Financial Results Presentation for H August 2017

Transcription

1 Financial Results Presentation for H August 2017

2 Overview of Financial Results for H and Full Year Targets

3 Financial Results Highlights for H Summary of Statement of Profit or Loss H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Alcohol Beverages Business % % Soft Drinks Business % % 8.0 Food Business % % 2.9 Overseas Business % % Other Business % % Adjustmenet (corporate and elimination) Revenue % , % Alcohol Beverages Business % % 1.0 Soft Drinks Business % % 4.2 Food Business % % 0.7 Overseas Business % % 27.3 Other Business % % 0.1 Adjustmenet (corporate and elimination) Amortization of acquisition-related intangible assets Corporate adjustment (IFRS adjustment) Core operating profit % % 23.0 Operating profit % % 21.3 Profit attributable to owners of parent % % 14.0 Revenue H1: Finished far above target with 20.4% YoY growth due to newly consolidated Central Europe business (JPY81.7 billion) in addition to revenue increase of existing Businesses. Annual targets: The target revised upward by JPY210.0 billion to JPY2,030.0 billion mainly due to the addition of Central Europe business impact (JPY212.0 billion) Core Operating Profit H1: Finished far above target with 36.6% YoY growth due to newly consolidated Central Europe business (JPY9.2 billion)* in addition to profit increase of existing Businesses. Annual targets: Revised upward by JPY23.0 billion to JPY188.0 billion due to the upward targets revision of domestic 3 Businesses and the addition of Central Europe business impact (JPY26.8 billion)*. *Amortization of intangible assets in Central Europe business is not posted in H1 results, however annual target includes the estimated tentative number (JPY9.0 billion) 1

4 Alcohol Beverages Business (Sales Volume of Beer-type) <Sales Volume> (Millions of cases) <Market Total> H1 (6months ended June 30) 2017 revised target (announced on August 3) Jan. - Jun. Annual forecast Inc./Dec. YoY Target Inc./Dec. YoY YoY YoY Beer % % ~2% -1~2% Happoshu % % ~3% -3~4% New Genre % % 0.00 unchanged YoY -1~2% Beer-type beverages Total % % around -1% -1~2% <Sales Volume by Brand> (Millions of cases) H1 (6months ended June 30) 2017 revised target (announced on August 3) <Container Type> Jan. - Jun. Inc./Dec. YoY Inc./Dec. YoY Super Dry Total % % Style Free Total % % 0.70 Clear Asahi Total % % 0.10 YoY Bottle - 5.2% Can - 0.7% Keg - 2.1% Market Total H1: YoY decline of approx. 1% in total volume due to volume decrease in Beer and Happoshu categories, despite marketing activities reinforced by brewers focusing on their core brands Annual target: YoY contraction of 1 to 2% in total volume, taking into account the factors including negative impacts of increase in retail prices Sales Volume of Asahi Breweries H1: -0.2% YoY decline in total volume, due to decrease in Beer, despite favorable performance form New Genre <Beer> -2.0% YoY decline and below the target due to under performance from the Dream, despite developing promotional activities relating to 30 th anniversary of Super Dry <Happoshu> -0.2% YoY decline due to the impact of market contraction, despite YoY growth for the Style Free brand <New Genre> +3.9% YoY growth due to strong performance from Clear Asahi brand driven by renewal of existing products and new launch of Zeitaku Zero Annual target: 2.00 million cases decline in total volume, due to decrease of Beer, despite increase of Happoshu 2

5 Alcohol Beverages Business (Revenue) <Revenue> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Beer % % Happoshu % % 1.9 New Genre % % Beer-type beverages total % % Whiskey and spirits % % 2.6 Wine % % RTD low-alcohol beverages % % 2.0 Shochu % % Other % % Other alcohol beverages total % % 3.1 Non-alcohol beverages % % 0.5 Other, contracted manufacture, etc % % 1.1 Asahi Breweries Revenue % % Other / elimination in segment % % Corporate adjustment (IFRS adjustment) Revenue total % % Revenue of Other Alcohol Beverages H1: Finished above target with +3.9% YoY growth due to favorable performances from main categories including RTD low-alcohol beverages boosted by strong sales of Mogitate In non-alcohol beverages, finished above target with +2.3% YoY growth due to strong performance from Dry Zero, No.1 market share brand Annual target: Total revenue of other alcohol beverages revised upward by JPY3.1 billion from the initial target to JPY165.4 billion driven by upward revision of Whiskey and spirits and RTD low-alcohol beverages which have enjoyed favorable performances In non-alcohol beverages, the target revised upward by JPY0.5 billion from the initial target to JPY32.2 billion 3

