Q1 2020 Financial Results Digest

May 2020

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Executive Summary＜Q1 2020 Results＞◆Revenue decreased by 4.7% YoY due to impact of COVID-19 outbreak mainly from March.
◆Core operating profit decreased by 36.0% YoY due to negative factors for earnings, andworsening channel and brand mix in Overseas Business.

◆Profit decreased by 45.3% YoY due to lower core operating profit and expenses associatedwith COVID-19 outbreak.
＜2020 Full Year Forecast＞◆Earnings forecast left undetermined due to uncertainty over when COVID-19 outbreak will end.
（※Revised forecast will be announced by 1H results announcement, including the impact on business ofCarlton & United Breweries (CUB) in Australia, whose acquisition is to be completed）◆Will maintain initial dividend increase forecast based on shareholder return policy aimed atstable dividend increases.
＜Acquisition of beer business in Australia and financing plan＞◆Acquisition of CUB will move to complete on 1st June with all the regulatory approvals .
◆Financing plan for acquisition to be flexibly reviewed as appropriate in response to stock
market performance and funding environment.

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Financial Results Highlights for Q1 2020
◆ Core operating profit down 34.9% in Q1 due to impact of COVID-19 outbreak（constant currency basis)・Alcohol：YoY decrease in revenue and profits due to sharp decline in beer sales mainly in on-premise market because
of self-restraint request from the government.
・Soft Drinks：YoY decrease in revenue and profits due to weak vending machine sales and worsening product mix
amid “stay at home” appeals.
・Food：YoY increase in revenue and profit up on brisk sales of mainstay brands due to heightened health consciousness andconsumers spending more time at home.
・Overseas： YoY decrease in revenue and profits due to sales volume declines and deteriorating product mix in Europe,
Australasia due to lockdown policies.
<Revenue and Core operating profit (constant currency basis*)><actual currency basis>

Q1 (3months ended March 31)(JPY billion)

Q1 (3months ended March 31)

YoY (Amount / %)YoY (Amount / %)Alcohol Beverages Business

166.3- 12.8- 7.1%

166.3- 12.8- 7.1%

Soft Drinks Business

75.1

- 1.7

- 2.2%

75.1

- 1.7

- 2.2%

Food Business

28.2

2.0

7.5%

28.2

2.0

7.5%

Overseas Business

144.4

- 0.1

- 0.1%

136.4

- 8.1

- 5.6%

Other Business

23.5

- 0.6

- 2.5%

23.5

- 0.6

- 2.5%- 20.41.0-- 20.4

1.0

-

417.1

- 12.2- 2.9%

409.1- 20.2- 4.7%

Alcohol Beverages Business

13.5

- 1.0

- 7.1%

13.5

- 1.0

- 7.1%

Soft Drinks Business

1.1

- 2.1

- 66.1%

1.1

- 2.1

- 66.1%

Food Business

3.7

0.6

20.9%

3.7

0.6

20.9%

Overseas Business

9.3

- 5.5

- 37.1%

8.8

- 5.9

- 40.3%

Other Business

- 0.6

- 0.1

-

- 0.6

- 0.1

-

Adjustmenet (corporate and elimination)

- 5.3

- 0.4

-

- 5.3

- 0.4

-

Amortization of acquisition-related intangible assets

- 5.4

- 0.1

-

- 5.2

0.1

-

16.1

- 8.7

- 34.9%

15.9

- 8.9

- 36.0%Adjustmenet (corporate and elimination)

RevenueCore operating profit*based on previous year's FX rates
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Strong sales due to reviewing marketing

Alcohol Beverages Business（ Revenue/Sales Volume by Brands）<Revenue>(JPY billion)<Market Trend>
YoY

Q1 (3months ended March 31)

YoY (Amount / %)Asahi Breweries Revenue
Other/elimination in segment
Revenue total

162.5- 11.6- 6.7%

3.8- 1.2- 23.5%

Happoshu- 4～5％

166.3- 12.8- 7.1%New Genre＋1～2％'Total- 5～6％<Reference: Revenue by category (before rebate deduction)>

Beer

approx.-12％<Sales Volume by Brands>(Millions of cases)

