ASAHI GROUPINTEGRATED REPORT

2020

Asahi Group Holdings, Ltd.
https://www.asahigroup-holdings.com/en/
1-23-1 Azumabashi, Sumida-ku,
Tokyo 130-8602, JapanIR Section

Tel: (+81) 3-5608-5126

Sustainability Section

Tel: (+81) 3-5608-5218

Section 01

Source of Value Creation

The Asahi Group in the New Normal Era

Asahi Group Philosophy
Our Mission

Deliver on our great taste promise
and bring more fun to life

Our Vision

Be a value creator globally and locally,
growing with high-value-added brands

Our Values

Challenge and innovation
Excellence in quality
Shared inspiration

In the current era, there is instability across the globe and it is difficult to forecast
the future. However, such times present a perfect opportunity for the Asahi Group to

Our Principles

draw on the Asahi Group Philosophy as the driving force for implementing
sustainable management focused on the medium to long term and building strong
trust-based relationships with its stakeholders. By doing so, we aim to become acorporate group that is highly evaluated by society in the future.

Building value together with all our stakeholders
Customers:

Win customer satisfaction with products and services
that exceed expectations

Employees:

Foster a corporate culture that promotes individual
and Company growthSociety:

Contribute to realizing a sustainable society throughour business

Partners:

Build relationships that promote mutual growth

Shareholders: Increase our share value through sustainable profit growthand shareholder returns

ASAHI GROUP INTEGRATED REPORT 202001

Section 01

Source of Value Creation

The Asahi Group in the New Normal Era

Issuance of Integrated Report 2020

Developing the Asahi Group to be Valued by the Current and Future Society;
Explaining the Asahi Group’s Growth Story from Three Perspectives
We strive to develop the Asahi Group to be valued by the cur-the future in 10 years has come now, working not only to for-perspective. To that end, at meetings of the Board of

stakeholders. Integrated Report 2020 has been produced torent and future society. To that end, we are promoting the pre-mulate action plans for a recovery in our current business per-

Directors, we have been analyzing megatrends with a focus

include the perspective of sustainable enhancement of cor-miumization of our core brands, making proposals for added

formance but also to enhance our response capabilities andon 30 years in the future and discussing such matters as ourporate value while describing the issues, targets, strategies,

value, and working to address our key priorities, such aslevel of flexibility toward changes in the external business envi-

vision for the Group and the kind of unique value we should

and specific measures for future growth and taking into

enhancing management resources and reinforcing ESG initia-

ronment. In these ways, we are pursuing management

pursue going forward. The Board of Directors comprises

account our current performance and business environment.

tives, in accordance with the Asahi Group Philosophy (AGP)

reforms with a focus on the new normal era and enhancing

members with a wide range of skills, and at Board meetings,

I therefore declare that the compilation process, including

and the Medium-Term Management Policy. In June 2020, we

our ability to achieve the various guidelines we have adopted

these members actively exchange their candid opinions fromthe discussions we have held, and the content of this reportwelcomed the Australia-based Carlton & United Breweries Pty.

under the Medium-Term Management Policy. In particular, we

multilayered perspectives. Moving forward, while backcasting

are appropriate. Our unique value creation story, which isLtd. (CUB) into the Group. By doing so, we established aare focusing on the three key management issues of “sustain-

the long-term scenarios we have fleshed out through our dis-

depicted in this report, serves as the manual for enhancing

global operating structure spanning the three core regions ofability,” “global management,” and “global brands,” in an

cussions thus far, we will begin to hold discussions regarding

the Group’s corporate value. We appreciate your taking theJapan, Europe, and Oceania, and under this structure we are

effort to make our growth story more sustainable. In Integrated

the growth strategies we will pursue next.

time to read this report and look forward to not only yourmoving forward with our global growth strategies. Going for-

Report 2020, we introduce future policies and specific initia-

ward, we will expand the rollout of our five global premium

tives toward addressing these issues.

To realize the AGP, it is extremely important that we pro-impressions of the report itself but also your honest opinions

mote co-creation with our stakeholders. To that extent, we willon the Group’s management. We also ask for your continued

brands while enhancing the business competitiveness of each

Meanwhile, we find ourselves in an era where it is diffi-

maintain our approach in which we actively disclose not only

support going forward.

Regional Headquarters (RHQ). Furthermore, as the structure

cult to forecast the future, and I have repeatedly stated that,

financial information but also non-financial information that isof society and consumption patterns undergo dramatic

because we are in such an era, it is even more important to

crucial for enhancing our corporate value over the medium tochange due to the COVID-19 pandemic, we understand that

formulate strategies from a medium- to long-termlong term, and in which we further promote dialogue with our

Key Agenda

Key Agenda

01

Key Agenda

02

Sustainability

The Asahi Group aims forthe complete integration ofsustainability within its management. Based on the Group’s
new sustainability promotion struc-

GlobalManagement

June 2021

03

The Group has establisheda global management structurethat centers on the three coreregions of Japan, Europe, andGlobal Brands

In November 2020, theGroup centralized its global
brand management structure
within the Europe Business.

Oceania. Under this structure, theCurrently, the Group is reestablishingture, the functional divisions of the Global

Group is expanding initiatives from Group-

Asahi Super Dry, Peroni Nastro Azzurro, Kozel,

Headquarters (GHQ) are promoting initiatives

wide and global perspectives, including thePilsner Urquell, and Grolsch as its ­global pre-in collaboration with the RHQ with a viewglobal rollout of core brands, initiatives toward

mium brands. At the same time, the Group is­toward achieving Group-wide targets. This

sustainability, and earnings structure reforms.

working to reformulate its future brand strate-

section introduces the progress and results ofThis section introduces the characteristics ofgies. This section explains the progress being

these initiatives.

the Group’s global management. At the same

made with initiatives in this regard.

time, it explains the necessary challenges
to tackle and policies to implement in termsof global management, including human­resources and digital transformation (DX).

Akiyoshi Koji

02

ASAHI GROUP INTEGRATED REPORT 2020

Chairman of the Board

ASAHI GROUP INTEGRATED REPORT 202003

Section 01

Source of Value Creation

Contents
Section 01

Section 02

Source of Value Creation

Improving the Sustainability of the Asahi Group

00
02
06
14
16
18

The Asahi Group in the New Normal Era
Issuance of Integrated Report 2020
Message from the CEO
Road Map for Enhancing Corporate Value
Model for Corporate Value Enhancement
The Asahi Group’s Business Foundation

Key Agenda 01 Sustainability

20
22
34
38
40
42

Sustainability of the Asahi Group
Environment
PeopleCommunities
HealthResponsible Drinking

Key Agenda 02 Global Management

44

Dialogue: Future Management Issues Recognizedby the Board of Directors

48 	Column: Bringing Together the Insight of Each Region
to Maximize the Strengths of the Group

52 Strengthening Supply Chain Sustainability
54 	Column: Maximizing the Group’s Competitiveness

Key Agenda 03

56

Global Brands

Marketing Strategy for Our Global Premium Brands

Special Feature Success Driven by Regional Strengths

58
60
62
64

Japan

Corporate Governance80
82

EuropeThe Asahi Group’s Management TeamThe Asahi Group’s Governance—Governance Systems
for Rapidly Accelerating Global Management

OceaniaSoutheast Asia

Section 03
Progress in Financial and Business Strategies

66
70
72

Section 04

Message from the CFO
Business Overview
Strategy by Business

Section 05
Fact Data

96
98
100
102
104
108

Our History
Financial Highlights
Sustainability Highlights
Eleven-Year Financial and Non-Financial Summary
Discussion and Analysis of 2020 Business Results
Company Profile / Investor Information

by Leveraging the Power of Digital Technologies

Editorial Policy

page 20

In compiling Integrated Report 2020, we have referred to the International
Integrated Reporting Framework issued by the International Integrated Reporting
Council as well as the Guidance for Collaborative Value Creation issued by the
Ministry of Economy, Trade and Industry. In doing so, we have created a communication tool that systematically combines financial and non-financial information as

Key Agenda 01

part of our strategy story, aiming to further develop Glocal (global and local) Value

Sustainability

report in the hope that it will promote deeper understanding of the Group among a

Creation Management. We will continue working to enhance the content of thebroad range of readers, including our shareholders and investors.

Report Period Covered
January 1, 2020–December 31, 2020
(including some information outside this period)

Scope of Report
Asahi Group Holdings, Ltd. and Group companies

page 44

page 56
Key Agenda 03

Global Brands
Key Agenda 02

Global Management
04

ASAHI GROUP INTEGRATED REPORT 2020

About Stated Amounts
For all amounts stated in this publication, the figures are truncated to the nearest
unit and the percentages are rounded to the nearest digit.

Forward-Looking Statements
The current plans, forecasts, strategies, and performance presented in this report
include forward-looking statements based on assumptions and opinions arrived atfrom currently available information. We caution readers that actual future results
could differ materially from these forward-looking statements depending on theoutcome of certain factors. All such forward-looking statements are subject tocertain risks and uncertainties including, but not limited to, economic conditions,market competition, foreign exchange rates, taxes, and other systems and factors
influencing the Company’s business areas.

ASAHI GROUP INTEGRATED REPORT 202005

Section 01

Source of Value Creation

Messagefrom the CEO

Leveraging My Experience as One Facet of
the Group’s Competitive Advantage

countless number of projects. Dealing with business partners
was usually a similar type of experience, and I worked earnestly every day in these dealings. Throughout this experi-

What are the strengths of the Asahi Group? When I am asked

ence I maintained an attitude that, as the head of thesethat question, I answer that the Group’s strengths are its his-companies, there was no room for me to say “I don’t know,”

tory of continuously pursuing challenges and innovations“I can’t,” or “I don’t understand.” In addition, I would often

since its founding. As we can illustrate a typical example ofvisit workplaces and engage in dialogue with frontline

our greatest innovation, Asahi Super Dry, we have pursued

employees in a so-called town hall format. During these vis-

seemingly countless challenges and innovations throughout

its, I had many painful experiences, including when I went toour history, including launching industry-first products, pro-a factory that was slated to close to explain our management

posing new value, and entering overseas markets. The desire

policy. One of the employees asked me a question regarding

to take on challenges is deeply rooted in our organizational

the operational continuity of the factory, and I had to answer

culture, and I personally have pursued a wide range of chal-them while concealing the fact that the shutdown of the fac-

lenges both in Japan and overseas. My career overseas dates

tory had already been determined.

back to the time at Nikka Whisky, when I was involved in theThrough these experiences, I feel I gained the same

export of whisky to Asia, centered on South Korea andunderstanding as local people regarding overseas businessTaiwan. In 2001, I transferred to Asahi Breweries and, in

methods and the thought processes. I have no aversion to2009, was involved in the acquisition of Schweppes

dealing with overseas management styles or overseas mana-

Australia, which essentially was the start of the Asahi Group’s

gerial personnel. I believe the experience I have thus far cul-full-fledged global expansion. After my involvement in thattivated can be leveraged as an indispensable competitive

acquisition, I promoted M&As primarily overseas. In 2014, I

advantage in the Group’s current stage of growth.

helped the Group win a lawsuit pertaining to the acquisitionof an alcohol-beverage company in Oceania, winning a settlement totaling over JPY 20 billion. Going back a few years, in2011 I was appointed as the CEO of our holding company inAustralia and spearheaded integration efforts with the numer-

Aiming to Promote Logical Management
That Combines the Best Aspects of Japanand Overseas

ous operating companies brought under our corporate
umbrella through acquisitions. After these efforts were com-

The mission I have been given is to carry on the Asahi Grouppleted, I also served as the head of these operating compa-

Philosophy (AGP) and the Medium-Term Management

nies, and this was a period when I faced the greatest

Policy, which is grounded in the AGP. At the same time, I

challenges of my overseas work experience. Being Japanese,must strengthen our global management structure, which

it takes me much longer to process my duties in English

now spans across Japan, Europe, and Oceania, and promotecompared to a native speaker. Despite this, there was no

the expanded rollout of our five global premium brands.*1

waiting around when it came to making decisions on impor-

Furthermore, my mission involves realizing more sophisti-tant matters, and so there was no way I could slow down thecated management strategies through the integration of sus-

pace of our decision-making. Unlike in Japanese business, ittainability in our management.

is not common overseas to lay the groundwork, so to speak,

06

Comparing the management styles of Japan with thoseto prepare for important meetings, so during meetings I was

overseas, in the case of Japan, once a matter has been

usually shown a massive number of documents for the first

determined, progress is made rapidly toward that matter.

time and had to make decisions on the spot. Under those

However, as I mentioned previously about the idea of laying

conditions, I battled every day to make decisions on a

the groundwork, it tends to take a great deal of time to reach

ASAHI GROUP INTEGRATED REPORT 2020

With a versatile approach, we will boldly lead the way
in promptly responding to the various changes occurringin these highly uncertain times.

Atsushi KATSUKI
President and CEO, Representative Director

ASAHI GROUP INTEGRATED REPORT 202007Section 01

Source of Value Creation

Message from the CEOa decision on a matter because the process is very thoroughprepared to make a swift response when such a crisis occurs

and overly cautious. Meanwhile overseas, when, for exam-and limit the amount of damage it does to our businesses tople, marketing or capital investments are being carried out,

the greatest extent possible.

the decision-making process is swift and transparent as*1 Asahi Super Dry (Japan), Peroni Nastro Azzurro (Italy), Kozel (Czech Republic), Pilsner

decisions are usually made based on a clear set of financial

Urquell (Czech Republic), and Grolsch (the Netherlands)

The most important effort we need to make isrolling out our five global premium brands in areas outsideof their respective home markets.

standards, meaning there is no need to spend time excessively pondering over an issue. Based on my experienceswith both styles of management, I aim to promote logicalmanagement that combines the best aspects of Japan andDrawing on the Growth Potential of Our Robust
Lineup of Brands

overseas and use such management to accelerate our efforts
toward globalization.

they will be able to unreservedly enjoy draft beer in a bar or

Japanese brand. Management personnel and marketing

restaurant setting as quickly as possible.

teams in the Europe Business have also placed a high level

By proposing new value in each region of operation

I often hear that Asahi is facing an “innovation dilemma” dueof expectations on the potential of Asahi Super Dry, adopt-through efforts such as these, we will create opportunities tofurther enhance the value of our brands.

In 2020, our balance sheet expanded significantly withto the Asahi Super Dry brand. However, I have the complete

the acquisition of the CUB business in Australia. At the sameing the target of doubling the current sales volume of the

opposite opinion. The robust lineup of brands that we pos-time, we were able to enhance our financial soundness

brand with the aim of making it one of the top 10 beer

sess represents a strength that our competitors cannot imi-

through public offerings and other measures. With that said,

brands in the world. I personally have experience in signifi-

tate. There may be a tendency to view our stance of focusing

in terms of reducing our high level of interest-bearing debt,

cantly growing the sales volume of Asahi Super Dry during

our efforts heavily on our leading brands including Asahi

we will strive to improve net debt/EBITDA (earnings before

the five-and-a-half years I worked in Australia. Previously,

Super Dry as a weakness, but I believe that if we are able tointerest, taxes, depreciation and amortization) to the level ofthe sales channels for Asahi Super Dry centered on

anticipate changing and diversifying needs and make pro-close to three times, a figure that is considered in the indus-

Japanese restaurants and other Asian cuisine restaurants.

The Asahi Group is more than just a business of alcohol bev-

posals for new value that exceed customer expectations, thentry to be financially sound. I position the three to four years it

However, we dramatically changed course from thaterages. While, since 2016, our focus has tended to be on

we can dramatically grow the value of Asahi Super Dry andwill take to reach this level as a period in which we will refine

approach, placing the focus on selling Asahi Super Dry as aalcohol beverages, toward which we have invested a greatother core brands.

premium brand at local high-class bars, pubs, hotels, anddeal of management resources, including large-scale acquisi-

our true strengths as a corporation, and during this time weRight now, the most important effort we need to make is

Recognizing the Need for Strategic Measures
Based on Various Perspectives

will further enhance the quality of each of our businesses

restaurants, which represent a massive market. Asahi Super

tions, the growth of non-alcohol beverages and foods is also

rolling out our five global premium brands in major cities

through efforts to enhance our global management, as I

Dry’s level of recognition as a high-end, stylish premium

extremely important from the perspective of improving thearound the world that are outside of their respective homementioned before.

brand rose among people in local markets, and that aware-Group’s overall corporate value. For that reason, we need tomarkets. In November 2020, we centralized marketing func-

ness even spread to the off-premise market. These actual

reorganize the balance of and basic approach to manage-

tions for this rollout in the Europe Business, thereby reinforc-

nificant slump primarily in the Alcohol Beverages Businessobservations are part of the reason why I believe that there

ment resource allocation. One shared issue between non-ing our structure for promoting this task. In terms of trends inand the Overseas Business due to the impact of the COVID-

is still major potential to grow the Asahi Super Dry brand.

alcohol beverages and foods is the need for stepping up

markets across the globe, while there is a view that consum-

19 pandemic. Ultimately, we were able to keep declines in

ers are to a certain extent looking for lower prices due to thecore operating profit to around 20% and in profit attributablepremise sales, which have stagnated due to the impact ofbusinesses have top-class brand power, scale, and profitabil-

COVID-19 pandemic, the reality is, the trend toward premi-

to owners of parent to approximately 30%. We were also able

the pandemic. What is important in this endeavor is toity in the countries in which we operate, such as Japan andumization is progressing when it comes to at-home con-to generate JPY 196.8 billion in free cash flow, well exceed-ensure that bars and restaurants continue to serve as theAustralia. However, Coca-Cola and Pepsi are far more

sumption. For example, the average sales price in theing our expectations, and I believe this demonstrates the highbest or most important contact point with customers.

advanced in terms of overall global reach. The leeway we

off-premise market in 2020 grew by a high single-digit per-level of cash-generating power that the Asahi Group pos-

Furthermore, the basis of our efforts to realize a recovery inhave to consider making an entry on a broader global scale iscentage over the previous year, and we have continued tosesses. Meanwhile, we are aware that we face major issues

the on-premise channel is making proposals and providing

limited. However, with a focus on emerging countries, where

see a trend in which the growth rate for products in the superfrom the perspective of risk management. Following the intro-

support so that customers can enjoy our beers in a bar or

populations and consumption are expected to grow going for-premium and premium price range has been higher thanduction of enterprise risk management (ERM) in 2019, man-restaurant setting. This includes taking steps to further

ward, we aim to achieve growth in overseas markets whilethat of products in the mainstream. For that reason, weagement was given a sense of relief as ERM is a mechanism

enhance the quality of our kegs for core brands in eachstrategically allocating management resources. The Food

expect that strengthening the rollout of global premiumfor controlling the overall risk we face as an organization.

country and region. It is expected that it will take a certain

Business is facing ­similar conditions. In the Japanese mar-brands in not only the on-premise market but also the off-

However, the fact that a crisis occurred that exceeded ouramount of time for sales volumes in the global on-premiseket, the Food Business is recording a solid performance withpremise market will significantly contribute to our profitsrisk assumptions under ERM means that ERM was not func-

market to return to the level that they were in 2019, before

a number of leading brands across a broad range of catego-

going forward. I have actually seen reports detailing how, as

tioning to its full potential against the COVID-19 pandemic.

the COVID-19 pandemic. However, in Japan, for example,

ries. Although we will continue to focus on this market, welifestyles are changing, there is a heightened awarenessTo that end, we are currently making diligent efforts to further

we are working to spur innovation through such efforts aswill use the technologies and other resources that we haveamong consumer groups such as millennials and Generation

enhance our risk management centered on ERM. In addition

Asahi Super Dry Nama Jokki Can, which offers a foamy headcultivated in Japan to deploy growth strategies targeting

