RNS Number:0160S
Kirin Brewery Co Ld
13 November 2003
KIRIN BREWERY COMPANY, LIMITED November 11, 2003
SUMMARY OF CONSOLIDATED FINANCIAL RESULTS FOR THE 9 MONTHS
ENDED SEPTEMBER 30, 2003 (UNAUDITED)
(English Translation)
Fiscal year ending 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, Executive officer,
General Manager of Communications Dept.
Telephone: 81- 3- 5540- 3450 from overseas
1. Items pertaining to preparation of quarterly consolidated statements of income, etc.
Whether US GAAP is applied: None
Change in accounting policies: Yes (Please see "SEGMENT INFORMATION")
Changes in scope of consolidation and application of equity method:
Consolidation : Increase 1 company
Equity method : Decrease 1 company
2. Business results and financial positions for the 9 months (January 1, 2003 - September 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) (%)
9 months ended September 30,2003 1,173,527 0.1 81,879 5.2 78,113 6.5
9 months ended September 30,2002 1,172,292 0.9 77,857 25.7 73,342 24.1
Year ended December 31, 2002 1,583,248 89,789 84,443
Net income Percentage Net income Net income
(millions yen) change per share per share
(%) primary diluted
(yen) (yen)
9 months ended September 30,2003 34,870 13.0 36.08 36.07
9 months ended September 30,2002 30,857 29.2 31.44 -
Year ended December 31, 2002 32,540 33.26 -
Notes Percentage change means the ratio of increase or decrease in each item of business results for the 9 months ended
: September 30, 2003, to those for the 9 months ended September 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)
September 30, 2003 1,746,930 801,875 45.9 829.90
September 30, 2002 1,716,697 783,015 45.6 804.39
December 31, 2002 1,744,131 769,227 44.1 795.71
(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)
9 months ended September 30,2003 72,100 (49,345) (8,832) 118,748
9 months ended September 30,2002 52,210 (156,693) 71,799 110,823
Year ended December 31, 2002 87,750 (175,377) 50,699 105,625
3. Forecast of business results for the current fiscal year (January 1, 2003-December 31, 2003)
Sales Income before Net income Net income
(million yen) extraordinary items (million yen) Per share
(million yen) (yen)
Year ending December 31, 2003 1,610,000 87,000 33,000 34.15
Note: Forecasted operating income 90,000 million yen
4. Results of Operations for the Nine Months to the End of the Third Quarter
Consolidated net sales for the nine-month period to the end of the third quarter (January 1, 2003 to September 30, 2003)
were 1,173.5 billion yen, up 0.1% from the same period of the previous fiscal year. Although sales of alcohol beverages
were down slightly, sales in the soft drink and pharmaceuticals businesses were strong. In terms of profitability,
consolidated operating income increased 5.2% over the same period of the previous fiscal year to 81.8 billion yen,
consolidated income before extraordinary items rose 6.5% to 78.1 billion yen, and consolidated net income increased
13.0% to 34.8 billion yen.
Results by Business Segment
Alcohol Beverage Business
Kirin continued to develop its comprehensive alcohol business by strengthening Group cooperation, expanding its
portfolio of alcohol beverages , making strategic investments in the growing categories.
In the beer category, the Company developed new products around its key Kirin Lager and Kirin Ichiban Shibori brands
that offer new degrees of added value. Kirin Lager's position as the Company's representative brand was bolstered by the
release of Kirin Classic Lager in cans in the Chugoku and Shikoku areas, and the launch of Kirin Lager Blue Label, with
50% less sugar, in response to growing health consciousness. For Ichiban Shibori, Kirin continued with its "food" series
of commercials, with the aim of securing its position as the representative draft beer brand. Kirin also worked 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 in 2002. Since the launch of Tanrei Alpha in February, Kirin has
continued to improve production technology, cutting 95 percent (Kirin's comparison) of purine bodies and improving the
beverage's taste. Other value-added happo-shu brands were also launched to respond to diversified customer needs,
including the dark happo-shu Namakuro, which follows the same "easy-drinking and inexpensive" concept behind Gokunama,
and Kirin Honey Brown, a limited-release happo-shu, which delivers a new kind of taste by using honey as one of its
ingredients.