6 Alcohol Beverages Business (Core Operating Profit) <Core Operating Profit> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Beer-type - Decrease in sales volume Change in Beer-type Other than beer-type beverages - increase in sales volume Cost reduction in manufacturing Cost increase in manufacturing Decrease in sales promotion expenses Increase in other expenses (Increase in personnel expenses) (Decrease in depreciation) (Increase in sales equipment expenses) (Others) Asahi Breweries % % 0.6 Other / elimination in segment % % 0.4 Core Operating Profit % % 1.0 H1: Factors of Increase / Decrease <Details of Main Increase / Decrease Factors> Beer-type Decrease in sales volume: -0.5 (Beer -1.6, Happoshu 0.0, New Genre +1.1) Cost reduction in manufacturing: +2.0 (Raw materials +1.2, Mix improvement of other than beer-type +0.5) Cost increase in manufacturing: -0.3 (Raw materials -0.1, etc.) Decrease in sales promotion expenses: +0.6 (Advertisement +0.4, Promotion +0.2 / Beer-type +1.2, Others -0.6) Annual target: Factors of Increase / Decrease <Details of Main Increase / Decrease Factors> Beer-type Decrease in sales volume: -2.3 (Beer -2.8, Happoshu -1.0, New Genre +1.5) Cost reduction in manufacturing: +3.1 (Raw materials +2.1, Mix improvement of other than beer-type +1.0) Cost increase in manufacturing: -0.4 (Raw materials -0.2, etc.) Decrease in sales promotion expenses: +2.5 (Advertisement +0.7, Promotion +1.8 / Beer-type +4.0, Others -1.5) 4

7 Soft Drinks Business (Sales Volume) <Sales Volume> (Millions of cases) <Market Total> H1 (6months ended June 30) 2017 revised target (announced on August 3) Jan. - Jun. Inc./Dec. YoY Target Inc./Dec. YoY Carbonated drinks % % 1.05 unchanged YoY Fruit juice % % ~6% Coffee % % ~2% Tea % % ~3% Mineral water % % ~4% Lactic acid drinks * % % ~5% Other drinks * % % ~4% Sales Volume Total % % ~1% * Lactic acid drinks includes Calpis brand and other lactic acid products, which was previously in Other drinks. Other drinks compiles the previous Functional, Other drinks and Sales of other company's products YoY <Sales Volume by Core Brands> (Millions of cases) H1 (6months ended June 30) Inc./Dec. YoY Mitsuya % Wilkinson % WONDA % Jurokucha % Oishii Mizu % Calpis % <Container Type> <Channel Type> Jan. - Jun. YoY Jan. - Jun. YoY Glass Bottle 4.5% Vending machines - 0.4% PET Bottle total 5.5% Over-the-counter total 2.5% PET large size - 8.8% Convenience Store 21.0% PET small size 17.8% Supermarket - 1.0% Can - 5.5% Others - 5.2% Others 3.1% Market Total H1: Approx. +1% growth in total volume driven by renewal launches of core brands and promotion enhancement of health functional products in each beverages company Asahi Soft Drinks Sales Volume H1: Finished above target with +1.9% YoY growth driven by strong performances from Wilkinson and Calpis brands Annual targets: The target revised upward by +1.0% YoY in total volume due to enhancing value of core brands and strengthening development of added value products 5

