November 5, 2020
Asahi Group Holdings, Ltd.

Fiscal 2020 Q3 Financial Results Conference Call
Date & Time: Thursday, 5th November, 2020
16:30-17:30 Japan Standard Time
Speaker: Osamu Ishizaka, Head of Corporate Communications, Executive Officer◆ Q3 2020 Financial Results Digest＜Q3 2020 Financial Results Highlights＞• Total revenue fell 4.3% year on year to 1,483.1 billion yen, as an increase in revenue in
our Overseas Business, which was primarily due to the consolidation of the CUB businessfrom June, was outweighed by the COVID-19 pandemic’s negative impact on revenues atour three domestic business segments.
• Total core operating profit also benefitted from the consolidation of the CUB business butlower revenues at existing businesses and channel mix deterioration resulted in a 19.1%
year-on-year decline to 131.7 billion yen.
• Nonetheless, a better-than-expected rebound in the July through September quarter has
us outperforming our full-year forecast for Group-wide core operating profit.
• The entire Group will continue efforts aimed at beating our full-year targets, but in theOctober through December quarter we are scheduled to amortize in a lump sum intangible
assets of the CUB business. In addition, the risks from a resurgence of COVID-19 infectionin Europe and lower demand for year-end parties in Japan could have a larger negative
effect than we had originally assumed.
＜Operating Profit and Profit Attributable to Owners of Parent＞• Operating profit in the first three quarters of 2020 totaled 118.0 billion yen, down 26.2%
year on year, reflecting an increase in “Other” expenses due to COVID-19-related
temporary costs and the decrease in core operating profit.
• Profit attributable to owners of parent decreased 29.5% year on year to 79.6 billion yen
reflecting losses on sales of investments accounted for using the equity method,deterioration in finance income, and other factors, which outweighed a decrease in income

tax expense.
• However, a stronger-than-expected increase in core operating profit has operating andnet profits on pace to come in above our full-year forecast.
• In the fourth quarter, we face negative risks to core operating profit and a possible increasein costs, including business integration-related expenses in Australia and Europe, but westill are aiming to beat our full-year forecasts.
＜COVID-19 Impacts＞• Beer sales in all geographical regions bottomed out in April and began to recover fromMay onward. However, in Japan the decline in sales worsened again in summer owing to
the cancellation of events and government requests to eating and drinking establishments
to once again shorten operating hours. Meanwhile, relaxation of restrictions in Europe andAustralia enabled our operations in those regions to recover to around the same levels as
those seen in the previous fiscal year
• Europe has, however, been seeing a resurgence in COVID-19 infections since October,prompting re-tightening of restrictions, including lockdowns in Czechia. Accordingly, we
assume European sales will decline once again.
• Just how much sales will be affected is hard to say at this time, as the extent of the impact
will depend on infection case number trends and the length of time the restrictions areimposed. Given the better-than-expected results in the July through September quarterand the fact that our full-year forecast incorporates a certain amount of negative risk in
the October through December quarter, we think it unlikely that sales will fall below thefull-year forecast.
• Meanwhile, the Soft Drinks Business is on a recovery track, while the Food Business
continues to face a challenging operating environment, with Mintia continuing to struggle.
＜Alcohol Beverages Business (Revenue of Beer-typed/Sales Volume by Brands)＞• In the first nine months of 2020, the overall market for beer-type beverages is thought tohave shrunk by about 9% to 10%, as declines in on-premise demand and demand related
to holidays and celebrations have outweighed the positive impact from increased
consumption in the off-premise market and a temporary spike in demand prior to revisionof the liquor tax in Japan.
• Efforts to strengthen our mainstay brands continue to provide a certain level of results,
with year-on-year sales of Asahi Super Dry and Style Free exceeding the market average
and our annual sales target for Asahi the Rich being revised upward again. However, with
on-premise beer accounting for a large proportion of our sales of beer-type beverages,
total revenue from beer-type beverages fell 16.4% year on year, to 410.4 billion yen.

