Update the Medium-Term Management Policy
based on the new group philosophy
Financial Results
2018 Summary
2019 Forecast

February 2019

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Financial Results for 2018
Financial Forecast for 2019*

We change the disclosure method to allocate the results of IFRS adjustment into
each individual Business's revenue and core operating profit. In response to thischange, the figures in 2018 and 2019 forecast in each Business include theimpacts of IFRS adjustment.
* We reconstructed the business segment on January 1, 2019. We reflect the
impact related to the issues described as below *1, 2 to the figures in 2018 and2019 forecast.
*1 We changed the export structure and transferred the export beer sales in Asahi
Breweries in Alcohol Beverages Business previously to Other/elimination inOverseas Business.
*2 We transferred Taiwan Calpis which was previously in Other/elimination inOverseas Business to Asahi Soft Drinks in Soft Drinks Business.

Financial Results Highlight for 2018
(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Alcohol Beverages Business

919.4- 39.0- 4.1%- 23.2

941.0

27.6

3.0%

Soft Drinks Business

368.8

- 5.8

- 1.5%

- 0.9

379.6

8.8

2.4%

Food Business

116.0

2.2

1.9%

2.1

118.0

2.0

1.7%

Overseas Business

713.3

76.3

12.0%

11.0

711.1

0.7

0.1%

Other Business

109.5

3.3

3.1%

- 1.3

115.2

6.1

5.6%

- 106.6

- 1.6

-

- 7.3

- 111.8- 12.5-2,120.3

35.4

1.7%

- 19.7

2,153.0

32.7

1.5%

Alcohol Beverages Business

117.1

- 3.4

- 2.8%

- 3.9

113.9

4.4

4.0%

Soft Drinks Business

38.1

- 0.2

- 0.6%

- 0.8

39.9

2.7

7.2%

Food Business

12.2

0.6

4.9%

0.1

12.7

0.3

2.7%

Overseas Business

99.6

32.5

48.5%

4.0

105.8

5.2

5.2%

Adjustmenet (corporate and elimination)

Revenue

2.4

0.4

19.7%

- 0.0

2.0

- 0.5

- 19.5%Adjustmenet (corporate and elimination)- 19.0

1.3

-

2.4

- 23.3- 4.5-

Amortization of acquisition-related intangible assets- 22.0

- 2.8

-

- 0.2

- 21.0

1.0

-

- 7.0

- 3.3

-

- 0.2

-

-

-

Core operating profit

221.4

25.0

12.7%

1.4

230.0

8.6

3.9%

Operating profit

211.8

28.6

15.6%

7.8

217.0

5.2

2.5%

Profit attributable to owners of parent

151.1

10.1

7.1%

9.1

152.0

0.9

0.6%

Other BusinessCorporate adjustment (IFRS adjustment)【2018】
・Revenue: Finished below target with +1.7% YoY growth mainly due to the decrease in Alcohol Beverages and Soft
Drinks Businesses, despite the growth of Overseas Business.
・Core OP: Finished above target with +12.7% YoY growth driven by substantial increase in Overseas Business, mitigating
the decrease in Alcohol Beverages Business.
【2019】
・Revenue: Target +1.5% YoY growth driven by the increases in the three domestic Businesses centered on Alcohol
Beverages and the slight increase in Overseas Business including the forex impact.
・Core OP: Target +3.9% YoY growth driven by the increases in the three domestic Businesses and Overseas Businesscentered on Europe business.
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

1

Alcohol Beverages Business (Sales Volume of Beer-type)<Sales Volume>(Millions of cases)
20182019 forecast

YoY (Amount / %)2018

YoY (Amount / %)Against target<Market Trend>
2019 forecast

YoY

YoY

-5～6％

-1～2％

Beer

93.51

- 6.47- 6.5%- 2.34

94.80

1.29

1.4%

Happoshu

13.89- 1.12- 7.4%- 0.4513.60- 0.29- 2.1%

-8～9％

-3～4％

New Genre

39.75- 3.23- 7.5%- 1.85

42.10

2.35

5.9%

+4～5％

Around. +1％

147.16- 10.82- 6.8%- 4.65150.50

3.34

2.3%

-2～3％

Around -1％

2018

YoY

Beer-type beverages Total<Sales Volume by Brands>(Millions of cases)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against target

Super Dry Total

90.85- 7.09- 7.2%- 2.25

92.20

1.35

1.5%

Can

- 10.8%

Style Free Total

12.57- 0.78- 5.8%- 0.5312.50- 0.07- 0.6%

Keg- 4.5%

Clear Asahi Total

32.76- 3.09- 8.6%- 1.94

33.00

0.24

0.7%

Bottle- 7.3%【Market Total】
・2018: -2% to -3% YoY decline in total volume due to outflow to the other categories and sluggish performance of on-premisemarket, despite of the addition of private label products in the other brewer in New Genre category.
・2019: YoY contraction by approx. -1% in total volume expected due to the industry’s structural trend in addition to theoutflow to the other categories, despite of the addition of private label products in New Genre category.
【Sales Volume of Asahi Breweries】
・2018<Beer> Finished below target with -6.5% YoY decline due to the market contraction and downturn in reaction to reinforced
marketing activities last year, despite boosting market demand through the launch of Asahi Super Dry Shunrei
Karakuchi.
<Happoshu> Finished below target with -7.4% YoY decline due to the market contraction, despite promoting the activity
focused on Style Free.
<New Genre> Finished below target with -7.5% YoY decline mainly due to the decrease in Clear Asahi Prime Rich under the
influence of competitors’ new products launches.
・2019<Beer> Target +1.4% YoY growth driven by revitalizing brand equity of Asahi Super Dry through such means as renewing
the marketing strategy<Happoshu> Target -2.1% YoY decline due to the market contraction and the other brands decrease, despite the continuous
marketing activity focused on Style Free.
<New Genre> Target +5.9% YoY growth driven by strengthening marketing activities for Clear Asahi and launch of Gokujo
Kireaji.
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

