Japan Business Strategyand Role of AGJ
March 8, 2022

Evolving Business Environment and Impact
Evolving business environment

Impact on Asahi

Recentchanges• Economic recovery from the COVID19 pandemic• Liquor tax reform in 2026

• Revenue returning to pre-COVIDlevels• Tax reform a tailwind for beer

Structuralchanges• Generational shift• New demand, occasions, andvalues previously unaddressed
to expand– Middle-aged/senior groups driving
consumption in beer, expected to shrink– Millennials becoming the main
consumers• Consumption mix shift– Consumption mix changing due todifferent preferences by generation– Increasingly diversified values andpreferences within each generation• Cost increase due to higher prices ofraw materials and goods• Rising awareness of sustainabilityⒸASAHI GROUP HOLDINGS. All rights reserved.

• Unpenetrated markets becoming
the main battlefield for growth• Growing profit pressure due tocost increase• Sustainability becoming thecornerstone in managing thebusiness2•3

Asahi Group and AGJ Management Policy
Basic concept behind Asahi Group long-term strategy

Contribute to sustainable society and respond to changing conceptions ofwellbeing through delivering great taste and fun
Basic concept behind Japan business strategy

Grow and thrive harmoniously with society as One Asahi by proactively
addressing needs and changes through a consumer-oriented approach
1. Discover and create opportunities byaddressing new needs and occasion throughunderstanding the market with a consumeroriented approach

4. World-class standards in efficiency and costcompetitiveness2. Deliver experience and emotional value
together with taste, quality and functionality

6. Sustainability through coexisting with society
while creating value

3. Pursue Asahi’s uniqueness in addition to scaleⒸASAHI GROUP HOLDINGS. All rights reserved.

5. Speed and agility to proactively address
consumer and market needs

7. Eliminate silos and boundaries between
companies as One Asahi
3•4Creating Value as “One Asahi”
Past

FutureOrganized by business/category
Asahi
Breweries

Asahi SoftDrinks

Asahi
Group
Foods

Corporate

Corporate

Corporate

Supply chain

Supply chain

Supply chain

Sales

Sales

Sales

MarketingMarketingMarketingConsumer-oriented / One Asahi
Consumers

Integratedinsight

Point ofsaleCommunication

Product/brandBusiness

ConsumersⒸASAHI GROUP HOLDINGS. All rights reserved.

Asahi GroupJapan

Supply chain
Corporate4

•5

Key Results Indicator and 3 Strategic Pillars

Consumer

Point of saleBusiness
operation• Product/brand penetration,purchase trends, satisfaction byconsumer segment• Performance at each stage fromdistribution to store• Operation efficiency andproductivity

GrowthCost

Sustainability

Across Japan businessⒸASAHI GROUP HOLDINGS. All rights reserved.

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Priority Initiatives to Drive 3 Strategic Pillars
Growth1

Cost

Consumer-oriented growth
opportunity discovery & creation

42

Brand portfolio
optimization

53

Accountmanagement78910ⒸASAHI GROUP HOLDINGS. All rights reserved.

Sustainability

Consolidation ofsourcing function
Production / logistics network redesign

S&OP enhancement

6

Incorporating sustainability
into business value

SG&A streamlining

Leadership in achieving
neutrality

Talent reskilling

IT infrastructure enhancement and DX acceleration6

1

Consumer-oriented Opportunity Discovery
Younger generations shrinking
due to a declining birthrate

Biggest consumers of alcohol
becoming smaller due to Japan'saging population

Consume softdrinks onlyIn transition from softdrinks to alcohol

Main consumers ofalcohol

The reality among
these age groups not
fully captured

Stage of “sowing seeds”
for future to increase
Asahi fans by offering
products preferred byteens

Deliver specific value
differentiated from the mainalcohol segments to build abridge to alcohol

Enhance our strengths to
win in this segment where
Asahi achieved strong
performance in the past

Relieve anxiety about
health and life-related
burden• Establish a
consumer-oriented
insight integration
function in AGJ• Identify preference,value and occasion
by consumer tounderstandunderlying needs• Optimize products
and brands

Sustainableproducts/brandsⒸASAHI GROUP HOLDINGS. All rights reserved.