In order to create a new category of beer-flavored sparkling beverages aimed at adults, Kirin launched Malt Squash,
offering authentic beer taste with approximately 0.5% of the alcohol.
In the growing chu-hi category, Kirin bolstered the Kirin Chu-hi Hyoketsu brand, and took steps to offer new degrees of
value in the chu-hi drink category. A new lime flavor was added to the lineup, with Chardonnay Sparkling and White Peach
Sparkling launched as part of the new Premium Fruits series , adding to the variety and range of chu-hi drinks
available.
In an effort to create a new kind of shochu (Japanese distilled liquor made from grain) market last year, Kirin began
marketing two products nationwide that had only been released on a trial basis in select areas . The sales area for Mugi
Shochu Pure Blue was expanded in May, and for Hyoketsu 21o Straight in June.
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. The number of entries for this campaign, at
approximately 72 million, was the largest number ever recorded for a closed campaign.
(Number of entries versus public campaigns previously conducted in Japan, as of September 2003)
In the spirits and wine category, Kirin continued with efforts to strengthen the Chivas Regal and Four Roses brands.
Kirin also expanded its business foundation when it acquired the Japan sales rights to Franzia, the world's top-selling
wine brand*, and began importing and selling Australian wine produced by a subsidiary of Kirin Group company Lion Nathan
Limited.
*Greatest sales volume for a single brand (Source: Impact Databank 2002 Edition)
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 in September 2002. Kirin also continued
with effective investment of marketing funds and strategic allocation of resources in the growing 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, although sales of chu-hi drinks were strong, the increase in tax on happo-shu and
falling sales of beer led to net sales in the alcohol beverage business of 761.5 billion yen, a decrease of 3.6%
compared with the same period of the previous year.
Soft Drink Business
Kirin Beverage Corporation, which operates Kirin's soft drinks business, undertook efforts to strengthen the foundation
of its business by enhancing its product portfolio, and conducted aggressive marketing aimed at nurturing and growing
key brands.
By product, the premium brand Korase Namacha was launched as part of the Kirin Namacha lineup for a limited time during
the summer, adding a new freshness to the brand. Aggressive marketing for Gogono-kocha ("afternoon tea") as "a new
refreshing taste in iced tea" resulted in sales well above initial targets. Greater focus was made on penetration of the
Kirin Amino Supli brand, with a series of television commercials produced in anticipation of the peak demand season. As
part of an overhaul of the Kirin Fire brand, new products were launched nationwide in September. In the growing market
for mineral water, the Company conducted marketing aimed at further market penetration and establishing Volvic as a
premium mineral water brand.
In marketing, Kirin stepped up its sales efforts, focusing mainly on volume retailer channels . The Company also began
exploring business integration with Koiwai Dairy Products Co., Ltd., with the aim of further expanding the chilled
product and distribution business.
In the China business, growing sales and strong performance is reported for Kirin Gogono-kocha, Kirin Namacha, Kirin
Amino Supli and Kirin Kikicha.
As a result of the above, net sales of the soft drink business totaled 270.0 billion yen, an increase of 3.8% compared
with the same period of the previous year.
Pharmaceutical Business
In the pharmaceuticals business, Kirin continued to conduct marketing 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. The Company also focused on exclusive marketing efforts in Japan for Rocaltrol Injection, a
treatment for secondary hyperparathyroidism. ESPO pre-filled syringes were launched in April, and the hyperphosphatemia
agent PHOSBLOCK Tablets, developed in cooperation with Chugai Pharmaceutical Co., Ltd., was launched in June. In the
human antibody drug field, Kirin signed a licensing agreement in July with Takeda Chemical Industries, Ltd. for its
human antibody-producing mouse technology.
Net sales in the pharmaceuticals business, as a result of the expansion of Kirin's in-house marketing efforts , totaled
40.0 billion yen, an increase of 12.5% compared with the same period of the previous year.
