financial results presentation for 2016 · 2017-03-08 · financial results presentation for 2016....

February 2017

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Financial Results Presentation for 2016

Financial Results for 2016Financial Forecast for 2017

Managing Director and Managing Corporate Officer (CFO)

Yoshihide Okuda

Impact of Introduction of IFRS


1

（①＋②）（①）（②） (JPY billion)

Revenue 1,706.9 1,890.3 - 183.4 1,857.4 - 150.5 Sales deductions ofpromotion incentives

Core Operating Profit *1 148.5 140.8 7.7 135.1 13.4

*1 Core Operating Profit is the reference index for normalized business performance. Core Operating Profit = Revenue - (COGS + general administrative cost)

Details of imapact to Core Operating Profit: JPY 7.7 billion

Total Impact - 9.4 - 17.1 7.7

Amortization of goodwill and depreciation (consolidated subsidiaries) - 6.2 - 17.1 10.8

Alcohol Beverages Business - 0.2 - 1.3 1.1

Soft Drinks Business - 1.7 - 3.0 1.3

Food Business - - 0.4 0.4

Overseas Business - 4.2 - 12.2 8.0

Other Business - 0.2 - 0.2 0.0

Corporate adjustment (IFRS) - 3.1 - - 3.1

Adjustment of defined benefit - 2.6 - - 2.6

Adjustment of depreciation etc. - 0.5 - - 0.5

Profit attributable to owners of the parent company 89.2 81.8 7.4 76.4 12.8

Details of impact of Profit attributable to owners of the parent company: JPY 7.4 billion

Total Impact - 13.1 - 20.5 7.4

Adjustment between J GAAP and IFRS in Core Operating Profit - 9.4 - 17.1 7.7

Amortization of goodwill and depreciation (affiliates) - - 3.4 3.4

Other adjustment of difference between J GAAP and IFRS - 3.7 - - 3.7

20162015

J GAAP Inc / Dec Main factorIFRS J GAAP impact

Non-amortization of goodwill

Details of Core Operating Profit of Europe business(JPY billion)

2016Core OP 4.2Once off costs -6.0

2017Core OP 17.4Once off costs -1.9

【2016】・Revenue: +1.0% YoY growth mainly driven by revenue growth across Alcohol Beverages and Soft Drinks Businesses,

mitigating the slight decline in Food and Overseas Businesses・Core OP: +5.5% YoY growth driven by revenue growth across all three domestic Businesses, despite negative impacts of

Europe business due to once off costs【2017】・Revenue: Target +6.6% YoY growth in revenue through existing businesses focusing on core brands and inclusion of the

full-year revenue of Europe business・Core OP: Target +11.1% YoY growth through growing revenue in the domestic businesses and driving cost efficiency,

combined with inclusion of full year contribution of Europe business.

Financial Results 2016 Highlight


2

(JPY billion)2016 2017 forecastYoY (Amount / %) YoY (Amount / %)

Alcohol Beverages Business 976.6 5.7 0.6% 982.8 6.2 0.6% Soft Drinks Business 363.9 13.6 3.9% 366.3 2.4 0.7% Food Business 110.8 - 0.5 - 0.4% 111.0 0.2 0.2% Overseas Business 250.3 - 0.1 - 0.1% 354.6 104.3 41.7% Other Business 102.3 5.0 5.2% 107.5 5.2 5.1% Adjustmenet (corporate and elimination) - 97.1 - 6.3 - - 102.2 - 5.1 -

Revenue 1,706.9 17.4 1.0% 1,820.0 113.1 6.6% Alcohol Beverages Business 120.8 1.1 0.9% 122.0 1.2 1.0% Soft Drinks Business 32.3 7.1 28.0% 32.9 0.6 1.7% Food Business 10.3 1.8 21.4% 10.8 0.5 5.3% Overseas Business 12.3 - 1.6 - 11.5% 31.6 19.3 155.9% Other Business 2.0 - 0.4 - 18.3% 2.0 - 0.0 - 0.0% Adjustmenet (corporate and elimination) - 19.9 - 1.5 - - 20.9 - 1.0 - Amortisation of acquisition-related intangible assets - 6.2 - 0.5 - - 9.4 - 3.1 - Corporate adjustment (IFRS adjustment) - 3.1 1.9 - - 4.0 - 0.9 -

Core Operating Profit 148.5 7.8 5.5% 165.0 16.5 11.1% Operating Profit 136.9 40.3 41.7% 146.0 9.1 6.7% Profit attributable to owners of the parent company 89.2 13.5 17.8% 96.0 6.8 7.6%

Alcohol Beverages Business (Sales Volume of Beer-type)


3

【Market Total】・2016: YoY decline from 1 to 2% in total volume, despite reinforced marketing activities around beer・2017: Similar trend expected for this year with YoY contraction from 1 to 2% in total volume

【Sales Volume of Asahi Breweries】・2016: +0.3% YoY growth driven by strong performance of New Genre, despite YoY volume decline in Beer and Happoshu -2.8% decline in total volume due to under performance in on-premise and lower then expected volume of Extra

Sharp and Dry Premium -3.3% decline in total volume, despite YoY growth for the Style Free brand +10.1% growth in total volume with strong performance from Clear Asahi Prime Rich mainly driven by

successful brand renewal・2017: Target +0.4% YoY growth by focusing marketing activities on core brands in each category Target +0.9% YoY growth through promotional campaign of Asahi Super Dry 30th anniversary edition and

proposal of ‘koto’ consumption (‘experience’ consumption) +8.3% YoY decline in total volume expected due to market contraction, despite promotional activities in

place for Style Free brand Target +2.5% YoY growth in total volume through reinforcement of Clear Asahi brand including the launch

of Clear Asahi Zeitaku 0

(Millions of cases) 2016 2017 forecast 2016 2017 forecastYoY (Amount / %) YoY (Amount / %) YoY YoY

Beer 103.09 - 2.96 - 2.8% 104.00 0.91 0.9% -1～2％ Approx. -1％Happoshu 15.27 - 0.53 - 3.3% 14.00 - 1.27 - 8.3% -6～7％ Approx. -5％New Genre 42.92 3.93 10.1% 44.00 1.08 2.5% -1～2％ -1～0％