117.5- 11.3- 8.8%

Whiskey and spirits

13.2

0.6

4.7%

RTD low-alcohol beverages

10.4

0.5

5.5%

Super Dry141.2

- 17.3- 10.9%

Wine

9.1

- 0.5

- 5.7%

Style Free

23.9

0.7

3.0%

Shochu5.8- 0.1- 1.4%

Clear Asahi

37.9

- 1.1

- 2.8%

Non-alcohol beverages

6.2

0.1

0.9%

Beer-type
ビール類合計beverages total

Q1 (3months ended March 31)

YoY (Amount / %)※Super Dry Container Type（Can -3％、Bottle-14％、Keg-23％）【Market Total】
・YoY decrease by -5 to -6 % in the total volume due to sluggish performance of on-premise market and outflow to othercategories, despite of an increase in new genre with new product launches.
【Sales Volume by Brands】◇Super Dry -10.9% YoY decline due to on-premise channel decrease in Mar., despite favorable performance due toreviewing marketing in Jan.-Feb.
◇Style Free ＋3.0% YoY increase due to the effective sales promotion in response to health consciousness increase.
◇Clear Asahi -2.8% YoY decline due to the impact competitors’ new products launches, despite developing themarketing activities linked with food.
◇The Rich
Since its launch on Mar. 17, more than 2 million cases have already been shipped.
Revised annual sales target to 8 million boxes, double the initial plan.
【Revenue of Other Alcohol Beverages】
・YoY growth in total of other than beer-type beverages mainly by the revenue increase in whiskey and spirits withstrong sales in Black Nikka and RTD low-alcohol beverages aggressively expanded sales promotion activities in line withthe renewal of Zeitaku Shibori, despite the decrease in wine and shochu.
・+0.9% YoY growth in revenue in Non-alcohol beverages mainly driven by creation of new drinking opportunities, despite
on-premise market decrease.
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Alcohol Beverages Business (Core Operating Profit)<Core Operating Profit>(JPY billion)
Q1 (3months ended March 31)

YoY (Amount / %)Change in sales, category and container mix

-

- 4.0

Cost reduction in manufacturing-

0.5

Cost increase in manufacturing

-

- 0.8

Advertisement and Sales promotion expenses-

2.0

Other expenses-

1.6

Asahi Breweries

13.8

- 0.8

- 5.5%

Other/elimination in segment

- 0.3

- 0.2

-

13.5

- 1.0

- 7.1%

Core Operating Profit【Core Operating Profit】
・ -7.1% YoY decline due to the sales decline in beer-type, despite streamlining overall fixed cost including advertisement
and sales promotion expenses＜Q1: Factors Contributing to Increase/Decrease＞ (JPY billion)
Change in sales, category and container mix: -4.0
(Sales volume decrease in beer-type -4.0, Sales increase in other alcohol beverages +0.3,
Change in category and container mix, and others)
Cost reduction in manufacturing: +0.5
(Product mix improvement in categories other than beer-type +0.2, etc.)
Cost increase in manufacturing: -0.8 (transportation -0.4, etc.)
Decrease in sales promotion expenses: +2.0 (Advertisement ＋1.0, Promotion expenses +1.0)(Beer-type ＋1.0, Others +1.0)
Other expenses: ＋1.6
(Personal expenses-0.0, Depreciation+0.1, Selling equipment expenses +0.1, Other materials +1.4)

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Soft Drinks Business(Sales Volume/Core Operating Profit)<Sales Volume>(Millions of cases)<Market Trend>＜Container Type＞

Jan. - Mar.

Q1 (3months ended March 31)

YoY (Amount / %)<Channel Type>

Jan. - Mar.

YoY

Jan. - Mar.
YoY

YoY

Carbonated drinks

15.24

0.87

6.1%

approx. -1％

Can

0.7%

Vending machines- 10.5%Lactic acid drinks

9.23- 0.70- 7.0%

approx. -7％

PET Bottle total- 3.6%

Over-the-counter
total- 0.8%

Coffee8.32- 0.81- 8.8%

approx. -6％

PET large size

- 7.9%

Convenience Store- 0.7%

Tea

7.74- 0.58- 7.0%

approx. -1％

PET small size

- 1.2%

Supermarket

Mineral Water

3.73- 0.42- 10.1%approx. +3％

Glass Bottle- 11.8%OthersFruit juice

3.28- 1.15- 25.9%approx. -3％

Others- 11.5%

Other drinks

5.37

1.20

28.8%

-

Sales Volume

52.91- 1.58- 2.9%

approx. -2％<Revenue/Core Operating Profit>(JPY billion)
Q1 (3months ended March 31)