Other Businesses
In agribio, Kirin began marketing the new color Blue in its Kirin 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). Also, a second
FLOREAL location, a new concept retail flower shop established by Flower Gate, Inc. last year, was opened in the Aoyama
area of Tokyo due to the popularity of the pilot store.
In nutrient foods, Takeda-Kirin Foods Corporation began marketing their jointly developed beer yeast extract Komi,
strengthening its seasoning product lineup.
As a result of the above, sales in other businesses totaled 101.9 billion yen, an increase of 17.6% compared with the
same period of the previous year.
5. Policies Concerning Improvements in the Management Structure
As part of its management structure reform, effective March 28, 2003 Kirin revised the makeup of the Board of Directors,
and introduced 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.
CONSOLIDATED BALANCE SHEETS (millions yen)
ASSETS At At Increase At
September 30,2003 September 30,2002 (Decrease) December 31, 2002
Amount Percentage Amount Percentage Amount Amount Percentage
over total over total over total
assets assets assets
Current Assets % % %
Cash 121,396 111,276 10,120 108,148
Notes and accounts receivable 232,010 218,827 13,183 269,106
Marketable securities 1,441 3,788 (2,347) 2,017
Inventories 102,099 94,398 7,701 83,949
Other 54,757 49,753 5,004 65,820
Allowance for doubtful accounts (3,680) (3,158) (522) (5,456)
Total current assets 508,024 29.1 474,887 27.7 33,137 523,585 30.0
Fixed Assets
Property, Plant and Equipment
Buildings and structures 188,915 187,717 1,198 189,050
Machinery, equipment and 186,400 192,300 (5,900) 190,687
vehicles
Land 168,780 166,289 2,491 166,393
Other 76,016 69,296 6,720 63,252
Total 620,112 35.5 615,604 35.8 4,508 609,382 35.0
Intangible Assets
Consolidation differences 46,666 46,124 542 45,513
Other 110,935 106,174 4,761 106,608
Total 157,601 9.0 152,299 8.9 5,302 152,122 8.7
Investments and Other Assets
Investment securities 341,645 349,650 (8,005) 330,905
Other 124,212 128,129 (3,917) 132,049
Allowance for doubtful accounts (4,666) (3,874) (792) (3,913)
Total 461,191 26.4 473,905 27.6 (12,714) 459,041 26.3
Total fixed assets 1,238,905 70.9 1,241,809 72.3 (2,904) 1,220,546 70.0
TOTAL ASSETS 1,746,930 100.0 1,716,697 100.0 30,233 1,744,131 100.0
(millions yen)
LIABILITIES, At At Increase At
MINORITY INTERESTS September 30,2003 September 30,2002 (Decrease) December 31, 2002
AND SHAREHOLDERS' EQUITY Amount Percentage Amount Percentage Amount Amount Percentage
over total over total over total
assets assets assets
Current Liabilities % % %
Notes and accounts payable 98,931 96,196 2,735 98,649
Short-term loans payable 37,007 62,183 (25,176) 47,824
Liquor taxes payable 77,564 77,609 (45) 113,660
Income taxes payable 22,845 16,735 6,110 15,599
Accrued expenses 66,723 64,800 1,923 59,573
Deposits received 52,155 56,462 (4,307) 61,227
Other 42,262 45,850 (3,588) 64,619
Total current liabilities 397,490 22.8 419,840 24.4 (22,350) 461,154 26.4
Long-term Liabilities
Bonds 133,909 130,224 3,685 129,948
Long-term debt 133,441 103,981 29,460 105,148
Pension and retirement benefits 90,352 97,041 (6,689) 95,414
Other reserves 9,129 9,072 57 8,607
Deposits received 72,280 79,628 (7,348) 78,567
Other 29,360 19,114 10,246 21,633
Total long-term liabilities 468,474 26.8 439,063 25.6 29,411 439,318 25.2
TOTAL LIABILITIES 865,965 49.6 858,903 50.0 7,062 900,473 51.6