Beer-type beverages T 161.29 0.44 0.3% 162.00 0.71 0.4% -2～3％ -1～2％

(Millions of cases) 2016 2017 forecast 2016 YoYYoY (Amount / %) YoY (Amount / %)

Super Dry Total 100.00 - 3.83 - 3.7% 100.50 0.50 0.5% Can - 1.0% Style Free Total 13.36 0.06 0.5% 12.70 - 0.66 - 4.9% Keg - 3.1% Clear Asahi Total 35.48 3.73 11.7% 36.50 1.02 2.9% Bottle - 7.1%

Alcohol Beverages Business (Revenue)


4

【Revenue of Other Alcohol Beverages】・2016:

+6.9% YoY growth in total, with increase in sales of wine and RTD (new launch of Mogitate), mitigating the decline in sales of whiskey and shochu+8.2% YoY growth in sales of Non-alcohol beverages mainly driven by renewal of Dry Zero and launch of Healthy Style

・2017:Target +2.0% YoY growth through renewal of Mogitate (RTD) and reinforcement of SANTA HELENA (Wine) and Black NIKKA (Whiskey)Target +0.3% YoY growth in sales of Non-alcohol beverages through Dry Zero promotion and functional enhancement of Dry Zero Free


Beer 560.3 - 14.0 - 2.4% 566.7 6.4 1.1% Happoshu 59.1 - 1.9 - 3.2% 54.1 - 5.0 - 8.5% New Genre 142.2 13.1 10.1% 145.8 3.6 2.5%

Beer-type beverages total 761.6 - 2.9 - 0.4% 766.6 5.0 0.7% Whiskey and spirits 54.3 - 3.6 - 6.1% 52.4 - 1.9 - 3.5% Wine 40.1 6.3 18.5% 42.0 1.9 4.6% RTD low-alcohol beverages 37.2 8.9 31.5% 39.5 2.3 6.2% Shochu 27.4 - 1.4 - 4.8% 28.3 0.9 3.3% Other 0.1 - 0.0 - 21.1% 0.1 0.0 97.2%

Other alcohol beverages total 159.1 10.2 6.9% 162.3 3.2 2.0% Non-alcohol beverages 31.6 2.4 8.2% 31.7 0.1 0.3% Other, contracted manufacture, etc. 24.0 0.7 2.9% 23.4 - 0.6 - 2.5%

Asahi Breweries Revenue 976.3 10.4 1.1% 984.0 7.7 0.8% Other / elimination in segment 39.7 - 0.3 - 0.7% 38.8 - 0.9 - 2.2% Corporate adjustment (IFRS adjustment) - 39.4 - 4.5 - - 40.0 - 0.6 -

Revenue total 976.6 5.7 0.6% 982.8 6.2 0.6%

Alcohol Beverages Business (Core Operating Profit)


5

【2016: Factors Contributing to Growth / Decline】 (JPY billion)

Other alcohol beverages – increase in sales volume: +5.0Cost reduction in manufacturing: +4.6(Raw materials +2.0, Utilities +1.6, Product mix improvement in categories other than beer-type +0.7, and others)

Beer-type – Increase in sales volume: -0.3 (Beer -5.2, Happoshu -0.7, New Genre +5.6)Cost increase in manufacturing: -0.6 (Raw materials -0.4, and others)Increase in sales promotion expenses: -5.1 (Advertisement -0.2, Promotion -4.9), (Beer-type -3.0, others -2.1)Increase in other expenses: -3.1Note: New consolidated impact of ENOTECA (Jan. – Mar.):

Other alcohol beverages – increase in sales volume +1.9, Increase in other expenses -1.7

【2017 forecast: Factors Contributing to Growth / Decline】 (JPY billion)

Beer-type – Increase in sales volume: +1.5 (Beer +1.6, Happoshu -1.6, New Genre +1.5)Other alcohol beverages – increase in sales volume: +1.0Cost reduction in manufacturing: +2.6(Raw materials +1.7, Product mix improvement in categories other than beer-type +0.9)Decrease in sales promotion expenses: +1.0 (Advertisement +0.2, Promotion +0.8), (Beer-type +1.6, others -0.6)

Cost increase in manufacturing: -0.6 (Raw materials -0.2, and others), Increase in other expenses: -4.8


Beer-type - Increase in sales volume - - 0.3 - 1.5 Change in Beer-type - 0.6 - 0.5 Other alcohol beverages - increase in sales volume - 5.0 - 1.0 Cost reduction in manufacturing - 4.6 - 2.6 Cost increase in manufacturing - - 0.6 - - 0.6 Increase in sales promotion expense 108.5 - 5.1 107.5 1.0 Increase in other expenses - - 3.1 - - 4.8

Asahi Breweries 119.5 1.1 0.9% 120.8 1.3 1.1% Other / elimination in segment 1.3 - 0.0 - 0.5% 1.2 - 0.1 - 11.0%

Core Operating Profit 120.8 1.1 0.9% 122.0 1.2 1.0%

Soft Drinks Business (Sales Volume)


6

【Market Total】・2016: Approx. +3% YoY growth in volume driven by favorable weather and increase of marketing activities

around core brands in each beverage company・2017: Expected to maintain YoY in total volume, with beverage companies focusing their activities in

improving profitability【Asahi Soft Drinks Sales Volume】

・2016: +3.0% YoY growth in total sales volume delivering the target, with strong performances from core brands driven by the initiatives focusing on product mix improvement

・2017: Target +0.5% YoY growth in total volume through enhancement of brand values of core 6 brands and growing the health category

(Millions of cases) 2016 2017 forecast 2016 2017 forecastYoY (Amount / %) YoY (Amount / %) YoY YoY

Carbonated drinks 58.19 4.11 7.6% 60.86 2.66 4.6% +0~1% Fruit juice 23.60 - 1.16 - 4.7% 19.79 - 3.81 - 16.1% +1~2％ Coffee 44.00 1.57 3.7% 45.50 1.50 3.4% +1~2％ Tea 42.10 1.92 4.8% 41.85 - 0.25 - 0.6% +7~8％ Mineral Water 25.94 - 0.63 - 2.4% 29.07 3.13 12.1% +5~6％ Lactic acid drinks 41.29 1.79 4.5% 40.96 - 0.33 - 0.8% +6~7％ Other drinks 18.73 - 0.21 - 1.1% 16.97 - 1.76 - 9.4% -