2

Alcohol Beverages Business (Revenue)<Revenue>(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Beer

519.8

- 26.2- 4.8%- 14.0Asahi Breweries Revenue

916.0

26.6

3.0%

Happoshu

52.9

- 5.0

- 8.6%- 1.7

Other/elimination in segment

25.0

1.0

4.1%

New Genre

131.8- 10.6- 7.5%- 6.2

Revenue total

941.0

27.6

3.0%

Beer-type beverages total

704.5- 41.8- 5.6%- 21.9Whiskey and spirits

57.8

2.8

5.1%

0.9

RTD low-alcohol beverages

44.4

3.8

9.5%

- 0.8

Wine

42.2

0.9

2.2%

0.5

Shochu

27.4

- 0.5

- 1.8%

- 0.2

Other

0.0

- 0.0

- 10.2%- 0.0

Beer-type beverages total

Other alcohol beverages total

171.9

7.1

4.3%

0.4

Non-alcohol beverages

33.2

1.3

4.2%

Beer

524.3

10.5

2.1%

Happoshu

51.7

- 1.2

- 2.3%New Genre

139.6

7.8

6.0%

715.7

17.2

2.5%

Whiskey and spirits

59.3

1.4

2.5%

0.1

RTD low-alcohol beverages

50.0

5.6

12.6%

Wine

43.5

1.3

3.1%

Shochu

27.3

- 0.0

- 0.2%

Non-alcohol beverages

34.1

0.9

2.7%

23.8

- 0.3

- 1.3%

0.2

933.4- 33.8- 3.5%- 21.1Other, contracted manufacture, etc.
Asahi Breweries Revenue

24.0

- 3.7

- 13.4%

0.1

Corporate adjustment (IFRS adjustment)- 38.0

- 1.5

-

- 2.1

Revenue total

919.4- 39.0- 4.1%- 23.2Other/elimination in segment<Reference: Revenue by category (before rebate deduction>【Other alcohol beverages total】
・2018: Finished above target with +4.3% YoY growth in total due to increase of RTD low-alcohol beverages
with newly launched Zeitaku Shibori and whiskey and spirits with favorable performance of Black Nikka.
Finished above target with +4.2% YoY growth in sales of Non-alcohol beverages mainly driven by
reinforced marketing activities of Dry Zero.
・2019: Target YoY growth in total driven by enhancing RTD low-alcohol beverages with newly launched
Wilkinson Hard Nine (+12.6% YoY).
Target +2.7% YoY growth in sales of Non-alcohol beverages driven by newly launched impact of Dry
Zero Spark.

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

3

Alcohol Beverages Business (Core Operating Profit)<Core Operating Profit>(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Beer-type - Change in sales volume-- 10.7- 6.3

Change in sales, category and container mix-

Change in Beer-type

-

0.6

- 0.9

Cost reduction in manufacturing-

2.2

Other alcohol beverages - change in sales volume

-

3.2

0.7

Cost increase in manufacturing

-

- 1.4

Cost reduction in manufacturing

-

1.3

-

Advertisement and Sales promotion expenses

-

- 0.5

Cost increase in manufacturing

-

- 1.6

- 0.6

Other expenses

-

- 7.4

104.3

0.6

0.2

Asahi Breweries

112.8

4.2

3.8%

-

3.1

2.8

Other/elimination in segment

1.1

0.2

24.2%

116.2

- 3.4

- 2.8%

- 4.0

113.9

4.4

4.0%

0.9

0.0

1.0%

0.1

117.1

- 3.4

- 2.8%- 3.9

Advertisement and Sales promotion expenses

Other expenses
Asahi Breweries
Other/elimination in segment
Core Operating Profit

Core Operating Profit

11.2【2018: Factors Contributing to Growth/Decline】 (JPY billion)<Breakdown of main factors>
Beer-type – Decrease in sales volume: -10.7 (including the impact of price revision)
Cost reduction in manufacturing: +1.3
(Raw materials +0.4, Product mix improvement in categories of other than beer-type +0.7, etc.)
Cost increase in manufacturing: -1.6 (Raw materials -0.4, Utilities -0.7, etc.)
Decrease in sales promotion expense: +0.6 (Advertisement -1.3, Promotion expenses +1.9)(Beer-type +1.5, Others -0.9)【2019 forecast: Factors Contributing to Growth/Decline】 (JPY billion)<Breakdown of main factors>
Change in sales, category and container mix: +11.2(Sales volume increase in beer-type +6.7, Sales increase in other alcohol beverages +4.2, etc.)
Cost reduction in manufacturing: +2.2
(Raw materials +0.3, Product mix improvement in categories other than beer-type +1.4, etc.)
Cost increase in manufacturing: -1.4 (Raw materials -0.5, Utilities -0.4, etc.)
Increase in sales promotion expenses: -0.5 (Advertisement -1.9, Promotion expenses +1.3)(Beer-type unchanged, Others -0.5)

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

4

Soft Drinks Business (Sales Volume)<Sales Volume>(Millions of cases)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against target<Market Trend>
20182019 forecast