MINORITY INTERESTS 79,089 4.5 74,778 4.4 4,311 74,431 4.3
Common Stock - - 102,045 5.9 (102,045) 102,045 5.8
Additional Paid-In Capital - - 70,868 4.1 (70,868) 70,868 4.1
Revaluation variance for Land - - (1,625) (0.1) 1,625 (1,627) (0.1)
Retained Earnings - - 625,670 36.5 (625,670) 630,744 36.2
Net unrealized holding gains on securities - - 16,887 1.0 (16,887) 6,132 0.4
Foreign currency translation adjustments - - (22,121) (1.3) 22,121 (25,308) (1.5)
Total - - 791,724 46.1 (791,724) 782,855 44.9
Treasury Stock - - (8,709) (0.5) 8,709 (13,628) (0.8)
TOTAL SHAREHOLDERS' EQUITY - - 783,015 45.6 (783,015) 769,227 44.1
Common stock 102,045 5.8 - - 102,045 - -
Capital reserve 70,868 4.1 - - 70,868 - -
Retained earnings 652,661 37.4 - - 652,661 - -
Revaluation variance for Land (1,674) (0.1) - - (1,674) - -
Net unrealized holding gains on securities 20,874 1.2 - - 20,874 - -
Foreign currency translation adjustments (28,844) (1.7) - - (28,844) - -
Treasury stock (14,056) (0.8) - - (14,056) - -
TOTAL SHAREHOLDERS' EQUITY 801,875 45.9 - - 801,875 - -
TOTAL LIABILTIES, MINORITY INTERESTS AND 1,746,930 100.0 1,716,697 100.0 30,233 1,744,131 100.0
SHAREHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF INCOME (millions yen)
9 months ended 9 months ended Increase Year ended
September 30, 2003 September 30, 2002 (Decrease) December 31, 2002
Amount Percentage Amount Percentage Amount Amount Percentage
over sales over sales over sales
% % %
Sales 1,173,527 100.0 1,172,292 100.0 1,235 1,583,248 100.0
Cost of Sales 725,418 61.8 738,392 63.0 (12,974) 1,000,199 63.2
Gross Profit 448,109 38.2 433,900 37.0 14,209 583,048 36.8
Selling, General and 366,229 31.2 356,042 30.4 10,187 493,259 31.2
Administrative Expenses
Operating Income 81,879 7.0 77,857 6.6 4,022 89,789 5.7
Non-operating Income
Interest income 503 683 (180) 1,147
Return on funds in trust - 210 (210) 210
Dividend income 2,158 1,794 364 2,614
Equity in earnings of affiliates 24 835 (811) 2,102
Gain on transactions related to gift coupon 2,047 - 2,047 453
Other 2,988 3,158 (170) 3,689
Total 7,722 0.7 6,682 0.6 1,040 10,217 0.6
Non-operating Expenses
Interest expense 7,234 6,478 756 8,955
Other 4,253 4,718 (465) 6,607
Total 11,488 1.0 11,197 1.0 291 15,562 1.0
Income before Extraordinary 78,113 6.7 73,342 6.3 4,771 84,443 5.3
Items and Income Taxes
Extraordinary Income
Gain on sales of fixed assets 864 2,115 (1,251) 3,401
Gain on sales of investment securities 74 410 (336) 420
Reversal of allowance for doubtful accounts 1,573 - 1,573 -
Gain on transfer of substitutional portion 2,601 - 2,601 -
of the Welfare Pension Fund
Reversal of allowance for furnace overhaul - 700 (700) 700
Total 5,113 0.4 3,226 0.3 1,887 4,521 0.3
Extraordinary Expenses
Loss on disposal of fixed assets 1,553 4,699 (3,146) 6,715
Loss on sales of fixed assets 115 171 (56) 379
Loss on revaluation of investment securities - - - 2,236
Loss on sales of investment securities 64 5 59 7
Business restructuring costs 1,245 - 1,245 -
Loss on devaluation of real estate in trust - - - 3,352
Premium on retirement benefits - - - 1,755
Total 2,978 0.3 4,876 0.4 (1,898) 14,447 0.9
Income before Income Taxes 80,248 6.8 71,692 6.1 8,556 74,517 4.7
and Minority Interests
Income Taxes 39,176 3.3 35,309 3.0 3,867 36,214 2.2
Minority Interests 6,201 0.5 5,525 0.5 676 5,762 0.4
Net Income 34,870 3.0 30,857 2.6 4,013 32,540 2.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (millions yen)