　Sales Volume 253.86 7.38 3.0% 255.00 1.14 0.5% +2~3% -1~0%

2016 2017 forecastYoY (Amount / %) YoY (Amount / %)

　Mitsuya 39.03 0.78 2.0% 40.00 0.97 2.5% 　Wilkinson 16.30 3.68 29.2% 18.00 1.70 10.4% 　WONDA 41.91 1.02 2.5% 43.50 1.60 3.8% 　Jurokucha 24.05 1.83 8.2% 25.00 0.95 3.9% 　Oishii Mizu 25.94 - 0.63 - 2.4% 29.07 3.13 12.1% 　Calpis 35.15 1.45 4.3% 35.40 0.25 0.7%

Soft Drinks Business (Core Operating Profit)


7

【2016: Factors Contributing to Growth / Decline】 (JPY billion)

Increase in sales volume +4.3, change in product & pack mix, etc. +1.6Cost reduction +4.0(Raw materials +1.2, Packages +1.6, operational efficiency / in-house production +1.2)

Cost increase -0.5 (Raw materials -0.3, Packages -0.2), Increase in sales promotion expenses -2.7(Advertisement -0.7, Promotion -2.0)

【2017 forecast: Factors Contributing to Growth / Decline】 (JPY billion)

Increase in sales volume +0.7, change in product & pack mix, etc. +0.3, Cost reduction +2.7(Raw materials +0.9, Packages +0.5, operational efficiency / in-house production +1.3)

Cost increase -0.5 (Raw materials -0.1, Packages -0.4), Increase in sales promotion expenses -0.8(Advertisement -0.2, Promotion -0.6), Other expenses -1.8 (Depreciation and HR cost)

【LB】・2016: +17.6% YoY growth in core operating profit driven by product mix improvement and manufacturing cost

reduction through group procurement, mitigating decline in sales・2017: Target +0.7% YoY growth in core OP through driving growth of profitable products such as Long Life products

and cost reduction of raw materials

(Millions of cases / JPY billion)2016 2017 forecastYoY (Amount / %) YoY (Amount / %)

　Sales Volume total 253.86 7.38 3.0% 255.00 1.14 0.5% 　Revenue total 363.9 13.6 3.9% 366.3 2.4 0.7%

Increase in sales volume - 4.3 - 0.7 Change in product & pack mix, etc. - 1.6 - 0.3 Cost reduction - 4.0 - 2.7 Cost increase - - 0.5 - - 0.5 Increase in sales promotion expenses - - 2.7 - - 0.8 Other expenses - 0.4 - - 1.8

　 Asahi Soft Drinks 31.3 7.1 29.5% 31.8 0.5 1.7% 　 LB 0.8 0.1 17.6% 0.8 0.0 0.7% Other / elimination in segment 0.2 - 0.2 - 41.7% 0.3 0.0 7.4%

　Core Operating Profit 32.3 7.1 28.0% 32.9 0.6 1.7%

Food Business (Revenue / Core Operating Profit)

【Revenue】・2016: +0.4% YoY decline in total, despite a strong performance in core brands including MINTIA and baby

food, sales have declined due to review of overseas freeze dried food business (negative impact of JPY4.5 billion)

・2017: Target +0.2% YoY growth in total through effective sales promotion utilizing the brand power, despite some decline expected due to B2B business restructuring

【Core Operating Profit】・2016: +21.4% YoY growth driven by the improvement of product mix and strong performance of core

brands while absorbing impacts of once off costs relating to business integration activities・2017: Target +5.3% YoY growth through continuous improvement of product mix, core brand power

enhancement, and manufacturing cost reduction


8


Asahi Group Foods 122.4 5.4 4.6% 123.0 0.6 0.5% Other / elimination 0.0 - 0.2 - 94.0% 0.0 - 0.0 - Corporate adjustment (IFRS adjustment) - 11.6 - 5.7 - - 12.0 - 0.4 -

Revenue 110.8 - 0.5 - 0.4% 111.0 0.2 0.2%


Asahi Group Foods 10.1 1.5 17.9% 10.4 0.3 3.5% Other / elimination 0.2 0.3 - 0.4 0.2 107.4%


Overseas Business (Revenue)


9

【Revenue (excluding foreign exchange impacts associated with conversion of local currencies into JPY)】・Oceania: +2.4% YoY growth driven by strong performance of Super Dry, mitigating the short fall in sales of

carbonated drinks (Non-alcohol beverages -3%, Alcohol beverages +10%)・Southeast Asia: -0.6% YoY decline due to the changes of recording sales revenues (negative impact of JPY1.5 billion)

in Malaysia and also through sales decline vs previous year in Indonesia・China: +7.1% YoY growth driven by sales of Asahi Super Dry in China and export; mainly to Oceania

・Oceania: Target +3.6% YoY growth through sales increase within growing categories; mineral water and premium and craft beer segments (Non-alcohol beverages +1%, Alcohol beverages +7%)

・Southeast Asia: Target +10.2% YoY growth through enhancement of marketing investment and new product development to strengthen product portfolio

・China: -1.1% YoY decline expected due to negative impact in sales caused by tentative export production site change


Europe business 26.4 26.4 - 121.4 95.0 360.1% Oceania business 148.3 - 14.9 - 9.1% 157.7 9.4 6.4% Southeast Asia business 52.2 - 9.3 - 15.1% 54.8 2.6 4.9% China business 17.0 - 1.7 - 8.9% 15.4 - 1.6 - 9.3%

　 Other / elimination 6.4 - 0.7 - 9.5% 5.3 - 1.1 - 17.7% 　 Corporate adjustment (IFRS adjustment) - - - - - - Revenue 250.3 - 0.1 - 0.1% 354.6 104.3 41.7%