Z toward the peace of mind provided by the high-quality

to reducing and managing risks related to strategies for con-that forms naturally by opening the top of the can, and our

emerging countries.

products produced and sold by major manufacturers. This

trolling our management targets based on ERM, these efforts

home beer server, which can maintain beer at below-zero

Additionally, when thinking from a broader, more long-heightened awareness has certainly provided a favorable tail-aim to create scenarios that anticipate the sudden occur-

temperature and can be used at home or outdoors. Theseterm perspective, there is a need for us to direct managementwind for the shift toward premiumization.

products aim to help customers remember how much they

resources toward research and development (R&D). In 2020,

enjoyed the taste of draft beer, and we sincerely hope that

the Group’s R&D expenses totaled roughly JPY 13.1 billion,

As for our performance in 2020, we were expecting a sig-

rence of a crisis like we see today to ensure that we are08

most latent potential, and this is not because it is a

ASAHI GROUP INTEGRATED REPORT 2020

Asahi Super Dry is the global premium brand with the

At the same time, we are working to quickly revamp on-

efforts for a true global expansion. Our non-alcohol beverages

ASAHI GROUP INTEGRATED REPORT 202009

Section 01

Source of Value Creation

Message from the CEO

It is imperative that we place sustainability at thecore of our management and create business models under which
the resolution of social issues provides a source for profits.

regardless of nationality or gender, to serve in important rolesat the Global Headquarters (GHQ) in Tokyo. Moreover, as

tioned belief in the need to build business models centered

teleworking has become commonplace now as a result of theon co-creation with our stakeholders. Due to the various

COVID-19 pandemic, there is no need for all employees ofchanges in social trends, the connection between people and

the GHQ to reside in Japan. To that end, one major benefit ofcommunities is starting to weaken. However, by promoting

teleworking is that it has given us an even greater opportunity

efforts to reverse this trend, we will strive to resolve issues

to allow overseas employees to play an active role.

which comes to approximately 0.6% of our total revenue.

already coming to an end. To that end, it is imperative thatfacing local communities. Under old ways of thinking, sup-This level is roughly the same as our overseas competitors.

we place sustainability at the core of our management andporting local communities tends to simply mean making

have so far let these businesses operate independently post-

create business ­models under which the resolution of social

donations. However, the efforts I envision for “Communities”

acquisition, and this has enabled them to achieve a certain

issues provides a source for profits.

entail contributing to society through our business activities.

level of results. In addition to continuing to do so, we will

To realize such a business model, we are engaging in a

For example, in Italy, we are providing support to farmers

fully leverage our global platform that spans across Japan,

sions, the Board decided to raise the amount of R&D

wide range of initiatives with a sense of speed. One such ini-

who grow barley, a main ingredient of beer, and other crops

Europe, and Oceania to share best practices between busi-

expenses so that the Group can continue to maintain its

tiative is the Global Sustainability Committee, which was

to help them improve their productivity. To further reinforce

nesses with the aim of further enhancing their overall quality

established in 2020. At the committee’s first meeting, wethese kinds of activities at a global level, we newly estab-and achieving even greater results. To ensure that this typethorough efforts to reduce overall costs, we will invest further

were able to decide on such matters as raising the 2030 tar-lished our campaign slogans and the core areas in which weof two-layered framework functions sufficiently, utilizing local

resources into R&D, digital transformation (DX), and otherget under Asahi Carbon Zero, our medium- to long-term goal

can contribute to society through our business activities. As

human resources is a must. We will therefore reinforce ourfor CO2 emissions reduction. In this way, the committee is

we move forward, each RHQ around the world will engage

global human resource systems, including remuneration

can create new added value through innovation to realize

serving as a significant driving force for promoting themore proactively in specific activities toward “Communities.”

systems, and actively take steps to transfer and promotesustainable top-line growth, which in turn will lead to profit

Group’s sustainability strategies. The meeting was attended

Amid the rapid changes that are occurring in modern

personnel between RHQ. At the moment, our RHQ in

growth. In terms of DX investments, we are working toby members of upper management from the Japan, Europe,society, we will establish high-aiming targets with an accurate

Europe, Oceania, and Southeast Asia have established theirenhance our current operating model, including through pro-

Oceania, and Southeast Asia Regional Headquarters (RHQ).

understanding of these changes and take on the challenge ofown individual compensation committees, and a director of

Legal systems and other matters differ from region to region,transforming ourselves as an organization. To do so will

the Board responsible for the Group’s human resources is asame time, we are urgently moving forward with DX efforts

and this naturally means the status of sustainability efforts inrequire painstaking efforts, but we believe that pursuing thismember of each committee. These committees determinethat will enhance the value we provide and reinforce oureach region differs as well. By having members of the com-challenge will provide us with an opportunity for growth andremuneration systems and other important matters for theirmittee from these kinds of differing backgrounds engage inenable us to pave the way for creating an even better society

respective RHQ. As we move forward, we will more activelyof consumer contact points, such as beer servers and vend-

open and lively discussion, the first meeting of the Global

and a brighter future. Placing sustainability at the center of

pursue the optimal format for these systems to ensure thating machines, and moving forward with digital marketing

Sustainability Committee provided us with an opportunity to

our management, we will continue to be a corporate groupall employees can work with ambition and a sense of fulfill-

activities that utilize data. We are also making active use ofraise the level of our sustainability efforts on a Group-widethat grows together with society.

ment regardless of region.

DX to share best practices across all regions of operation.

basis—and this was seen as an extremely positive develop-

However, focusing its attention on megatrends 20 to 30 years
from now, the Board of Directors held discussions on
medium- to long-term strategies and, through these discus-

global presence in the future. While we will continue to makestrategies. This will help us paint a clearer picture on how wemoting the remote control of factories and teleworking. At thesales capabilities. These include promoting the digitalization

Going forward, we will ramp up these efforts with the aim ofinnovating current business models and creating new ones
through DX.

Realizing Sustainable Growth for the Company
and Society as a Whole

ment among all members.
Also, in terms of the material issues that we updated in
2020, we are currently placing priority on the “Environment”*2 The Science Based Targets initiative encourages corporations to establish targets forgreenhouse gas emissions based on scientific evidence and offers evaluations andapprovals of such targets.
*3 RE100 is an initiative that aims to use renewable energy for 100% of electricity
consumed for business activities.

In regard to the Europe and Oceania businesses, weFurthermore, in March 2021 we formulated the “People
Statement,” which serves as our basic approach to humanresources. This statement aims to further promote activeroles for outstanding human resources across the globe

and “Communities” and are strengthening efforts toward thosewith diverse personalities and foster a corporate culture withissues accordingly. We recognize strengthening efforts toward

an even higher level of employee engagement. Upon its

the “Environment” is an extremely urgent task amid a growing
demand from society to address climate change and other environmental challenges. For the previously mentioned medium- to

10

Furthermore, we are reinforcing efforts toward“Communities” on a global scale based on my aforemen-

Further Increasing the Group’s
Competitiveness by Evolving intoa Borderless Organization­establishment, the “People Statement” was shared with theapproximately 30,000 employees across the Group. In­conjunction with the “People Statement,” we announced
our “Global Diversity & Inclusion Statement.” Guided by

The Group’s business uses the blessings of nature for its

long-term goal for reducing CO2 emissions, Asahi Carbon Zero,

offerings and therefore, we earn the trust of our s­ takeholders—

we upwardly revised our targeted amount of reductions. In con-

Asahi Group Holdings, Ltd. is the company that holds

these two ­statements, we will draw on the diverse values

and only through with that trust can we serve our social role.

nection with this revision, for the Scope 1 and 2 target by 2030,

together the entire Asahi Group. Accordingly, adopting a cor-held by our employees of different regions and cultures to

To become a corporate group that will be valued highly by

our commitment to the “1.5ºC Target” was recognized by the

porate culture by Japanese people for Japanese people isenhance a sense of unity across the organization. At the

future society, I believe we must build business models

SBT initiative.*2 Additionally, we began participating in theclearly not the right choice for the future of the Group.

same time, we will establish ourselves as an even more­centered on co-creation with our stakeholders. While growing

RE100*3 global environmental initiative and are working to for-

Cultivating and utilizing global human resources is a majorinnovative organization.

our business by expanding its scale is something we

mulate guidelines related to packaging and containers andchallenge in terms of accelerating our regional and global­obviously should aim for as a corporation, the era where a

implement specific policies based on these guidelines. In thesegrowth. To address this issue, we will actively open up oppor-

company can survive simply with such a business model isways, we are accelerating our efforts toward the “Environment.”

tunities for outstanding human resources within the Group,

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202011

Section 01

Source of Value Creation

Message from the CEO

Positioning Communication and Trust-Based
Relationships at the Core Elements to be a
Value Creator Globally and Locally

Fostering Trust through Further Dialogue with
Our Stakeholders
An important job of mine is to build trust-based relationships

The Asahi Group has been expanding its overseas busi-

with our shareholders, investors, and other stakeholders

nesses for over 10 years. During this time, we have learned

through dialogue. One on the most urgent task of the Group

that, if we are to truly set our sights on global growth, having

is to ensure the financial soundness of our balance sheet,a corporate culture overly focused on rules and regulations

which inflated significantly after acquiring the CUB businessand adopting a top-down reporting line are simply not effec-

in Australia. In 2020, we also faced the major financial issue

tive. We also have come to understand the importance ofof permanently financing the bridge loan of more than JPY 1

bringing together an organization based on shared culture­trillion when making this acquisition. To address this issue,

and beliefs. The AGP represents the culmination of all wewe worked to increase capital through such means as a pub-have learned thus far with our global expansion and therefore

lic stock offering, for the first time in 31 years, and subordi-

will serve as the basis for all our management strategies andnated bonds. At the same time, we were able to capture thebusiness expansion efforts going forward.

overwhelming demand from the market through the issuance

Looking back on the acquisitions we have made thus far,of domestic straight bonds and bonds denominated in euros,

close communication, both before and after the acquisition,

among other measures. Our ability to implement these initia-

has been the key to their success. This does not mean one-tives is the result of the understanding that we have gained

way communication from our side but rather open commu-

from our investors through active dialogue with them regard-

nication that helps us learn each other’s strengths while

ing our growth strategies, which involve promoting the shift tofostering a mutual understanding and respect for our differ-premiumization centered on the global premium brands I

ing cultures—communication that helps us envision a future

mentioned earlier, and our strategies to realizing financial

in which we work together to respond to change. Engaging

soundness, which involve increasing capital and reducing

in this kind of communication has led to the success of ourinterest-bearing debt.

acquisitions, and the discussions with the upper manage-

Dialogue is also extremely important when it comes torealize a better society while making sure
we ­maintain the trust of our stakeholders.

ment of each RHQ is what helped create the AGP.

sustainability, and we will therefore promote even greater dia-

Furthermore, such communication is what made the PMI*4

logue on the co-creation we aim to achieve with our stake-process following the acquisition of the CUB business goholders under the AGP. It is imperative that we collaborate

doing things or being constricted by past experiences canfrom a medium- to long-term perspective so that we cansmoothly and enabled us to promptly commence initiatives

with relevant stakeholders in the areas of our material issues

have a negative impact. With a versatile approach and with-once again return to our original course for growth.

geared toward creating synergies. By sharing insights basedsuch as the “Environment,” which includes our response toout fearing the idea of suddenly changing course, I will main-on long-term outlooks and implementing strategies formu-

climate change; “People,” which involves human rights andtain our strong desire to incorporate change. Not adhering

agement that will be valued highly by society in the future.

lated together through our management, I feel that the moti-

diversity; “Responsible Drinking”; and “Communities,” which

only to any one certain approach, I will consider various opin-

With our sights set on the road ahead, we will share the initia-

vation level of local employees has been rising and this has

includes the aforementioned activities we are promoting inions and perspectives and promptly change my actions whentives we must take with our stakeholders and act on thoseactually contributed to business growth. The local employees

each region. By learning the perspectives of stakeholders

needed as I work to tackle issues with a keen awareness on

initiatives together with them. We will continue to push for-fully understand the direction of the Group’s management,

through dialogue and accelerating initiatives based on those

how those issues relate to me. This is the kind of approach I

ward with efforts to realize a better society while making sureand I have a solid understanding on all aspects of the local

perspectives, we will work together with them to build a sus-

want the Group to maintain going forward.

we maintain the trust of our stakeholders. I ask that you lookbusinesses. This is what allows us to integrate our manage-

tainable society.

Together with our stakeholders, we aim to promote man-

The Group has a sincere and bright corporate culture

forward in anticipation as the Asahi Group accelerates toward

ment strategies and quickly put them into action. The

where people naturally help each other. The fact that all ourits next stage of growth in 2021, a year in which the morning

increased motivation at a local level resulting from commu-

employees work together under the same direction towardsun (asahi) will rise. I would like to ask our stakeholders forthe mission and principles determined in the AGP is a testa-

their continued support as we do so.

nicating and working together under a trust-based relation-

Closingment to this corporate culture. At the same time, some of ourship has been the major reason for the success of the PMI

12

We will continue to push forward with efforts to ­June 2021

and has also eliminated any potential for a massive failure

When I was appointed as Group CEO, I was honestly over-businesses and divisions are lacking a sense of speed, so I

going forward.

whelmed with excitement and anxious to get right to work. As

will demonstrate strong leadership under a versatile*4 Post-merger integration

I mentioned at the beginning of my message, I am confident

approach to ensure that they are able to promptly respond tothat the wealth of experience I gained both in Japan andchange. By the end of this year, we aim to have reinforced

overseas will allow me to handle any issue or project we mustthe foundation that enables us to respond to environmental

tackle, no matter how difficult. With that said, in these highly

changes from the COVID-19 pandemic and produce solid

Atsushi KATSUKI

uncertain times, becoming overly focused on a single way ofresults. In 2022, we will tackle a broad range of challenges

President and CEO, Representative Director

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202013

Section 01

Source of Value Creation

External Environment

Road Map for Enhancing Corporate Value

Declining birthrate and aging population; technological innovation (DX); emergence of
new business models; climate change, disasters, plastic; increasingly more complex
country risks; tightening of laws and regulations; “With COVID-19” and “Post-COVID-19”
eras; diversifying values; increasing information security risks​

The Asahi Group has steadily evolved over the past 10 years, extending its business foundation across theglobe with its full-scale entry into Oceania, Southeast Asia, and Europe. Going forward, the Group will continue
to pursue its evolution by leveraging the Asahi Group Philosophy (AGP), established in 2018, as the driving
force for realizing its vision to “be a value creator globally and locally, growing with high-value-added brands.”

IssuesWorsening profitability in domestic business (consumer shift away from beer), ability torespond to change (dependence on specific brands, inflexibility in business models),
flexible and robust profitability, enhancement of sustainability, globalization, etc.

Medium to Long Term•	Promote our premium strategies by cultivating
high-value-added brands and expanding
global brands

20182010 ~

Profitability (core operating profit)

Overseas revenue

Formulating the Asahi
Group Philosophy

Core operating profit: ¥95.3 billion
EPS: ¥114.1

Approx. ¥100.0 billion

2020

Core operating
profit:EPS：

Approx.

¥167.8 billion¥196.5•	Generate ¥50.0 billion from the impact ofefforts to enhance cost efficiency (2021–2023)
and increase investment toward “enhancing
management resources” and “reinforcing ESG
initiatives” with a focus on growth overthe medium to long term

Sustainability

Human resource strategy

M&As

Environmental Vision 2020 (2010)

Management of human resource
systems by region•	Full-scale entry into Oceania (2009) andSoutheast Asia (2011), centered on the Soft
Drinks Business•	Full-scale entry into the European beer business(2016: Western Europe; 2017: Central andEastern Europe)• Established the “People Statement,” a new basic
human resources policy (announced in March 2021)• Established the “Global Diversity & Inclusion
Statement” (announced in March 2021)•	Completed the process for acquiring the CUB
business in Australia• Formulated plans and subsequently began initiatives
to create integration synergies in Oceania

01
Sustainability
Accelerating efforts toward•	Accelerate the rollout of premium brands
in the global market

with our stakeholders•	Strengthen the premiumization of brandportfolios in local markets

P.20•	Integrate sustainability strategies andmanagement strategies

Formulated Asahi Group

Sustainability of the Asahi Group’s Growth Storysustainability based on co-creation¥800.0 billion•	Held meeting of the Global Sustainability
Committee with the aim of integrating sustainability
into management•	Accelerated the promotion of sustainability in such
ways as upwardly revising CO2 reduction targets andissuing Green Bonds

Three Management Issues forContinuous Corporate Value Enhancement•	Achieve Asahi Group’s Sustainability Vision

02
Global Management
Enhancing management resourcesthat support sustainable growth and•	Secure next-generation management personnel by
establishing succession plans on a global scale•	Improve employee engagement and expand
glocal (global and local) human resources bystrengthening various development programs•	Prioritize the allocation of free cash flow to
reducing debt and boosting investment capacity•	Reinforce global management structure
centered on the three regions of Japan, Europe,and Oceania

reinforcing our global network

P.44

03
Global Brands
Strengthening global brand management

Governance

14

ASAHI GROUP INTEGRATED REPORT 2020

•	Reinforcement of Group governance functions
through the shift to a pure holding company
structure (2011)•	Introduced CXO system and established Board of
Directors Skill Matrix and CEO Skill Set• Commenced the full-scale operation of Group ERM
and Risk Appetite•	Promote ongoing efforts toward global
governance reform that enhances substance ofgovernance itself•	Enhance risk management centered on ERM

that drives our premium strategies

P.56

ASAHI GROUP INTEGRATED REPORT 202015

Model for Corporate Value Enhancement

AGP

Further Accelerating Value Creation throughManagement Strategies That Reflect the AGP

The Asahi Group’s Mission and Vision

Our Mission
Deliver on our great taste promise
and bring more fun to life

Under the AGP, we laid out Our Mission and Our Vision, which are goals that the Asahi Group should realizein the future. To reach these goals, we will steadily implement our value creation process, which establishes
Our Values and Our Principles—the other two parts of the AGP—as the source of our corporate value
creation, and our Medium-Term Management Policy, which centers on the three key management issues forenhancing our sustainability.