9 months ended 9 months ended Increase Year
September September (Decrease) ended
30, 2003 30, 2002 December
31,
2002
Cash flows from operating activities
Income before income taxes and minority interests 80,248 71,692 8,556 74,517
Depreciation and amortization 55,504 54,787 717 75,206
Increase (decrease) in reserves (8,303) (1,011) (7,292) 635
Interest and dividend income and return on funds in trust (2,661) (2,688) 27 (3,972)
Interest expense 7,234 6,478 756 8,955
Decrease (increase) in notes and accounts receivable 39,447 43,301 (3,854) (6,164)
Decrease (increase) in inventories (9,166) (21,333) 12,167 (11,131)
Increase (decrease) in notes and accounts payable (6,543) (15,285) 8,742 (11,265)
Increase (decrease) in liquor taxes payable (37,259) (42,184) 4,925 (6,107)
Other (8,793) (1,773) (7,020) 10,092
Sub-total 109,708 91,984 17,724 130,766
Interest, dividend and return on funds in trust received 4,957 4,393 564 6,227
Interest paid (7,636) (6,244) (1,392) (8,785)
Income taxes paid (34,929) (37,922) 2,993 (40,457)
Net cash provided by (used in) operating activities 72,100 52,210 19,890 87,750
 Cash flows from investing activities
Payments for purchases of property, plant, equipment and (44,694) (70,178) 25,484 (85,492)
intangible fixed assets
Proceeds from sales of property, plant and equipment 2,529 4,334 (1,805) 5,278
Payments for purchases of marketable securities and investment (2,898) (102,440) 99,542 (103,832)
securities
Proceeds from sales and redemption of marketable securities and 3,800 12,333 (8,533) 11,075
investment securities
Proceeds from termination of funds in trust - 17,411 (17,411) 17,411
Payments for acquisition of shares of newly consolidated (11,909) (10,036) (1,873) (12,674)
subsidiaries
Other 3,826 (8,116) 11,942 (7,144)
Net cash used in investing activities (49,345) (156,693) 107,348 (175,377)
Cash flows from financing activities
Increase (decrease) in loans 8,039 52,647 (44,608) 37,981
Proceeds from issue of bonds - 40,000 (40,000) 40,000
Payments for purchases of treasury stock (230) (8,623) 8,393 (13,542)
Cash dividends paid (10,163) (9,891) (272) (11,777)
Cash dividends paid to minority shareholders (6,322) (2,191) (4,131) (2,203)
Other (154) (142) (12) 239
Net cash provided by (used in) financing activities (8,832) 71,799 (80,631) 50,699
Effect of exchange rate fluctuation on cash and cash equivalents (295) (328) 33 (1,282)
Net increase (decrease) in cash and cash equivalents 13,626 (33,012) 46,638 (38,209)
Cash and cash equivalents at beginning of period 105,625 144,331 (38,706) 144,331
Cash and cash equivalents of subsidiaries included in (or excluded (503) (495) (8) (495)
from ) the consolidation scope at beginning of period, net
Cash and cash equivalents at end of period 118,748 110,823 7,925 105,625
(SEGMENT INFORMATION)
Business Segment Information
(millions yen)
9 months ended September 30,2003
Alcoholic Soft drinks Pharma- Others Total Eliminations Consolidated
beverages ceuticals
Sales
1 Unaffiliated customers 761,566 270,022 40,003 101,933 1,173,527 - 1,173,527
2 Intersegment 1,811 459 - 59,609 61,880 (61,880) -
Total sales 763,378 270,481 40,003 161,543 1,235,407 (61,880) 1,173,527
Operating expenses 710,276 256,660 28,662 156,346 1,151,946 (60,298) 1,091,647
Operating income 53,101 13,821 11,340 5,197 83,461 (1,581) 81,879
Notes : 1. Business segments are classified based on type and nature of products.