Europe business 26.4 26.4 - 119.5 93.1 352.9% Oceania business 167.1 3.9 2.4% 153.6 5.3 3.6% Southeast Asia business 61.1 - 0.4 - 0.6% 57.5 5.3 10.2% China business 20.0 1.3 7.1% 16.8 - 0.2 - 1.1%

　 Other / elimination 7.4 0.3 4.5% 5.7 - 0.8 - 11.9% 　 Corporate adjustment (IFRS adjustment) - - - - - - Revenue 282.0 31.5 12.6% 353.1 102.8 41.0%

Overseas Business (Core Operating Profit)


10

【Core Operating Profit (excluding foreign exchange impacts associated with conversion of local currencies into JPY)】

・Oceania: +7.8% YoY growth driven by revenue growth and integration synergies, mitigating negative foreign exchange impacts on imported raw material costs (negative impact of JPY2.2 billion)

・Southeast Asia: +7.7% YoY growth mainly driven by minimizing the deficit of Indonesian business through reduction in production cost, mitigating the profit decline in Malaysia

・China: +71.8% YoY growth driven by revenue growth of Asahi Super Dry and manufacturing cost reduction through streamlining the process

・Oceania: Target +10.2% YoY growth through maximizing the effect of integration synergies, while continuing to mitigate the negative foreign exchange impacts of imported raw materials (negative impact of JPY1.0 billion)

・Southeast Asia: Target +14.8% YoY growth through growing revenue and efficiency of procurement and manufacturing processes

・China: -18.4% YoY decline expected due to decline in revenue combined with planned marketing investment to establish a stable presence within the premium beer market


Europe business - 1.8 - 1.8 - 15.5 17.3 - Oceania business 11.0 - 0.5 - 4.4% 12.4 1.4 13.1% Southeast Asia business 2.5 - 0.3 - 10.9% 2.7 0.2 9.3% China business 1.2 0.4 46.2% 0.9 - 0.3 - 25.2% Other / elimination - 0.5 0.6 - 0.0 0.6 -

Core Operating Profit 12.3 - 1.6 - 11.5% 31.6 19.3 155.9%


Europe business - 1.8 - 1.8 - 15.3 17.1 - Oceania business 12.4 0.9 7.8% 12.1 1.1 10.2% Southeast Asia business 3.0 0.2 7.7% 2.8 0.4 14.8% China business 1.4 0.6 71.8% 1.0 - 0.2 - 18.4% Other / elimination - 0.6 0.5 - 0.1 0.6 -


Operating Profit / Profit Attributable to Owners of the Company

【2016】・Operating Profit: Uplift of +41.7% YoY, driven by liquidation of sales of non-current assets and reduction of

impairment loss・Profit attributable to owners of the parent company:

+17.8% YoY increase mainly due to increase in income tax, despite capital gain from sales of Tingyi-Asahi Beverages equity stake

【2017】・Operating Profit: Target +6.7% YoY growth despite expected loss on sales and retirement of non-current assets and

cost increase relating to business integration and restructuring・Profit attributable to owners of the parent company:

Target +7.6% YoY growth driven by reduction of income tax, despite downturn in reaction to the gain from sales of investments accounted for using equity method


11


　Revenue 1,706.9 17.4 1.0% 1,820.0 113.1 6.6% 　Core Operating Profit 148.5 7.8 5.5% 165.0 16.5 11.1%

Adjustment item - 11.6 32.5 - - 19.0 - 7.4 - Gain on sales and retirement of non current assets 1.3 5.1 - - 6.0 - 7.3 - Impairment loss - 6.3 20.8 - - 6.3 - Business integration expeses - 4.4 3.7 - - 4.4 - Others - 2.2 3.0 - - 13.0 - 10.8 -

　Operating Profit 136.9 40.3 41.7% 146.0 9.1 6.7% Financing income or loss - 0.9 0.2 - - 1.8 - 0.9 - Equity in net income (loss) of affiliates 2.0 - 15.7 - 88.8% 3.2 1.3 64.5% Gain on sales of the parts of stocks of equity method affiliates 12.2 12.2 - - - 12.2 - Gain from remeasurement relating to business combination - - 5.4 - - - - Others - 0.0 0.9 - - 3.0 - 3.0 -

　Profit before tax 150.1 32.5 27.6% 144.4 - 5.7 - 3.8% Income tax - 63.0 - 20.0 - - 48.3 14.7 -

　Profit for the year 87.1 12.5 16.8% 96.1 9.0 10.3% Profit attributable to owners of the parent company 89.2 13.5 17.8% 96.0 6.8 7.6% Profit attributable to non-controlling interests - 2.1 - 0.9 - 0.1 2.2 -

Overview of the Results for 2016&

Future Business Strategy

President and Representative Director, COOAkiyoshi Koji

Executive Summary


12

◆ Strengthened earning power through driving strategies focusing on brand strength・Achieved growth of core brands and product mix improvement in domestic 3 Businesses. Drove earnings structure reform

・Nurtured brands in growing categories and expanded integration synergies mainly across Oceania business◆ Expanded foundation for growth in overseas and improved “asset and capital efficiency”

・Expanded foundation for growth in overseas through acquisition of Western Europe beer business and acquisition agreement of Central and Eastern Europe beer business

・Reviewed assets through initiatives such as selling stocks of equity method affiliates in China and domestic alliance partners

◆ Create strong brands focusing on high added value and play a leading role in steering the industry towards “value added” competition

・Nurture and expand profitable leading brands and categories in each business・Promote “value added” competition in products and sales activities. Facilitate industry wide collaboration framework.