YoY (Amount / %)

75.1

- 1.7

Change in sales, category and container mix

-

- 1.5

Cost reduction in manufacturing-

0.6

Cost increase in manufacturing

-

- 0.2

Advertisement and Sales promotion expenses

-

- 0.1

Other expenses

-

- 0.9

1.1

- 2.1

Revenue Total

Core Operating Profit

4.1%- 14.0%- 2.2%- 66.1%＜Q1: Factors Contributing to Increase/Decrease＞ (JPY billion)
Change in sales, category and container mix: -1.5
(Increase in sales volume -1.4, Change in category and container mix,
and others)
Cost reduction in manufacturing: +0.6
(Packages +0.3, operational efficiency / in-house production +0.3)
Cost increase in manufacturing: -0.2 (Packages -0.2)
Increase in advertisement and sales promotion expenses : -0.1
(Promotion expenses -0.1)【Market Total】
・-2% YoY decline in total volume mainly due to the negative impacts of vending machines and convenience store channel,
despite expanding consumption of supermarkets due to consumption from staying at home.
【Asahi Soft Drinks Sales Volume】
・-2.9% YoY decline in total mainly due to the sales decrease in coffee and fruit juice, despite the sales increase in carbonateddrinks.
【Core Operating Profit】
・-66.1% YoY decline due to sales volume decline and deteriorating product mix, despite manufacturing cost reduction byinitiatives of operational efficiency / in-house production.
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Food Business (Revenue/Core Operating Profit)<Revenue/Core Operating Profit>(JPY billion)
Q1 (3months ended March 31)

YoY (Amount / %)Asahi Group Foods

28.2

2.0

7.5%

Other / elimination

- 0.0

- 0.0

-

28.2

2.0

7.5%

Asahi Group Foods

3.5

0.6

21.1%

Other / elimination

0.1

0.0

16.1%

Core Operating Profit

3.7

0.6

20.9%

Revenue【Revenue】
・+7.5% YoY growth driven by product development that captures changes in health consciousness andconsumer needs.
【Core Operating Profit】
・+20.9% YoY growth mainly by revenue growth and efficiency improvement in adverting expenses.

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Overseas Business *constant currency basis(Revenue/Core Operating Profit)<Revenue *constant currency basis>(JPY billion)
Q1 (3months ended March 31)

YoY (Amount / %)Europe business

73.4

- 3.4

- 4.4%

Oceania business

43.6

4.9

12.7%

Southeast Asia business

11.3

- 0.9

- 7.5%

Asahi International

19.6

1.6

8.6%

Other / elimination

△ 3.6

- 2.3

-

144.4

- 0.1

- 0.1%

Europe business

7.9

- 1.6

- 17.0%Oceania business

1.8

- 0.7

- 27.3%

Southeast Asia business

0.2

- 0.4

- 67.3%Asahi International

- 0.2

- 2.1

-

Include a rebound from last year's temporary profit(1.1 bn JPY)

Other / elimination

- 0.5

- 0.6

-

<Perfomance including foreign exchange imapct>

9.3

- 5.5

- 37.1%

Revenue

Revenue

Include 2.8bn JPY related to container deposit legislation<Perfomance including foreign exchange imapct>

136.4

- 8.1

- 5.6%

Include once-off cost (-0.4 bn JPY) related to CUB acquisition

8.8

- 5.9

- 40.3%【Revenue/Core Operating Profit*constant currency basis】
・Europe：-4.4% YoY decline in revenue due to sales volume declines (-5%) with the tightening of regulations in each country.
-17.0% YoY decline in core operating profit due to sales volume decline mainly in on-premise channel and deteriorating
channel and brand mix in beer sales.
・Oceania：+12.7% YoY growth driven by sales increase in Non-alcohol beverages centered on carbonated drinks.
(Non-alcohol beverages +22%, Alcohol beverages +2%)
-27.3% YoY decline in core operating profit due to sales volume decline and deteriorating channel mix mainly inalcohol beverages.
・Southeast Asia：-7.5% YoY decline in revenue due to the downturn of soft dinks demand by Movement Control Order incountries in the area.
-67.3% YoY decline in core operating profit due to revenue decline and raw materials cost increase in Malaysia.
・AIL：+8.6% YoY growth in revenue driven by sales volume increase（＋5％）, including new consolidation effects of Fuller’s,
despite of sales decrease in Asia.
-JPY2.1 billion YoY decline in core operating profit due to the reaction of temporary profit last Q1 and deteriorating channel
mix by on-premise channel sales decrease.