YoY

YoY

Carbonated drinks

67.26

5.19

8.4%

0.93

70.58

3.32

4.9%

+2～3%

Lactic acid drinks

49.53

5.16

11.6%

1.07

51.97

2.44

4.9%

+7～8%

Coffee42.11- 2.06- 4.7%- 1.69

42.34

0.22

0.5%

0～-1%

Tea

41.29

1.09

2.7%

0.55

40.98

- 0.31- 0.7%+2～3%

Mineral Water

23.96

0.50

2.1%

- 0.8423.00- 0.96- 4.0%+3～4%

Fruit juice

21.20- 1.22- 5.4%

1.65

19.42

- 1.78- 8.4%

0～+1%

Other drinks

20.77

1.49

7.7%

0.96

20.91

0.14

0.7%

Sales Volume266.13

10.15

4.0%

2.63

269.203.07

1.2%

around +2% unchaged YoY<Sales Volume by Brands>
20182019 forecast

YoY (Amount / %)MITSUYA CIDER

39.47

1.95

CALPIS

42.63

WONDA

40.24

Asahi Juroku-cha

24.08

1.15

OISHII MIZU

23.96

WILKINSON

22.25

YoY (Amount / %)

5.2%

41.10

1.63

4.1%

4.29

11.2%

44.30

1.67

3.9%

- 1.41- 3.4%

40.40

0.16

0.4%

5.0%

24.40

0.32

1.3%

0.50

2.1%

23.00

- 0.96- 4.0%

2.35

11.8%

24.50

2.25

10.1%

【Market Total】
・2018:YoY growth of approx. 2% in total volume driven by hot weather and aggressive marketing activities ineach beverage company, despite of negative factors including several natural disasters.
・2019: Expected to maintain YoY in total volume with beverage companies focusing their activities on proposalof added value products, despite of the expected deterioration of consumer sentiment in response to thehike of consumption tax rate.
【Asahi Soft Drinks Sales Volume】
・2018: Finished above target with +4.0% YoY growth in total sales volume with strong performances fromcore brands excluding WONDA.
・2019: Target +1.2% YoY growth in total volume through enhancement of new value proposal utilizing the core
brands equities.
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

5

Soft Drinks Business (Core Operating Profit)<Core Operating Profit>(Millions of cases / JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Sales Volume Total

266.13

10.15

4.0%

2.63

Sales Volume Total

269.203.07

1.2%

Revenue Total

368.8

- 5.8

- 1.5%- 0.9

Revenue Total

379.6

8.8

2.4%

Change in sales volume

-

4.3

1.0

Change in sales, category and container mix-

3.3

Change in product & pack mix, etc.

-

0.3

0.1

Cost reduction in manufacturing-

2.1

Cost reduction in manufacturing

-

3.7

-

Cost increase in manufacturing

-

- 2.6

Cost increase in manufacturing

-

- 2.0

- 0.4

Advertisement and Sales promotion expenses-

1.3

Advertisement and Sales promotion expenses

-

- 2.9

- 1.1

Other expenses

-

- 1.4

Other expenses

-

- 2.6

- 0.5

Asahi Soft Drinks

39.9

2.7

7.2%

Asahi Soft Drinks

37.9

0.8

- 0.8

Other/elimination in segment

-

-

-

39.9

2.7

7.2%

-

- 0.9

-

-

0.2

- 0.2

- 42.5%

0.0

38.1

- 0.2

- 0.6%- 0.8

LB
Other/elimination in segment
Core Operating Profit

2.3%

Core Operating Profit【2018: Factors Contributing to Growth/Decline】 (JPY billion)<Breakdown of main factors>
Increase in sales volume: +4.3, Change in product & packaging mix: +0.3
Cost reduction in manufacturing: +3.7
(Raw materials +1.2, Packages +0.8, operational efficiency / in-house production +1.7)
Cost increase in manufacturing: -2.0 (Raw materials -0.9, Packages -1.1)
Increase in advertisement and sales promotion expenses: -2.9 (Advertisement +1.0, Promotion expenses -3.9)【2019 forecast: Factors Contributing to Growth/Decline】 (JPY billion)<Breakdown of main factors>
Change in sales, category and container mix: +3.3 (including the impact of price revision)(Increase in sales volume +2.6, Change in category and container mix +0.7)
Cost reduction in manufacturing: +2.1
(Raw materials +0.8, Packages +0.6, operational efficiency / in-house production +0.7)
Cost increase in manufacturing: -2.6 (Raw materials -0.2, Packages -2.4)
Decrease in advertisement and sales promotion expenses : +1.3 (Advertisement +0.5, Promotion expenses +0.8)

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

6

Food Business (Revenue/Core Operating Profit)<Revenue>(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Asahi Group Foods

128.6

2.5

2.0%

2.3

118.0

2.0

1.7%

Other / elimination

- 0.0

0.0

-

- 0.0

-

0.0

-

Corporate adjustment (IFRS adjustment)- 12.7

- 0.3

-

- 0.2

-

-

-

116.0

2.2

1.9%

2.1

118.0

2.0

1.7%

Revenue<Core Operating Profit>(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

11.8

0.7

6.3%

0.2

Other / elimination

0.4

- 0.1

- 25.2%

Core Operating Profit

12.2

0.6

4.9%

Asahi Group Foods

12.3

0.3

2.7%

- 0.1

0.4

0.0

2.3%

0.1

12.7

0.3

2.7%

【Revenue】
・2018: Finished above target with +1.9% YoY growth with expanding lineups centered on core brands including
MINTIA.
・2019: Target +4.9% YoY growth driven by revenue growth and reduction of manufacturing costs throughfactors including review of procurement for raw materials and improvement of manufacturing efficiency.
【Core Operating Profit】
・2018: +1.7% YoY growth driven by enhancing core brands equities and development of added value products
leveraging the core technologies.
・2019: Target +2.7% YoY growth driven by continuous improvement of product mix through enhancement ofdevelopments of added value products and manufacturing cost reduction.