8 Soft Drinks Business (Core Operating Profit) <Core Operating Profit> (JPY billion / Millions of cases) H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY H1: Factors of Increase / Decrease <Details of Main Increase / Decrease Factors> Increase in sales volume: +1.6, Change in product & pack mix, etc Cost reduction: +1.4 (Raw materials +0.7, Packages +0.3, Operational efficiency / in-house production +0.4) Cost increase: -0.1 (Raw materials -0.1) Decrease in sales promotion expenses: +1.0 (Advertisement -0.3, Promotion +1.3) Annual targets: Factors of Increase / Decrease <Details of Main Increase / Decrease Factors> Increase in sales volume: +2.3, Change in product & pack mix, etc Cost reduction: +3.0 (Raw materials +1.4, Packages +0.3, Operational efficiency / in-house production +1.3) Cost increase: -0.3 (Raw materials -0.2, Packages -0.1) Decrease in sales promotion expenses: +0.4 (Advertisement -0.5, Promotion +0.9) Sales Volume Total % % 1.40 Revenue Total % % 8.0 Increase in sales volume Change in product & pack mix, etc Cost reduction Cost increase Decrease in sales promotion expenses Other expenses Asahi Soft Drinks % % 4.2 LB % % 0.0 Other / elimination in segment % % 0.0 Core Operating Profit % % 4.2 LB H1: Revenue / Above target, Core OP / Finished above target with +16.8% YoY growth due to mix improvement and manufacturing cost reduction Annual targets: +0.7% YoY growth in Core OP due to increasing numbers of dealers in mass retailers and promoting manufacturing cost reduction and accelerating group procurement 6

9 Food Business (Revenue / Core Operating Profit) <Revenue> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Asahi Group Foods % % 2.2 Other / elimination Corporate adjustment (IFRS adjustment) Revenue Total % % 2.9 <Core Operating Profit> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Asahi Group Foods % % 0.7 Other / elimination % Core Operating Profit % % 0.7 Revenue H1: Finished above target by JPY2.9 billion with +3.9% YoY growth due to the favorable performances from core brands including MINTIA and Dear Natura Annual targets: The target revised upward by JPY2.9 billion to JPY113.9 billion due to enhancing sales of core brands, despite expected sales decrease of mail-order business Core Operating Profit H1: Finished above target by JPY1.2 billion with +25.8% YoY growth driven by streamlining sales promotion expenses in addition to the impact of sales volume increase and mix improvement Annual targets: The target revised upward by JPY0.7 billion to JPY11.5 billion due to the impact of sales increase and efficient sales promotion expenses 7

10 Overseas Business (Revenue) <Revenue> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Europe business Oceania business % % 1.7 Southeast Asia business % % China business % % 0.7 Other / elimination in segment % % Revenue % % <Revenue (excluding foreign exchange impacts associated with conversion of local currencies into JPY)> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Europe business Oceania business % % 1.6 Southeast Asia business % % China business % % Other / elimination in segment % % Revenue % % Revenue (excluding foreign exchange impacts associated with conversion of local currencies into JPY) Note: See P.10 for Details of Europe business <H1> Oceania: +6.6% YoY growth due to enhancing growing categories including mineral water and beer (Non-alcohol beverages +4%, Alcohol beverages +11%) Southeast Asia: -2.7% YoY decline mainly due to negative impacts of contraction of Soft Drinks market in Malaysia China: +0.7% YoY growth driven by sales expansion of Super Dry in China and exports for Oceania <Annual targets> Oceania: +4.6% YoY growth through enhancing core brands sales and launching new products (Non-alcohol beverages +3%, Alcohol beverages +7%) Southeast Asia: -0.2% YoY decline despite tackling to enhance the core brands equity mainly in Malaysia China: -3.1% YoY decline due to mix deterioration of contract manufacturing of Tsingtao beer, despite sales expansion of Super Dry 8

