2 0.8 0.4
SAN MIGUEL CORPORATION 13.7 15.3 (1.6)
This information is provided by RNS
The company news service from the London Stock Exchange
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