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

7

Overseas Business (Revenue)<Revenue>(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Europe business

465.5

91.9

24.6%

16.0

464.5

- 1.0

- 0.2%

Oceania business

174.7

1.5

0.9%

- 2.5

176.4

1.7

1.0%

Southeast Asia business

45.9

- 9.5

- 17.1%

- 2.0

44.7

- 1.3

- 2.8%

China business

9.8

- 6.6

- 40.3%

0.3

5.4

- 4.3

- 44.4%

17.3

- 1.1

- 5.7%

- 0.8

20.1

5.6

38.9%

713.3

76.3

12.0%

11.0

711.1

0.7

0.1%

Other/elimination
Revenue<Revenue (excluding foreign exchange impacts associated with conversion of local currencies into Japanese yen) >(JPY billion)

20182019 forecast

YoY (Amount / %)457.0

Oceania business

182.0

Southeast Asia business

44.3

China business

9.7

- 6.7

- 41.0%

Other/elimination

17.3

- 1.0

- 5.7%

710.2

73.3

11.5%

2.9

Revenue

83.4

YoY (Amount / %)Against Target

Europe business

22.3%

7.6

480.5

15.0

3.2%

8.8

5.1%

- 1.6

186.7

12.0

6.9%

- 11.2- 20.1%

- 2.5

45.5

- 0.5

- 1.1%

0.4

5.6

- 4.2

- 42.6%

- 1.1

20.4

6.0

41.4%

738.7

28.3

4.0%

【Revenue (excluding forex impacts associated with conversion of local currencies into JPY)】
Note: See P.10 for details of Europe business2018
・Oceania: +5.1% YoY growth driven by strong performance of Alcohol beverages with Peroni, despite of decline of Non-alcohol
beverages. (Non-alcohol beverages -2%, Alcohol beverages +15%)
・Southeast Asia: -20.1% YoY decline due to the impact of deconsolidation of Indonesia business, despite of favorable performance ofAsahi brands in Malaysia and Myanmar.
・China: -41.0% YoY decline due to the impact of deconsolidation of Yantai Beer, despite of favorable performance of premium brands
including Asahi Super Dry.
2019
・Oceania: Target +6.9% YoY growth driven by reinforcing the sales for added value products and premium brands (Non-alcohol
beverages +1%, Alcohol beverages +9%).
・Southeast Asia: Target -1.1% YoY decline due to the impact of deterioration of consumer sentiment in response to the tax revision,
despite enhancing added value improvement centered on core brands.
・China: -42.6% YoY decline due to the impact of transfer of export to Oceania, despite strengthening sales activities for Asahi SuperDry and Europe brands.
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

8

Overseas Business (Core Operating Profit)<Core Operating Profit>(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Europe business

81.1

30.1

58.9%

4.6

84.5

3.4

4.2%

Oceania business

14.8

0.8

5.5%

- 0.4

15.3

0.5

3.5%

Southeast Asia business

2.2

1.4

174.5%

0.1

2.8

0.6

25.0%

China business

0.5

- 0.5

- 50.0%

0.0

- 0.7

- 1.2

-

Other/elimination

1.0

0.7

354.1%

- 0.3

3.9

1.9

96.1%

Core Operating Profit

99.6

32.5

48.5%

4.0

105.8

5.2

5.2%

<Core Operating Profit (excluding foreign exchange impacts associated with conversion of local currencies into Japanese yen) >2018(JPY billion)

2019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Europe business

79.7

28.6

56.1%

3.1

87.4

6.3

7.8%

Oceania business

15.4

1.4

9.9%

- 0.3

16.2

1.4

9.5%

Southeast Asia business

2.1

1.3

159.5%

0.1

2.9

0.6

27.1%

China business

0.5

- 0.5

- 50.7%

0.0

- 0.7

- 1.2

-

Other/elimination

1.0

0.7

353.7%

- 0.3

3.9

1.9

97.8%

Core Operating Profit

98.6

31.6

47.1%

2.6

109.7

9.1

9.0%

【Core OP (excluding foreign exchange impacts associated with conversion of local currencies into JPY)】
Note: See P.10 for details of Europe business2018
・Oceania: +9.9% YoY growth driven by revenue growth in Alcohol beverages and operational efficiency improvement throughintegration synergies.
・Southeast Asia: +159.5% YoY growth mainly due to the impact of deconsolidation of Indonesia business and reduction of
manufacturing costs through productivity improvement.
・China: -50.7% YoY decline due to the impact of deconsolidation of Yantai Beer, despite of the manufacturing costs reduction throughstreamlining procurement process.
2019
・Oceania: Target +9.5% YoY growth driven by revenue growth of premium brands and productivity improvement.
・Southeast Asia: Target +27.1% YoY growth driven by mix improvement and reduction of manufacturing costs reduction throughreview for manufacturing process.
・China: Target JPY1.2 billion YoY decline due to the impact of transfer of export to Oceania, despite enhancing product mix
improvement through reinforcing sales activities for premium beer category.

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

9

Europe Business (Revenue/Core Operating Profit)<Revenue>(JPY billion)
20182019 forecast

YoY (Amount / %)Western Europe
Central Europe(consolidated from Apr. 2017)

Europe businessYoY (Amount / %)Against Target

149.5

14.4

10.7%

4.2

154.4

4.9

3.3%

316.1

77.5

32.5%

11.8

310.1

- 6.0

- 1.9%

465.5

91.9

24.6%

16.0

464.5

- 1.0

- 0.2%<Core Operating Profit>(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