2. Main products of sales bysegment are as follows;
Business segments Main products
Alcoholic Beer, Sparkling malt liquor (Happoshu), Whiskey, Spirits, Wine etc.
beverages
Soft drinks Soft drinks, Other drinks
Pharmaceuticals Pharmaceutical products
Others Engineering, Logistics, Floriculture etc.
(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 businesssegment 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 current fiscal year.
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 3,536 million yen, operating expenses of the Soft Drinks segment increased by 20 million yen ,
operating expenses of the Pharmaceuticals segment decreased by 3,430 million yen, and operating expenses of the Others
segment decreased by 126 million yen for the 9 months ended September 30, 2003.
Business segment information for the 9 months ended September 30, 2002, restated to conform with the change of
classifications for business segment information and the method of allocation of operating expenses adopted for the 9
months ended September 30, 2003, was as follows.
(millions yen)
9 months ended September 30, 2002
Alcoholic Soft drinks Pharma- Others Total Eliminations Consolidated
beverages ceuticals
Sales
1 Unaffiliated customers 789,973 260,069 35,548 86,700 1,172,292 - 1,172,292
2 Intersegment 2,351 873 - 66,568 69,793 (69,793) -
Total sales 792,324 260,943 35,548 153,269 1,242,085 (69,793) 1,172,292
Operating expenses 746,511 243,505 25,266 146,755 1,162,040 (67,605) 1,094,434
Operating income 45,812 17,437 10,281 6,513 80,045 (2,188) 77,857
(PRODUCTION, ORDERS RECEIVED AND SALES)
(1) PRODUCTION PERFORMANCE
Production performance for the 9 months ended September 30, 2003 classified by the type of business segment was as
follows:
Business Segment 9 months ended September 30,2003 Percentage change (%)
Alcoholic beverages 738,582 (millions yen) (2.2)
Soft drinks 93,760 (millions yen) 6.0
Pharmaceuticals 43,607 (millions yen) 14.0
Others 35,311 (millions yen) 17.7
Total 911,261 (millions yen) (0.1)
Notes : The amounts are calculated based on sales price without consumption taxes.
(2) ORDERS RECEIVED
Orders received for the 9 months ended September 30, 2003 classified by the type of business segment was 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 (%)
period
Alcoholic beverages 459 (millions yen) 234.2 - -
Soft drinks 1,701 (millions yen) 74.7 - -
Pharmaceuticals - (millions yen) - - -
Others 5,704 (millions yen) (6.1) 673 (millions yen) (36.4)
Total 7,865 (millions yen) 9.4 673 (millions yen) (36.4)
Notes : The amounts are calculated based on sales price without consumption taxes.
(3) SALES PERFORMANCE
Sales performance for the 9 months ended September 30, 2003 classified by the type of business segment was as follows:
Business Segment 9 months ended September 30,2003 Percentage change (%)
Alcoholic beverages 761,566 (millions yen) (3.6)
Soft drinks 270,022 (millions yen) 3.8
Pharmaceuticals 40,003 (millions yen) 12.5
Others 101,933 (millions yen) 17.6
Total 1,173,527 (millions yen) 0.1
Notes : The amounts do not include the related consumption tax, etc.
Percentage change means the ratio of increase or decrease in each item for the 9 months ended September 30, 2003 to
those for the 9 months ended September 30, 2002.
For purposes of comparison, figures for the 9 months ended September 30, 2002 have been restated to conform with the
change of classifications for business segments in the current fiscal year.
KIRIN BREWERY COMPANY, LIMITED November 11, 2003
SUMMARY OF NON-CONSOLIDATED FINANCIAL RESULTS FOR THE 9 MONTHS
ENDED SEPTEMBER 30, 2003 (UNAUDITED)
(English Translation)
Fiscal year ending 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, Executive officer,
General Manager of Communications Dept.