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Operating Profit/Profit attributable to owners of parent(JPY billion)
Q1 (3months ended March 31)

YoY (Amount / %)409.1

- 20.2- 4.7%

Core operating profit

15.9

- 8.9

- 36.0%Adjustment item

- 3.0

- 1.4

-

Loss (gain) on sales and retirement of
non current assets

- 0.4

0.1

-

Business integration expeses

- 0.8

- 0.5

-

Others

- 1.7

- 1.0

-

Operating profit

12.9- 10.4- 44.5%

- 1.5

- 0.2

-

0.1

- 0.2

- 78.7%

- 2.0

- 1.8

-

9.5

- 12.6- 57.1%

- 1.2

5.6

-

Profit8.3- 7.0- 45.9%Profit attributable to owners of parent

8.3

- 6.9

- 45.3%

- 0.0

- 0.1

-

Revenue

Finance income or loss
Share of loss (profit) of entities accounted forusing equity method
OthersProfit before tax
Income tax expense

Profit attributable to non-controlling interests【Operating Profit】
・Profit：-44.5% YoY decline due to the increase of Others including expenses associated with COVID-19
outbreak in addition to Core OP decline.
【Profit attributable to owners of parent】
・-45.3% YoY decline due to the decrease of OP despite the decrease of income tax expenses.

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Impact of COVID-19 Outbreak（Domestic）<Main Impacts on the Three Domestic Businesses>
Sales trends (March and April)Business

Sales contribution
March

Alcohol
Beverages

J
A
P
A
N

Soft Drinks

Food

On-premise:
Beer and beertype beverages:
approx. 30%(approx. 45% forbeer only)・ Super Dry sales volume (bottles andkegs) declined(Approx. -40% in Mar, approx. -80% in
Apr.)・ Super Dry sales volume (cans) trending
down due to demand falling in onpremise channel and weak demand forholidays and celebrations
・ Overall volume decreased, despite
demand shifted to off-premise channel(mainly for new-genre beverages)

Supermarkets:
42%
Vending
machines: 21%
Convenience
Stores: 19%
Other: 18%

・ Vending machine and convenience store
channel sales volume declined(vending machine: -13% in Mar.,approx. -35% in April)(convenience store: ＋1% in Mar,approx. -10% in April)

Food: 46%
Baby andhealthcare: 38%
Food ingredients:
15%

・ Decline in sales of Mintia(Mintia sales -8% in Mar., approx.
-50% in Apr.)・ Decline trend in sales of baby foods(baby foods: +13% in Mar. approx. 15% in Apr.)
・ Increased sales of freeze-dried(freeze-dried: +20% in Mar., approx.
+20% in Apr.)

Beer & beertype
beverages-19%

Business Total-1%

Business Total
+5%

April
*preliminary
data

Beer & beertype
beverages
approx.-35%

Business Total
approx.-20%

COVID-19 related
restrictions

・ Schools closed fromearly March; citizens
asked to work
remotely and stayhome as much as
possible・ State of Emergency
declared on April 7 (inseven prefectures)
・ State of Emergency
expanded from April
16 (nationwide)

Business Total
approx.-10%

・ State of Emergency
extended from May 4(nationwide, until May
31)

Note: Sales data for March and April are on a value basis for Alcohol Beverage and Food businesses and a volume basis for Soft Drink business. Comparisons are YoY.
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Impact of COVID-19 Outbreak（Overseas）<Main Impact on Overseas Businesses>
Sales situation (Volume)

Business

Ratio on
Sales

March

*preliminary
data

Czechia【On-trade】
Approx.
40%

Declined in
the midteens

Declined in
the mid
twenties

・On-trade: declined significantly
・Off-trade: grew from last year

April

COVID-19 related restrictions

・12 Mar. Prohibition of non-essential
moving・12 Mar. Prohibition of on-tradebusiness (allowed take out)
*expect restrictions to be relaxed in stages