Our Vision

Enhance management resources

Be a value creator globally and locally,

aimed at expanding
new foundations for growth­growing with high-value-added brands

t

cas

ck
Ba

Strengthen earnings powerby further enhancing
added value and earnings

Customers

structure reform

Strategies
Three Management Issues forEnhancing the Group’s Sustainability

Continuously Evolving
Value Chain

01 Sustainability
02 Global Management

P.52

03 Global Brands
Research andDevelopment

Marketing andSales

Three Management Issues and Their Relationship to
the Medium-Term Management Policy
Strengthening
earnings power

AGP
Shareholders

Employees

Guiding Principles toward
Corporate Value Enhancement

Our Principles

Reinforce ESG initiatives

Building value together

supporting our sustainable value

with all our stakeholders

creation process

Production andLogistics

02 Global Management

P.44

03 Global Brands

P.56

Overview of the Medium-Term Management Policy

Procurement
Strengthening earnings power by further enhancing added value andearnings structure reform

Our Values
Challenge and innovation

P.20

Reinforcing
ESG initiatives

Enhancing “Glocal* Value Creation Management” based on
the Asahi Group Philosophy
*Glocal = global and local

AGP
Values We Cherish

01 Sustainability

Enhancingmanagement
resources•	Promote the premiumization strategy by enhancing high-value-added brands in all
businesses and expanding the five global brands

Partners

Society•	Reform the earnings structure in response to changes in the business environment

Excellence in quality
Enhancing management resources aimed at expanding new foundations for growth

Shared inspiration

16

ASAHI GROUP INTEGRATED REPORT 2020

Customers:

Win customer satisfaction with products and services
that exceed expectations

Employees:

Foster a corporate culture that promotes individual
and Company growthSociety:

Contribute to realizing a sustainable society throughour business

Partners:

Build relationships that promote mutual growth

Shareholders:

Increase our share value through sustainable profit growthand shareholder returns•	Bolster investment in intangible assets (R&D, human resources, etc.) with the aimof boosting innovation and new value creation•	Construct new operating model by accelerating DX (digital transformation)

Reinforcing ESG initiatives supporting our sustainable value creation process•	Integrate sustainability into management strategy through such initiatives as“Asahi Group Environmental Vision 2050” and “Sustainable Communities”•	Enhance risk management systems (enterprise risk management), strengthening global
governance centered on the three pillars of Japan, Europe, and Australia

ASAHI GROUP INTEGRATED REPORT 202017

Section 01

Source of Value Creation

The Asahi Group’s Business Foundation

Business foundation spanning the globe,
centered on a three-region operating structure

The Asahi Group’s Evolving Global
Management

Aiming to further strengthen Group-wide collaboration topromote glocal value creation management

Global Senior Leadership Meeting

P.48

Aiming to gather the best practices ineach region to become a global leader
Regions with production bases

Global Sustainability Committee

Regions where we roll out products

P.50

Employees
Plants
Subsidiaries
As of December 31, 2020

Managing global brands in an integrated manner to2020
Revenue¥ 2,027.7 billion
Core operating profit¥ 167.8 billion

Revenue breakdown
by business segment*1
Core operating profit breakdown
by business segment*2

Japan

Ratio of employees
by business segment

13,87834
49

Alcohol Beverages
Soft Drinks

EuropeOceania

10,097
17
43

3,544
14
79

accelerate growth

Global Marketing Council

P.56

Food
Overseas

Controlling overall risk across the Group effectively andOtherefficiently and clarifying risks to take and risks to avoid

Southeast Asia
*1 The ratio of revenue in each business to total revenue is calculated by dividing the revenue in each business by total consolidated
revenue, including adjustments (corporate/elimination).
*2 The ratio of core operating profit in each business to total core operating profit is calculated by dividing the core operating profit ineach business by total consolidated core operating profit (excluding amortization of intangible assets occurring following acquisitions),
including adjustments (corporate/elimination).

18

ASAHI GROUP INTEGRATED REPORT 2020

2,016

5

Other Regions

32

315		

1

Implementing enterprise4

risk management (ERM)

P.94
ASAHI GROUP INTEGRATED REPORT 202019

Section 02

Improving the Sustainability of the Asahi GroupKey Agenda

01

Sustainability of
the Asahi Group

Sustainability

KPIs Based on Material Issues

The Asahi Group aims for the complete integration of sustainability within its management.

Materiality

Theme
Sustainable raw material
procurement

Guided by that aim, in 2020 the Group completely renewed its sustainability policies, vision,material issues, and promotion structure. The Group has also established KPIs for each of its material

Organization

Risk/Chance
Risk

Raise the ratio of palm oil purchased from RSPO-certified suppliers to 25% in 2021
(Book and Claim certification system)

AHSEA

Risk

Purchase 20% of palm oil from MSPO-certified suppliers by 2021 in Malaysia

Operatingcompanies inJapan, AHA, AHSEA

Risk

ChanceRealize 100% utilization of materials for plastic containers that can be used effectively by 2025
* Effective use: Reusable, recyclable, compostable, thermal recyclable, etc.

Under the renewed sustainability structure, we have made it a policy to establish task forces to handle important sustainability-

AEI

Risk

ChanceUse only containers, as well as secondary packaging, that are reusable or fully recyclable by 2030

related themes. In advance of other themes, we established the Environmental Task Force in 2020. For certain themes of environmen-

ASD

Risk

ChanceMake the ratio of eco-friendly materials in plastic containers 60% by 2030

tal initiatives, we have established Group-wide targets and have worked to incorporate those targets into the targets of each Regional

AEI

Risk

ChanceUse only containers, as well as secondary packaging, that are made chiefly from recycled content by 2030

AHSEA

Risk

ChanceUse recycled materials on 30% of PET bottles by 2025

ASD

Risk

ChanceAchieve sales target for unlabeled bottles

AEI

Risk

ChanceReduce plastic container/packaging by 25% by 2030 (compared with 2019)

AHSEA

Risk

ChanceReduce the amount of single-use plastic used per liter of product by 5% annually through to 2025

AHSEA

Risk

ChanceIncrease the ratio of FSC-certified cardboard used for product packaging to 100% by 2021

issues and is closely monitoring the progress of efforts to address these issues.

Headquarters (RHQ). In particular, for climate change, we upwardly revised our interim goal under Asahi Carbon Zero, which aims toEnvironment

Sustainable containers/
packagingachieve zero CO2 emissions. At the same time, we incorporate the revised values of this goal into the road map at each RHQ andestablished individual targets accordingly (see table below). We are also establishing Group-wide targets for themes other than climatechange and are taking steps to apply these targets to the targets of each RHQ to an even greater extent.

P. 22

Entire Group*1

Sustainable water
resources

Asahi Group Sustainability Principles

Res
Dev ear
elo

d
an
g
es

d
an
ent
pm

Business
Activities

Responsible
Drinking

PeopleDeliver on our great
taste promise andbring more fun to life

Asahi Group
Sustainability Vision

an

d

Pro

cu

HealthPartners

Communities

Achieve water neutrality at all breweries in Japan by 2025 through the utilization of Asahi Forest

Circular economy

Operatingcompanies in Japan

Risk

ChanceMaintain the 100% recycling rate for all by-products and waste

Respect for human rights

HD

Risk

Complete a round of the human rights due diligence process at suppliers by 2022

Human resources
development

HD

ChanceAchieve the following targets for the numbers of participants in training programs:• LEAD (a program to develop business leaders in Japan): 80• Global Leadership Development Program (a program to develop glocal business leaders): 20• One Young World (an external training program focused on resolving global issues): 15

Diversity

HD

ChanceIncrease the ratio of women holding managerial positions to 20% by 2021

AB

Risk

Achieve a 100% participation rate in the seminar for managers, seminar for supervisors, and training for
employees, which are all intended for plant employees

Operatingcompanies in Japan

ChanceAchieve a 100% stress check implementation rate

Operatingcompanies in Japan

ChanceAchieve a 98% rate for the medical consultation of metabolic syndrome by 2023

Operatingcompanies in Japan

ChanceAchieve a 45% rate for the implementation of guidance on lifestyle diseases by 2023

ASD

ChanceAchieve 2021 target for the number of original regional co-creation measures implemented by business units

P.34

SocietyCommunities

KPIs for Climate Change

Create people-to-people
connection

Asahi Carbon Zero
—The Asahi Group’s Medium- to Long-Term Target for Reducing CO2 Emissions

2050

Reduce our CO2 emissions in Scope 1, 2, and 3 to zero, thereby becoming carbon neutral*1
Reduce CO2 emissions in Scope 1 and 2 by 50% (compared with 2019)*2
Reduce CO2 emissions in Scope 3 by 30% (compared with 2019)*1
Japan
Reduce CO2 emissions every
year by 1% or more over theprevious year

2025

Carry out water risk survey periodically (once every 5 years) at Group manufacturing bases

ChanceWorkforce health andsafety

2030

Risk
Risk

Peoplereti
u c ti
gis
Lo

on

me

nt

Prod

cs

Environment

Employees

Reduce water intensity to 3.2 m3/kl or less by 2030 through streamlining of water usage and expansion ofrecycling system

ch

Mar
ke
ti
Sa n
l

Shareholders

AGP

Entire Group

Risk

AB

Customers

EuropeOceaniaSoutheast Asia

Reduce CO2 emissions in Scope
1 and 2 by 50% (comparedwith 2019)

Reduce CO2 emissions in Scope
1 and 2 every year by 2% ormore over the previous year

Japan

EuropeOceaniaSoutheast Asia

• Use renewable energy for
100% of electricity purchased
at all production bases• Reduce CO2 emissions every
year by 1% or more over theprevious year

Shift to 100% renewable energy
for the electricity used at plants

Shift to 100% renewable energy
for the electricity used inAustralia and New Zealand

Reduce CO2 emissions in Scope
1 and 2 every year by 2% ormore over the previous year

ASAHI GROUP INTEGRATED REPORT 2020

P.38

HealthP.40

Reduce CO2 emissions in Scope
1 and 2 to zero by introducing
renewable energy at plants,
thereby becoming carbon neutral*1	Applicable companies: Asahi Breweries, Ltd., Asahi Soft Drinks Co., Ltd., Asahi Europe and International Ltd., and Asahi Holdings (Australia) Pty Ltd*2	Applicable companies: Operating companies in Japan, Asahi Europe and International Ltd., and Asahi Holdings (Australia) Pty Ltd

20

KPI

AGS

ASD

ChanceAchieve 2021 sales target for “Mitsuya Nihon Kudamono” made with domestically grown specified fruit varieties

AHSEA

ChanceConduct community participation programs such as beach cleanups at each business unit twice a year

Realize sustainable supplyHD
chainsSecure food safety &reliability

Create value of health

Risk

Conduct 12 on-site interviews based on the supplier CSR questionnaire

Entire Group

Risk

Achieve zero quality accidents

AHSEA

Risk

Acquire HACCP certification for all plants by 2022

ASD

ChanceAchieve the sales targets for Foods for Specified Health Uses, Foods with Functional Claims, and healthcare
products Target products: Karada Calpis, Karada Juroku-cha, etc.

ASD

ChanceAchieve sales targets for the 100ml series, which advertises value of health Target products: Todoku Tsuyosa-no
Nyusankin, Mamoru Hataraku Nyusankin, etc.

AHSEA

Responsible
Drinking

P.42

Reduction in
inappropriate drinking

Solution of social issues
through creation of new
drinking opportunities

Risk

ChanceReduce the quantity of sugar contained in 70% of the RTD products in Malaysia to 5g or less per 100ml by 2021

Entire Group*2

Risk

Achieve a 100% participation rate of employees in at least one training program by 2023

Entire Group

Risk

Achieve 80% compliance with IARD Digital Guiding Principles by 2021

Entire Group

Risk

Display age restrictions on alcohol consumption on all products under alcoholic beverage brands (including
non-alcoholic beverages sold under that brand) by 2024

Entire GroupChanceAchieve 15% low-alcohol and non-alcohol sales composition ratio by 2025

AB

ChanceAchieve 20% low-alcohol and non-alcohol sales composition ratio by 2025

AEI

ChanceAchieve 20% non-alcohol sales composition ratio by 2030

AHA

ChanceAchieve 25% low-alcohol and non-alcohol sales composition ratio by 2025

Note: Abbreviations stand for the following operating companies.
HD: Asahi Group Holdings, Ltd., AB: Asahi Breweries, Ltd., ASD: Asahi Soft Drinks Co., Ltd., AGS: Asahi Group Foods, Ltd., AEI: Asahi Europe and International
AHA: Asahi Holdings (Australia) Pty Ltd, AHSEA: Asahi Holdings South East Asia
*1 AB, ASD, AEI, AHA, AHSEA*2 Operating companies in Japan, AEI, AHA

ASAHI GROUP INTEGRATED REPORT 202021

Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

Environment
The Asahi Group is promoting efforts to address the material issueof “the environment,” guided by Asahi Group Environmental Vision
2050. The Group established this vision based on the two goals of“aim to achieve zero environmental impact in our business activities (neutral)” and “utilize the Group’s proprietary technologies tocreate more environmental value in society (plus).”	Participation in the International Environmental Initiative RE100
In October 2020, we became the first company in the Japanese beverage industry to join RE100, an initiative that aims to use renewable energy for 100% of theelectricity consumed for business activities. By joining this initiative, we aim torealize a shift to 100% renewable energy by 2050. We are moving forward withefforts to achieve this goal, and by 2025, we expect that 90% of our production
bases, including those overseas, will have switched to renewable energy for
100% of their electricity purchases.

Zero Environmental Impact (Neutral)

Initiative in Oceania

Respond to Climate Change

In the Oceania business, we have committed to source 100% of our electricity
The Asahi Group has established Asahi Carbon Zero as a medium- to long-term goal for reducing CO2 emissions. In regard tofrom renewable energy by 2025. As part of this commitment, in 2018 we signed

the Scope 1 and Scope 2 target for 2030 under Asahi Carbon Zero, we changed our target for CO2 reduction from 30% toa power purchase agreement (PPA) to enable our purchase of renewable elec-

50% in February 2021. In addition, we changed the base year set for these targets from 2015 to 2019 to better reflect thetricity. A PPA is a direct contract with a power producer that allows corporations

scope of our current business, which has grown following our business expansion.

to procure renewable electricity generated from wind or solar. Through this effort

Through these revisions, our Scope 1 and 2 target by 2030 in Asahi Carbon Zero has

toward renewable energy, we are able to announce that the mainstay brandbeen recognized by the Science Based Targets (SBT) initiative for its commitment toVictoria Bitter has now been brewed with 100% solar electricity since 2020.
Photo credit: BayWa r.e. renewable energy

the “1.5ºC Target,” which aims to limit the average global temperature rise caused byclimate change to less than 1.5ºC compared with pre-Industrial Revolution levels.

Initiative in Europe
In the Europe business, we aim to switch to 100% renewable electricity at ourfactories by 2025 and, by 2030, we aim to have all our factories be carbon­neutral. We are continuing to work toward achieving renewable electricity usageat our breweries in Poland by 2021 and in Italy and Romania by 2023.

Scope 1 and Scope 2 Target for 2030

New target for 2030

50 % reduction(Compared with 2019)

Overview of the Revised Target under

Initiative in Japan

Asahi Carbon Zero

Asahi Breweries, Ltd. has been expanding the utilization of green power,* which•	Changed base year to 2019 to reflect the current state of

it uses under a contract with Japan Natural Energy Company Limited, for Asahi

affairs following business expansion through acquisitions•	Significantly raised targets for CO2 reduction
PrevioustargetNewtargetSuper Dry 500 ml since late May 2020. By doing so, the products that Asahi
Breweries manufactures using green power now include Asahi Super Dry 350 ml
and 500 ml cans, Asahi Dry Zero 350 ml cans, and all beer products in gift sets.
* Electricity generated using natural energy that has a low environmental impact, such as wind power and biomassenergy. Asahi Breweries has been using Green Power Certification Systems since 2009.

Previous target for 2030

30 % reduction(Compared with 2015)22

ASAHI GROUP INTEGRATED REPORT 2020

2015

2019

2030

ASAHI GROUP INTEGRATED REPORT 202023

Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

Environment

Make Sustainable Use of Resources—Agricultural Raw Materials

processes, we are taking steps to reduce the volume of water used itself, in such ways as reducing the amount of waterused for cleaning within the changeover process to manufactured products, as well as optimizing the washing cycle for

Based on the “Asahi Group Sustainable Procurement Principles,” the Asahi Group is working to realize the “Asahi Group
Supplier Code of Conduct” in collaboration with its suppliers. By doing so, the Group is promoting procurement activities
that give consideration to sustainability. As part of these activities, we commenced a survey on human rights risks andproduction lines and plumbing.
Through these efforts, the Yatala Brewery has realized a high level of water use efficiency, using only on average 2 m3
of water to manufacture 1 kl of product.

environmental risks pertaining to the agricultural products we use as important raw materials for our alcohol and softdrink products and pertaining to the areas in which these agricultural products are produced.

Make Sustainable Use of Resources—Containers and Packaging

In areas in Europe that produce barley and hops, we are promoting efforts in collaboration with local stakeholders
with the aim of reducing environmental burden and realizing the stable production of high-quality raw materials. Also, in

Guided by its Approach to Sustainable Containers and Packaging, the Asahi Group has established the “Guidelines of

the Czech Republic, we are holding discussions with relevant government agencies, experts, and other related parties

Container and Packaging Design” and is working to promote the 3R (reduce, reuse, recycle). To address the urgent

with the goal of securing water for hops production.

global issue of plastic pollution, the Group has established its “Guidelines on Plastic,” and is moving forward with efforts
to achieve the targets adopted under “3R + Innovation,” a strategy for realizing sustainable containers and packaging,with a view to 2030.

Initiatives to Reduce Plastic Containers and Packaging in Europe
For the Grolsch brand in the Netherlands, in 2020 we started a pilot program toreplace plastic shrink wrap used for six packs of beer cans with cardboard
TopClip packaging, thereby working to reduce the amount of plastic we use. At
the moment, this initiative has only been rolled out in certain regions. However,by replacing plastic packaging with TopClip across all regions in the Netherlands
in 2021, we will reduce the amount of plastic we use a year by 100,000 kg,
which is equivalent to 4 million plastic bags.

Promoting the Use of Recycled PET Resin
Surveyed regions for agricultural products used as important
raw materials in alcohol and soft drink products

For the mineral water brand Cool Ridge, we began the process of transferring
our still water bottle products to 100% recycled PET resin in 2019 (excluding thecap and label). In addition, at Asahi Soft Drinks Co., Ltd., we have started to use

Make Sustainable Use of Resources—Water
To realize the sustainable use of water resources, the Asahi Group endeavors to reduce the amount of water it uses withthe goal of achieving a basic unit of water consumption of 3.2 m3/kl or less by 2030. In addition, we are moving forwardwith water risk surveys at our production bases in order to ascertain and eliminate water risks.

Efforts to Reduce Water Consumption at Yatala Brewery
The water recycling facility at the Carlton & United
Breweries’ Yatala Brewery produces high-quality recycledwater. This recycled water is used in various settings within
the manufacturing process (excluding any processes
which come in contact with product), such as cleaning
steam generators and production tanks, as well as creating
steam used for heat sterilization. In this way, we are work-

recycled PET resin on certain parts of product packing for such products as
CALPIS WATER and MITSUYA CIDER and are working to gradually expand theuse of this resin to other products.

	Recycling Plastic through Collaboration That Goes Beyond theBeverage Industry
Asahi Group Holdings, Ltd. is collaborating with R Plus Japan Ltd., a company
that engages in the recycling of used plastics. R Plus Japan collaborates withmultiple companies across various industries that form the plastic value chain,including recycled plastic processors, raw material manufacturers, container andpackaging manufacturers, general trading companies, and beverage manufacturers. R Plus Japan aims to develop chemical recycling technologies that haveeven less burden on the environment and realize the practical application ofsuch technologies by 2027.

ing to reduce the amount of valuable water resources that
we consume. In addition, by reviewing our manufacturing

24

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202025

Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

Environment

Creating Environmental Value (Plus)

Utilize Microbe and Fermentation Technologies

	Contributing to the Recycling of Local Organic Resources with the Composting Promoter Thervelics

Expanding the Development of Agricultural Materials That Utilize Brewing Yeast Cell Walls
Asahi Biocycle Co., Ltd. engages in the sale of agricultural materials derived from brewing yeast cell walls, which are aby-product of the beer brewing process. These materials are used widely across Japan, including on farms and at baseball stadiums and golf courses that make use of natural grass. One example of the utilization of these materials is thecrop rotation project that Asahi Biocycle is pursuing at former sites of rice paddies in Ikeda-cho, Ibi District, Gifu
Prefecture in collaboration with the Ibigawa Agricultural Cooperative Association, Support Ibi Ltd., and Bio Seed
Technologies Inc.
Former sites of rice paddies have poor drainage, and, as a result, the kinds of crops that can be grown on these sites
are limited. Furthermore, putting these areas to a new use requires large-scale water drainage measures and soil-making
activities over the course of several years. Due to these factors, former sites of rice paddies are often abandoned and no

Although Japan relies heavily on the import of food and resources to produce food, large quantities of food are wasted
and, in each region, massive costs are required to dispose of this wasted food. Furthermore, CO2 is emitted whenorganic matter that could potentially be reused in an effective manner is incinerated, which in turn negatively impacts
the environment.
Working together with Well Create Co., Ltd., the NTT West Group, and the SOFIX Agricultural Promotion Organization,
Asahi Biocycle implemented a verification project related to the recycling of local organic resources in Miyagi, Shiga, andOkinawa prefectures from July 2020 to February 2021.
For this project, Asahi Biocycle provided the composting promoter Thervelics, which contains useful microorganisms
derived from the Group’s research into the lactic acid drink CALPIS. Additionally, the company used microorganism analysis technologies to carry out a flora analysis* on how Thervelics contributed to the diversity of organically composted soil.

longer used for crop cultivation, which has become an issue.
Under the crop rotation project, Asahi Biocycle and other participating members worked from spring to fall 2020 tocultivate sweet potatoes using a former site of rice paddies. The cultivation efforts centered on the use of Asahi Biocycle’s

Unused Waste

Organic Fertilizers

agricultural materials and were carried out without investment in new facilities such as water draining construction. These-R eduction of food waste

agricultural materials helped the crops take root and improve their development, leading to an increase in yield of roughly-R eduction of animal waste-D evelopment of composting
technologies

1.3 times over the previous year. As a result, the project has had success with the cultivation of sweet potatoes, which-R eduction of plant waste-D evelopment of easy-to-use fertilizers-C ultivation of effective sales channels

ordinarily can only be cultivated using soil with proper drainage.