◆ Challenge global players mainly in Europe and reconstruct the business portfolio・Reconstruct the global strategy focusing on integration of Europe business into Asahi Group and growth in premium markets

・Optimize the business portfolio through further review of the domestic and overseas assets

Overview of 2016 Results


◆ KPI and Guidelines

KPI and Guidelines of Medium-Term Management Policy and the Progress

2015 Results Guidelines for 2016 to 2018

Revenue JPY 1,857.4billionStable growth from main businesses – Business restructuring + New M&As

Core operating profit

JPY 135.1billion

Existing businesses (Average annual growth rate in the high single digits) + Impact of new M&As

EPS 166.3 yen Average annual growth of approx. 10%

ROE 8.8％ Maintain and grow to 10% or higher

*The above indicators take into account the impact of IFRS transition at the end of FY2016.*The guidelines exclude special factors such as foreign exchange impact and once off extraordinary items

J GAAP IFRS J GAAP IFRS

(JPY billion)


13

Alcohol Beverages Business Summary


14

◆ Strengthened earning power through creating strong brands anddriving earnings structure reform・Achieved growth in revenue and profit through increase in sales of New Genre and low-alcohol RTD beverages and efficiency improvement

・Challenges remain in transforming our brands into high added value brands due to stagnant condition within the on-premise market and downturn in reaction to the limited time offers launched last year

◆ Nurture and strengthen strong brands with high profitability and play a leading role in steering the industry towards “value added” competition・Nurture and strengthen strong brands with high profitability in each category with the focus in beer

・Lead the industry into “value added” competition in products and sales activities. Facilitate industry wide collaboration framework

Overview of 2016 Results


Overview of Alcohol Beverages Business (1)


15

◆ Asahi Super Dry: Proposal of New Value

◆ Clear Asahi: Enhancement of Brand Value

◆Sales Volume in 2016: 35.48 million cases(YoY +11.7%)

◆Sales Target in 2017: 36.50 million cases(YoY +2.9%)

Prime Rich Zeitalu 0

Performance by Container

Limited Edition Extra HardLimited Edition

◆ Sales Volume Performance of Clear Asahi Brand

Occasion andexperiencemarketing

Asahi Super Dry 30th anniversary

Sales Promotion Relating toOlympics and Paralympics

(millions of cases)

Super Dry

Breakdown YoY

Can 50.3% 1.6%

Keg 30.3% - 2.9%

Bottle 19.4% - 7.3%

Total 100.0% - 1.6%

Container

Overview of Alcohol Beverages Business (2)◆ Revenue and Core Operating Profit Ratio by

Category excluding Beer-type beverages

◆ RTD: Sales and Market Share Trend


16Source: Intage

(JPY billion)

Note: Revenue of each category is based on J GAAP

◆ Non-alcohol Beer Taste Beverages:Sales Volume and Market Share Trend

(Millions of cases)

Source: Intage

Shochu

RTD

Whiskey

Wine

Non-alcohol

(JPY billion)

Summary by Business


17

◆ Strengthen earning power through implementing marketing strategy focusing on core brands and synergy expansion Achieved industry-leading profitability driven by easing of the competitive environment and

internal structural reform Drive “value added” competition through focus on core brands and innovation

◆ Significantly increase the profitability through growth of core brands and product mix improvement Increased focus in our core competence and earnings structure reform as newly “Asahi Group

Foods” Drive optimization of business portfolio and enhance our corporate value within the food industry

◆ Become a growth engine by strengthening growing categories and reconstructthe business portfolio

Fostered brands in growing categories, including Super Dry in Oceania Expand foundation for growth in overseas to maximize the strength and create global synergy

Soft Drinks Business

Food Business

Overseas Business

Overview of Soft Drinks Business

◆ YoY by Containers and Sales Channels (2016)

◆ Revenue and Core OP Margin

◆ Facilitation of “Health” Field

◆ Composition Ratio Trend of Core 6 Brands

FOSHU Food with function claim Lactic acid

• Propose broader health value including FOSHU and Foods with function claims

• 2016 YoY: +17%, 2017 forecast: double digit growth

(Millions of cases)

J GAAP IFRS

Container ChannelYoY YoY

Glass Bottle 1.6% Vending machines - 0.2%

PET Bottle Total 4.5% Over-the-countertotal 3.9%

PET large size - 2.8% Convenience Store 10.6%

PET small size 11.3% Supermarket 7.6%

Can 0.5% Others - 8.9%

Others 0.0%


18

Overview of Food Business


19

J GAAP IFRS

(JPY billion)

Source: Intage

(JPY billion)

◆ Revenue and Core OP Margin

◆ Revenue Trend of Core Brands ◆ Market Share Trend of ‘MINTIA’

◆ Cost Reduction (including integration synergiesbenefit): Result & Target

◆ Initiatives in Growing Category

Total Water Sales: YoY +19.1%

Overview of Overseas Business (Oceania business)

（＋23%）

(On a volume basis, source: Aztec)

201520132012 20162014

+37.4%

Dry BlackSoukaiSuper Dry

201620142012 2013

+12.3%

2015

Other ciderAsahi

37%36%29%15%2% Asahi share

14%

54%15%

Asahi

PrivateLabel

Other

Company A

18%Approx. 80％ sharein Private Label

（＋16%）


20

2016-2018

3 year target

Cost Reduction 1.8 2.4 Over 5.0

(JPY billion) 2016Result2017

Target

◆ Revenue and Core OP Margin(based on local currency: AUD)

(CAGR)

(CAGR)

中計進捗

◆ 重要業績評価指標（KPIｓ）ジュウヨウギョウセキヒョウカシヒョウ

2012年実績ネンジッセキ2013年実績ネンジッセキ中計　　進捗チュウケイシンチョク2014年実績ネンジッセキ中計　　進捗チュウケイシンチョク2015年実績ネンジッセキ3ヵ年平均成長率ネンヘイキンセイチョウリツ中計　　進捗チュウケイシンチョク中期計画目標　　　　　　　　　　　　　（2015年）チュウキケイカクモクヒョウネン

　ＲＯＥ8.4%8.0%×8.1%×8.6%-×10%を目処メド

　補正ROE　（※）　ホセイ8.6%8.7%△9.4%△10.3%-○

　補正ROE（のれん等償却前）ホセイトウショウキャクマエ11.2%11.9%○12.6%◎12.9%-◎12％を目処メド

　ＥＰＳ（成長率）セイチョウリツ123円エン10.6%○9.7%△9.5%10.0%○年平均10％以上ネンヘイキンイジョウ

　※補正ＲＯＥ＝自己資本から「為替換算調整勘定」、「その他有価証券評価差額」を除いたベースホセイジコシホン

＜KPIｓの前提ガイドライン＞ゼンテイ

2012年実績ネンジッセキ2013年実績ネンジッセキ中計　　進捗チュウケイシンチョク2014年実績ネンジッセキ中計　　進捗チュウケイシンチョク2015年実績ネンジッセキ3ヵ年平均成長率ネンヘイキンセイチョウリツ中計　　進捗チュウケイシンチョク中期計画ガイドライン　　　　　　　　　　　　　（2015年）チュウキケイカクネン