Gross Core Operating Profit

22.5

2.9

14.9%

1.1

24.0

1.5

6.6%

One off Cost

- 0.2

1.6

-

- 0.1

-

0.2

-

Western Europe

22.3

4.6

25.7%

1.0

24.0

1.7

7.5%

Gross Core Operating Profit

59.9

14.8

32.7%

3.4

60.6

0.6

1.0%

One off Cost

- 1.1

10.7

-

0.2

- 0.0

1.1

-

Central Europe

58.8

25.5

76.5%

3.6

60.5

1.7

2.9%

Europe business

81.1

30.1

58.9%

4.6

84.5

3.4

4.2%

Western Europe

- 4.5

- 0.2

-

- 0.0

- 4.4

0.2

-

Central Europe- 13.2

- 3.5

-

- 0.2

- 12.6

0.6-- 17.7

- 3.7

-

- 0.2

- 17.00.7-

Amortization of intangible assets【2018】
・Revenue: Finished above target with +24.6% YoY growth driven by revenue growth in all home markets and the newly
consolidated impact of Central Europe business.
・Core OP: Finished above target with +58.9% YoY growth driven by revenue growth both in Western and Central Europe
businesses and mix improvements, in addition to the newly consolidation impact of Central Europe business.
【2019】
・Revenue: Target -0.2% YoY decline due to the negative impact of the appreciation of yen (negative JPY16.0 billion),
despite promoting further premiumization in home markets and third countries.
・Core OP: Target +4.2% YoY growth driven by revenue growth and mix improvement, despite of the negative impact of
the appreciation of yen (negative JPY2.9 billion).
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

10

Operating Profit/Profit Attributable to Owners of Parent(JPY billion)
20182019 forecast

YoY (Amount / %)YoY (Amount / %)Against Target

2,120.3

35.4

1.7%

- 19.7

2,153.0

32.7

1.5%

Core operating profit

221.4

25.0

12.7%

1.4

230.0

8.6

3.9%

Adjustment item

- 9.6

3.6

6.4

- 13.0

- 3.4

- 4.1

1.3

0.6

- 5.0

- 0.8

-

- 9.6

-

-

-

1.4

1.4

-

-

- 1.4

Business integration expeses

- 3.0

1.1

- 2.2

-

3.0

Impairment loss

- 0.3

9.8

- 0.3

-

0.3

Others

- 3.6

- 0.5

8.3

- 8.0

- 4.4

Operating profit

211.8

28.6

7.8

217.0

5.2

- 3.6

0.1

- 0.3

- 3.0

0.6

0.9

- 0.2

0.1

0.7

- 0.2

- 0.9

- 18.8

-

-

0.9

- 3.3

- 0.7

0.1

4.3

214.0

6.7

4.3

- 62.0

- 5.6

8.6

152.0

1.1

0.7%

9.1

152.0

0.9

0.6%

- 0.4

-

0.1

Revenue

Loss (gain) on sales and retirement of
non current assets
Loss (gain) on sales of stocks of subsidiaries andaffiliates
Gain (loss) on revaluation of subsidiaries andaffiliates

Finance income or loss
Share of loss (profit) of entities accounted forusing equity method
Loss (gain) on sales of investments accounted forusing equity method

15.6%

- 0.8

0.6

207.3

10.3

- 56.4

1.8

Profit

150.9

12.1

8.7%

Profit attributable to owners of parent

151.1

10.1

7.1%

Profit attributable to non-controlling interests

- 0.1

2.0

OthersProfit before tax
Income tax expense

5.2%

2.5%

3.2%

【2018】
・Operating Profit: Finished above target with +15.6% YoY growth driven by Core OP growth and the decrease of factors including
Others cost.
・Profit attributable to owners of parent:
Finished above target with +7.1% YoY growth due to OP growth and decrease of income tax expense【2019】
・Operating Profit: Target +2.5% YoY growth driven by Core OP growth, despite of downturn in response to revaluation of subsidiaries
and affiliates and increase of Other costs expected.
・Profit attributable to owners of parent:
Target +0.6% YoY growth driven by OP growth, despite of the increase of income tax expense.
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

11Formulation of new group philosophy“Asahi Group Philosophy”
The Medium-Term Management Policy Update

Executive Summary◆Overview of the management over past three years
・ Strengthening brand equities in the three domestic businesses and improving profitability
through making more progress than planed in reforming the earning structure
・ Expanding the foundation for growth significantly driven by acquiring Europe beerbusinesses and restructuring business portfolio with agility・ Outperforming the guidelines of key performance indicators and enhancing corporate value
through improving asset and capital efficiency and enhancing ESG initiatives◆External Environment in the Future
・ Expanding various opportunities and risks including value diversification in consumer
sentiment and global premium market growth・ Growing needs to disclose integrated information and promote constructive dialogues withstakeholders in response to factors including the revision of Japan’s Corporate Governance
Code◆Formulation of new group philosophy and the Medium-Term Management
Policy update
・ Formulating Asahi Group Philosophy sharing worldwide in the new stage for growth・ Updating the Medium-Term Management Policy embodying AGP and enhancing “Glocal Value
Creation Management”

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

12External Environment in the Future◆External Environment in the Future
・ Development of further value diversification in consumer sentiment driven by factors including various
tax revisions and development of digitalization
・ Expansion of various opportunities and risks including growing VUCA* environment and global premiumcategory growth・ Growing needs to disclose integrated information and promote constructive dialogues with stakeholders
in response to the revision of Japan’s Corporate Governance Code and the release of Guidance forCollaborative Value Creation by METI in Japan*Volatility, Uncertainty, Complexity, Ambiguity◆SWOT Analysis for business portfolio

Weakness
ThreatCopyright © ASAHI GROUP HOLDINGS. All rights reserved.