Telephone: 81- 3- 5540- 3450 from overseas
1. Items pertaining to preparation of quarterly non-consolidated statements of income, etc
Whether US GAAP is applied: None
Change in accounting policies: None
2. Business results and financial positions for the 9 months (January 1, 2003 - September 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) (%)
9 months ended September 30,2003 700,123 (5.4) 46,601 18.4 60,133 27.5
9 months ended September 30,2002 740,054 39,360 47,146
Year ended December 31, 2002 999,920 44,024 53,831
Net income Percentage Net income Net income
(millions yen) change per share per share
(%) primary diluted
(yen) (yen)
9 months ended September 30,2003 35,783 39.1 37.02 -
9 months ended September 30,2002 25,730 26.22 -
Year ended December 31, 2002 26,380 26.96 -
Notes Percentage change means the ratio of increase or decrease in each item of business results for the 9 months ended
: September 30,2003, to those for the 9 months ended September 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)
September 30, 2003 1,283,545 718,164 56.0 743.10
September 30, 2002 1,254,390 694,675 55.4 713.64
December 31, 2002 1,280,112 679,770 53.1 703.18
3. Forecast of business results for the current fiscal year (January 1, 2003-December 31, 2003)
Sales Income before Net income Year-end Dividend per
(millions yen) extraordinary (millions yen) dividend per share for the
items share year
(millions yen) (yen) (yen)
Year ending December 31, 2003 970,000 64,000 33,000 6.00 12.00
Notes : Forecasted operating income 48,000 million yen
BALANCE SHEETS (millions yen)
ASSETS At At Increase At
September 30, 2003 September 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 84,898 58,535 26,363 54,838
Notes receivable 467 1,873 (1,406) 2,088
Accounts receivable 137,577 129,266 8,311 178,193
Marketable securities - 2,006 (2,006) 1,001
Inventories 41,309 41,888 (579) 36,851
Other 27,295 27,185 110 35,268
Allowance for doubtful accounts (2,971) (2,197) (774) (4,327)
Total current assets 288,576 22.5 258,559 20.6 30,017 303,914 23.7
Fixed Assets
Property, Plant and Equipment
Buildings 115,327 122,305 (6,978) 120,449
Machinery and equipment 118,426 131,180 (12,754) 130,748
Land 113,108 113,193 (85) 113,263
Construction in progress 20,297 12,282 8,015 8,130
Other 27,564 29,291 (1,727) 28,759
Total 394,724 30.7 408,254 32.5 (13,530) 401,351 31.4
Intangible Assets 6,011 0.5 6,190 0.5 (179) 6,047 0.5
Investments and Other Assets
Investment securities 215,178 209,349 5,829 190,820
Investments in subsidiaries and 270,637 257,408 13,229 257,612
affiliates
Life insurance investments 35,169 33,811 1,358 34,985
Other 77,635 84,376 (6,741) 88,743
Allowance for doubtful accounts (4,386) (3,559) (827) (3,362)
Total 594,233 46.3 581,386 46.4 12,847 568,799 44.4
Total fixed assets 994,969 77.5 995,831 79.4 (862) 976,198 76.3
TOTAL ASSETS 1,283,545 100.0 1,254,390 100.0 29,155 1,280,112 100.0
(millions yen)
LIABILITIES At At Increase At
AND SHAREH OLDERS' EQUITY September 30, 2003 September 30, 2002 (Decrease) December31, 2002
Amount Percentage Amount Percentage Amount Amount Percentage
over total over total over total
assets assets assets
Current Liabilities % % %
Notes payable 4,088 842 3,246 592
Accounts payable 30,765 34,255 (3,490) 33,987
Short-term loans payable 33,000 27,400 5,600 17,500
Liquor taxes payable 74,675 75,278 (603) 111,206
Income taxes payable 17,719 11,336 6,383 8,467