売上高ウリアゲダカ15,791億円オクエン8.6%◎4.2%○4.2%5.6%◎年平均成長率　3％以上ネンヘイキンセイチョウリツイジョウ

EBITDA　（※）1,710億円オクエン7.4%◎4.7%×3.0%5.0%×年平均成長率　6％以上ネンヘイキンセイチョウリツイジョウ

当期純利益トウキジュンリエキ572億円オクエン8.0%○11.9%◎8.5%9.5%◎年平均成長率　7％以上ネンヘイキンセイチョウリツイジョウ

営業利益率エイギョウリエキリツ6.9%6.9%×7.2%△7.3%-△8％以上イジョウ

配当性向ハイトウセイコウ22.8%31.7%○30.2%○29.4%30.5%○30％を目処メド

総還元性向ソウカンゲンセイコウ22.8%80.5%◎102.8%◎56.0%79.0%◎50％以上イジョウ

　※ＥＢＩＴＤＡ＝営業利益（のれん等償却前）＋減価償却費エイギョウリエキトウショウキャクマエゲンカショウキャクヒ

業績グラフ

計画ケイカク計画ケイカク

20122013201420152012201320142015

売上高ウリアゲダカ15,79117,14217,85518,600EPS金額キンガク122.8135.7148.9163.1

営業利益エイギョウリエキ1,0841,1751,2831,350ROE8.4%8.0%8.1%8.6%

当期純利益トウキジュンリエキ572617691750補正ROE ホセイ8.6%8.7%9.4%10.3%

業績グラフ

売上高

営業利益

当期純利益

業績推移

EPS金額

ROE

補正ROE

業績推移 (2)

計画ケイカク

2001200220032004200520062007200820092010201120122013201420152016201720182019202020212022202320242025

酒類事業シュルイジギョウ112191093811070111641054210310103071019698559633942494409486964610015

飲料事業インリョウジギョウ197017761894204022522499268329662969315232983754466247664949

食品事業ショクヒンジギョウ151148220223268557692817963100510011035108211201148

国際事業コクサイジギョウ1481421323345395715544337859789421580192923472597

その他タ845749687681699527405215153127(38)(18)(16)(24)(109)

業績推移 (2)

酒類事業

飲料事業

食品事業

国際事業

その他

エクストラコールド

計画ケイカク

200520062007200820092010201120122013201420152016201720182019202020212022202320242025

酒類事業シュルイジギョウ10542103101030710196985596339424944094869646100151011510216103181042210526106311073710845109531106341.1%

飲料事業インリョウジギョウ22522499268329662969315232983754466247664949509752505408557057375909608662696457665124.7%

食品事業ショクヒンジギョウ26855769281796310051001103510821120114812401339144715621687182219682126229624799.2%

国際事業コクサイジギョウ5395715544337859789421580192923472597285731433457380241834601506155676124673625.0%

その他タ699527405215153127(38)(18)(16)(24)(109)

26929

103.0%

108.0%

110.0%

0.0%


酒類事業

飲料事業

食品事業

国際事業

その他

CA

201020112012201320142015201６(E)

エクストラコールド6331,6562,8146,51610,00012,00014000

ドライプレミアム樽生タルナマ5,800

CA


機能性

2010201120122013201420152016(E)

　ビール11,60811,07811,09610,88810,82610,61010,850

　発泡酒1,8631,6481,5451,5571,6101,5801,350

　新ジャンルシン3,6443,8863,6753,8753,8853,9003,950

　売上数量合計バイジョウカズリョウゴウケイ17,11516,61116,31516,32016,32116,08016,150

スタイルフリー計ケイ1,1451,2031,1901,2391,2041,3301,280

クリアアサヒ計ケイ2,1432,4202,3772,8212,8643,1753,230

当社新ジャンル内構成比トウシャシンナイコウセイヒ58.8%62.3%64.7%72.8%73.7%81.4%81.8%

オフ717747747725650605630

機能性

クリアアサヒ計

当社新ジャンル内構成比

総合酒類

201120122013201420152016(E)

ビール41441

発泡酒ハッポウシュ3,5173,3403,2893,7914,0033,800

新ジャンルシン1,6231,9582,3062,1512,4892,586

アサヒ合計ゴウケイ2,5222,3702,3152,3622,5592,800

構成比コウセイヒ49.1%44.7%41.4%39.8%39.2%41.0%

機能性市場キノウセイシジョウ5,1405,2975,5955,9416,5336,827

ビール類内構成比ルイナイコウセイヒ11.8%12.2%13.0%14.1%15.6%16.5%

ビール類合計ルイゴウケイ43,64843,28942,95542,26041,90841,469

総合酒類

新ジャンル

発泡酒

ビール

ビール類内構成比

ノンアル

2007200820092010201120122013201420152016(E)

洋酒ヨウシュ273275259304308298378447579579

ワイン153148124115106115120144339417

低アルテイ357314306312282288274277283305

焼酎ショウチュウ549527503483403327316307288288

ノンアル他タ3232397048211224254293301

営業利益率エイギョウリエキリツ4%5%6%7%6%10%10%12%13%13%

合計ゴウケイ1364129712311284114712401312143017811890

その他タ111111

ノンアルコール46210223253292300

ノンアル

洋酒

ワイン

低アル

焼酎

ノンアル他

営業利益率

オセアニアコストダウン

2010201120122013201420152016(E)

ノンアル市場8411,1391,0851,0831,0121,0041,005

ドライゼロ13526503543631734750

当社構成比トウシャコウセイヒ13.9%2.2%31.7%33.4%38.4%42.2%42.7%

ノンアル市場シジョウ9761,1651,5881,6261,6431,7381,755

オセアニアコストダウン

ドライゼロ

ノンアル市場

当社構成比

(JPY billion)2016Result2017Target2016-2018

3 year target

Cost Reduction1.82.4Over 5.0

Europe Beer Business

Performance of Europe Business


21

◆ Breakdown by country (from Jan. to Dec., 2016 rough estimate)