Italy【On-trade】
Approx.
40%

Poland【On-trade】
Mid-single
digit

Eur
ope

・On-trade: declined significantly
・Off-trade: grew from last year

Declined inapprox.
30%

Declined in
the highfifties

・On-trade: declined significantly
・Off-trade: declined from last year

Declined in
the midteens

Declined in
the highteens

・9 Mar. Expand Prohibition of nonessential moving to whole country
・12 Mar. Prohibition of on-tradebusiness
・22 Mar. Prohibition of businessactivities except for essential products
・13 Mar. Prohibition of on-tradebusiness (allowed take-out/delivery)
・24 Mar. Prohibition of non-essential
moving*expect restrictions to be relaxed in stages

Aus
trali
a

UK

【On-trade】
Approx.
60%

・On-trade: declined significantly
・Off-trade: grew from last year

Alcohol
Bevera
ges
*only
beer

【On-trade】
Approx.
30%

・On-trade: declined significantly
・Off-trade: grew from last year
including temporary demand effect

Increasedin the midteens

Declinedaround 40%

Grew inapprox.
20％(Beer only)

Declined inapprox.
40%(Beer only)

・23 Mar. Prohibition of on-tradebusiness: (allowed take-out)
・23 Mar. Prohibition of non-essential
moving・23 Mar. Prohibition of on-tradebusiness (allowed take out)
・30 Mar. Prohibition of non-essential
moving*expect restrictions to be relaxed in stages* Fuller's started consolidation from April 2019
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Novel Coronavirus Response Policy◆ Building value together with all of our stakeholders, based on AGP (announced on Apr.24)
Employees:

Prioritize protecting health and safety of employees and their families; take measures topreserve employment as far as possible and provide appropriate support.

Consumers:

Keep all facilities worldwide in operation to fulfill our responsibility to supply our products.
Propose and develop products in response to changes in business environment.

Business partners:

Provide sustained support to customers and business partners facing what are adverse operating
environments such as on-premise amid government restrictions on outings.

Society:

Donate products and money to those on the frontlines such as Children’s Cafeterias andhealthcare workers.

Shareholders/Investors: Continue to disclose information in a timely and appropriate manner. Ensure financial
soundness position and maintain dividend policy.

◆ Focused response to each phase of COVID-19 outbreak
Spread of infection

RecoveryThe “new normal”

Restrictions and calls for selfrestraint continue

Restrictions relaxed in stages, butsocial distancing maintained

The new normal; end of social
distancing

2021

2020
Q1

Q2

・ Ensure safety of employees andtheir families
・ Support business partners and local
communities
・ Implement BCP (including SCM
measures)

Q3・ Prioritize marketing strategy
・ Ensure sufficient cash flow and soundfinancial position (curb capital
expenditure, fixed costs, etc.)

Q4

Q1・ Implement strategies focused onstrengths
・ Rapid response to the new normal
・ Take on the challenge of engaging
in disruption⇒ Focus efforts on regaining momentum by harnessing strengths such as brands, SCM, and human resources
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11

CUB Business Overview and Financing Plan
◆ Target Business Overview

Target・ CUB’s beer and cider businesses and the related businesses in Australia
・ Intellectual property rights associated with all CUB beer and cider brands,
including Carlton, Great Northern and other brands
・ Perpetual license to sell AB InBev brands in Australia and manufacturing
license of some of AB InBev’s brands and other related assets

Production
and Logistics
Sites

3 breweries, 3 craft breweries, 13 logistics sites◆ Rationale and Overview of Financing Plan
・ Considering to raise JPY300.0 billion of equity credit attributes in order to secure financial soundness andmaintain current credit rating
・ Minimizing dilution for existing shareholders with combining issuance of common stock including use oftreasury share, and subordinated bondFunding Methods
Public Offering

Overview
Issuing common stock including use of treasury shares (Approx. 25.50 million shares)(Maximum amount: JPY200.0 billion)

Subordinated Bond

Issuing subordinated bond (assuming 50% equity credit attribute), which is considered as
an equity regarding the credit ratings (Equity Value: Approx. JPY100.0 billion)

Debt

Considering to diversify funding methods in order to reduce total cost of capital and interest(Approx. JPY800.0 billion)⇒ For financial plans, consider flexibly reviewing the timing and balance according to thestock market and procurement environment.
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12

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.