Accrued expenses 29,295 31,505 (2,210) 37,566
Deposits received 50,363 54,515 (4,152) 59,386
Other 29,957 30,495 (538) 34,181
Total current liabilities 269,865 21.0 265,629 21.2 4,236 302,888 23.7
Long-term Liabilities
Bonds 110,000 110,000 - 110,000
Long-term debt 26,000 21,000 5,000 26,000
Pension and retirement benefits 75,719 83,020 (7,301) 81,385
Other reserves 1,013 1,330 (317) 1,414
Deposits received 62,344 69,350 (7,006) 68,301
Other 20,437 9,385 11,052 10,350
Total long-term liabilities 295,515 23.0 294,086 23.4 1,429 297,453 23.2
TOTAL LIABILITIES 565,380 44.0 559,715 44.6 5,665 600,341 46.9
Common stock - - 102,045 8.2 (102,045) 102,045 8.0
Additional paid-in capital - - 70,868 5.7 (70,868) 70,868 5.5
Legal reserve - - 25,511 2.0 (25,511) 25,511 2.0
Retained earnings
Voluntary earned surplus - 427,666 (427,666) 427,666
Unappropriated retained earnings - 60,605 (60,605) 61,255
Total retained earnings - - 488,272 38.9 (488,272) 488,922 38.2
Net unrealized holding gains - - 16,686 1.3 (16,686) 6,050 0.5
on securities
Treasury stock - - (8,709) (0.7) 8,709 (13,628) (1.1)
TOTAL SHAREHOLDERS' EQUITY - - 694,675 55.4 (694,675) 679,770 53.1
Common stock 102,045 8.0 - - 102,045 - -
Capital reserve
Additional paid-in capital 70,868 - 70,868 -
Total Capital reserve 70,868 5.5 - - 70,868 - -
Retained earnings
Legal reserve 25,511 - 25,511 -
Voluntary earned surplus 441,942 - 441,942 -
Unappropriated retained earnings 71,014 - 71,014 -
Total retained earnings 538,468 42.0 - - 538,468 - -
Net unrealized holding gains 20,640 1.6 - - 20,640 - -
on securities
Treasury stock (13,858) (1.1) - - (13,858) - -
TOTAL SHAREHOLDERS' EQUITY 718,164 56.0 - - 718,164 - -
TOTAL LIABILITIES 1,283,545 100.0 1,254,390 100.0 29,155 1,280,112 100.0
AND SHAREHOLDERS' EQUITY
STATEMENTS OF INCOME (millions yen)
9 months ended September 9 months ended September Increase Year ended
30, 2003 30, 2002 (Decrease) December 31, 2002
Amount Percentage Amount Percentage Amount Amount Percentage
over sales over sales over sales
% % %
Sales 700,123 100.0 740,054 100.0 (39,931) 999,920 100.0
Cost of Sales 488,588 69.8 518,454 70.1 (29,866) 703,954 70.4
Gross Profit 211,535 30.2 221,599 29.9 (10,064) 295,965 29.6
Selling, General and 164,933 23.6 182,238 24.6 (17,305) 251,941 25.2
Administrative Expenses
Operating Income 46,601 6.7 39,360 5.3 7,241 44,024 4.4
Non-operating Income
Interest income 391 540 (149) 726
Return on funds in trust - 210 (210) 210
Dividend income 11,913 8,198 3,715 9,318
Other 5,562 3,383 2,179 4,971
Total 17,866 2.6 12,332 1.7 5,534 15,226 1.5
Non-operating Expenses
Interest expense 1,532 1,392 140 1,961
Other 2,802 3,154 (352) 3,458
Total 4,334 0.6 4,546 0.6 (212) 5,419 0.5
Income before Extraordinary 60,133 8.6 47,146 6.4 12,987 53,831 5.4
Items and Income Taxes
Extraordinary Income 1,902 0.3 2,336 0.3 (434) 2,324 0.2
Extraordinary Expenses 1,352 0.2 3,852 0.5 (2,500) 11,268 1.1
Income before Income Taxes 60,683 8.7 45,630 6.2 15,053 44,887 4.5
Income Taxes 24,900 3.6 19,900 2.7 5,000 18,507 1.9
Net Income 35,783 5.1 25,730 3.5 10,053 26,380 2.6
Retained earnings brought forward 41,030 40,750 280 40,750
from the prior fiscal year
Dividends (interim) 5,799 5,874 (75) 5,874
Unappropriated retained earnings 71,014 60,605 10,409 61,255
This information is provided by RNS
The company news service from the London Stock Exchange
END
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