11 Overseas Business (Core Operating Profit) <Core Operating Profit> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Europe business Oceania business % % 0.7 Southeast Asia business % % China business % % 0.1 Other / elimination in segment Core Operating Profit % % 27.3 <Core Operating Profit (excluding foreign exchange impacts associated with conversion of local currencies into JPY)> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Europe business Oceania business % % 0.7 Southeast Asia business % % China business % % 0.0 Other / elimination in segment Core Operating Proft % % 26.9 Core Operating Profit (excluding foreign exchange impacts associated with conversion of local currencies into JPY) Note: See P.10 for Details of Europe business <H1> Oceania: +18.2% YoY growth due to generation of integration synergies in addition to the impact of sales volume increase and efficient promotion expenses Southeast Asia: -72.2% YoY decline mainly due to negative impacts of revenue decrease and raw materials price surge in Malaysia China: -29.1% YoY decline due to mix deterioration of contract manufacturing of Tsingtao beer <Annual targets> Oceania: +16.4% YoY growth driven by further generation of integration synergies in addition to the impact of sales volume increase and mix improvement in Alcohol beverages Southeast Asia: -41.7% YoY decline despite tackling review of manufacturing process for further cost reduction mainly in Malaysia China: -18.2% YoY decline despite estimating YoY growth in H2 through streamlining sales promotion expenses and reviewing the process of raw material procurement 9

12 Europe Business (Revenue / Core Operating Profit) <Revenue> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Western Europe % 3.7 Central Europe Europe business <Core Operating Profit> H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Gross Core Operating Profit % 0.8 Once off Cost Western Europe Gross Core Operating Profit Once off Cost Central Europe Europe business Amortization of intangible assets Revenue (excluding foreign exchange impacts associated with conversion of local currencies into JPY) H1: JPY142.6 billion achieved by newly consolidation of Western Europe business (Jan.-Jun. JPY61.0 billion) and Central Europe business (Apr.-Jun. JPY81.7 billion) Annual targets: Full year contribution of Western Europe business (JPY125.1 billion) and newly consolidation of Central Europe business (Apr.-Dec. JPY212.0 billion) Core Operating Profit (excluding foreign exchange impacts associated with conversion of local currencies into JPY) H1: JPY16.0 billion achieved by newly consolidation of Western Europe (Jan.-Jun. JPY6.7 billion) and Central Europe business (Apr.-Jun billion) Annual targets: Full year contribution of Western Europe business (JPY16.5 billion) and newly consolidation of Central Europe business (Apr.-Dec. +JPY26.8 billion) 10

13 Operating Profit / Profit attributable to Owners of Parent Summary of Statement of Profit of Loss H1 (6months ended June 30) 2017 revised target (announced on August 3) Inc./Dec. YoY Target Inc./Dec. YoY Revenue % , % Core operating profit % % 23.0 Adjustment item Gain (loss) on sales and retirement of non current assets Impairment Loss Business integration expeses Others Operating profit % % 21.3 Financing income or loss Share of profit (loss) of entities accounted for using equity method Gain on sales of investments accounted for using equity method Others Profit before tax % % 19.1 Income tax expense Profit for the period Profit attributable to owners of parent % % 14.0 Profit attributable to non-controlling interests Operating Profit H1: Finished above target by JPY17.9 billion with +34.0% YoY growth due to significant upward of Core operating profit, despite the loss of gain on sales of non current assets Annual targets: The target revised upward by JPY21.3 billion to JPY167.3 billion due to upward revision of Core operating profit, despite increase of business integration expenses Profit attributable to Owners of Parent H1: Finished above target by JPY7.3 billion with +40.8% YoY growth due to significant upward of Operating profit, despite deterioration of Financing income or loss and increase of Income tax expense Annual targets: The target revised upward by JPY14.0 billion to JPY110.0 billion due to upward revision of Core operating profit, despite anticipating deterioration of Financing income or loss 11

14 Overview of Business Results for H & Future Business Strategy

15 Executive Summary Overview of Results for H Finished above target with the increase in revenue and profit through driving strategies focusing on brand strength Strengthened earning power through enhancing brand equity in domestic 3 Businesses and improved asset efficiency Challenges remained in further revitalization of beer category and strategy for growth in Southeast Asia Expanded the overseas foundation for growth dramatically and improved asset and capital efficiency Expanded the Europe business foundation driven by PMI of Western Europe and newly consolidation of Central Europe Improved asset efficiency through sales of investments accounted for using equity method in China and cross-shareholdings Future Business Strategy Play a leading role in steering industry towards sound value added competition Nurture and expand profitable leading brands and categories in each business Promote further sound value added competition in products and sales activities. Accelerate global strategy for growth centered on Europe equity and optimization of business portfolio Promote strategy aiming to become a global player in premium beer category with competitive advantage Focus on competitiveness in our business portfolio through further reviewing both domestic and overseas assets 12