• As for our full-year forecast, progress with sales volume is below forecast and year-end
demand from parties and other gatherings could be lower than we initially assumed. We
are responding by strengthening marketing of core brands, especially our beer brands
following the reduction in the tax on beer in October, and will work to connect this to arecovery in sales volume from 2021 onward.
＜Alcohol Beverages Business (Revenue)＞• Total revenue from alcohol beverages other than beer-type beverages is on track to exceed
our forecast, despite lower revenues in all categories except RTDs.
• As with beer-type beverages, we expect year-end demand to be weaker than initiallyforecast. However, we are redoubling our marketing activities in each category, with anemphasis on core brands, as we aim to achieve our annual targets for all non-beercategories.
＜Alcohol Beverages Business (Core Operating Profit)＞• Total core operating profit of the Alcohol Beverages Business declined 23.2% year on year,to 59.9 billion yen. Despite our efforts to streamline and reduce overall costs, including
advertisement and sales promotion expenses and “Other” expenses, we were unable tooffset the large decline in revenue from sales of beer-type beverages and other products.
• However, we are still on track to beat our full-year forecast. Sales could be difficult again
in the October through December quarter, but we aim to achieve our full-year forecasts
by continuing to strengthen our efforts to control fixed costs.
＜Soft Drinks Business (Sales Volume)＞• In the first nine months of 2020, the overall market for soft drinks is thought to haveshrunk by about 6% to 7% owing to a slump in consumption, including sales throughvending machines, although we did see a slight year-on-year rebound in July from theweak sales due to the cool summer in the previous year.
• Asahi Soft Drinks’ total sales volume declined 4.6% year on year, to 191.71 million cases,
as strong sales of carbonated beverages were offset by weak sales of coffee and fruit juice
drinks.
• Sales were below the pace needed to reach our full-year targets, which is now looking
slightly more difficult following adverse weather conditions in October. However, we will
strengthen our marketing efforts, especially for core brands, to set the stage for a recovery
from 2021 onward.
＜Soft Drinks Business (Core Operating Profit)＞• The Soft Drinks Business’s total core operating profit decreased 6.7% year on year, as ourefforts to reduce costs in manufacturing and streamline advertising and sales promotion
expenses could not overcome channel mix deterioration and the decline in sales volume.
• However, category mix improvements and other factors have kept segment profits onpace to beat our full-year forecast, and even though sales volume is below forecast we
aim to surpass the target for full-year core operating profit.
＜Food Business (Revenue/Core Operating Profit)＞• Food Business revenue declined 4.8%, owing to lower sales of Mintia mainly due to a drop
in office-related demand. Segment core operating profit was down 14.2% year on year.
• Nonetheless, core operating profit is above forecast, and we aim to achieve our full-yeartargets while increasing investment in marketing in the October through December
quarter to boost sales momentum for Mintia.
＜Overseas Business (Revenue)＞• On a reported basis, the Overseas Business’s total revenue for the first three quarters of2020 increased 7.5% year on year, to 557.9 billion yen, thanks to the consolidation of theCUB business, which offset an 11.7 billion yen negative forex impact and lower sales onan existing-business basis.
<Overseas Business revenue breakdown on a constant currency basis>• Revenue in the Europe business decreased 8.2% year on year, if we exclude the 3.9 billion
yen negative forex impact, which I will explain later.
• The Oceania business meanwhile saw an 81.6% year-on-year increase in total revenue,
reflecting the consolidation of the CUB business, and strong off-premise sales at ourexisting businesses, which more than covered the decline in their on-premise sales. I will
discuss the CUB business later.
• At the Southeast Asia business, revenue slipped 1.0% year on year on lower sales for all
products except dairy products in Malaysia. Asahi International, meanwhile, posted a
15.9% decline in revenue, mainly due to lower sales in the UK.