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Brand Portfolio Optimization
Shift focus from category to consumer

Alcohol

Non-alcohol

Beverage market

Category2• Generate consumer
insights to understandspecific preference/value and occasion bygender, age group, andgeneration

Hydration drinks
Energy drinks

Baby boomers

Carbonated drinks

Gen X

RTD

Gen Y
Gen Z

Beer-type

Brand development
and expansion

Gender/Agegroup/Generation• Win in growing markets,
including new markets
and category creation

Occasion• Understand the market with through the lens of the consumer(gender, age group, generation) rather than categoryⒸASAHI GROUP HOLDINGS. All rights reserved.

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3Account Management
Account dashboard andprofit visualization• Visualize financial/operational KPIs at theorganization, category and account level• Start with Asahi Breweries, expand to otherbusinesses and then integrate

Data-driven sales
activities

Win-winrelationship• Develop solid data at eachlevel such as corporate head,branch manager and sales rep• Data-driven joint
business planningwith key accounts• Drive data-driven sales
activities– Optimize shelfallocation– Joint promotion– Maximize profit for
both key accounts
and AsahiⒸASAHI GROUP HOLDINGS. All rights reserved.

94

Share know-how

Global scale/know-how

Local(Japan)

Centralize Japan
sourcing(Apr~)

Expand know-how across thebusinesses

Business specific• Aluminummetal• Aluminumcoil• Malt• Hop• Maize etc.

• PET resin

New

Businessspecific

Specifications

GlobalConsolidation of Direct Material Sourcing Function

Local (Japan)• Can• Sugar• Bottle• Cornstarch• Generalpurpose
additive• HFCS• Can lid• Fruit juice
for limited
edition• Flavoring• Generalpurpose fruit
juice etc.

• Additive for • Special
limitedcomponent
editionetc.

GlobalSuppliersⒸASAHI GROUP HOLDINGS. All rights reserved.

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4Consolidation of Indirect Material Sourcing Function（JPY 100M）

Implemented indirectsourcing transformation
initiative~30• Started to expand
centralized sourcing of
indirect materials from2022• Further expanded scopeto 90%• Improved cost reduction
capability with additional
resources for indirectsourcing and early
involvement withsuppliers

ActualsⒸASAHI GROUP HOLDINGS. All rights reserved.

115Production/Logistics Network Redesign
Japan SCM Point of Arrival

Start SC transformation in West, East andKyushu and expand across the nation
Beer mfg. site

• Increase profitability through capacity
optimization

Beverage mfg. site

RTD mfg. site

– Optimize production capacity based on the anticipated
mid-term market trends– Reinvent the production/logistics footprint to address
2024 issues in the logistics industry• Achieve growth in the key segments andbusinesses by adapting to structural changes
in the market– Transform into more effective network to enable widerrange of liquor and product manufacturing• Establish leading position as an ESG frontrunner– Expand the high efficiency model for new factories
across the entire Asahi Group to drive our ESG
performanceⒸASAHI GROUP HOLDINGS. All rights reserved.

All-JapanWest• Expand the highefficiency modelfrom Shin-Kyushu
to other factories
across the nation• Consolidate beer mfg.
at Shikoku to otherfactories (2023)• Consolidate RTD mfg.
at Nishinomiya
to Suita (2024)
Nishinomiya
HakataShinKyushu(Tentativename)

KyushuSuitaShikoku

IbarakiKanagawaEast• Consolidate beer mfg.
at Kanagawa to otherfactories (2023)• Relocate from Hakata to Shin-Kyushu(Tentative name) as a hybrid manufacturing(beer, beverage and RTD) factory (2026)

126S&OP(Sales and Operations Planning) Enhancement
Consumer-oriented value proposition, Win-win relationship with channels
Roles and expectations of operations management
NimblenessEndurance
Prioritization

Nimbleproductdevelopment

Volume andprofit growth

Enhancement of demand and supply planning processes

Demand planning

S&OP Process

Supply planning

Streamline processes across Japan business to maximize profitability & capital efficiency
Product level profitability a key ingredientⒸASAHI GROUP HOLDINGS. All rights reserved.