16 Overview of Alcohol Beverages Business (1) Asahi Super Dry: Proposal of New Value Performance by Container (Jan. Jun., 2017) Super Dry Occasion and experience marketing Shunrei Karakuchi Asahi Super Dry 30th anniversary Limited Edition Extra Hard Sales promotion relating to Olympics and Paralympics Clear Asahi: Enhancement of Brand Value Container Break Down YoY Can 49.5% 2.8% Keg 30.9% - 2.2% Bottle 19.6% - 5.2% Total 100.0% - 0.3% Clear Asahi Sales Volume and Market Share Trend (millions of cases) Other Zeitaku 0 Sugar 0 Prime Rich <Launch seasonal limited editions> spring summer autumn Clear Asahi winter 13

17 Overview of Alcohol Beverages Business (2) Revenue and Core OP Margin by Category excluding Beer-type Beverages Non-alcohol Shochu RTD Wine Whiskey Note: Revenue of each category is based on J GAAP RTD: Revenue and Market Share Trend Non-alcohol Beer Taste Beverages: Sales Volume and Market Share Trend (millions of cases) H1 Result and Target of Asahi H1 Result: 3.49 million cases Full Year Target: 8.10 million cases Source: Intage Source: Intage 14

18 Overview of Soft Drinks Business Revenue and Core OP Margin Trend Wilkinson Sales Volume Trend (Millions of cases) <J GAAP> <IFRS> (Millions of cases) Composition Ratio Trend of 6 Core Brands Facilitation of Health Field Propose broader health value including FOSHU and Foods with function claims H1 2017: +40% YoY Calpis Oishii Mizu FOSHU Foods with function claims Lactic Acid Jyurokucha WONDA Wilkinson Mitsuya 15

19 Overview of Food Business Revenue and Core OP Margin Trend MINTIA Revenue and Market Share Trend <J GAAP> <IFRS> Source: Intage Revenue Trend of Core Brands Freeze Dried Miso Soup Baby Food Infant Formula Dear Natura MINTIA 16

20 Overview of Overseas Business (Western Europe Business) 2017 H1 Results and 2017 Targets (excluding foreign exchange impacts associated with conversion of local currencies into Euro) (Million Euro) H YoY*2 Target*3 Results (Reference) Revised forecast YoY*2 (Reference) Revenue (excl. liquor tax) 402 6% 5% 814 4% 2% Core OP * % 14% % 3% Once off costs *1 Core Operating Profit without deduction of once off cost *2 Comparision in forex rate of FY results is the estimated number due to before the acquisition. *3 Comparision in budget forex rate. <Overview> Exceeded the target substantially driven by sales increase centered on core brands and cost efficiency <Future Strategy> Aim to achieve the target through sales increase and mix improvement by enhancing the brand equity <Initiatives by areas> (Italy) Enhance main products and launch new products of Peroni brand, reduce the procurement cost (Netherland) Strengthen the premium category of Grolsch brand and streamline marketing expenses etc. (UK) Enhance the added value proposal of Peroni Nastro Azzurro and sales of new products (Third Countries) Enhance the presences of Peroni Nastro Azzurro and Grolsch in the main markets (France & Canada, etc.) 17

21 Overview of Overseas Business (Oceania Business) Revenue and Core OP Margin Trend (based on local currency: AUD) Reduction (including integration synergies): Result & Target 2017 H1 Result 2017 Target year target Cost Reduction Over 5.0 Initiatives in Growing Categories (Australia) (YoY +31%) Approx. 80% share in Private Label Private Label 60% (YoY +33%) Mineral Water Market Share Jan.-Jun., 2017 Asahi 16% Company A 11% Other 13% Imported Premium Beer Market Share Jan.-Dec., 2016 Super Dry Sales Volume Trend in Australia Dry Black Soukai Super Dry +37.4% (CAGR) Market total: +17.3% YoY growth Source: AZTEC, on a volume basis Source: Canadean, on a volume basis 2012年 2013年 2014年 2015年 2016年 2017(E) 年 Source: AZTEC, on a volume basis 18