◆ Revenue (excluding liquor tax) and Core Operating Profit (Core OP) margin trend

FY2016 CAGR2013-2016Sales Volume 0.73 Million KL ＋3.4％

Revenue 747 Million Euro ＋5.7％

EBITDA 170 Million Euro ＋12.2％

Core OP 128 Million Euro ＋19.6％

Note: excluding intercompany / elimination Note: excluding corporate expenses

FY2016 (ended March 31, 2016)

(Million Euro)

2017 ForecastJan. - Dec.

Core Brands and Market Environment By Country (1)

Peroni No.1 Italian brand cultivatedover 150 years historyNo.1 market share (17%)

Grolsch Swing top bottle beer with 400 years historyNo.2 market share (12%)

ＣＡＧＲ（2012-2016）

Discount

Mainstream

Premium

SuperPremium

26％

27％

34％

13％

2016 Market Total 1,703K Liter

+3.5％

-1.0%

-0.1％

-1.8％

+0.3％

Discount

Mainstream

Premium

Super Premium

6％

19％

54％

21％

ＣＡＧＲ（2012-2016）

1,155K Liter

+4.0％

+1.6%

-1.7％

-3.7％

-1.3％

Source: Canadean

Italy

Netherlands

Source : Canadean, volume basis

2016 Market Total


22

Core Brands and Market Environment By Country (2)

MeantimePioneer of modern craft beer

Peroni Nastro AzzurroNo.1 super premium brand in U.K.No.10 market share (3%)

Discount

Mainstream

Premium

Super Premium16％

25％

57％

3％

ＣＡＧＲ（2012-2016）

4,498K Liter

+6.1％

+0.8%

-1.4％

-7.6％

±0％

Source: Canadean

UK

Source : Canadean, on a volume basis

(2016)

2016 Market Total

Note: Jan – Dec 2016 Actual. Including contract manufacturing and sales distribution


23

Governance System of Europe Business


24

◆ European headquarters have been set under the control of Asahi Group Holdings. It serves as headquarters for the entire Europe business under the management of local CEO

◆ Business Integration Team has been set up in the European headquarters. It operates as a functional unit for separation, integration and synergy activities

Birra Peroni S.r.l.(Italy)

Royal Grolsch NV(Netherlands)

Asahi UK(U.K.)

Note: former Miller Brands

Meantime BrewingCompany Ltd.

（U.K.）

Asahi Europe Ltd.(European

Headquarters)

Asahi Group Holdings

Finance, HR, SCM etc.

Business Integration Team

Asahi Europe will become a global premium beer powerhouse

Medium-Term Vision of Europe Business


25

◆Medium-Term Vision of Asahi Europe Ltd.

Growth Engines & RocketsLeveraging on our strength and success models so far, we will transform the businesses

in Italy, Netherlands and UK into stable growth enginesWhilst continuing to grow through premiumization of our brands in third countries

serving as our rockets.

Expanding “global premium brands”・Expanding access to the premium market leveraging on Super Dry・Expanding the market geographically for the global brands including Peroniand Grolsch

Creating synergies leveraging on the strength originating form Japan・Streamlining the entire SCM using the know-how of our “cost competitiveness”・Expanding innovative initiatives leveraging on our R&D capabilities fosteredthorough responding to diversified needs in the Japanese market

Revenue：Average annual growth rate in the high single digitsCore operating profit：Average annual growth of +/- 10%

◆Strategic Options for Creating Synergies

2017 Target of Western Europe Business


26

◆ 2016 Results and 2017 Targets

【2017 Targets】・Revenue：Target of 800 million Euro driven by sales increase focusing on core brands and creating of new

demands through development of high added value products・Core OP：Target of 145 million Euro driven by revenue increase, unit price increase through expansion of

high added value products and cost efficiency

(Italy) Reinforce the foundation of Peroni within the mainstream and premium categories and nurture

brands in added value category(Netherlands) Diversify the portfolio leveraging on Grolsch brands and roll out strategies fit for the region(UK) Implement brand strategy focusing on high added value category (premium and craft beer) and

expand sales area(Third country) Roll out global brands focusing on growing premium markets

(Million Euro, hkl) 2016 results Reference:10/1-12/31 Reference: YoY *2

（Oct. 11-Dec. 31） YoY Excl. forex impact YoY Excl. forex impacts *3

Revenue (excl. liquor tax) 174 - 1% 4% 800 - 4% 3% 5.7%

35 3% 10% 145 - 4% 9% 19.6%

One off costs -50 - - -16 - - *1 Core Operating Profit without deduction of one-time cost*2 Based on the estimated 2016 results*3 Foreign exchange target in 2017: 1￡ = 1.12 Euro (2016: 1￡ = 1.38 Euro)

2017 targets CAGR(2013-2016)

Core OP *1

Global Market Trends of premium beer


27

◆ Premium and super premium categories account for approx. 30% of the entire beer market, driving the total market growth

FY10-15CAGR

(USD million)(Millions of cases)

Source : Canadean

-1.0% +1.5% +2.7% +6.2%FY10-15CAGR

(Total)

+1.6% -1.5% +4.1% +3.1% +7.1% +3.7%

(Total)

(volume) (value)

Global Expansion of Asahi Brands

＜Asahi Brand Overseas Sales Performance＞


28

The International Brewing Awards2011 in UKChampion Keg Lager

World Beer Cup 2014 in USAInternational-Style Lager

Gold medal

Brussels Beer Challenge 2015 in BelgiumLager : International Style PilsnerGold medal

＜Award-Winning Record of Asahi Super Dry＞

⇒ Expanding access to the premium beer market for utilizing further potential of Asahi Super Dry

（Millions of cases)