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Sustainability Beyond Neutralization
Respond to climatechangeTarget

0

Neutraliz－ ation

Respond to plastic issue

Realize sustainablecommunities

Achieve No.1 consumer advocate for Asahi products and brands
as a leading environmental and sustainable company•

Introduce eco-friendly products and brands•

Offer value that suit for increasing interest in sustainability•

Offer diverse drink options for consumers including smart drink, non-alcohol drink, and low-alcohol drink•

Reduce emission by 2030:––•

Carbon natural by 2050•••

Shift to renewable energy
Optimize mfg. process
Capture CO2 and recycle
carbonInstall solar power generatoretc.

••

Make PET bottles with 100%
sustainable materials by2030•

Reduce use of plastic•••

Use of lightweight PET bottles
Expand label-free bottles
Increase use of recycledplastics and bioplastics
Avoid plastic packaging etc.

Scope 1・2 ▲70%
Scope 3 ▲30%

ⒸASAHI GROUP HOLDINGS. All rights reserved.

••Connect dots tobring positive
impact to business,
local community
and well-being

Solution of social
issues•TargetAction+CreationofpositivevalueAction

7•

Realize the societythat is enjoyable forpeople who drink/
don’t drink alcohol•

Realize circulareconomy•

Reduceinappropriate
drinking•

Reduce and recycle
waste generated
throughmanufacturing•

Promote activities
for responsible
drinking

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8

SG&A Streamlining
Reinvent the structure

AGJAudit• Functions that need to be
managed by eachcompany remain as is

Asahi Group Foods

Sales

HR/AdminProcurement

Sales・・・

DX Management

Value Creation

HRAdmin/LegalHR/AdminⒸASAHI GROUP HOLDINGS. All rights reserved.

Asahi Soft Drinks

Procurement

SalesHR/Admin

Procurement

・・・

SCM

Procurement

CorporateCommunication

Business Planning

Asahi Breweries• Consolidate back-officeand other functions into
AGJ that can be centrally
managed・・・

AGJ to lead to
optimization of theconsolidated functions15

9 10 IT Infrastructure Enhancement, DX Acceleration andTalent Reskilling

Develop group-wide database as foundation of consumer insights

Digitalizing operations
Sales Force
Automation （SFA）

Product Lifecycle
Management (PLM)

Visualize and sharesales activities, todisseminate know-howand increase efficiency

Streamline project
management acrossall stages of productdevelopment lifecycle,
to optimize efficiency
and effectiveness

IoT

Other

Smart factory tooptimize efficiency inproduction andlogistics

Standardize workflows
through ServiceNow
Integrated talentmanagement system
across businesses, etc.

Talent reskilling
Develop talent that can make decisions and act based on leveraging data.
Reskill talent so this becomes a part of their core capabilityⒸASAHI GROUP HOLDINGS. All rights reserved.

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AGJ to Lead Japan Strategy
AGH

AGJ’s role
• Pursue optimization as One Asahi

AEIAHAAHSEA• Drive efficiency through consolidationof common functions

AGJAB

ASD AGS• Drive growth, cost, and sustainability
initiatives that are better led centrally…

• Support and accelerate initiatives
driven by each business• Share best practices across regions

AGJ to equip itself with the functions necessary to fulfill its role,
while closely cooperating with each business and other regionsⒸASAHI GROUP HOLDINGS. All rights reserved.

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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 ofpublication, 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 orin conjunction with any part of these materials.

ⒸASAHI GROUP HOLDINGS. All rights reserved.

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