Opportunity●Expanding market structure change by liquor tax
revision and diversifying consumer sentiment●Revitalizing consumer sentiment driven by Tokyo
2020 Olympic and Paralympic Games and Osaka
Expo in the coming years●Diversifying consumption value in the youth driven
by development of e-commerce and digitalization○Growing premium and super premium beer market
sustainably○Expanding markets in high added value categories
including non-alcohol beverages

Strength●Holding No.1 brands in various categories including
beer-type beverages●Holding industry-wide top-class profitability in
Alcohol Beverages, Soft Drinks and Food Businesses○Acquiring established premium brands in Europe,
the brand nurturing know-how and humanresources○Structuring leading networks in Oceania and Asia

Blue: Domestic, Brown: Overseas●Progressing maturation of alcohol beverages
and soft drinks markets due to the declining
birthrate and the aging population●Continuing severe competition under deflation
environment○Increasing oligopolization by global large
companies○Increasing various regulations against alcoholand sugar and others●Decreasing markets more than expected due todeterioration of economies and consumer
sentiment●Deteriorating competitive environment due tothe increase of consumption tax rate
○Slowing down premiumization in response to
economic downturn in focused areas○Changing business models sophisticated bylarge competitors through digitalization

13

Asahi Group Philosophy

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

14

Overview of the Medium-Term Management Policy
Enhancing "Glocal Value Creation Management" based on Asahi Group Philosophy◆ Strengthening earning power driven by high added value enhancement and earning structurereform・Enhancing high added value brands in Japan and overseas and achieving revenue growth with expanding cross-selling・Reforming the earning structure through introduction of zero based budgeting and optimization of procurement system*The target of earning structure reform impact including zero based budgeting (2019-2021 accumulated):over JPY30.0 billion
・Sophisticating business administration utilizing ROIC and improving asset and capital efficiency through cash flow
maximization◆ Sophisticating management resources aimed at expansion of the new foundation for growth・Reforming corporate culture for realizing innovation and disruption and investing intangible assets (R&D and humanresources and others)
・Promoting bolt-on type M&As complementing the existing businesses and expanding alliances with competitors andother industries' players
・Implementing business structure reform taking advantage of digital transformation and advancing business model◆ Reinforcing ESG initiatives supporting sustainable value creation process・Formulating "Asahi Group Environmental Vision 2050“ and improving sustainable activities through value creation
leveraging the unique strength
・Enhancing glocal talent management and HR diversity and fostering human rights management system
・Sophisticating risk management system (Enterprise Risk Management) and reforming governance system supportinggroup and global growth⇒ Promoting constructive dialogues with the above three key initiatives as engagement agendas

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

15

Guidelines of Key Performance Indicators◆ Key Performance Indicator (KPI) Concept and Guidelines
2017 results

Guidelines for next 3 years out

Revenue

JPY2,084.9
billionStable growth from existing businesses – Businessrestructuring + New M&As

Core OPJPY196.4
billionCAGR : mid to high single digit

EPS (adjusted*)

262.2 yen

CAGR : mid to high single digit

ROE (adjusted*)

13.7％

Maintain 13％ or above*Adjusted figures are calculated after the deduction of special factors including business portfolio restructuring and forex impact(JPY billion)<J GAAP><IFRS>

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

(yen)<J GAAP>＜IFRS＞

16

Financial and Cash Flow Strategy (2019 revised)◆ Financial and Cash Flow Guidelines
Guidelines from 2019 onward

Cash Flow

FCF : above JPY170.0 billion (annual average)

Investment for
GrowthDebt Reduction

Prioritize M&As for expansion of foundations for growth and promote
debt reduction for enhancing investment capacity

Shareholder
Returns

Net debt / EBITDA : below 2 times by the end of FY2021
Stable dividend increases with the aim of a dividend payout ratio of
35% * (-2021)
Note: aiming at dividend payout ratio of 40% in the future*Adjusted profit attributable to owners of parent is used for calculation<Net debt/EBITDA><J GAAP><IFRS>

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

17

Key Initiatives by BusinessBusiness

Medium-Term Key Initiatives◆Sophisticating structure for innovation and cost reduction and establishing the position as aleading company in the domestic alcohol industry

Alcohol
Beverages

1) Implementing integrated marketing strategy for new market creation looking toward the futureenvironmental change and renovating the core brands value
2) Promoting zero based budgeting, minimizing the cost and creating resources for investments for
growth through building optimal production and logistics system
3) Sophisticating product development process, expanding new drinking opportunity and enhancing
business model utilizing digital transformation◆Aiming at an leading company in the soft drinks industry with industry-wide top-classprofitability

Soft Drinks

1) Enhancing core 6 brands values and improving profitability driven by building optimal production andlogistics system and reforming vending machines business
2) Establishing new foundation for growth through challenging new category creation and allocating
business resources for health-conscious category3) Strengthening corporate brand value driven by solving social challenges in the region of health andenvironment and expanding alliances with partners◆Enhancing the unique strength further and expanding foundation for growth through newmarket creation

Food1) Improving core brand and category values further utilizing core technologies and materials2) Nurturing growth drivers in new categories and markets and developing overseas business
3) Streamlining overall value-chain, improving productivity and reinforcing quality assurance system◆Leading sustainable group growth centered on promoting premiumization and expanding crossselling of core premium brands

Overseas

1) Reinforcing premium portfolio in each country and expanding cross-selling of core premium brands
centered on Europe
2) Creating opportunity for growth driven by innovation in the region of non-alcohol beer taste beverages
and functional drinks in light of consumption diversification
3) Promoting continuous zero based budgeting, reinvesting for further growth and strengthening
foundation for growth through bolt-on type M&As

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

18

Results and Forecasts for Earning Structure Reform
including Zero Based Budgeting (ZBB) impacts◆ Results and Forecasts for Earning Structure Reform
Note: The figures include the net impacts of ZBB
JPY billion

2019-2021
3 year forecast

2016-2018
Forecast

Structure optimal production and logistics system in response to
demand shift among categories and consumption diversification

Alcohol
Beverages

Soft Drinks

Initiatives

17.1

Reduce container weights and raw material costs bystreamlining procurement area and methods

Over 20.0

Enhance optimal production and logistics system by improving
oerational efficiency and strengthening partnership
Reduce manufacturing cost by reviewing manufacturing method
and packaging design

Over 14.0

Structure optimal production and logistics system by improving own
production capacity and reviewing consignment production scheme

