Asahi Group Holdings, Ltd.
2023 Financial Results Briefing: Summary of Conference Call (1)Date: Wednesday, February 14, 2024, 15:30-17:00
Presenter: Atsushi Katsuki, President and CEO, Representative Director◆Executive Summary (P1)
• Despite considerable cost increases, which have been ongoing since 2022, the Asahi
Group Holdings was able to achieve a higher-than-expected revenue and Core
Operating Profit growth in 2023 thanks to the positive impact of expanding sales
and firm cost management.
• We have been able to successfully increase unit sales prices in all regions bypursuing appropriate pricing strategies while also enhancing our competitive
advantage in each region, and by actively expanding our premium category.
• Furthermore, we have been able to steadily build a sounder financial base by
generating higher-than-expected free cash flow (FCF) to be channeled into
reducing financial debt and reducing Net Debt/EBITDA to roughly 3.1.
• While we do need to continue to closely monitor the impact of persistent cost
increases and inflation on demand, we intend to steadily boost profitability byimproving our competitive advantage while also consolidating our global
procurement function and actively promoting structure reforms in each region.
• Despite the persistently tough business environment, we are determined to press
ahead with our efforts to strengthen investment in our brands, core strategies, andhuman capital in order to achieve sustainable growth.
• In addition to the announcements made on January 10 to evolve our corporate
governance and refresh our business execution framework, we will seek to improve
medium- to long-term corporate value by optimizing cash flow allocations with aview to ensuring sound finances.
◆Evolve Management Framework to Achieve True Global Operations
1(P2)• We have been building a strong operational base in Europe and Oceania since 2016
through large-scale M&A, and we have created greater-than-expected synergies in
the regions by pursuing appropriate post-merger integration (PMI) to help
successfully incorporate those bases into the Group.
• In 2022, we established Asahi Group Japan and a new framework consisting offour regional headquarters. We have been able to successfully enhance ourcompetitive advantage in each region despite the tough business environment
during the COVID-19 pandemic by determinedly expanding investment in ourbrands and core strategies.
• We have regained significant growth momentum in the Alcohol Beverages
Business in Japan in particular by applying our global expertise and adapting ourpolicies, while also consistently expanding marketing investment to strengthen ourbrand.
• We intend to capitalize on our achievements in these regions and seek to maximize
corporate value to a degree that exceeds the sum of our individual businesses aswe enter a new phase towards becoming a truly global company.
◆Evolve Group Governance(P3)• First, we have added one new internal director and two new outside directors on
the Board of Directors, which serves as the cornerstone of governance, in order toensure a majority of outside directors. Moreover, we have greatly increased thediversity of the 11-member Board, which now includes five women and two foreign
nationals, to suit our evolving business structure and strategy.
• We have also refreshed our business execution framework. Specifically, we have
set up new Group CxO positions in the five functions of Finance, People, Growth,Sustainability, and R&D that should operate comprehensively across the Group.
• In addition, we established the Executive Committee to serve as an advisory bodyto myself as the Group CEO. The Executive Committee will serve as a forum fordiscussing overall strategy and direction across the Group by including Group CxO
and regional CEO in Group management decision-making.

2• Finally, we intend to transform our Group headquarters into a highly diverse
organization that befits a global company and that enables diverse humanresources to play an active role, irrespective of nationality, gender, or other factors.
◆Progress of Medium- to Long-term Management Policy (P4)
• Looking first at our business portfolio, we are making steady progress on improving
unit sales prices primarily for beer and non-alcohol beer* and expanding our global
brands.
• In terms of expanding into new areas, we implemented the full-scale launch of ourU.S. investment company and are developing new applications for yeast and lactic
acid bacteria technologies. However, we need to accelerate the development andfostering of growth categories, including BAC, in order to effectively respond tochanging wellbeing requirements.
• Regarding the sustainability element of our core strategy, we formulated ourEnvironment Vision 2050 roadmap and accelerated targets forward from 2050 to2040. We also reviewed our sales targets for non-alcohol beer and low-alcohol
beverages and promoted initiatives to help revise our human rights policy. You canfind the details of these measures on p19-20, so please take a look later.
• In terms of digital transformation (DX), we conducted AI-driven trial verificationsin the personalization sphere and established our AGPRO global procurement
platform. On the R&D front, we continue to pursue research and acquire
exceptionally talented human resources in four key domains, and to strengthen
regional collaboration to help develop specific value propositions.
• Regarding efforts to strengthen our strategic foundation, we have been promoting
various measures designed to help globalize our operations and improve diversity.
As I have just explained, we have also worked hard to evolve our Group governanceby renewing our business execution framework and establishing AGPRO.
◆Progress of Medium- to Long-term Management Policy (P5)
• Looking now at the key indicators for our management policy, we are making
better progress on FCF than we had planned, but Core Operating Profit andadjusted earnings per share (EPS) are expected to fall short of the CAGR guidelines3