• As for our full-year forecasts, the Europe and Oceania businesses are ahead ofexpectations thanks to a stronger-than-expected recovery during the July throughSeptember quarter. Although we expect the Europe business to suffer from a resurgenceof COVID-19 in the October through December quarter, we are looking for the Overseas
Business as a whole to exceed our full-year targets.
＜Overseas Business (Core Operating Profit)＞• On a reported basis, total Overseas Business core operating profit declined 12.6% year
on year, to 69.4 billion yen. Despite the positive impact from consolidation of the CUB
business, profit declined owing to a 1.0 billion yen negative forex impact and lower profits
from existing businesses.
<Overseas Business core operating profit breakdown on a constant currency basis>• At our Europe business, total core operating profit on a constant currency basis decreased
20.2% year on year, as lower sales to the on-premise channel and channel mix
deterioration outweighed the positive effects of expanding consumption in the off-premisechannel and continuing premiumization.
• The Oceania business, however, saw its core operating profit expand 165.6%, as thepositive effect from consolidation of CUB offset lower profit from existing business,temporary expenses of 7.6 billion yen, and other negative factors.
• Profit in the Southeast Asia business declined 25.9% year on year, primarily owing to lower
revenue and steep rises in raw material prices. Asahi International saw its profit fall 75.8%
year on year, mainly due to the impact of a decline in revenue from the UK, where onpremise channel account for a high share of sales, as well as channel mix deterioration.
• The Overseas Business is on pace to beat our full-year forecasts, especially in Europe andOceania. However, we expect conditions in Europe to be difficult in the October throughDecember quarter. Nonetheless, we will redouble our efforts to exceed our full-yeartargets for the Overseas Business as a whole.
＜Europe Business＞• July through September quarter results at the Europe business recovered sharply fromthe first-half results, as the reopening of eating and drinking establishments and relaxationof restrictions on people's movements in Europe helped reduce the year-on-year decline
in sales volume to just 1%.
• In addition to the rebound in the on-premise channel, the recovery was supported by arise in the average unit price in the off-premise channel, which boosted the average unit
price for the Europe business as a whole. We believe this confirms the sustainability of our
premiumization strategy going forward.
• We expect the COVID-19 resurgence to make for a difficult operating environment in theOctober through December quarter. However, as we did during the pandemic’s first wave,
we will respond quickly by grasping the changes in purchasing trends and consumer
sentiment, which will strengthen our resilience during the next recovery period.
＜Oceania Business (Revenue/Core Operating Profit)＞• The CUB business is well-ahead of forecasts despite the impact from the second lockdown
in the state of Victoria. The strong results to date have been supported by expanding salesof core brands, such as Great Northern and Victoria Bitter, and better-than expected
recovery outside of Victoria.
• In Melbourne, eating and drinking establishments have been open again since October 28,
but controls on customer numbers and other remaining restrictions will continue to havesome negative impact on results. In this environment, the Oceania business aims toexceed its full-year targets by carrying out aggressive marketing targeted at peak season.
＜Balance Sheet & Cash Flow＞• Since releasing first-half results, we continued financing activities to cover the CUBacquisition, procuring 156.8 billion yen through a public offering of new shares and 300
billion yen through the issuance of subordinated bonds. As a result, we accomplished ourgoal of procuring 300 billion yen in equity credit attributes.
• We were also able to issue domestic straight bonds and Eurobonds at low interest rates.
We have therefore completed the shift to permanent financing totaling about 750 billion
yen for the CUB acquisition.
• With regard to cash flow as well, debt repayment is proceeding ahead of schedule,
supported by the reduction of working capital and liquidation of non-core assets, as wellas the trend toward an earnings recovery.
• We intend to continue with our efforts to bolster the resilience of the performance of all
businesses from next fiscal year onwards, while swiftly securing financial soundness andmeeting the expectations of our shareholders and investors.