22 Overview of Central Europe Business Overview of the Business (FY2016 ended March, 2016) <Revenue Composition> (1 Euro = yen at the end of March, 2017) Acquired Business Sales Volume Revenue Core OP EBITDA Manufacturing and sales companies in 5 Central and Eastern Europe countries. Trademarks including Pilsner Urquell, Kozel and intellectual property rights Approx million KL (Approx. 250 million cases) 1,641 million Euro (Approx. JPY196.4 billion) Approx. 365 million Euro (Approx. JPY42.5 billion) Core OP margin: 22.2% Approx. 494 million Euro (Approx. JPY59.1 billion) EBITDA margin: 30.1% Note: excluding intercompany / elimination Country Market Volume Market Share Poland 38.6mhl 35% (No.1) Czech 15.0mhl 44% (No.1) Slovakia 4.3mhl 30% (No.2) Hungary 6.5mhl 38% (No.1) Romania 18.5mhl 34% (No.1) 19

23 Core Brands and Market Environment By Country (1) Czech 2016 Market Volume 1, KL CAGR ( ) +0.5% Super Premium 29% +4.7% Premium 16% +0.6% Mainstream 40% -1.6% Pilsner Urquell (Super Premium) Market Share 9% Poland Gambrinus (Mainstream) Market Share 17% Kozel (Mainstream) Market Share 9% Discount 15% 2016 Market Volume Super Premium 3% Premium 22% 3, KL -1.4% CAGR ( ) +0.6% +30.8% +6.7% Mainstream 48% -1.7% Lech (Premium) Market Share 7% Zubr (Mainstream) Market Share 12% Tyskie (Mainstream) Market Share 11% Discount 27% Source : Canadean, on a volume basis -2.6% 20

24 Core Brands and Market Environment By Country (2) Romania 2016 Market Volume 1, KL CAGR ( ) -0.2% Super Premium 24% Premium 10% +66.1% -6.8% Mainstream 55% +2.9% Ursus (Super Premium) Market Share 4% Timisoreana (Mainstream) Market Share 14% Ciucas (Mainstream) Market Share 14% Discount 10% Source : Canadean, on a volume basis -26.1% Sales Volume Composition in Third Countries (Apr., 2015 Mar., 2016) <Core Global Brands> Pilsner Urquell Tyskie Kozel 21

25 Medium-Term Vision and 2017 Target of Central Europe Business Medium-Term Vision Implement premiumization and mix improvement in each homeland by leveraging the market leader position. Expand global brands such as Pilsner Urquell and Kozel to create new categories for growth <Business Strategy by Area> (Czech) Maintain and grow cash generation ability based on strong brand power in each price segment and solid SCM and sales distribution foundation (Poland) Grow steadily and improve competitiveness centered on improving the category/product mix (Third countries) Expand premium brands in the existing core markets (Germany and South Korea) and new focusing markets (Japan) <Guidelines for the next 3+ years> CAGR Revenue: low to mid-single digit Core operating profit: high single digit 2017 Results (Apr.-Jun.) and 2017 Targets (Apr.-Dec.) (excluding foreign exchange impacts associated with conversion of local currencies into Euro) (Million Euro) 2017 results (Apr.-Jun.) YoY (Reference) 2017 targets (Apr. -Dec.) YoY (Reference) Revenue (excl. liquor tax) 527 1% 1,370 0% Core OP * % % Once off costs * Core Operating Profit without deduction of once off cost 22