over a three-year horizon, which includes the 2024 planned level, due tounprecedented cost increases over the past two years and our decision to expand
various strategy investments.
• However, at this point in time, we continue to aim for Core Operating Profit growthin the high single digits, and we are working to gradually boost CAGR byincreasing returns through various strategic investments, including greater
marketing investment.
• In terms of our financial policy, we expect Net Debt/EBITDA to improve to a betterthan-planned 2.7x by the end of 2024 following efforts to use FCF to reduce debt
and other measures.
• Regarding shareholder returns, we plan to increase our annual dividend by JPY
11 per share in 2024, resulting in a dividend payout ratio of 38%. As shown in thenext slide, we have increased our annual dividend for 16 consecutive years since2008, and we intend to continue increasing the dividend payout ratio to 40% by
2025 as part of our aim to consistently increase dividends in line with profit growth.
◆Generate/Allocate CF to Improve Corporate Value (P7)• It goes without saying that our ability to generate cash is fueled by sustainabletop-line growth and increased cost efficiencies. In terms of revenue, as I mentioned
earlier, we are working to consistently improve unit sales prices and promote ourpremium strategy by expanding global brands, etc., while also accelerating thedevelopment of BAC and high value-added products.
• On the cost front, in addition to the launch of our AGPRO global procurementcompany and the reform of earnings structures in each region, we intend toincrease the Group’s ability to generate cash flow by controlling working capitaland improving capital efficiency in general.
• Regarding the allocation of generated cash, we are prioritizing the allocation offunds to areas that will help strengthen our strategic foundation, such as brandenhancement and M&A investment, as well as sustainability, DX, and R&D core
strategies, and human capital.