◆ Performance of Tsingtao Brewery

◆ Performance of Tingyi (Cayman Islands) Holding Corporation

Performance of Equity Method Affiliates in China


29

FY2016

FT2015

FY2016

FY2015

2015 Q4 2016 Q1 2016 Q2 2016 Q3 TotalResult YoY Result YoY Result YoY Result YoY Result YoY

Net Sales 3,320 0.2% 6,862 - 4.4% 7,884 - 11.3% 8,290 0.5% 26,356 - 4.6%Operating Income -239 - 748 10.9% 654 - 15.0% 853 31.5% 2,017 19.3%Net Income -32 - 534 2.5% 535 - 21.0% 771 41.1% 1,808 16.2%

(Millions of Yuan)


Net Sales 3,313 - 19.2% 7,178 - 3.1% 8,888 - 6.9% 8,248 - 6.0% 27,628 - 7.4%Operating Income -403 - 675 3.1% 770 - 24.8% 649 - 35.7% 1,691 - 30.7%Net Income -189 - 521 - 11.0% 678 - 17.2% 547 - 29.5% 1,556 - 21.7%

(Millions of Yuan)


Net Sales 644 - 12.9% 1,192 - 5.4% 1,343 - 21.1% 1,696 3.5% 4,875 - 8.7%Operating Income -198 - 41 - 36.4% 27 - 78.3% 174 69.0% 44 - 72.1%Net Income -175 - 28 - 40.2% 12 - 87.2% 146 84.8% 10 - 88.8%

(Millions of USD)


Net Sales 739 - 13.8% 1,260 - 18.9% 1,702 - 4.3% 1,638 - 5.3% 5,339 - 9.8%Operating Income -133 - 64 - 44.0% 124 - 8.9% 103 0.5% 158 - 30.3%Net Income -126 - 47 - 44.3% 91 - 20.2% 79 - 4.6% 90 - 48.5%

(Millions of USD)

◆ Sales promotion expenses trend in Alcohol Beverages Business

◆ Progress of earnings structure reform

Earnings Structure Reform and Sales Promotion Expenses in Alcohol Beverages Business


30

J GAAP IFRS

2013 2014 2015 2016 2017(E) Inc/Dec 2016 Inc/Dec 2017(E) Inc/Dec

622 694 742 791 783 △ 8 396 3 383 △ 13 290 289 292 294 292 △ 2 294 2 292 △ 3

Total 912 983 1,034 1,085 1,075 △ 10 691 5 675 △ 16

519 578 588 607 599 △ 8 24 32 31 26 24 △ 2

150 155 157 173 166 △ 7 Beer-type total 693 764 776 806 789 △ 17

Other than Beer-type total 219 219 259 280 286 6

New Genre

(JPY billion)

Sales promotion

Advertisement

Beer

Happoshu

Reduce the cost of raw materials such as malt and auxiliary materials

Reduce the package cost through group procurementReduce manufacturing cost by reviewing the material procurement and manufacturingprocessOptimize production and logistics system through the business integration

Reduce manufacturing cost by reviewing raw materials procurement

Facilitate joint procurement and logistic cost efficiency through business integration

Create synergies through SCM integration and optimization (Oceania business)Optimize SCM through reduction of manufacturing cost and efficient logistics (Europebusiness)

Total 12.4 11.7 20.0~30.0

1.0

Overseas 4.2 6.0~

(JPY billion) 2017Target

Initiatives 2016-20183 year Target

Alcohol Beverages 3.7

14.0~Soft Drinks 2.8

Food

2016Results

4.7

4.1

0.8

2.8

◆ Key Currencies and the Company’sAverage Exchange Rates

◆ Impact of Foreign Exchange Rateson Income Statement

Impact of Foreign Exchange Rate

(JPY billion)


31Note: Impact of foreign exchange rates means the impact of conversion ofbusiness results in local currencies into the results in yen

(yen)

◆ Exchange Rate Sensitivity of Key CurrencyImpact form forex fluctuations of 1 yen to target currency (full year)

Currency Target Revenue Core OP Target business

Euro 120.0 ±1.0 ±0.1 EuropeAUD 83.0 ±1.9 ±0.2 OceaniaRMB 15.0 ±1.0 ±0.1 China

Business Currency 2016Results2017

Target Remarks

Europe Euro 0.0 1.9 Oceania AUD - 18.8 4.1 Southeast Asia - - 8.9 - 2.8 China RMB - 3.0 - 1.4 Other - - 2.4 - 1.2 Revenue - 33.0 0.7 Europe Euro 0.0 0.2 Oceania AUD - 1.4 0.3 Southeast Asia - - 0.5 - 0.1 China RMB - 0.2 - 0.1 Other - 0.0 - 0.0 Amortization of intangible assets Euro 0.0 - 0.1 Europe Amortization of intangible assets AUD 0.2 - 0.0 Oceania Amortization of intangible assets - 0.2 0.0 Southeast AsiaCore operating profit - 1.8 0.3 Equity in net income of affiliates USD 0.1 - 0.0 Tingyi-Asahi Beverages Holding Equity in net income of affiliates RMB - 0.6 - 0.5 Principally Tsingtao Brewery Equity in net income of affiliates - 0.2 0.0 Equity in net income of affiliates - 0.3 - 0.4

2014 2015 2016 2017Target

Information in this material is not intended to solicit sale or purchase of shares in Asahi Group Holdings. The views, estimates and other information expressed in this document are based on the company's judgment at the time of publication, and no guarantees are provided regarding the accuracy of such information. This information is subject to changewithout notice. The company and its officers and representatives accept no responsibility or liability for any damage or inconvenience that may be caused by or in conjunction with any part of these materials.

スライド番号 1スライド番号 2スライド番号 3スライド番号 4スライド番号 5スライド番号 6スライド番号 7スライド番号 8スライド番号 9スライド番号 10スライド番号 11スライド番号 12スライド番号 13スライド番号 14スライド番号 15スライド番号 16スライド番号 17スライド番号 18スライド番号 19スライド番号 20スライド番号 21スライド番号 22スライド番号 23スライド番号 24スライド番号 25スライド番号 26スライド番号 27スライド番号 28スライド番号 29スライド番号 30スライド番号 31スライド番号 32スライド番号 33スライド番号 34スライド番号 35スライド番号 36

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