FoodOverseas

Over 10.0

Total

Over 30.0

Streamline logistics system driven by integrating logistics sites
and promoting automated warehouses (Oceania)

11.3

3.1

Reduce manufacturing cost by reviewing manufacturing process
and sophisticating demand and supply adjusting method
Reduce manufacturing cost through improving procurement
efficiency and optimize fixed cost (Europe)

2016-2018
Results

Over 6.0

10.7

20.0-30.0

42.2<Zero Based Budgeting Initiatives>
・ Ensuring all fixed costs including advertisement and sales promotion expenses and personnel
costs to visualize and clearly defying what initiatives to stop and finally prioritizing the budget
allocation
・ Investing the resources from stopping expenses in key initiatives in the Medium-Term
Management Policy in addition to increasing the profit
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

19

Reinforcement of ESG Initiatives
Reinforcing ESG initiatives supporting sustainable value creation process◆ Formulating "Asahi Group Environmental Vision 2050", improving sustainable activities throughvalue creation leveraging the unique strength・ Goals of Asahi Group Environmental Vision 2050
1) Achieving zero CO2 emissions2) Using 100% of sustainable resources (agricultural raw materials, containers and packaging,water)・ Corporate value creation seeking solutions to social issues by leveraging Asahi’s unique strengths(yeast and lactic acid bacteria technologies)◆ Enhancing glocal talent management and HR diversity and fostering human rights management
system・ Developing human resources and enhancing HR diversity by putting the right person to the rightplace globally and merging local HR management systems
・ Strengthening initiatives for respect for human rights by evaluating various internal and externalrisks relating to human rights and renewing due diligence process for human rights◆ Sophisticating risk management system (Enterprise Risk Management) and reforming governancesystem supporting group and global growth・ Reinforcing global risk management system with the operation of ERM (Enterprise Risk
Management)・ Strengthening governance system by reforming the board of directors through such means asenhancing supervisory function of the board of directors as a body that supervises businessexecutions and promoting diversification
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

20

Asahi Group Environmental Vision 2050
Asahi Group Environmental Vision 2050
We will work on to achieve the goals below by 2050
・ Aiming to achieve zero environmental impact in the business activities
・ Endeavoring to create more environmental value to society by leveraging theGroup’s unique technologies

Zero Environmental Impact (Neutral)

Response to climatechangeZero CO2 emissions
2030: reduction by 30％
2050: zero emissions

Sustainable
resources use
・Sustainable procurementof agricultural raw
materials

・Sustainable use ofcontainers andpackaging

Environmental Value Creation (Positive)
Utilization oftechnologies on
microorganisms andfermentation

Process innovation

New environmental
value creation
leveraging the uniquestrength

Creation of
breakthroughtechnologies andsystems・Water neutral

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

21

Overview of Business Results for 2018&
Future Business Strategy

Alcohol Beverages Business (Beer Initiatives)
Asahi Super Dry Brand Theme: The JAPAN BRAND
Increasing loyal users through integrated marketing and improving brand equities
Brand Communication Strategy

Emotional Value Appeal

Ad Strategy Enhancing Appeal of Brand Equity
Corporate Innovation

Establish the brand image representing Japan
with high quality, uniqueness and challenge
spirits

Functional Value Appeal

Asahi Super Dry Brand Image

Improve the value of“KARAKUCHI” andfreshness

Reinforcing Initiatives to Acquire New Customers

Extra Cold
Improving quality ofhead on beer

Stylish tumbler

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Asahi Super Dry
Shunrei Karakuchi

Sales Promotion Leveraging Tokyo 2020 Olympic andParalympic Games

555ml jug

Region-limited Label

Asahi Breweries, Ltd. is a Tokyo 2020 Olympic and Paralympic Gold Partner(beer and wine)22

Alcohol Beverages Business (New Genre)◆ Sales Volume Trend of New Genre(Millions cases)<Challenge in 2018>
Contraction of Clear Asahi brand due to new
product launches impacts in competitors
Delay to tackle the change of consumption trend<Strategy in 2019>
Improving added value of Clear Asahi brand andreestablish the position in New Genre category
leveraging the launch of Gokujo <Kireaji>
Note : Market share is calculated based on shipment volume◆ Brand Development in response to Consumer Preferences in New Genre
Sharpness/Refreshing
Refreshing

Sharpness
Pursuing Clear Taste
Barley100％
×Asahi’s UniqueSharpness
Original fermentation
technology
Gokujo <Kireaji>
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Rich Barley Taste
Improving barley taste
and refreshing aroma
through renewal

Clear Asahi

Glamorous/Richness
Glamorous
Richness
Top-end Richness andAroma

Establishing premium
position in New Genre
category
Clear Asahi Prime Rich23

Alcohol Beverages Business (Other Alcohol Beverages)◆ Revenue Trend in Other Alcohol Beverages(JPY billion)

Non-alcohol
ShochuWine
RTD

Whiskey

Note : Revenue figures are based on J GAAP

◆ RTD: Revenue and Market Share Trend(JPY billion)(Millions cases)

New Launch: Wilkinson Hard Nine
Expanding the market presence
by appealing core values of strong
carbonated and non sugar

Source : Intage

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

New Launch: Dry Zero Spark
Developing the market driven by
new value proposal leveraging
brand equity of Dry Zero

Source : Intage

24Soft Drinks Business Overview◆ Revenue and Core OP Margin Trend◆ Sales Volume Trend of WILKINSON and CALPIS（Million cases）(CAGR)＋7.2％＋17.5％<J GAAP>＜IFRS＞◆ Key Profitability Improvement Drivers
2014
Sales Volume① Increase(Millions cases)② Composition of

③

CAGR
+3.1%

235.692018
266.13

70.9%

72.4%

Composition ofsmall PET bottles

54.5%

61.1%

Operational

production effectContribution for tackling the social issues linked to healththrough such means as leveraging Calpis-Derived Lactic
Acid Bacteria Science Series
FOSHU