Produce

RecycleBy continuing to help make use of former sites of rice paddies and other abandoned agricultural sites, Asahi Biocycle
aims to revitalize the agricultural industry and increase the food self-sufficiency rate going forward. At the same time, thecompany will work to expand the settings in which its agricultural materials are used.

-F ormation of fertilizer databases

Logistics and Sales-D iversification of
consumer needs-P reservation of flavor-G uarantee of freshness-E stablishment of high-quality analysis
technologies

Abundant Farmlands
Database for organic local
resources(cloud)-E stablishment of technologies to inspect flavor-E stablishment of verification technologies-G uarantee of traceability-B randing of produce-R eduction of abandoned farmland-E stablishment of high-quality
analysis technologies-D evelopment of fertilization
technologies

Safe and Secure Crops-E stablishment of technologies to inspectsafety and security-G uarantee of affordable farmland

Consume

Healthy Producers-S upport for people who wish
to work in agriculture-P romotion of producer
profitability

At Lake Biwa, Asahi Biocycle established a framework for recycling local resources by composting organic materials thathave been incinerated, such as aquatic plants that grow abundantly in the lake and non-native fish species that havebeen removed from the lake, and subsequently utilizing the compost on farms. At the same time, the company was able
to significantly reduce CO2 emissions from the incineration process and reduce the cost of incineration as well.
Furthermore, through flora analysis, the company clarified changes to the composition of microorganisms within compostand soil. In this way, Asahi Biocycle succeeded in confirming the effectiveness of Thervelics as a compost promoter andin visualizing data on resource recycling.
Asahi Biocycle aims to further develop and expand the organic local resource recycling techniques promoted throughthis verification project to other areas going forward.
* Technology that uses the genes of microorganisms to analyze what kind of microorganisms, and to what percent, are contained within the subject of analysis, as well as how thecomposition of those microorganisms undergoes change, etc. Originally, the Asahi Group leveraged flora analysis to analyze intestinal flora, but is currently putting the practice toHarvesting the sweet potatoes, September 2020

26

ASAHI GROUP INTEGRATED REPORT 2020

Kunihiko Takahashi, Representative Director, Senior Managing Corporate
Officer, Support Ibi Ltd.

use within the analysis of soil and compost.

ASAHI GROUP INTEGRATED REPORT 202027

Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

Environment

Efforts to Respond to Climate Change— Endorsing the Recommendations of the TCFD

Results of Scenario Analysis and Direction of Response Measures

The Asahi Group understands that evaluating the impact of climate change-related risks and opportunities on its busi-

Similar to our efforts in 2019, as a result of analyzing climate change risks based on the 2ºC scenario and the 4ºC scenario refer-nesses and drafting appropriate response measures are important matters in terms of realizing a sustainable society

encing the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA), we have been able toand ensuring business continuity. To that end, the Group endorses the recommendations of the Task Force on Climate-confirm two risks with major impacts: the reduction of Asahi Group’s main agricultural raw material yields and increased costs ofrelated Financial Disclosures (TCFD).

production and container purchasing due to the introduction of carbon taxes.

We conducted a scenario analysis in the beer business in 2019 and expanded the scope of this analysis to the softdrinks business and all alcohol beverages businesses, including the beer business, in 2020. In 2021, we are moving
forward with plans to conduct a scenario analysis in all major businesses, including the food business.

Risks Related to the Reduction of Main Agricultural Raw Material Yields and Response Measures
Reduced Yields of the Company’s Main Agricultural Raw Materials

Risk

GovernanceViewing climate change as an important issue pertaining to sustainability, the Asahi Group’s Global Sustainability Committee,

Under the 4ºC scenario, we found that yields were significantly reduced for corn and coffee. Using a price estimation model, we

chaired by the CEO, formulates climate change strategies. At the same time, the committee submits reports to the Board of

estimated the cost of this impact.

Directors and works to strengthen a PDCA cycle under the Board’s supervision. At the Global Sustainability Committee meeting
held in December 2020, members including the CEOs of each regional headquarters (RHQ) held lively discussions regarding theGroup’s 2030 goals for reducing CO2 emissions. As a result, we decided to upwardly revise our target values and committed ourselves to actively promoting initiatives to achieve these new values.


Please see page 50 for more information on the Global Sustainability Committee.

P.50

Yield Forecasts for Each Scenario as of 2050 (Compared with Current Yields)

Main Raw Materials of Soft Drinks and Alcohol Beverages
Other Than Beer

Main Ingredients of Beer
Item

Risk Management
BarleyIn the “Asahi Group Risk Appetite Statement,” which was formulated in 2020, the Asahi Group has announced its policy of pro-

2ºC Scenario

4ºC Scenario

Country of Production

2ºC Scenario

Canada (Spring)

+1％

+2%

Item

Australia

+1％

+2%

France (Spring)

-10%

-18%

Brazil

+3%

+12%

-5%

-10%

India

0%

-3%

+8%

+19%

Japan

+2%

+21%

Thailand

-26%

-45%

Australia

-9%

-19%

United States

-6%

-11%
-3%

Australia

-7%

-13%

Czech Republic (Spring)

+18%

+7%

Czech Republic (Yield)

-5%

-7%

Czech Republic (Quality)

-13%

-25%

Sugar

Raw Milk

Group-wide basis through collaboration between our sustainability management system, renewed in 2020, and the ERM system.


Please see page 94 for details on the collaboration between climate change risks and ERM.

P.94

Japan

-2%

New Zealand

-2%

-2%

Brazil-8%-23%

Common Ingredients of Alcohol Beverages and Soft Drinks
Item

Country of Production

2ºC Scenario

4ºC Scenario

United States

-12%

-24%

Corn

Brazil-3%-9%

We formulated and announced our medium- to long-term goal for reducing CO2 emissions, Asahi Carbon Zero, with the aim of¥ 1.97

Argentina

-9%

-16%

China

0%

-10%

achieving zero CO2 emissions by 2050. In order to increase the probability of achieving this target, in December 2020 webillionUkraine

-17%

-26%

Australia

-13%

-27%

Indices and Targets

4ºC Scenario

France (Winter)Hopssystem. While working to set in motion a PDCA cycle under this management system, we are pursuing risk management on aCountry of Production

Eastern Region of Germany (Winter)moting efforts to reduce risks that impact the natural environment.
Accordingly, climate change has been adopted as a main risk for the Group within our enterprise risk management (ERM)

More than a 15% decrease compared to now

upwardly revised our 2030 goal to a 50% reduction (compared with 2019). At the same time, we renewed our road map towardrealizing Asahi Carbon Zero by promoting initiatives such as participating in RE100 and acquiring Science Based Targets (SBT)

Coffee¥ 2.66billionColombia

-4%

-15%

Guatemala

-11%

-17%

Tanzania-2%-9%Ethiopia

-8%

-25%

Vietnam-9%-24%

Indonesia

-10%

-30%

Quantitative risks of yield reduction

1.5ºC verification. In addition, we are establishing and implementing initiatives to realize the use of sustainable materials, such as
agricultural raw materials, packaging, and water.
Please see page 20 for details on our specific indices and targets.

P.20

Strategies

Forecast for Price of Corn
(Cents per bushel)

Average price under the 4ºC scenario
Average price underthe 2ºC scenario

800

In 2020, we took on the challenge of expanding the scope of and enhancing our scenario analysis. As a result of carrying out
more extensive and accurate scenario analysis, various impacts and risks have become apparent, such as reduced yields of agri-

GDP per capita

600

Previous year’s market conditions

cultural products, important raw materials, and increased costs of production and container purchasing due to the introduction ofcarbon taxes.
Meanwhile, we are also beginning to see the potential for limiting such impacts and acquiring business opportunities by reinforcing mitigation and adaptation policies in response to risks. We will reflect the results of our scenario analysis when establishing KPIs and the road map for achieving our goals in line with Asahi Group Environmental Vision 2050.

28

ASAHI GROUP INTEGRATED REPORT 2020

Supply–demand balance

400

approx. 28 %Average price for maintaining 0.6ºC

200

0approx. 59 %Past results
1971

Future outlook
2020

2050

Using factors that cause corn price fluctuations, such as supply–demand balance,
GDP per capita, and the previous year’s
market conditions, we created a formulafrom past results and calculated future
prices based on this formula.

ASAHI GROUP INTEGRATED REPORT 202029

Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

Environment

Direction of Response Measures for Reducing Yields of Agricultural Products

Response Measures

Response Measures

Direction of Response Measures for Increased Production Costs
Due to Carbon Tax Introduction

The Asahi Group intends to pursue the following measures to address the risks related to its main agricultural raw materials.
The Asahi Group has been striving ambitiously to set high goals for reducing CO2 emissions.

Cooperating with Suppliers
ies so that they can cope with climate change. We are also examining the development of alternatives to materials that we cur-

Upwardly Revising 2030 Goals for Reduction of
CO 2 Emissions

rently use. Furthermore, going forward, we will reinforce the partnership that the Group has with suppliers and implement various

In order to accelerate initiatives for achieving carbon neu-

policies in order to respond to further reduced yields in the future.

trality by 2050, we upwardly revised our 2030 goal values

We share the risks associated with agricultural products with our suppliers, and we are considering ways to enhance crop variet-

Achieving Carbon Neutrality by 2050

from the current 30% reduction to a 50% reduction. We

Supporting Farmers

have confirmed that this revised target would result in a

The Asahi Group is undertaking a number of initiatives, such as supporting barley farm-

reduction of ¥2.23 billion in CO2 costs in 2030 and the fullers in Italy who create the main ingredient for our products and conducting a pilot test in

cost amount of ¥6.43 billion in 2050. We recognize that theReduce 2030 CO2 emissions by 50%

strategies we are currently striving toward are highly resil-

the Czech Republic to promote smart farming for hop cultivation.

ient to the rising costs of climate change and are appropri-

Birra Peroni (Italy)

Utilizing In-House Technology

ate from a resilience perspective.

The Asahi Group is developing an agricultural material that utilizes the cell walls of brewer’s yeast. This material promotes the growth of plant roots and, through its utilization,

Utilizing In-House Technology

we hope to improve the ability of agricultural products to cope with environmental

As part of our decarbonization initiatives, we have begun achanges due to climate change. We have already achieved results with various agricul-

demonstration project at the Ibaraki Brewery of Asahi

tural products and, going forward, we will expand the use of this agricultural material andArea processedwith material

promote research geared toward its practical application.

Conventionalarea

Root growth promotion by utilizing the cell
walls of brewer’s yeast

Breweries, Ltd. to generate electricity using fuel cells powered

Acquiring SBT 1.5ºC
Certification

Participating in RE100

Formulation of goals based on
scientific evidenceInternational initiative to increase
the reliability of our goals

by biomethane gas derived from brewery wastewater, which
could serve as a new model for reducing CO2 emissions.

TCFD

Risks Related to the Introduction of Carbon Taxes and Response Measures
Response Measures
Risk

Cost Increases Due to Carbon Tax Introduction

We conducted estimations of higher production costs for direct operations if a carbon tax is introduced and increased costs due

We have adopted the Group-wide goal of 3R + Innovation, and are striving to lower our environmental burden throughto fluctuating prices of PET bottles.

­sustainable containers and packaging.

Impact on Production Costs

Switching to Recycled PET Bottles

Impact of Fluctuating PET Bottle Prices

In Australia, we have launched Cool Ridge, a mineral water(¥ billion)8¥ 6.47billion¥ 6.43

Amount of PET
Bottles Purchasedbillion

CO2 Weight
Conversion

Amount of
Financial Impact
for the Company

6

4

2030
Carbon tax $100

began to use recycled PET for CALPIS WATER and other beverage bottles from July 2019. Going forward, in addition to
our 3R initiatives, we will minimize our negative environmen-

monetary impact oftal impacts by reinforcing our alliances with other companies.

production phases0with a bottle made from 100% recycled PET. In Japan, we

Calculating theCO2 emissions on2

2050
Carbon tax $144

Alcohol Beverages Business (Scope 1)
Alcohol Beverages Business (Scope 2)
Soft Drinks Business (Scope 1)
Soft Drinks Business (Scope 2)30

Direction of Response Measures for Fluctuating PET Bottle Prices
Due to Carbon Tax Introduction

ASAHI GROUP INTEGRATED REPORT 2020

Weight ofPurchaseAmount purchased
in Japan, Oceania,
and Southeast Asia
in 2019X

3.6
CO2 emission
factor per tonof PETX

Carbon Tax
Amount multiplied
by CO2 cost per tonof PET

Reducing the Weight of PET Bottles

Bottle to Bottle
Converting used PET bottles
to PET raw materials andcreating new PET bottles

Asahi Group operating companies will continue efforts to
reduce the weight of PET bottles, and are also considering
utilizing alternative containers and expanding the use of PET

112,600

405,360

tons

tons

¥6.23
billionbottles made from biomass materials.

ASAHI GROUP INTEGRATED REPORT 202031

Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

Environment

ColumnIssuance of Green Bonds

On October 15, 2020, the Asahi Group became the first domestic food manufacturer to issue Green
Bonds. The proceeds raised through the issuance of these bonds will be used for such matters as procuring recycled PET, procuring biomass plastic, purchasing renewable energy, and promoting conservation
activities at the Company forest “Asahi Forest.”Through the implementation of the projects targeted with the bonds, we will respond to climatechange and promote the sustainable use of resources with the aim of achieving Asahi Group
Environmental Vision 2050.

Voice
Accelerating Initiatives from a Financial Perspective
We are currently picking up the pace of initiatives aimed at achieving Asahi Group
Environmental Vision 2050, and I believe a major reason why we are doing so isthe fact that we have been positively impacted by the approaches and actions thatnew members of the Asahi Group, which have joined us amid our overseas expansion, are taking toward ESG initiatives. With this development, we had a discussion
within Finance on what we can do from a financial perspective to help accomplish

Overview of Green Bonds
Issuerthe vision.
As the awareness of the Sustainable Development Goals (SDGs) rises around the

Asahi Group Holdings, Ltd.

Maturity

Five years

Issue amount¥10.0 billion

Issue date

October 15, 2020

Use of proceeds• Procurement of recycled PET• Procurement of biomass plastic

world, it is important that we clarify more specifically how the Group’s individual

Shunjiro Sakano
Head of Finance, Executive Officer
Asahi Group Holdings, Ltd.

efforts contribute to the realization of the SDGs. One effective way that we can dothat is to publicly commit each of our initiatives to realizing the SDGs by clarifying
frameworks for how we use proceeds raised through the issuance of Green Bonds.

Our recent issuance of Green Bonds was realized through close collaboration between Finance and Sustainability.
• Purchase of renewable energy• Forest conservation activities at Company forest “Asahi Forest,” etc.

Being the first Green Bond issued by a food manufacturer in Japan, we have had a broad range of investors express
their interest to invest.
Going forward, we will bring together the individual initiatives of each Asahi Group company as we move forwardwith examinations on how we can raise funds in a manner that provides added value from the perspective of the SDGs.

Framework

By doing so, we will help realize a sustainable society.
(1) Initiatives toward achieving Asahi Carbon Zero

Purchase of renewable energy, introduction of energy-saving equipment at plants, introduction of heat-pumpvending machines

Use of proceeds(3) Initiatives toward promoting sustainable water resources

Forest conservation actives at the Company forest “Asahi Forest”

Management ofproceeds

Approximately ¥564 million was allocated to expenditures in eligible projects in 2020.

(2) Initiatives toward using sustainable containers and packaging

Procurement of recycled PET, procurement of biomass plastic

Process for project
evaluation andselection

Report on Allocation

Projects that are eligible to receive the proceeds raised through these Green Bonds are evaluated andselected by Asahi Group Holdings’ Corporate Strategy Board or at each Group company’s management
meetings in accordance with the Group’s Sustainability Strategy, which was determined by the Global
Sustainability Committee.
The proceeds raised by the Green Bonds will be managed by the Finance of Asahi Group Holdings, Ltd.
under a special Green Bond bank account. The Finance will track and manage the proceeds on a quarterly
basis using an internal management system. Until Green Bond proceeds are actually allocated to eligible
projects, they will be held in cash or cash equivalents.

Purchase of renewable energy: ¥44 million
Introduction of heat-pump vending machines: ¥207 million
Procurement of recycled PET, procurement of biomass plastic: ¥269 million
Etc.

Impact Report
2020(1) Status of initiatives toward achieving Asahi Carbon Zero
Amount of renewable energy electricity purchased

14GWh

Amount of CO2 emissions reduced

1,674t(2) Status of initiatives toward using sustainable containers and packaging
Amount of eco-friendly materials used, such as recycled PET and biomass plastic

Reporting

Until the total amount of Green Bond proceeds are allocated to eligible projects, or as long as there are Green
Bonds outstanding, Asahi Group Holdings will report the status of proceed allocation on its corporate website
and in its integrated report on a yearly basis. Additionally, as long as there are Green Bonds outstanding, theCompany will report the positive environmental impacts of eligible projects on its corporate website and in its
integrated report on a yearly basis, in the same manner as it reports the status of proceeds allocation.

2,419t(3) Status of initiatives toward promoting sustainable water resources
Overview of Asahi Forest

Land managed under Asahi Forest in 2020
was 2,467 ha, helping Asahi Breweries, Ltd.
becoming 95% water neutral

Note: Certain items were revised based on the most recently available environmental data to ensure appropriate reporting.

32

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202033

Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

PeopleFor the material issue of “people,” the Asahi Group has com-

Ascertaining the Actual Conditions of Human Rights Due Diligence at Suppliers

menced efforts to create human rights due diligence for employees
and suppliers. At the same time, the Group is taking steps to for-As the first step of our efforts toward human rights due diligence for suppliers, we have started initiatives to identify sup-mulate and implement globally shared human resource strategies.

plier risks and modern slavery risks in order to ascertain the actual human rights conditions at suppliers.

Identifying Supplier Risk
To identify supplier risk, we implemented a survey targeting the primary suppliers of 21 major operating companies inJapan, Europe, Oceania, and Southeast Asia. This survey made use of the Supplier CSR Questionnaire, which we carry

Respect for Human Rights

out on a regular basis as part of our efforts toward supply chain management. The survey’s questions pertaining tohuman rights and labor are as follows.