4• We will also consider further increasing shareholder returns once we havedetermined our progress on reducing financial debt and if we do not have any largescale M&A or other investment requirements.
• It is hard to quantify specific returns from our investment in core strategies suchas sustainability and in human capital at this stage, but we will continue todeterminedly focus on prioritizing investment required to ensure medium- to longterm growth without being overly influenced by short-term negative PL impacts.
• To illustrate this point, the following slide entitled Brand Investment showschanges in advertising spend for the whole Group over the past three years andhow, even when the business environment was extremely tough during theCOVID-19 pandemic, we expanded brand investment and consequently increased
our competitive advantage in each region.
• We will work to visualize other investments as much as possible through value
association analysis and deepen the opportunity for constructive dialogue with all
our stakeholders regarding cash allocations designed to increase shareholder
returns and overall corporate value.
◆Progress on Our Premium Strategy (P9)• While total sales volumes for beer-type beverages and non-alcohol beer in the three
regions of Japan, Europe, and Oceania declined by 1.8% in 2023 (as shown in thethird line of the table), the 14.9% improvement in the unit sales price in Europe
and the 9.5% improvement for three regions generated primarily by our pricing
strategies, greatly contributed to top-line growth.
• The sales volumes listed on the bottom of the slide for global brands, excluding
home markets, contracted by 1% YoY in 2023 primarily due to a deterioration in
the consumer environment for Peroni Nastro Azzuro in the United Kingdom.
However, Super Dry sales volume increased by an impressive 35% YoY thanks tothe positive impact of the Rugby World Cup and other factors, resulting in anoverall year-on-year increase in sales volume of 4%.
• We have summarized some specific key topics relating to our global brands on thenext slide, but, as far as Super Dry is concerned, we need to maintain this5significantly higher sales momentum through continued brand extension andaggressive marketing.
• Meanwhile, we entered into a new partnership with Formula 1 team Scuderia
Ferrari on Peroni Nastro Azzuro from 2024 and are looking to further increase
brand awareness by promoting cooperation between these two iconic Italian brands.
◆Variable Costs Increase and Outlook (P11)• In 2023, total variable costs, consisting primarily of raw materials and energy,
stood at less than JPY 95 billion. While each region exhibited its own strengths
and weaknesses, the result for the Group as a whole was lower than expected.
• In 2024, we expect total variable costs to increase by approximately JPY 20 billion
as the cost of some items in the market remain high, suppliers are requesting priceincreases to cover soaring labor costs and other elements, and logistics costs arerising.
• Having said that, we are looking to offset those cost increases by continuing topursue the pricing strategies that we started implementing in 2023 and improving
our product mix through premiumization.
◆Japan: Overview and Direction (P12)• To give you an overview of our business in Japan in 2023, we implemented
appropriate pricing strategies to address significant cost increases. Thanks tostrong progress in this area, we were able to generate higher-than-expected
revenue and profits for the segment overall, despite higher additional brandinvestment in the fourth quarter.
• In terms of direction for 2024, we intend to strengthen our core brands to reflectchanges in demand, such as the recovery in beer following liquor tax revisions, andto achieve top-line growth by proposing new value and developing more high valueadded products.
• In addition to our efforts to reform earnings structures under our One Asahiframework, we intend to accelerate management reforms and advance humancapital and organizational functions across Japan by, for instance, transferring
6management employees from each operating company to Asahi Group Japan toensure appropriate employee treatment and assignment.
◆Japan (Alcohol Beverages Business): Main Topics (P13)• As shown in the graph in the upper left corner, the consistent recovery in beer sales
since the liquor tax was revised in October 2020 received an additional boost when
the liquor tax was revised again in October 2023. It also shows how the volume
composition ratio for canned beer and new genres has recently reversed.
• Anticipating these changes in market structure, Asahi Group Holdings started
significantly expanding its investment in advertising and sales promotion from thesecond half of 2021 and has strengthened marketing activities for canned beer.
• As shown in the graph in the upper right corner, total canned beer sales had
increased by 18% in 2023 compared to 2020 thanks to the renewed launch of themain Super Dry product as well as the release of Nama Jokki cans and Dry Crystal,and the entrenchment of Asahi Nama Beer in the market.
• Going forward, we intend to continue enhancing investment to help maintain thismomentum. In 2024, we plan to release Asahi SHOKUSAI through all channels
and to launch a new RTD called Mirai no Lemon Sour in a Jokki can. We also plan
to strengthen our marketing activities in high value-added categories by, forinstance, launching our Asahi ZERO product that leverages our alcohol removaltechniques.

◆Europe (P15, 16)
To summarize our business in Europe in 2023, sales volumes declined partly due
to inflationary pressures in the face of continued large cost increases. However, asI mentioned before, we made steady progress with our pricing strategies and otherpremiumization measures, as evidenced by the significant increase in unit salesprices.
• We have included the sales figures and total market share by category at the topof the next slide. Thanks to our renowned strength in the premium category, weare managing to increase market share while also significantly increasing unit
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sales prices, and also to consistently expand the competitive advantage of ourEuropean operation.
• It may take some time for consumption momentum to recover in the face of
persistent inflationary pressures, but we will continue to strengthen our platforms
for supporting sustainable growth by pursuing our premium strategy based on
Profitable Revenue Growth Management and expanding human capital
investment.
◆Oceania (P17, 18)• To give you an overview of our business in Oceania in 2023, we further
strengthened our earnings base by enhancing our competitive advantage throughcontinued growth of main brands and development of high value-added products,
and by promoting structural reforms covering everything from top-line sales tocosts.
• As you can see in the specific topics described on the next slide, sales volumes for
our Great Northern flagship brand expanded by 5% YoY, which was higher thanthe market average, as we continued to invest in the region following theacquisition of CUB in 2020. This is reflected in today’s successful growth figures.
• We have already started implementing structural reforms, but we intend topromote a wider range of initiatives going forward, with a focus on developing
innovative products while also strengthening our production bases and SCM andincreasing efficiencies.
• While we do need to prepare for a potential slowdown in the broader market as aresult of the recent deterioration in macroeconomic conditions and changes in thecompetitive environment, we are looking to establish an earnings base that is notoverly impacted by changes in the business environment by pursuing our multibeverage strategy more aggressively, while also implementing structural reforms
and continuing to implement strategic investments.
◆Finally• Despite the tough environment, we will strive to achieve sustainable growth andenhance corporate value by expanding strategic investment and optimizing cash
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allocations. We ask for your continued support as we press ahead with thesepolicies.
*Alcohol-free alcohol-tasted (flavored) beverages

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