Core 6 Brands④ efficiency/in-house◆ Enhancement of Health Functional Field

Foods with Function
Claims

LacticAcid

Positive JPY5.4 billion

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

25

Food Business Overview◆ Revenue and Core OP Margin Trend◆ Revenue and Market Share Trend in Baby Food
(JPY billion)(CAGR)＋7.6％<J GAAP>＜IFRS＞

Source : Intage◆ Core Brands Revenue Trend(JPY billion)

Freeze Dried
Miso Soup
Baby Food
Infant Formula
Dear Natura
MINTIA

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

26

Western Europe Business Overview◆ 2018 Results and 2019 Forecast(excluding foreign exchange impacts associated with conversion of local currencies into Euro)khl、million Euro

2018
Results

AgainstTarget*3

YoY*2

2019
Forecast

YoY*4

9,351

6%

3%

9,318

0%

Net Sales (exl. Alcohol tax)

929

9%

1%

977

5%

Core OP*1

172

13%

2%

190

11%

-1

91

9

0

1

Sales Volume

One-off cost
*1 Core OP before reduction of one-off cost

*2 Comparison in 2017 FX rate. 2017 result is estimated number due to before acquisition*3 Comparison in budget FX rate

*4 Comparison in FX rate of 2018.

(2018 Overview) Revenue increased above target driven by sales increase in all businesses with favorable performanceof main brands and brand enhancement of Super Dry
Profit increased above target driven by revenue growth and product mix improvement due to thegrowth of UK and the International businesses(2019 Strategy) Expand sustainable foundation for growth through revenue increase of premium brands including SuperDry and optimization of cost

◆ Progress of Strategy for GrowthPremium Ratio in Business

Peroni Nastro Azzurro
Net Sales Growth Rate (Global)＋10％<only UK>
＋7％

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

27

Central Europe Business Overview◆ 2018 Results and 2019 Forecast(excluding foreign exchange impacts associated with conversion of local currencies into Euro)khl、million Euro

YoY*2
（Full year basis)

2018
Results

2019
Forecast

AgainstTarget *3

YoY*4

Sales Volume

33,5314%

1%33,4420%

Net Sales (exl. Alcohol tax)

1,924

7%

2%

1,970

3%

460

19%

3%

475

7%

-8

84

2

0

8

Core OP*1

One-off cost
*1 Core OP before reduction of one-off cost

*2 Comparison in 2017 FX rate. 2017 result is estimated number due to before acquisition*3 Comparison in budget FX rate

*4 Comparison in FX rate of 2018.

(2018 Overview) Revenue increased above target driven by an increase in volumes across all countries with favourable
performance of premium brands and assisted by good weather
Profit increased above target driven by category mix improvement and cost optimisation programs(2019 Strategy) Continue to premiumize the portfolio in the domestic markets, accelerate growth of premium in the export
market, continuing to leverage this through cost optimization opportunities positively impacting an alreadystrong profit margin while growing our talent base for wider Group benefit◆ Progress of Strategy for GrowthPremium Ratio in Business

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Pilsner Urquell/Kozel
Net Sales Growth Rate (CE & Export)
Pilsner Urquell

Kozel

＋8％

＋8％

28

Expansion of Global Brands◆ Cross-selling Strategy for Global Premium Brands◆ Brand: Asahi Super Dry, Peroni Nastro Azzurro, Pilsner Urquell◆ Area: Super premium beer markets other than home markets
including UK◆ Basic Strategy: Strategy focused on portfolio utilizing brandequities and key cities in core areas
Sales Volume Forecast in 3 Brands Other Than Home Markets(-2021)CAGR (3 brands total)
about ＋10％
compared to 2018 results

about 35.00 million cases in 2018

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

29

Oceania Business Overview◆ Revenue and Core OP Margin Trend(based on local currency: AUD)

◆ Cost Reduction (including integration synergies):
Result
JPY billion

2016

2017

2018

Cost
Reduction

1.8

3.2

2.3

2016-2018
3 yr forecast

Over 5.0◆ Initiatives in Growing Categories (Australia)<Non/Law Sugar Cola Market Share><International Premium Beer Market Share>

2018

2018

Source: Aztec, volume basis※ 出典：Aztec,数量ベース

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Source: Aztec, value basis※ 出典：Aztec,金額ベース30<Reference> Impact of Foreign Exchange Rate
◆ Key Currencies and the Company’s
Average Exchange Rates Trend◆ Impact of Foreign Exchange Rates onStatement of Profit or Loss(yen)

Business

Currency

2018
result2019
forecast

Europe

Euro

8.5

-16.0

Oceania

AUD

-7.3

-10.3

-

1.7

-0.8

China

RMB

0.1

-0.2

Others

-

0.0

-0.3

2.9

-27.7

Southeast Asia

RevenueEurope

Euro

1.4

-2.9

Oceania

AUD

-0.6

-0.9

-

0.1

-0.0

China

RMB

0.0

0.0

Others

-

-0.0

-0.0

Amortization of
intangible assets

Euro

-0.3

0.6

Amortization of
intangible assets

AUD

0.1

0.1

0.7

-3.2

Southeast Asia

Core OP(JPY billion)

Reference◆ Exchange Rate Sensitivity of Key Currencies (2019)【Foreign exchange sensitivity for core currencies in 2019】
Impact from forex fluctuations of 1 yen to target currency (full year)
Currency

Euro
AUD
2016

2017

2018

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

2019 forecast

TargetRevenueCore OP

126

±3.7

±0.7

EuropeTarget business

78

±2.3

±0.2

Oceania

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 resultsin local currencies into the results in yen

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 orinconvenience that may be caused by or in conjunction with any part of these materials.