Conducting a Labor Conditions Survey of Foreign Technical Interns
in an Effort toward Due Diligence for Employees
Based on the results of a gap analysis that we conducted in 2019, we discovered thatissues related to foreign technical interns in terms of forced labor among employees inJapan pose a high level of risk and, accordingly, should be addressed with priority. To
that end, we conducted a labor conditions survey at the Okayama Plant of Asahi

Human Rights

Labor• Basic attitude toward human rights• Respect for human rights and prohibitionof discrimination• Avoidance of complicity in (or contribution to) human rights abuses• Respect for indigenous peoples and local
communities• Basic attitude toward labor practices• Prohibition of discrimination in the workplace• Provision of equal opportunities to employees
regarding human resources development and careeradvancement, etc.
• Prohibition of inhumane treatment• Payment of fair wages• Fair application of working hours, time off, and paid
time off, etc.

Group Foods, Ltd., which accepts foreign technical interns, based on Group data per-• Prohibition of forced labor• Prohibition of child labor• Respect for the religious traditions and customs ofthe country of operation• Recognition of and respect for freedom of association and the right to collective bargaining• Proper management of employee safety and healthtaining to the number of non-regular foreign workers and foreign technical interns
working at all Group companies in Japan. This investigation was carried out in collabo-

We provided all companies that submitted answers with the aggregate results of the survey showing differences in theration with The Global Alliance for Sustainable Supply Chain (ASSC) and involved aaverage score rate and the individual rankings of each company among all responding companies. By having suppliers

labor conditions survey of 40 technical interns and native-language interviews with

understand their strengths and weaknesses through this survey and work to make improvements on their weaknesses,

these interns. The investigation yielded an overall positive evaluation, finding that

we aim to reduce human rights risks across the supply chain.

there was interest among interns in the Technical Intern Training program and that
their living environment was sound. Going forward, we will strive to make various

Identifying Modern Slavery Risk

improvements, including posting notices in the employees’ native languages on such matters as internal regulations andIn 2017, the Asahi Group carried out an analysis of modern slavery risk. From the results of this analysis, we discovered

precautions within the plant and promoting educational activities on emergency response procedures.

that our coffee plantations in Ethiopia and Tanzania had the highest risk of modern slavery in terms of severity and levelof impact. From 2021, we will work to ascertain the actual human rights conditions at suppliers of high-risk commodities

Voice

Anticipating the Global Expansion of Asahi’s Efforts in Japanthese means, we will identify modern slavery risk.
Main Raw Materials Procured: Analysis of Modern Slavery Risk
Very highVietnam and Sri Lanka
Coffee, tea

Value chain risk

In the investigation we carried out at the Okayama Plant, we confirmed various kinds of internal documents and forms, working conditions at the plant, and living conditions within thedormitory for plant workers, and conducted individual interviews with the foreign technicalinterns that also served as on-the-job training for implementing on-site human rights due diligence. Through this investigation, we confirmed that the working and living conditions for foreign technical interns were excellent and that the plant had established a suitable structure
for taking in foreign technical interns from the perspective of in-house communication,
Masaki Wada
including the provision of interpreters within the plant.
Director
The Global Alliance for Sustainable
Through this investigation, I believe we gained valuable insights on the issue of illegal
Supply Chain
conduct involving systems for foreign technical interns and toward non-Japanese workers
themselves, a topic that has been often covered by the media. These included improving theirknowledge on how to implement on-site human rights due diligence and understanding various perspectives to consider whencarrying out an investigation. The illegal conduct involving non-Japanese workers in Japan can be seen as a microcosm of theillegal conduct involving workers in Southeast Asia and other regions. Accordingly, these kinds of investigations will be continuously carried out and activities geared toward resolving future issues as they arise should be promoted. By doing so, the responsibility that corporations have to adhere to the UN Guiding Principles on Business and Human Rights could be fulfilled.

through self-assessment questionnaires and other measures and also conduct field surveys of these suppliers. Through

ASAHI GROUP INTEGRATED REPORT 2020

Dairy products, malt

Europe and Australia
Dairy products, malt

Europe and Australia
Dairy products, malt

Low

34

Europe and Australia

The United States, Germany,and the Netherlands

South America and Southeast
Asian regions, etc.
Coffee, palm oil, sugar, tea, cacao

African countries, etc.*
Coffee, sugar, tea

Growing crops
Vietnam and Sri Lanka

PakistanOrange juice, corn, rice

Rice

The United States, Germany,and the Netherlands

South America and Southeast
Asian regions

Pakistan and African regions*Hops, malt

Rice, coffee, sugar, tea

The United States, Germany,and the Netherlands

South America and Southeast
Asian regions, etc.

Hops, malt

Hops, malt

Orange juice, corn, rice, coffee,
palm oil, sugar, tea, cacao

Rice, coffee, sugar, tea

Manufacturing /Processing

Pakistan and African regions,etc.

WholesaleRice, coffee, sugar, tea

Modern slavery risk by country

Very high* Ethiopia, Tanzania, Egypt, and Kenya

ASAHI GROUP INTEGRATED REPORT 202035

Key Agenda 01

Section 02

Sustainability

Human Resource Development

Improving the Sustainability of the Asahi Group

Diversity

Establishment of the “People Statement”

Initiatives toward Diversity & Inclusion

Under its Medium-Term Management Policy, the Asahi Group is promoting “Glocal Value Creation Management” based

Establishment of the “Global Diversity & Inclusion Statement”

on the AGP. The Group has adopted “enhancing management resources” with a view to expanding new sources for

We established the “Global Diversity & Inclusion Statement” to communicate our shared values and approach to diversity

growth as one key priority in the promotion of this management. Going forward, the Group will continue to step up its

and inclusion on a global scale. The statement was implemented on March 8, 2021, in conjunction with International

investment toward the intangible asset of human resources with a focus on value creation.

Women’s Day.

To demonstrate our commitment to responding to the changes in the business environment surrounding the Groupand our approach to human resources both internally and externally, we established the “People Statement” in 2021 toserve as our new human resource policy.

Global Diversity & Inclusion Statement
From Tokyo to Rome, Melbourne to Prague, and Auckland to Kuala Lumpur at Asahi we are a global

Learning, growing, achieving TOGETHER
There’s a feeling of excitement when you’re growing, learning, doing great work and delivering results.
And when we do this together, the magic really happens.

family united by the pride in our products and the passion of our people.
Our heritage is as rich and diverse as our global family, anchored in Japanese roots. From this we
draw a deep respect and care for our planet, our communities, our business, and most of all our­people. Our culture is one that nurtures a sense of belonging, where every person is respected andThis is how we work at Asahi—We are respectful, trusting, humble and inclusive. This fuels the way
we work together, our care for one another, and drives our outstanding results.

their uniqueness celebrated.
We know that our diverse and multi-cultural organization makes us stronger, more innovative and is

We connect, we grow, and we chase learning opportunities together—even if they come from mis-

key to our long term success, which is why we’re committed to a future where everyone belongs,

takes we’ve made; and together we “deliver on our great taste promise and bring more fun to life,”

our individuality matters and we can flourish personally and professionally. A culture where ideas canwhich is what we stand for as a global Group.

come from anywhere, everyone has a voice, and we all contribute to a better future.

We care deeply for one another—with our safety and physical & mental well-being always ourhighest priority.
We unite in our passion for excellence and respect, not just for ourselves and our teams, but also for

In-House Campaign “202inclusion (202i)”

our customers, our consumers, our communities, and our planet.

The Asahi Group positioned 2021 as the “year of inclusion,” and commenced the global
inclusion campaign “202inclusion (202i)” accordingly. This campaign aims to promote
the Group’s diversity and inclusion initiatives on a global basis. The specific initiatives weare pursuing with this campaign are as follows.
Establishing a Global Diversity and Inclusion Promotion Structure

Safety and Well-being

Growth through Learning

In June 2020, we launched the Global Diversity Panel through collaboration between theis our biggest priority

individually and collectively

Group headquarters and the overseas regional headquarters with the aim of promoting
diversity and inclusion Group-wide. Going forward, this panel will work to accelerate diversity and inclusion initiatives on a global scale through the establishment of clear targets

Everyone Matters

Better Together:

for the ratio of female managers and the implementation of campaigns such as 202i.

is our core belief

Collaboration fuels our growth

Broadcasting Video Messages from Management
To foster a corporate culture of inclusion, we produced a video announcing the theme of“Choose to Challenge” for each individual employee. In this video, the Group CEO and 19
members of management at Asahi Group Holdings, Ltd. and three domestic Group companies (Asahi Breweries, Ltd., Asahi Soft Drinks Co., Ltd., and Asahi Group Foods, Ltd.)as well as three overseas (Europe, Australia, and Southeast Asia) Group companies con-Declaration of “Choose to Challenge”

veyed a message to the approximately 30,000 employees of the Group, encouraging themto take on the challenge of eliminating gender-based discrimination and improving theposition of female employees.

36

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Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

Communities
The connections between people and people and communities have

Examples of Initiatives

weakened due to the changes in social trends, and this has led tothe emergence of various issues in local communities. In light of
this, the Asahi Group has positioned “Communities” as an issue tobe addressed with the utmost priority. In addition to organizing its
approach to communities on a global basis, the Group is moving­forward with specific initiatives at each of its regional headquarters.

Food

Campus Peroni

Birra Peroni S.r.l. is promoting the Campus Peroni project with the ambition
to foster dialogue and exchange knowledge and experiences between protagonists within the agricultural and cereal, a main ingredient of beer, sectors. Through Campus Peroni, it has been possible to: promote scientificresearch and innovation, spread the culture of quality, good practices, as

Establishing “RE:CONNECTION” as Our Community Activity Slogan

well as the best models of sustainability in agriculture and the food industry.

There has been an acceleration in economic development and the trend of mobilization among populations, leading to an

cultural production has built a dense network of connections and compari-

imbalance in the distribution of populations, including the heavy concentration of people in urban areas and depopula-sons for the enhancement of the supply chain. Maintaining high-quality values, continually improving efforts towardtion in rural areas around the world. As a result, regional connections and connections between people with a sharedtackling climate change, and supporting the income of farmers are key priorities for Birra Peroni. Guided by these priori-

sense of values have weakened. The weakening of such connections has given rise to a variety of social issues, such as

ties, we will continue to contribute to the sustainability of local communities going forward.

Campus Peroni’s model of exchange between research, training, and agri-

social isolation, deteriorating safety, declining attachment to local communities, and labor shortages in rural communities.
This weakening has also been a major reason for the decline in community-based activities.
The Asahi Group has enjoyed the support of local communities over its long history. Based on the belief that it isRegional Environment

Support for Water at CUB

important to reevaluate and once again promote various kinds of connections, we established “RE:CONNECTION” as theWith the cooperation of McColl’s Transport Pty Ltd, a major transport company in­slogan of our activities toward the material issue of “Communities.”

Australia, the Australia-based operating company Carlton & United Breweries Pty.

Through the resources and technologies of the Group, we will reevaluate and further promote connections between
people, people and communities, and communities and other communities as we work to resolve the wide range ofissues facing local communities. By doing so, we will create and share enjoyable experiences with local community members and contribute to the realization of sustainable communities.

Ltd. (CUB) is promoting the Water on Wheels program, which provides water todrought-stricken farmers.
With the Water on Wheels program, CUB provides specially treated recycledwater left over from the brewing process at its Yatala Plant, which is the largest brewery in Australia. McColl’s then transports this recycled water to farmers impacted by droughts. CUB is working to reduce
the amount of water it uses at its breweries. In addition, CUB is taking steps to reduce its impact on the local environ-

Establishing “Food,” “Regional Environment,” and “Disaster Relief”
as the Focus Areas of Our Activities

ment in such ways as making effective use of the water produced in the brewing process. Through these efforts, CUB willcontribute to the sustainability of local agriculture.

The Asahi Group has been able to achieve sustainable growth thanks to the blessings of nature. In light of this, we haveestablished “food,” “regional environment,” and “disaster relief” as three Group-wide focus areas for our material issue of“Communities.” We chose “food” and “regional environment” as focus areas due to the fact that these are two domains

Disaster Relief

Activities to Respond to the COVID-19 Pandemic

in which we have been able to leverage the strengths and expertise that we have gained through our business activities.

Following the global spread of COVID-19, the Asahi Group has been engag-

We selected “disaster relief” as a focus area as it becomes an urgent issue during times of emergency. By engaging in

ing in various support activities in each region of operation. At The Nikka

activities in these three focus areas, we will accelerate the creation of various kinds of connections going forward.

Whisky Distilling Co., Ltd. and the Australia-based Asahi Beverages Pty Ltd.,
we used in-house facilities to manufacture hand sanitizer, a product in short
supply at medical and other institutions due to the pandemic. We then provided these institutions with sanitizer free of cost.
Additionally, in Japan we donated Asahi Group products to the nonprofit
organization Kodomo Shokudo Support Center and to medical personnel. In
the United Kingdom, the Czech Republic, Malaysia, and other countries
and regions, we provided products of the Asahi Group and financial support

Food

Regional Environment

Disaster Relief

to hospitals, fire stations, and other institutions on the front lines in the battle against the outbreak. Going forward, we willcontinue to provide appropriate support in accordance with the conditions in each country and region and contribute to
the further expansion of relief efforts across the globe.

38

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Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

HealthAgainst a backdrop of increasing global health awareness, we are

Examples of Initiatives

actively engaging in creating health value through our products,
starting with reducing the quantity of sugar used in our products.

	Providing Physical and Mental Health Value through Lactic Acid
Bacteria and Other Proprietary Materials
We are continuing to develop products that focus on both physical and mental
health by utilizing our long-cultivated lactic acid bacteria research and fermentation technologies as well as our proprietary health materials.

Aiming to Create Health Value
In order to realize Our Mission as established under the AGP—“deliver on our great taste promise and bring more fun tolife”—we aim to continue to create health value. Increased awareness toward health is a global trend, and this has
become even more prevalent during the COVID-19 pandemic. For many people, the changes to their lifestyles that
accompanied refraining from going outside and various restrictions at public institutions, bars, restaurants, and otherestablishments became an opportunity for them to reevaluate their physical and mental health. Even in the area of food,
which is greatly connected to health, people’s awareness has, inevitably, begun to change drastically. In order for the
Asahi Group to respond to people’s health needs, we are creating health value through initiatives based on two pillars.

1. Creating Health Value through the Use of Proprietary Materials
Utilizing Fermentation and Lactic Acid Bacteria Technologies
We are carrying out initiatives to develop and cultivate new products that have health value by drawing on our long-cultivated technologies and research results related to such areas as fermentation and lactic acid bacteria. Currently, we arereinforcing our lineup of “food for specified health uses” (FOSHU) and “food with nutrient functional claims” (FNFC) by

Asahi Soft Drinks Co., Ltd.
At Asahi Soft Drinks Co., Ltd., we are proposing various ways to balance delicious
taste with ease of improving health.
In 2020, we launched a new product, GREEN CALPIS. The product is madewith soy milk, which has a reputation for being healthy and nutritious, thereby
responding to increasing health awareness.

Asahi Group Foods, Ltd.
At Asahi Group Foods, Ltd., we are expanding the direct-order businesses that
handle health foods using Asahi Group proprietary materials, such as lactic acidbacteria and Bacillus subtilis. In 2020, we released our new product Onaka Size
supplements that fall under the category of FNFC. In addition, we relaunched themental health supplement Koko Kara Care as an FNFC. The supplement promotes three functions: relieving psychological stress, enhancing sleep quality(depth of sleep), and improving the intestinal environment.

developing products such as beverages and supplements that cater to various settings in the lifestyles of our customers.

2. Providing a Wide Variety of Choice
Developing Reduced-Sugar and Sugar-Free Beverages

Initiatives to Reduce the Amount of Sugar Used in Our Products
In recent years, the World Health Organization (WHO) has been warning member nations of the serious issue of disease
resulting from unbalanced diets around the world. Excessive sugar intake is one of the most serious issues in this regard.

To respond to people’s increasing health awareness, we are increasing our product range and promoting initiatives that
support customers’ healthy eating habits. In particular, in countries and regions where excessive sugar intake is an issue,

Etika Beverages Sdn. Bhd.

we are promoting initiatives such as reducing the amount of sugar in our products and strengthening sales of sugar-free

Etika Beverages, which operates a soft drinks business in Malaysia, formulated the goal of reducing the quantity of sugar

beverages. In this way, we are creating health value by proposing new choices.

contained in 70% of RTD products to 6 grams or less per 100ml by 2021; however, it greatly surpassed this goal aheadof schedule by achieving 82% in 2020. Pepsi Black, a sugar-free carbonated beverage, and WONDA Zero Max, a­sugar-free RTD coffee were launched in their respective markets in Malaysia. The company has also been successful
with proactive product development, including the launch of three versions of Calpis Zero as the newest products in its­sugar-free series.

Asahi Beverages Pty Ltd.
Asahi Beverages has committed to a 20% reduction in sugar across our non-alcohol portfolio from 2015 to 2025. By
reducing the amount of sugar used in carbonated soft drinks and launching three sugar-free sparkling RTD beverages
from the Cottee’s brand (2020), a well-loved Australian brand, the company has contributed to the achievement of thisinitiative, and we ­continue to pursue further reductions in our sugar content.

40

ASAHI GROUP INTEGRATED REPORT 2020

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Key Agenda 01

Section 02

Sustainability

Improving the Sustainability of the Asahi Group

Responsible Drinking
Under the Group slogan “Responsible Drinking Ambassador,” intro-

Aiming to Reduce Inappropriate Drinking

duced in 2020, we are promoting various initiatives to create new
drinking opportunities and reduce inappropriate drinking in order

Alcohol-related social issues vary depending on country or region. Also, as many stakeholders are involved in theseto practice “responsible drinking.”

issues, we will work to resolve them together with industry groups, government administrations, and NPOs. In particular,
for global issues, we are reinforcing the initiatives that we implemented in conjunction with the International Alliance for
Responsible Drinking (IARD), a global NPO that promotes responsible drinking.

IARD Joint Statement

Resolving Social Issues through the Creation of New Drinking Opportunities

In January 2020, the Asahi Group announced its “IARD Joint Statement,” a five-step action plan to accelerate reductionin underage drinking in collaboration with 12 alcohol producers that participate in IARD. In addition to reinforcing existing

Whether refraining from drinking alcohol from a health management perspective, or refraining from drinking directly

initiatives, in this statement all member companies renewed their commitment to display information regarding the age

before working or driving, or when pregnant or nursing, the number of customers who make the intelligent choice of con-limit for drinking on products from all alcohol beverage brands by 2024.

suming low-alcohol and non-alcohol beverages during various drinking scenarios is increasing. While responding to thesecustomer needs, the Asahi Group is working to resolve social issues by expanding its lineup of low-alcohol and non-­alcohol
beverage products. At the same time, the Group has formulated targets toward the ratio of sales volume for products inthis category to total sales volume, and is working to achieve these targets.

Resolving Alcohol-Related Issues through Collaboration with Other Industries
Since issues related to the harmful use of alcohol often involve many parties, it is important to work together withstakeholders to resolve these issues across society. Together with IARD member companies, the Asahi Group is reach-

Low-alcohol beverage: Alcohol content of 3.5% or lessing out to various stakeholders regarding themes related to each issue and is moving forward with initiatives on a

Non-alcohol beverage: Based on the laws and regulations for each sales region­society-wide basis.
Targets for Percentage of Sales Volume for Low-Alcohol and Non-Alcohol Beverages of Total Sales Volume
Regional Headquarters

TargetTarget Year

Category

Europe (Asahi Europe and International)

20%

2030

Non-alcohol

Oceania (Asahi Holdings (Australia) Pty Ltd)

25%

2025

Low-alcohol and non-alcohol

01

02

03

Japan (Asahi Breweries, Ltd.)

20%

2025

Low-alcohol and non-alcoholGroup-wide

15%

2025

Low-alcohol and non-alcohol

Stakeholder
Dialogue

DigitalPlatforms

E-Commerce andDelivery Platforms“Smart Drinking” (Asahi Breweries, Ltd.)