26 Guideline for Growth and Synergy Generation of Europe Business year 5+ year Western Revenue:high single digit Core operating profit: +/-10% Central (CAGR) (CAGR) Revenue:low to mid-single digit Core operating profit:high single digit Note: The starting point is the estimated figure (Jan.-Mar.) + target figure (Apr.-Dec.) Synergy Generation:more than 10 billion (Guideline for 5+year) <Cost synergy(approx. 10 billion)> SCM: Improve procurement ability by leveraging scale, SCM optimization IT:Review infrastructure and functionality requirements to optimize Other:Streamline process and support organizations to improve efficiency <Revenue synergy (To be quantified)> Sales expansion through cross-selling global premium brands *Increase the volume of Asahi Super Dry, Peroni Nastro Azzurro, Pilsner Urquell by over 1.5 times in the main export markets Europe Manufacturing/Distributing Asahi Super Dry Asia Oceania Accelerate growth through brand portfolio expansion Developing innovative initiatives leveraging each R&D capability <Total European Business Guideline (CAGR)> Revenue:mid-single digit Core operating profit:+/-10% 23

27 KPI and Guidelines of Medium-Term Management Policy and the Progress KPI and Guidelines 2015 Results Guidelines for 2016 to 2018 Revenue Core operating profit JPY 1,857.4 billion JPY billion Stable growth from main businesses Business restructuring + New M&As Existing businesses (Average annual growth rate in the high single digits) + Impact of new M&As EPS yen Average annual growth of approx. 10% ROE 8.8% Maintain and grow to 10% or higher * Core operating profit = Revenue - (Cost of sales + Selling, general and administrative expenses) J GAAP IFRS J GAAP IFRS 24

28 <Reference> Global Beer Market Trend Premium and Super Premium Categories Account for approx. 30% of the Entire Beer Market, Driving the Total Market Growth (000KL) <Global Market Size and Price Segment Trend> (Volume) <Global Market Size and Price Segment Trend> (Value) (million USD) Composition Composition 8% 14% 16% 21% 63% 55% 15% 8% Total Total CAGR +0.3% +0.9% +2.3% +5.4% +1.3% CAGR +1.0% +1.2% +2.6% +6.3% +2.2% Source: Canadean 25

29 <Reference> Earnings Structure Reform and Sales Promotion Expenses in Asahi Breweries Progress of Earnings Structure Reform 2017 H1 Results 2017 Target Initiatives year Target Reduce the cost of raw materials such as malt and auxiliary materials Alcohol Beverages Reduce the package cost through group procurement Soft Drinks Reduce manufacturing cost by reviewing the material procurement and manufacturing process Optimize production and logistics system through the business integration 14.0~ Food 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) Overseas Optimize SCM through reduction of manufacturing cost and efficient logistics (Europe 6.0~ business) Total ~30.0 Sales Promotion Expenses Trend in Asahi Breweries H1 YoY 2017(E) YoY Sales Promotion Advertisement Total <Details by Category> Beer Happoshu New Genre Beer-type Total

30 <Reference> Impact of Foreign Exchange Rate Key Currencies and the Company s Average Exchange Rates Trend Impact of Foreign Exchange Rates on Statement of Profit or Loss Business Currency 2017 H YoY YoY Remarks Europe Euro Euro not including Central Europe Oceania AUD Southeast Asia China RMB RMB Other Revenue Europe Euro Euro not including Central Europe Oceania AUD AUD Southeast Asia China RMB RMB Other Amortization of of intangible assets Core Operating Profit Share of profit (loss) of entities accouted for using equity method Share of profit (loss) of entities Share of profit (loss) of entities accouted for using equity method accouted for using equity method USD Tingyi-Asahi Beverages Holding USD Tingyi-Asahi Beverages Holding RMB Principally Tsingtao Brewery RMB Principally Tsingtao Brewery Other Other Exchange Rate Sensitivity of Key Currencies Impact from forex fluctuations of 1 yen to target currency (full year) Currency Target Revenue Core OP Target Business Euro 12.2 ±2.8 ±0.4 Europe incl. Central Europe AUD 8.3 ±1.9 ±0.2 Oceania RMB 1.6 ±1.0 ±0.1 China (E) Note1: The figures do not include the impact to amortization of intangible assets Note2: Impact of forex rates means the impact of conversion of business results in local currencies into the results in yen 27

31 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 change without 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.