01

Stakeholder Dialogue

Asahi Breweries has defined “smart drinking” as a concept that involves theEstablish opportunities for dialogue with various stakeholders related to alcohol and its issues. Gather wisdom to resolve

development of products and services and the creation of environments that aim

issues across society as a whole and reflect that wisdom in our activities.

to expand the options for ways to enjoy drinking under various circumstances andsettings and to realize a society that embraces diversity. Based on this definition,

02

Asahi Breweries made its Smart Drinking Declaration in December 2020. In addi-

Join hands with digital platforms to create a framework that does not show alcohol advertisements to underage users.

tion, Asahi Breweries has adopted targets for the percentage of low-alcohol andPrevention of Underage Drinking in Cooperation with Digital Platforms

non-alcohol beverages, as seen in the table above. At the same time, Asahi

03

Breweries posted the alcohol content of its major products on its ­corporate web-Due to the impact of the COVID-19 pandemic, online alcohol sales have increased dramatically, and at the same time,site in June 2021.

alcohol purchases by minors have become an issue. Through collaboration with e-commerce and delivery platforms, we

Promotion of Responsible Drinking in E-Commerce

have established and are implementing global standards in order to avoid purchases by and delivery to minors and people struggling with alcohol addiction.

42

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Section 02

Key Agenda

02

Improving the Sustainability of the Asahi Group

Dialogue

GlobalManagement

Amid the unprecedented crisis, the COVID-19 pandemic, the Asahi Group completed the acquisition of theAustralia-based CUB business, following on from the acquisition of the Europe business, with the aim of realizing

Future Management Issues
Recognized by the Board of Directors—Management Needed for the Increasingly Globalized Asahi Group

1. Vision for Global Management

than controlling all aspects of the Group’s operation, the GHQ

sustainable growth in the future. As a result, the Group’s global operating structure now spans the three regions ofJapan, Europe, and Oceania. Under such a structure, the Group must now consider the steps to establish a firm
presence in the global market. In this section, Chairman of the Board Akiyoshi Koji and Outside Director Tatsuro
Kosaka exchanged opinions from a broad perspective regarding this issue and other future management issues.

should entrust the RHQ with aspects of operations that they are

Akiyoshi Koji

Tatsuro Kosaka

Koji: Leveraging its global operating structure that spans the

fully capable of handling to ensure that they maintain their local

three regions of Japan, Europe, and Oceania, the Asahi Group isautonomy. In addition, the GHQ should clarify the ways in which

Chairman of the Board

Independent Outside Director

proceeding with its glocal strategies. During my time as CEO, I

it can support the RHQ and work to eliminate operations thatcame to the conclusion that, when considering ways to achieve

overlap to the greatest extent possible. The long-cultivated re-sustainable growth for the Group going forward, it is better tosearch and development results in Japan and the best practices

formulate strategies that draw on our long-cultivated strengths

at each RHQ should also be shared on a global basis. Theserather than ones that involve entering into areas in which we

aspects are an integral part of forming trust-based relationships.

have little or no knowledge to promote business diversification.

Also, going forward we will have the CEOs of each RHQ

When making an acquisition, I placed the most emphasis

participate in the Group’s management. As a means of doing

on finding companies with talented human resources, starting

so, we held the Global Senior Leadership Meeting in 2020. The

with upper management. Thanks in part to the efforts made toCEOs of the GHQ and RHQ also share information on a monthly

compare and contrast ideas regarding management together

basis and hold meetings each quarter to exchange opinions onwith the talented human resources of acquired companies,

various themes. These meetings have been very well received

those human resources continue to play an active role withinby each RHQ. As we continue to promote these kinds of initia-

the Group even after the acquisition. Although the COVID-19

tives, there would likely be a transfer of managerial personnel

pandemic has had a major impact on all countries and regions

from one RHQ to another in the future.

around the world, the Europe business has exceeded its perfor-

Kosaka: Based on my personal experience, the kind of man-mance targets in the three years after the acquisition, and theagement style needed for a global company is a style that is

Oceania business continues to perform strongly. I believe that

optimized for that company’s corporate culture, history, andthis is made possible by the outstanding human resources thatcurrent direction of management, whether that be a style where

belong to each business.

functions and responsibilities are centralized in one location or

Kosaka: In only a matter of a few years, the Asahi Group,

one where they are decentralized and spread across each re-which conventionally realized growth centered on Japan, hasgion. The Group currently adopts a decentralized style of man-invested over JPY 2 trillion to establish a global operating struc-agement, and I believe this style not only reflects the emphasis

ture that spans over three regions. This kind of rapid globaliza-

the Group places on trust-based relationships but also aligns

tion has also given rise to various issues. The first issue is that

extremely well with the Group’s management policy of realizing

there is a lack of globally focused management and experience

the Asahi Group Philosophy (AGP).

with global human resource management at the Global

Under a decentralized style of management, it is important

Headquarters (GHQ). Furthermore, there is a lack of talent thatto clearly define the standards for delegating authority. It is also

can oversee global management. I believe that these are two

important to establish systems under which the GHQ can moni-

major issues that the Group needs to address. Language, his-

tor the RHQ. The GHQ must not only monitor the RHQ from a

tory, and culture differ from country to country and, as such,

quantitative perspective but also thoroughly understand what is

the management style in Japan and overseas differs as well.

occurring behind the figures when the performance of the RHQ

When it comes to global management, there is a broad range of

begins to change. While it will no doubt take a certain amount ofefforts that needs to be made, including not only establishingtime, it is my hope that the Asahi Group can transform itself into

information systems and other types of global infrastructure but

an organization where both the GHQ and RHQ can display aalso enhancing supply chain management through digital trans-

great deal of leadership through frameworks that are transparent

formation (DX).

and balanced.

Koji: Another particular point of emphasis in terms of global

Koji: I believe that the Group’s organization is not shaped like amanagement is forming a strong trust-based relationship be-

pyramid but rather like a sphere. The GHQ is at the center of

tween the GHQ and the Regional Headquarters (RHQ). Rather

that sphere, and the employees of each region are on the

小坂 達朗
社外取締役（独立役員）

44

ASAHI GROUP INTEGRATED REPORT 202045

Key Agenda 02

Section 02

Global Management

Improving the Sustainability of the Asahi Group

There is a need to further adapt to the rapid globalization of
the Group from both management and human resource perspectives.

terms of “ESG,” we need to further improve the effectiveness ofvalue creation management in a sustainable manner, it is essen-

the Board of Directors. By learning from the cutting-edge initia-

tial to secure human resources that can produce results from thetives being implemented in Europe and Oceania, I hope that we

sphere’s surface, meaning that there is always an appropriate

skill set for the Group CEO, the Nomination Committee placed

perspective of “Think Globally, Act Locally,” and to improve theare able to further enhance our initiatives toward environmental

amount of distance between the GHQ and regional employees.

particular importance on the following three aspects: leadership

human resource flexibility within the Group. To that end, we needissues, including the promotion of Asahi Carbon Zero, and deliver

Rather than a top-down approach, an essential part of the global

capabilities, the ability to draft and execute strategies based on

to enhance our human resource development activities from both

one of the best results among Japanese companies, and also

management style for the Group going forward is ensuring that

the AGP, and suitable global management attributes underpinned

a global and local perspective. At the same time, while collabo-

work toward the elimination of waste and effectively respond tothere is respect for each RHQ and a sufficient amount of discus-by global experience. In addition to these requirements, I person-

rating with the RHQ, the GHQ must enhance the level of flexibility

water risks.

sion and communication between the GHQ and RHQ based onally focused on whether or not a candidate was compassionate

for our personnel and engage in human capital allocation based

Koji: Going forward, the Board of Directors will strengthen its

the idea of a sphere-shaped organization.

and courageous. I have observed corporations in various coun-

not on the idea of putting the right person in the right place butmonitoring activities based on two perspectives. The first is using

Before making the final decision to pursue an acquisition, I

tries, and I have found that it is essential to have a compassion-

rather on finding the right place for the right person.

a multifaceted approach to further enhance the content of thepersonally held individual three-hour meetings with the personnel

ate person that is highly respected and admired by those around

who would lead each business post-acquisition. The personnel

them as CEO for achieving sustainable growth as a corporation.

that I met with were not concerned with what country their parent

Additionally, to lead the management of a massive organization, acompany was based in but rather placed emphasis on whether

CEO must be courageous enough to drive the Group in overcom-

their philosophies aligned with those of the parent company.

ing the various hardships it faces.

Taking this experience into account, we established the AGP in

Atsushi Katsuki was the person who met all of these require-plans and strategies formulated by the executive. The second is

4. Recommendations for the Next Generation of
the Group’s Management and Vision for the Boardof Directors

thoroughly monitoring business execution to ensure that it aligns
appropriately with these plans and strategies.
Moreover, as we continue to globalize, we must further enhance the transparency of our governance. It is a task for the

Koji: There is an increasing sense of uncertainty around the

GHQ to establish a system for ascertaining what kind of informa-

2019 to serve as a set of globally shared values. There was aments. With nothing to criticize in terms of his character, capabil-world due to the COVID-19 pandemic. In an age when it is diffi-

tion and thought process the management of the RHQ uses with-shared awareness with these regional personnel that, if we re-ities, and accomplishments, the Nomination Committee unani-

cult to forecast the future, it is important for management to envi-

in its decision-making and the kinds of discussions they have forspected each other, fully comprehended the AGP, and worked

mously proposed his appointment to CEO to the Board ofsion scenarios from the perspectives of risks and crises. At thereaching their decisions. Thanks to the strong trust-based rela-

toward its realization, we would no doubt produce quality work

Directors, which subsequently approved it. I have extremely highsame time, it is becoming more important for management totionships with the RHQ, we currently face no issues in terms of

together. This shared awareness was the key to establishing a

expectations for the leadership that President and CEO Katsuki

formulate strategies from a standpoint that is even more longgovernance. However, going forward we will need to establish

global platform after the M&A was completed.

will display going forward.

term. To that end, throughout the course of 2021, the Board offrameworks to ensure transparency no matter what management

Directors is carrying out an analysis of megatrends with a focus

structure we adopt. Of course, the very core of the Group’s gover-on 30 years in the future. Thinking in reverse from megatrends

nance is centered on achieving a mutual understanding and es-

30 years from now, directors in charge of business execution are

tablishing trust-based relationships with the RHQ through the

2. Transitioning to the Next Management Structure

3. Vision for Future Human Resource Strategies

Koji: There are three major reasons why I believe that 2021 rep-

Kosaka: People make a corporation what it is. I truly believe thatholding repeated discussions on our future business operations

thorough understanding and implementation of the AGP.

resents a turning point that will open up the next generation forthe most important asset to a company is its people. The funda-

and portfolio. First, we have asked the executive members to

Kosaka: I believe another issue to address as we move forward is

the Asahi Group. The first is that our current management struc-mentals of a human resource strategy are providing growth op-

establish a vision for society and the Group 10 years from now

making sure the Board of Directors functions more effectively. To

ture is appropriate for the next generation. Amid our advocacy for

portunities to outstanding human resources and enhancing en-and, based on that vision, formulate medium- to long-term strate-

realize sustainable growth for the Group and medium- to long-glocal management based on the idea of “Think Globally, Actgagement with them while having them work with a sense ofgies and specific initiatives. I also expect that these strategies

term enhancement of corporate value, the Board of Directors

Locally,” under our management structure we have gathered per-fulfillment and contribute to the growth of a company. To offer aand initiatives will have a high level of consistency with thosemust provide support for the executive while maintaining ansonnel capable of locally incorporating and implementing thesense of fulfillment, it is important to have a competitive remu-

formulated at each RHQ.

awareness of the appropriate amount of risk that needs to be

strategies we formulate from a global perspective. The second

neration system. The Asahi Group is moving forward with the

Kosaka: In regard to megatrends 30 years from now, the Board

taken. Adopting the same perspectives as those of the executive,

reason, which touches on what Mr. Kosaka pointed out just a

cultivation of global human resources internally, but it is also ex-

of Directors established a task force to conduct an analysis on

I hope we hold lively and broad discussions that focus more on

moment ago, is the urgent need to transform our business andtremely important for the Group to secure global human resourc-

these megatrends. Based on the results of this analysis, the task

the long term.

operating models through DX strategies. The third reason is thates from external organizations. This is because global humanforce examined how the internal and external environment will

we have just started to promote management in which we consid-

resources cannot simply be cultivated easily.

change 10 years in the future and discussed what steps theone of the keywords for future megatrends. Research and devel-

er what kind of megatrends there will be in 30 years from now

Also, looking back on some of the difficulties I have faced in

Also, I am always talking about the importance of innovation,

Group needs to take to prepare for such changes. In terms of theopment and technological innovation are what determines a cor-

and then think in reverse from there. Taking these three reasons

my own experience working for a global company, global humanprogress being made by the task force, the analysis of mega-

poration’s level of competitiveness. For that reason, I will closely

into account, I determined that now was an appropriate time toresources need to have a high level of English fluency and ability,

trends and the formulation of relevant initiatives were completed

observe how we invest in and allocate resources toward DX strat-

pass the baton of management to the next generation.

in addition to expert knowledge and experience. I therefore wouldin 2020, and now in 2021, we are at the stage of incorporatingegies and research and development activities. At the same time,

Kosaka: We held discussions in the Nomination Committee re-like to see the young employees of the Group strive to thoroughly

the results of the analysis into specific strategies.

in terms of diversity, I will continue to monitor the recruitment ofgarding succession plans over the course of four to five years.

improve their English language skills.

Through these discussions, we prepared a short list from a long

46

Koji: I wholeheartedly agree with Mr. Kosaka. In order to realize

Furthermore, the promotion of diversity and inclusion is

The three keywords related to future megatrends are “inno-

female and foreign personnel.

vation,” “customers,” and “ESG.” The main issues we need toLastly, I believe that it is important for outside directors andlist of names that included employees from both Japan and over-essential to further accelerating innovation. In Europe andtackle in terms of “innovation” are developing alternative ingredi-

outside Audit & Supervisory Board Members to have an affectionseas and evaluated them each year. Amid these repeated evalua-

North America, there are corporations that are adopting a KPI

ents for alcohol, creating new products, and launching new busi-

for the Asahi Group and a strong desire to support it well into thetions, we concluded that internal recruiting would sufficiently

whose goal is to achieve the same percentage of women innesses. In terms of “customers,” the health awareness of cus-

future. I believe that such an attitude will enable the Group to

meet the requirements for appointing the next Group CEO. We

managerial positions as there are in their workforce. In addition

tomers and society as a whole is changing. The way to satisfy

become even better and grow even further as we move forward.

also conducted a comparative assessment via an external humanto gender, I believe the Group needs to appoint people from

customers is changing as well, as is consumption behavior due

resource consulting firm that used the CEOs of global corpora-other countries and regions, such as Europe and Oceania, toto the integration of the real and virtual world. It is imperative thattions as a benchmark. Furthermore, when formulating the ideal

management positions.

we seize upon these changes as new opportunities. Finally, in

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Key Agenda 02

Section 02

Global Management

Improving the Sustainability of the Asahi Group

ColumnBringing Together the Insight of Each Region
to Maximize the Strengths of the Group

Global Senior Leadership
MeetingAiming to Further Strengthen Group Collaboration with a View
to Promoting Glocal* Value Creation Management*Glocal = global and local

We adopt an organizational structure that comprises the Global Headquarters (GHQ), which
specializes in the formulation of Group-wide strategies and the monitoring of management,
and the Regional Headquarters (RHQ), which works to realize business growth and maximize value in each RHQ’s area of operation. To realizing sustainable growth on a Groupwide basis under this structure, we held the Global Senior Leadership Meeting, which wasattended primarily by directors of the GHQ and RHQ.
Using the Asahi Group Philosophy (AGP) as the starting point, participants in the meeting discussed their visions for the Group 10 years in the future and shared medium- tolong-term strategies for realizing those visions. In addition, with the aim of creating value

Looking Forward to More Opportunities to Share Best Practices
from around the Globe through This Critical ForumThe Global Senior Leadership Meeting provided our leaders fromacross the globe a unique and timely opportunity to come together.
This was particularly the case at the end of such an eventful year.
A year where adaptability and resilience have never been more
­important to our continued success.
Given it was the first time that we had joined our global­colleagues, it truly highlighted the global reach of our Asahi­businesses and reminded us of the exciting growth that Asahi hasachieved. The meeting provided us all with the opportunity to­understand the dynamics of the different markets in which wecompete and, while the markets of the different RHQ are clearly
different, there are common themes and issues that we are alla­ ddressing. Sharing those experiences at the Global Senior
Leadership Meeting gives us all a competitive advantage at a local
level and aids in our implementation of Asahi Group strategies.
I was particularly impressed by the resilience of our teams
across the globe and their preparedness to deal with rapidlychanging market conditions. Despite recent challenges, each business has identified opportunities arising from adapting their businesses, including working even more closely with their partners
and customers to respond to the changing consumer needs andgrowing our amazing portfolio of brands.

Andrew Campbell
CEO, Asahi Beverages New Zealand, AHA

With Asahi Beverages Oceania having undergone a transformation last year with Carlton & United Breweries becoming part of
the Asahi Beverages family, the meeting was even more vital to
our Executive Team members’ personal understanding of the
Asahi Group, our strategies, and the work of each RHQ. It has
been important for me and our team of senior leaders back at
Asahi Beverages in Australia and New Zealand to understand theexperiences of the other RHQ and AGH.
Hopefully our experiences in Oceania will also be of value to
our AGH colleagues. Asahi Beverages’ success in significantly
growing our no, low and mid-strength beers, leading the market in
the ready-to-drink alcohol category, and continuing to diversify ourbeverage offerings may be of benefit to other RHQ.
I am looking forward to more opportunities to strengthen ourcollaboration and sharing best practices from around the globe
through this critical forum. Spending more time with my colleagues, hopefully in person, will make us and AGH stronger.

unique to the Asahi Group, the meeting served as a means to strengthen Group collaboration by having participants share and discuss management strategies at each RHQ with afocus on the themes of sustainability, diversity, employee growth, and brand and production technologies.
Report on the 2020 Global Senior Leadership Meeting (Held on November 30 and December 1, 2020)
ParticipantsAsahi Group Holdings CEO and officers
Heads of Japan Regional Headquarters and the Business Planning Department, presidents ofoperating companies, CEOs and directors of Asahi Europe and International, Asahi Holdings(Australia) Pty Ltd, and Asahi Holdings Southeast Asia Sdn. Bhd., as well as presidents ofother operating companies
Main Agenda• Efforts to implement the AGP• Future vision for the Group in 10 years• Mindset for realizing future vision• Direction of medium- to long-term strategies at each RHQ
Main Topics of Discussion• Creating value unique to the Group and using that value to promote social progress andimprove consumer benefits• Actively utilizing human resources on a Group-wide basis, promoting employee growth anddiversity and inclusion, and spurring various innovations

Absorbing New Values and Insight from Each Region
to Adopt New Ideas
At the Global Senior Leadership Meeting, we are able to once
again understand the Group CEO’s approach to global management and share the management direction and values adopted ateach RHQ. Accordingly, I felt the meeting was an extremely valuable opportunity that will help us accelerate our global expansion
going forward.
Rather than viewing everything related to our operations as
simply extensions of what we have done so far, we need to understand new values if we are to adopt new ideas. At the meeting, I
once again came to understand that many of these new values
can be found at overseas RHQ. Overseas, the approach to­medium- to long-term marketing strategies and brand cultivationdiffers from that of Japan. In addition, speaking with the regional
directors made me realize that, when it comes to increasing efficiency, we should consider how to better approach employee engagement rather than simply pursue cost efficiency.
Furthermore, the role that corporations are playing toward addressing digitalization, rising ESG awareness, and social issues

Kazuhiko Nomura
Head of Business Planning Department,
Japan Regional Headquarters

presented in the Sustainable Development Goals (SDGs) is changing significantly. In light of this, we need to have more of a focus
on global values within the communication activities we engage inas the Asahi Group in Japan. To that end, it was extremely helpful
to learn the details of the activities being promoted in each region.
Last year, we established Japan Regional Headquarters withthe aim of reinforcing our business in Japan. Even though we doour best to “think globally, act locally,” it is still often the case that
we work to resolve issues from a Japanese business perspective.
Going forward, we will work to strengthen our collaboration witheach RHQ while considering how we best can contribute to global
growth from Japan and how we can use what we learn from ourglobal operations to reinforce our domestic operations.

• Continuously promoting active dialogue between RHQ, including discussion on the prompt
rollout of the best practices of each region, a major Group strength

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Key Agenda 02

Section 02

Global Management

Improving the Sustainability of the Asahi Group

ColumnBringing Together the Insight of Each Region
to Maximize the Strengths of the Group

Global Sustainability
Committee
Becoming a Global Leader by Adopting
the Best Practices of Each Region
The Global Sustainability Committee, chaired by the CEO of Asahi Group Holdings, convened
for the first time in December 2020. The meeting was attended by the CEOs of each RHQ
and directors in charge of sustainability. These participants held discussions on the Group’s
response to climate change and shared the best practices of each region.
Through these discussions, the Global Sustainability Committee decided to raise the
Scope 1 and Scope 2 interim target of Asahi Carbon Zero, the Group’s medium- to long-termgoal for CO2 reductions as a means to combat climate change, from a 30% reduction com-

AEI Aims to Become a Leader in Sustainability in Europe

Sustainability has been a core and integral part of Asahi Group’s
vision. In consideration of this theme, we have strengthened ourambition and commitment even further by establishing the “Asahi
Group Sustainability Principles” and the “Asahi Group
Sustainability Vision” last year. Based on Our Principles under the
Asahi Group Philosophy of “contribute to realizing a sustainable
society through our business,” our focus has been to develop
strong foundations and principles of sustainability across all ourmaterial issues, followed by a seamless implementation of initiatives based on these foundations and principles on both a Groupwide and global basis.
With Asahi Group Environmental Vision 2050, we have established Asahi Carbon Zero, a medium- to long-term target inaddressing climate change, with the aim of achieving zero CO2emissions by 2050. In order to achieve this goal and aiming toaccelerate our efforts, we have renewed our 2030 targets andcommitments.
Consistent with its Asahi Carbon Zero commitment, Asahi
Europe and International (AEI) is working toward carbon neutrality

Drahomira Mandlikova
Chief Corporate Affairs Officer,
Asahi Europe and Internationalby 2050. AEI is encouraged to see that climate action is at theheart of the European Green Deal—an ambitious package of measures that incorporates 2050 climate neutrality. To this end, at AEI
we have set ambitions and goals across all areas of sustainability
to be best in class in Europe and in accordance with the European
Union’s sustainability plans.
At AEI, we recognize the importance of strong partnerships
and cooperation with other regions to achieve our goals. We plan
to collaborate on areas including innovative technologies related toagriculture, packaging, and the utilization of by-products andwaste to ensure that we are harnessing all possible synergies andbest practices.

pared with 2015 to a 50% reduction compared with 2019. To help the Group move to thestage of implementing specific actions to reach this target, the Sustainability Execution
Conference and the Sustainability Task Force are holding discussions on formulating the roadmap to achieving Asahi Carbon Zero and other important matters.
Report on the 2020 Global Sustainability Committee Meeting (Held on December 7, 2020)
ParticipantsAsahi Group Holdings CEO and director in charge of sustainability
Heads of the Strategy, Legal, Procurement, Human Resources, Corporate Communications, andSustainability departments and heads of Japan Regional Headquarters and the Business
Planning Department, CEOs and directors in charge of sustainability of Asahi Europe andInternational, Asahi Holdings (Australia) Pty Ltd, and Asahi Holdings Southeast Asia Sdn. Bhd.
Main Agenda• Revision to the 2030 CO2 emissions target with a view to realizing Asahi Carbon Zero
• Recognition of the updated Asahi Carbon Zero initiative for the Scope 1 and 2 target by 2030
to comply with the “1.5ºC Target” as promoted by the Science Based Targets (SBT) initiative• Participation in the RE100 initiative
Main Topics of Discussion• Taking on the challenge of reaching higher targets with the aim of being a global leader in the
response to climate change• Understanding that sustainability-related dialogue is important not only to improve shareholder value but also to facilitate dialogue with consumers and secure human resources• Understanding that the Group’s business is made possible by the blessings of nature and that

AHSEA is Strongly Committed to Becoming an Integral Part of
the Group’s Business and to Creating Sustainable Value
President and Representative Director, CEO* Akiyoshi Koji’s message clearly communicates Asahi’s commitment to build a sustainable society to allow better life to be inherited and experienced by
future generations through the creation of product and services
that exceed consumer expectations. As sustainability is a rapidly
evolving topic, we need to adapt and work within a flexible framework to encompass the crucial elements of sustainability into ourbusiness. With the clear directions set by the Global Sustainability
Committee, we can ensure that our plans are relevant and makean impact. These directions also enable us to place ourselves
alongside the leading sustainable companies globally. The Global
Sustainability Committee acts as a platform for various business
units to share best practices and work hand in hand to accelerate
the process for meeting the ambitious sustainability KPIs set for2030 and 2050.
Aligning the Asahi Group’s sustainability targets and resultswith the SDGs helps the Company validate its goals, with new targets set and recalibrated from time to time in order to address theglobal sustainability agenda. This also helps facilitate an

Renganathan TewagudanGroup Chief Supply Chain,Innovation & Sustainability Officer,
Asahi Holdings Southeast Asia Sdn. Bhd.

understanding of how the Company’s non-financial aspects are
driven to effect positive change in its businesses.
Although incorporating the values of sustainability and corporate responsibility in a manner that aligns with Asahi’s global targets is challenging, Asahi Holdings Southeast Asia (AHSEA)’s
leadership is highly committed to fostering businesses and sustainability values for which the Group is responsible. This commitment will be demonstrated through the pursuit of dynamic
management and governance related to climate change and human rights, aiming to achieve the Asahi Carbon Zero targets, realize the utilization of 100% recyclable plastic, promote the use ofrecycled PET, and ensure human rights compliance.
* Currently Chairman of the Board

working toward realizing a recovery in the natural environment is an essential effort in termsof ensuring business continuity

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Key Agenda 02

Section 02

Global Management

Improving the Sustainability of the Asahi GroupStrengthening Supply Chain Sustainability

Continuing to Create Value That Exceeds Customer

Expectations through “Challenge and Innovation”

Drawing on the gifts
Gifts

Research andDevelopment

Procurement

Production andLogistics

from nature to deliverMarketing and Sales

a great taste thatfrom nature

exceeds customer
Developed strengths• Fermentation and ingredient technologies such as
yeast and lactic acid bacteria• Optimization of procurement strategies tailored tothe operating environment (Operating companies)• Sensory analysis, analytical, and other fundamental
technologies• Adaptable procurement capabilities coordinatedwith the value chain (Operating companies)• Flavor design and product development based ontechnology• Enhancement of procurement functions throughGroup coordination (Holding company)• Cross-business-field accumulation and utilizationof insight• Procurement risk management capabilities(Holding company)

 hallenges to undertake from anC­operational perspective• Creation of synergies between global operatingbases, which have been expanded through M&As,
by accelerating personnel and technologicalexchanges• Acceleration of new value creation through open
innovation with outside fields

 hallenges to undertake from anC
ESG perspective• Development of technologies for reducing CO2
emissions and utilizing renewable energy• Development of containers and packaging that help
realize a sustainable society• Development of products and technologies thatoffer health value• Strengthening of quality assurance structure
through the use of the latest analytical technologies• Contribution to a recycling-based society throughrecycling and adding value to by-products

SDGs We Will Address to Accomplish These Goals

52

ASAHI GROUP INTEGRATED REPORT 2020

Developed strengths

 hallenges to undertake from anC­operational perspective• Fostering of mutually beneficial, win-win relationships with suppliers• Utilization of procurement know-how and supplier
network on a global scale

Challenges to undertake from an
ESG perspective• Reduction of CO2 emissions in line with Scope 3
from the production and transport of raw materials,
etc.
• Securement of eco-friendly materials for packaging• Ascertainment of environmental risks in provenance• Promotion of sustainable procurement based on the
Asahi Group Sustainable Procurement Principles• Widespread enforcement of the Asahi Group
Supplier Code of Conduct• Establishment and implementation of human rights
due diligence process in the supply chain

SDGs We Will Address to Accomplish These Goals

Developed strengths• The Group’s unique quality standards• The Group’s unique production management
systems (remote monitoring, etc.)• Highly efficient logistics networks• Supply–demand management techniques andinventory management techniques

 hallenges to undertake from anC­operational perspective• Pursuit of total freshness management activities• Building of global optimal production systems• Creation of synergies through the global sharing oftechnologies (product development, quality improvement, cost reduction)• Cost reduction through the rollout of global benchmarks and best practices• Standardization of manufacturing processes andexterior packaging• Expansion of modal shift and round-trip logistics• Collaboration with players from different industries/
competitors in the logistics domain• Establishment of new transportation methods that aim
to enhance transportation efficiency and save labor

Challenges to undertake from an
ESG perspective• Utilization of renewable energy in production
processes• Reduction of water consumption and effective use ofrecycled water within cleaning and sterilization
processes• Understanding and removal of water risks at production bases• Continuous recycling of by-products and waste• Establishment of human rights due diligence process
at Company-owned and outsourced factories• Promotion of modal shift and joint transportation• Reduction of environmental burden by promoting
local production for local consumption to shortentransportation distance• Examination and promotion of the use of logistics
equipment/vehicles that use eco-friendly fuel in placeof fossil fuelSDGs We Will Address to Accomplish These Goals

Developed strengths

expectations• Marketing capabilities that have cultivated top
brands in Japan, Europe, and Oceania• Development capabilities of new categories andbrands that respond to changes in the consumption
environment• Sales capabilities deeply rooted in local markets
and focused on proposing solutions to issues• Marketing network in Japan and overseas thatdrives new market cultivation

 hallenges to undertake from anC­operational perspective• Premiumization of brand portfolio in local markets• Expansion of the rollout of the five global premium
brands• Promotion of non-alcohol and low-alcohol beverage
strategies to acquire new drinking opportunities• Strengthening of co-creation capabilities withbusiness partners

Challenges to undertake from an
ESG perspective• Sales promotions for products that create healthvalue• Promotion of sustainable containers and packaging
through the use of eco-friendly materials, etc.
• Enhancement of the energy efficiency of beerdispensers and soft drink vending machines(Scope 3)• Implementation of awareness-raising activities toresolve alcohol-related issues and health issues• Collaborative efforts with local community members, etc., to address community issues

SDGs We Will Address to Accomplish These Goals

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53

Key Agenda 02

Section 02

Global Management

Maximizing the Group’s Competitiveness by

ColumnLeveraging the Power of Digital Technologies
The Asahi Group’s Digital Transformation Strategies
As a part of its revisions to the Medium-Term Management

model by promoting workstyle reforms and enhancing supply

Policy, the Asahi Group has laid out “constructing new oper-

chain management. As we proceed ahead, we will pursue theating model by accelerating DX (digital transformation)” as atransformation of our business model with the aim of creating

measure to “enhance management resources aimed at

new value. Our efforts to that end will involve the formulation

expanding a new foundation for growth,” one of the Group’sof the Group’s DX vision as well as the promotion of busi-

key medium-term issues.

nesses built around the use of data and assertive use of open

Our business environment continues to undergo majorchanges in the face of rapid advancements in digital technol-

Voice

“

Stepping up the Pace of DX
Strategies from a Variety of Aspects”

Yoshio Chikayasu
Executive Officer, in charge of DX

innovation and new digital technologies.
Over the medium to long term, we will continue to har-ogy and the global COVID-19 pandemic. In light of theseness the strengths of our globally expanded business founda-changes, we must utilize our data and digital technologies

tion, which spans across Japan, Europe, Oceania, andIn 2009, the Asahi Group began transforming its growthmethods are adopted by other RHQ. For these reasons,while creating new business processes and customer

Southeast Asia, and build a global platform predicated on our

strategy, which was previously centered on the domestic

both global and local perspectives must be taken into

­experiences, in order to continue to expand our businessadvancement of digital technology. Through such efforts, themarket, in order to tap into markets overseas and it has

account in our DX strategies.

moving forward.

Group will aim to realize sustainable growth.

been doing so ever since. Our role as an organization in

The Group’s global DX team has been established only

charge of promoting DX is to utilize digital technology torecently, comprising 10 or so members at each RHQ for acontinue to reinforce the internal IT infrastructure of thetotal of around 50 members. Our basis policy is to expand

Group, which has expanded across the globe. Our role

the scale of the team going forward by recruiting personnel

Examples of Asahi’s Operating Model Transformation Efforts: Promoting Remote Workstyles

also entails defining and systematically enforcing the digitalfrom outside the Group while cultivating personnel fromcapabilities necessary for anticipating global perspectives

within, centered on organizations belonging to the RHQ.

In response to the changing needs of customers, businessapproach of working at the office to diverse workstyles tai-and creating new value in response to the drastic changes

For example, at Japan Regional Headquarters, a programlored to the characteristics of each position. This will contrib-

taking place in our social environment and consumption

is currently underway to develop over 500 DX personnel.

since last year, the Asahi Group has been utilizing digitalute to the further development of each employee andtrends, alongside the digital revolution.

technologies to promote remote workstyles in all lines of its

enhance their work efficiency, leading to increased productiv-

First of all, the Group is working to transform its operating

partners, and the social environment that we have witnessedbusiness. We will transition from our traditional Group-wide

Case 1

ity for the Group as a whole.

Verification Tests on Remote Monitoring of Plants

With the aim of introducing a remote work system in the Production Department, the Asahi Group began verification tests on the operation of remote monitoring of its plants, which it aims to fully implement on an incremental basis from 2023. In addition, we commenced
verification tests on the use of augmented reality (AR) glasses, a headset-based communications device incorporating AR technology
used to confirm the status of production lines and provide technical assistance from remote locations. This device was utilized last year
at our Rome Plant in Italy to provide remote technical assistance for the production of Asahi Super Dry all the way from Japan. Looking
ahead, the Group will continue to advance its development of remote monitoring and technical assistance systems.

Case 2Centralizing the Group’s Sales Offices in Japan and Promoting Office Sharing Group-wide

The Asahi Group has been promoting remote workstyles primarily for office- and sales-related positions since last year. In Japan, our
55 sales offices for the Alcohol Beverages, Soft Drinks, and Food businesses will be gradually reduced to 26 as a part of our efforts toprovide employees with optimal workstyles that draw on the advantages of both working at home and the office. Moreover, 18 of the
26 sales offices will be utilized as shared office space by the employees of these three businesses to broaden communication with thehope of cultivating diversity and a sense of unity throughout the Group.

54

Improving the Sustainability of the Asahi GroupASAHI GROUP INTEGRATED REPORT 2020

Our goal for fiscal 2021 is to formulate a vision and

Our glocal (global and local) management hinges onroad map for our DX. We believe that even making simple

the optimization of operations by RHQ in Japan, Europe,changes can have tremendous impacts. For example, we

Oceania, and Southeast Asia in accordance with the

could conduct our global procurement analysis on acharacteristics of their respective markets. At the samemonthly basis rather than a six-month basis, as we do now,time, this management also draws on global and Group-

or we could manage our KPIs for supply chain manage-

wide best practices and capabilities in the pursuit ofment on a weekly basis rather than a quarterly one. Going

generating synergies. An example of this is our evaluation

forward, we will work to actively disclose information on ourand monitoring methods for capital investment projects.

ongoing efforts in DX and their results.

The key to these methods is to build work processes and

The outcomes of digital transformation are first seen

information systems for evaluation, monitoring, and verifi-

not through the implementation of new technologies or

cation that involve using the same schemes and stan-techniques but rather in the changing mindsets and work-

dardized definition of data from the budget stage of astyles of employees. This is the reason why I strive toproject all the way through to the introduction and opera-

promote DX along with Director and CHRO Keizotion while at the same time incorporating local character-

Tanimura. Age is irrelevant. There is certainly the possibil-

istics such as the importance and legality of a project by

ity of those aged 50 years and older to develop into digi-

region as well as local market conditions. Moreover, whiletally savvy talent. I truly believe that the Group’s strategy of

our RHQ actively share best practices among each other,promoting DX from a human resources point of view willcertain systems may need to be updated when suchserve as a catalyst for its continuous growth.

ASAHI GROUP INTEGRATED REPORT 202055

Section 02

Improving the Sustainability of the Asahi GroupKey Agenda

03

Global Brands

Marketing Strategy for Our Global Premium Brands—Promoting Our Premium Strategies by Expanding Our Five Global Brands

Strengthening Our Structure for Promoting the Growth of Our Five Global Brands
The Asahi Group has been taking steps to strengthen its

Urquell, and Grolsch as our global brands with the aim ofcontinue to strengthen our ability to communicate Peroni

recognition through partnerships and sponsorships withstructure for accelerating growth as a global premium beer

expanding our presence on a global scale. In addition, to

Nastro Azzurro as a global brand and raise its level of

events around the world.

manufacturer. These included centralizing the manage-

implement integrated marketing activities on a Group-wide

ment of marketing activities for our global brands withinbasis, we hold regular meetings of the Global Marketingthe Europe business in November 2020. This means forCouncil at which leading marketing personnel from eachthe first time at the Asahi Group we have all global brands

region engage in discussions. Through these discussions,

under the same management. We have reestablished

we are working to enhance our ability to execute marketing

Asahi Super Dry, Peroni Nastro Azzurro, Kozel, Pilsnerstrategies in both global and local markets.

Voice

Taking on the Challenge of Promoting Global Premium Brands— Examples of Efforts toward Accelerating Global Fame

Main Agenda of the Global Marketing Council•	Hold discussions on how to accomplish global brand growth strategies in the short, medium and long term.

We are accelerating our efforts to grow international

recording artist Robbie Williams. Finally, our brand•	Share mutual understanding of trends and opportunities in global innovation and confirm territories in which the Group ismaking efforts as well as the direction of such efforts.

fame, reach, and stature of our five global premium

renovation activities are accelerating with new packing

brands. This is evident in key initiatives such as direct-

and visual identity designs on four of the brands, Kozel•	Share examples of initiatives to promote innovation in each region and examine the Group-wide implementation of such initiatives.

ing innovation toward growth segments. We haveand Grolsch in 2020 followed by Asahi Super Dry and•	Align Marketing best practice across the Group, taking leading thinking from the different business units—Japan, Australia,
and AEI. AEI, for instance, developed the Marketing FOCUS principles with best practice tool kits.

launched non-alcohol variants of Peroni Nastro

Pilsner Urquell in 2021. The designs help the brands

Azzurro, Kozel, and Grolsch in a number of markets toimprove ROS in retail channels and support our sus-•	Identify and propose global development, including transfers and assignments, for top marketing talent to ensure the newgeneration of globally minded Marketing leaders.

tap into consumer demand for premium NABs. We

tainability initiatives. For example, Pilsner Urquell nothave developed strong partnerships to raise the level

only harmonized its global premium brand design,of brand recognition on a global level, including withwhich was previously different by region, but removed

Peroni Libera 0.0%, where we concluded an agree-

plastic and metal foil, replacing them with paper labels.

Taking on the Challenge of Promoting Global Premium Brands—Examples of Efforts toward Showcasing Peroni Nastro Azzurro

ment to become the global partner of the Aston Martin
Cognizant Formula One™ Team. Recently, we

56

The Peroni Nastro Azzurro brand became one of theannounced that the Asahi Super Dry brand is to

official partners of the 2021 Australian Open, which was

become an official partner of the 2023 Rugby World

held in February 2021. In addition, for the brand’s non-

Cup™. In addition, our core communications teamalcohol beer Peroni Libera 0.0%, we concluded an agree-

created strong, centrally developed advertising for thement to become the global partner of the Aston Martin

five brands to be shown across the globe, including a

Cognizant Formula One™ Team. Going forward, we will

new TV commercial for Pilsner Urquell featuring

ASAHI GROUP INTEGRATED REPORT 2020

Grant McKenzie
Chief Marketing Officer,
Asahi Europe and International

ASAHI GROUP INTEGRATED REPORT 202057

Special Feature

Section 02

Success Driven by Regional Strengths

Japan

Atsushi KATSUKI
Head of Japan Headquarters

Improving the Sustainability of the Asahi GroupKey Issues and Strategies at
Japan Regional Headquarters

Through these measures, we will pursue cost reductions of

Unlike years previously, a strategy based simply on salesof the resources conserved through these cost-reduction

volume is no longer feasible given the consumer needs

efforts will be reallocated to digital transformation (DX)and market trends anticipated in the years ahead. Our­strategies, research and development, and human resource

strategy of promoting high-value-added brands as­development­—areas instrumental to the ongoing growth of

declared in the Asahi Group Philosophy is imperative to

the Asahi Group. Our DX strategies will play a critical role in

the Japanese market in particular. The strategy is aimed at

not only advancing our operating model but also engaging

striking a balance between consumer demand and sales

in a variety of other activities, such as the creation of newvolume while continuing to expand revenue through thevalue by utilizing the massive amount of consumer data

repeated proposal of solutions capturing shifts in con-obtained by each business, global joint procurement, andsumer needs. In accordance with revisions to the Liquor

marketing based on data analytics. These strategies will

Tax Law in Japan, the tax rate levied on beer-type bever-also be directed toward the creation of our new businessages will be adjusted in a ­three-stage process taking placemodel. In addition, the resources will be proactively

in 2020, 2023, and 2026. The tax rate currently levied oninvested toward expediting open innovation with start-ups

beer, happoshu, and new genre beer-type beverages

outside the Asahi Group and developing a digital employee

differs. However, from October 2026 the price difference

training program.

JPY 35.0 billion or more over the next three years. A portion

between beer and new genre will likely shrink dramaticallybeer-type beverages. Recognizing the opportunities put

Sustainability Initiatives ofJapan Regional Headquarters

through the introduction of a unified tax rate for all threeforward by such shifts in our external b­ usiness environ-

Sustainability is another matter of significance we continue to

The Underlying Mission ofJapan Regional Headquarters

and efficiency of existing operations, such as the promotion

ment, we will look to concentrate investments on reener-

pursue at Japan Regional Headquarters. In Japan, we haveof remote work-styles in all of our business activities. In addi-

gizing our beer products—a core strength of the

focused on efforts to help resolve environmental and otherAs the business environment, the beer-type beverages

tion, the Group is working on value creation across its entire

Group—and strengthening new value proposals.

ESG issues to date. In April 2021, 19 plants in the Kanto andmarket in particular, continues to experience harsh condi-

organization and, to that end, is making proactive use of new

Furthermore, the consumption structure of the beer-type

Kansai regions adopted renewable energy to power theirtions, the Asahi Group recognizes that one of its urgent tasks

digital technology and data to continue to expand its existing

beverage market is undergoing a transformation charac-facilities, and we aim to follow suit for our remaining plants in

in Japan is to bolster profitability through the further

businesses and deliver new value propositions.

terized by the shift from the on-premise consumption to

Japan by 2025. Meanwhile, the Soft Drinks Business is­reinforcement of each of its businesses. For that reason, I

Japan Regional Headquarters has developed a deep

the off-premise consumption, the polarization of consumer

working to increase the ratio of eco-friendly materials used inwill directly take command of Japan Regional Headquarters

connection with consumers over the years through its Asahi

preferences for premium products and lower prices, andcontainers to 60% by 2030. Moreover, with respect to theas the Group’s CEO.

Super Dry in the Alcohol Beverages Business, MITSUYA indiversifying consumption patterns. At the Asahi Group, we

use of water, which is a vitally important raw material in many

the Soft Drinks Business, and MINTIA in the Food

will engage in initiatives that anticipate and adapt to suchof our products, a range of initiatives are being ­pursued byBusiness, Soft Drinks Business, and Food Business haveBusiness—all leading brands in their respective productchanges by investing our management resources in noteach business toward realizing the Group-wide ­targets forpursued growth irrespective of each other. However, looking

categories. We must exploit these strengths on a grand scale

only our beer brands but also in Clear Asahi and Asahi

water resources, while the area of land managed in ourahead we will be called upon to take a more comprehensive

in order to continue to grow moving forward. In April 2021,

THE RICH, two brands that have become a fixture in thecompany-owned Asahi Forest is undergoing expansion with aapproach in our efforts to realize the sustainability and

the Group launched Asahi Super Dry Nama Jokki Can, which

new genre category. Moreover, in response to the increas-view to achieving water neutrality at our breweries in Japan.

growth of our businesses, which represents the greatest

offers a restaurant-like beer experience with a foamy heading need for more convenient and health-conscious prod-

In addition to its greenhouse gas reduction and water

mission of Japan Regional Headquarters. We do not intend

that forms naturally by opening the top of the can. In addi-

ucts in the Soft Drinks Business, measures are being

conservation efforts, the Group is proceeding with an arrayon unifying every facet of these three businesses. Rather, thetion, to address the increasing consumer need for at-homeundertaken to improve our sales channels, includingof measures including the development of sustainable

research and development, procurement, production, andalcohol enjoyment spurred by the COVID-19 pandemic, we

vending machines—the role of which is currently undergo-containers and packaging, eco-friendly logistics, waste

marketing functions of each business will be shared andlaunched our home beer server, which can maintain beer at

ing changes—and to further enhance the added value of

reduction and recycling, the elimination of food loss, theutilized in a comprehensive manner with the aim of creating

below-zero temperature. In such ways, we are leveraging ourour small PET bottle products.

use of new by-products from brewing, and the application

new synergies. For example, we have assembled a produc-

deep connection with consumers—a long-cultivated strengthtion line and a distribution center for the Soft Drinks Businessof the Group—and making new value proposals with the goal

tives aimed at enhancing cost efficiency. Such initiatives

awareness of our sustainability initiatives to as many people

at Asahi Breweries’ Nagoya Brewery following the workof further strengthening our brand power. Moreover, theinclude our continuous efforts to visually monitor and priori-

as possible, we will continue to strengthen our communica-

achieved at Ibaraki Brewery, as a part of our efforts to reform

Group stepped up its product development and marketing

tize costs, which have been carried out for the past few

tion with all of our stakeholders as well as the information

the Group’s earnings structure. From a marketing perspec-

strategies emphasizing the environment and health of con-years, revisions to management resource allocation in line

we provide to them.

tive, the consumer data managed by each business has been

sumers with the introduction of unlabeled PET bottles andwith the aforementioned changes to the consumption

consolidated to speed up the pace of digital marketing.

Dear-Natura dietary supplements in the Soft Drinks Business­structure, establishment of optimal production andEfforts have also been made to enhance the sophistication

and Food Business, respectively.

­distribution systems, and engagement in joint procurement.

Until now, the Asahi Group’s Alcohol Beverages

58

ASAHI GROUP INTEGRATED REPORT 2020

Meanwhile, the Group will continue to implement initia-

of microbial-use technologies. With the desire to spread

ASAHI GROUP INTEGRATED REPORT 202059

Special Feature

Section 02

Success Driven by Regional Strengths

EuropeImproving the Sustainability of the Asahi Groupdemand and the choice to drink better, not more. The

trial-and-error approach while ascertaining and examining

trend toward consuming premium brands is stable now

how the impact of internet-based sales differs from that ofand will remain over the medium to long term. Even if theconventional sales channels.

structure of consumption changes temporarily, we possessrobust brands in each market that span various catego-

ESG Initiatives at AEI

ries, and this has allowed us to build a structure in which

Among all the initiatives we have adopted under our man-our businesses can complement one another. With ouragement strategies, initiatives toward ESG are particularly

strong brand foundation, I am confident that, even if there

important. At AEI, we have established Legacy 2030, an

is a slump in consumer demand, we will be able to once

independent long-term strategy with a view to 2030. Underagain spur demand through proposals for health-based

this strategy, we have set targets for important sustainability-

value and other kinds of added value.

related themes, such as carbon neutrality, responsible drink-

Our growth strategy emphasizes achieving stable

Paolo Lanzarotti
CEO,
Asahi Europe and International

top-line growth centered on premiumization and strength-

procurement, water, and containers and packaging), andening cost efficiency through rigorous management of thediversity and inclusion. While the Asahi Groupbottom line. AEI’s premium strategy focuses on not only

Environmental Vision focuses on 2050, I believe it is also

further enhancing our premium brands but also reinforc-

important to establish slightly more near-term goals in ordering our lineup of non-alcohol beverages, in consideration

to ensure that each employee views accomplishing theof how the heightened awareness of health and well-being

targets we have set as their own personal issue. For exam-around the world has accelerated innovation in the beerple, in terms of becoming carbon neutral, we aim to elimi-

category. Currently, non-alcohol beverages account fornate Scope 1 and Scope 2 CO2 emissions and reduce Scoperoughly 6% of our total sales volume at AEI. However, we

3 emissions by 30% by 2030. In addition, by 2025 we plan

Strengths of AEI

began to spread, all AEI employees took immediate action to

aim to raise this percentage to 20% by 2030. An example

to reduce CO2 emissions at our breweries by 50%. I justAsahi Europe and International (AEI) is the custodian of

respond to a wide range of risks. Looking back at February

to accomplish this is the recently announced partnership

mentioned our target of boosting the sales volume ratio ofmany brands that have been commercialized for hundreds

and March 2020, lockdowns commenced in Italy, and weof our non-alcohol beer Peroni Libera 0.0% with the

non-alcohol beverages to 20% by 2030, and this targetof years and loved by consumers for generations. With thequickly agreed to prioritize the health and safety of ourAston Martin Cognizant Formula One™ Team. Launchedreflects part of our specific approach to realizing our vision

reorganization efforts we carried out in November 2020,

employees and then made every effort we could to ensure

under the global premium brand Peroni Nastro Azzurro infor responsible drinking. I believe we need to play a leading

we transitioned to a structure under which the marketingthat our business operations would continue. In response to2019, Peroni Libera 0.0% is now sold in a number ofrole in resolving alcohol-related issues, and we are therefore

development and management of the five global premium

this, our employees proactively collaborated with each other,countries in Europe, including the United Kingdom.

always prepared to take the lead when it comes to efforts

brands Asahi Super Dry, Peroni Nastro Azzurro, Kozel,

coming up with various insights on how to overcome theThrough this partnership, we have the opportunity to not

toward responsible drinking. For diversity and inclusion, we

Pilsner Urquell, and Grolsch are centralized within AEI.

hardships we faced. Thanks to this collaboration, we were

only expand the global sales of Peroni Libera 0.0% but

aim to attain a 50:50 ratio of male and female in manage-

Through this transition, we now are responsible for mar-able to concentrate our efforts on growth opportunities, suchalso make significant progress toward our goal of ­achieving

ment positions by 2030. The Asahi Group must enhance its

kets in over 90 countries and regions around the world,

as facilitating communication with a view to enhancing branda sales volume ratio of 20% for non-alcohol beverages.

diversity to an even greater degree in order to achieve further growth. Legacy 2030 represents ambitious goals thatprimarily in Europe but also covering countries in Asia,

value and creating medium- to long-term plans for sustain-

The trend of premiumization is accelerating in otherNorth America, and South America. Going forward, rather

ability. Our ability to work as a team in this manner repre-

categories as well. In addition, consumer behavior andthan promoting expansion efforts specific to each brand,

sents one of AEI’s greatest strengths.

experiences are evolving due to the progression of digita-

as we have done thus far, we will strive to expand these

are closely linked to the sustainable growth of AEI.
Speaking of our people, at AEI, we promote two major

lization. These trends will likely make our relationshipinitiatives. The first is to provide growth opportunities toGrowth Strategies and Challenges to Overcome
at AEI

with consumers more personal and more immediate

employees by ensuring mobility on a global basis. The

greatly enhance our ability to access each market.

going forward. Also, in terms of sales channels, we cannot

second is offering opportunities for our employees to learn.

Accordingly, I believe that the reorganization efforts weEurope is still in the middle of a lockdown (as of March 31,

ignore the presence of e-commerce. At the moment, theFor example, we send our young employees to the global

made represent a significant turning point in our global

2021), and it is difficult to forecast when bars and restau-sale of alcohol beverages via e-commerce is prohibited inyouth summit One Young World Summit. At this summit, ourbrand strategy. In addition, we take pride in the fact thatrants will reopen and to what extent our sales levels willcertain countries. Even though the sale is small, it isyoung employees receive inspiration through discussions

we have achieved a level of profitability that exceeds therecover. Beer is a category of alcohol beverages that is

growing, and it is up to the consumer to decide the way

and networking activities with leaders of the next generation

average Group-wide core operating profit margin. I there-

deeply rooted in people’s lifestyles. To that end, I firmly

they make their purchase. Therefore focusing on e-com-from around the world.

fore feel we have the responsibility to lead the Group’s key

believe that there will once again be opportunities formerce is an absolute right thing to do as the channel ispriority of “strengthening earnings power.”

people to enjoy beer at bars and restaurants. Also, as the

opening up new opportunities. While many hurdles are

outlook for the economic environment is unclear, over the

involved in establishing new sales channels, we are at alast few years we have seen a flat-to-declining trend instage where we will work to accumulate insight through afive brands as a portfolio, which will in turn allow us to

Meanwhile, Europe is one region that has been significantly impacted by the spread of COVID-19. As the virus

60

ing, the use of sustainable resources (raw material

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202061

Special Feature

Section 02

Success Driven by Regional Strengths

Oceania

Improving the Sustainability of the Asahi Groupworking toward the same goal. By adhering to this basic

diversity and inclusion. One of the assessment criteria wemanagement approach, we have delivered on our results

adopted for the success of the integration with the CUB

each year, and we will remain committed to producing solid

business was the achievement of gender balance, and as aresults as we go forward.

result of doing so, we have further enhanced the level ofdiversity across our entire organization.

Growth Strategies and Challenges to Overcomein the Oceania Business

Robert Iervasi
Group CEO,Asahi Holdings (Australia) Pty Ltd

62

Every country experienced difficulty in 2020 due to theInstilling the Asahi Group Philosophy andRealizing Sustainability

unprecedented crisis of the COVID-19 pandemic, and there

Based on the Asahi Group Sustainability Vision, AHA has

are many reasons why we are continuing to struggle.

endorsed clear and ambitious sustainability goals focusing onAustralia and New Zealand have done particularly well withthe four themes of climate change, containers and packag-

their response to the pandemic, and we are starting to see

ing, raw materials, and water. A new initiative we launched in

the economy return to some semblance of normalcy. The

2021 is a sustainability think tank where we ask employees

pandemic has led to an increase in at-home consumption,

to participate in a program to come up with sustainability-

and this has provided us with an opportunity to leverage ourrelated ideas. For our initiatives toward containers and pack-strengths. In particular, consumption has been concentrated

aging, we established a joint venture with a local packaging

on brands that consumers have been sentimentally attachedmanufacturer and a local trash collection organization toto for many years. Due in part to this trend, the alcohol andbuild Australia’s largest plastic recycling facility with the aim

non-alcohol businesses have been able to leverage theirof accelerating efforts toward 100% recycled PET bottles,

strengths centered on core brands, which have continuously

which to date have been used in a certain number of ourbeen reinforced with an emphasis on brand value, thereby

beverage brands. This facility will recycle an amount of raw

recording solid sales.

plastic material each year equivalent to around 1 billion PETStrengths of the Australia Businessportfolio was strengthened even further with the integration of

Asahi Holdings (Australia) Pty Ltd (AHA) oversees the Asahi

the CUB business. By utilizing the sales channels of the CUBGroup’s Oceania Business. AHA possesses three businessbusiness, we will further enhance this core strength. Looking

slightly from an emerging market, changes in consumer­recycled PET and food packaging. We are also on track todivisions: the Australian alcohol beverage business, whichat our competitors, they either possess strengths in alcohol

preferences in a mature market can present both risks andhave 100% of our electricity coming from renewable power

combines AHA’s existing businesses with the CUB businessbeverages or non-alcohol beverages, which makes AHA the

opportunities. For example, one major challenge we mustsources in 2025. During fiscal 2021, we intend to announce

that the Group acquired in 2020; the Australian non-alcohol

only company in the region that has a portfolio of strong

tackle is deciding on the message we want to send with ourseveral initiatives geared toward achieving that goal.

beverage business centering on Schweppes Holdings Pty

brands in both categories. Our third core strength is our scale.

brands to address consumers’ heightened awareness toward

Furthermore, we have recently overhauled our supply chainLtd., which was the first acquisition the Group made inWith the integration of the CUB business and our existing

health and the environment, including in terms of the sugar

to source barley direct from Australian farmers. In accor-

Australia back in 2009; and the New Zealand beveragebusinesses, we now boast the largest business scale andcontent of soft drinks, responsible alcohol consumption, anddance with our strict quality program, we are monitoring thebusiness, which comprises both alcohol and non-alcohol

network in Oceania, and utilizing this significant competitive

plastic containers. As a multi-beverage provider, our deci-barley grown by the farmers we source from and are also

businesses. We are also responsible for corporate functions

advantage allows us to implement a broad range of strategies.

sion-making centers on bringing enjoyment to customers,

tracking water use and other agricultural inputs to ensurethat help each business division achieve its targets. Going

Going forward, we will continue to proactively invest in

responding flexibly to change, and leveraging our market-

that we are supporting sustainability targets.

forward, we will strive to accelerate the overall growth of the

our human resources, as I believe that enhancing employee

leading scale with speed. Furthermore, guided by our

Oceania business while evolving ourselves as a multi-bever-engagement and motivation will enable us to deliver even­premiumization strategy, we are working to accelerate costbusiness, it has been interesting to see two different cultures

age platform in the region.

greater results. Meanwhile, our management style empha-

synergies and create top-line synergies in such ways as

come together. There is some commonality in these twoAustralia and New Zealand are mature markets. Differing

bottles and will produce more than 20,000 tons of new

With the integration of the CUB business and our existing

In terms of AHA’s core strengths, our No. 1 strength issizes a thirst and drive for results, so while we will continue

drawing on the integration of the CUB business to enhance

cultures but also some differences. Of course, having

our people. We invest a significant amount of time and costs

to greatly value our employees, we will not waver on thisthe efficiency of our procurement, production, and logistics­differences is certainly not a bad thing, because from thesein human resource cultivation and engagement. Our

point. Under our medium-term plan, which we adopt on our

networks. At the same time, we are pairing these efforts withdifferences we can make various realizations. For thatengagement score within Oceania is over 80%, and 90% of

own initiative, not only have we established sales strategies

initiatives to enhance our operations through digital transfor-

reason, we view this integration as an extremely important

our workforce have expressed their optimism toward theirthat focus on brands and marketing, we have also estab-mation. By doing so, we aim to realize profit growth over theopportunity for us to further enhance our corporate culture.

future as AHA employees. The deep trust-based relation-

lished strategies, initiatives, and KPIs from the perspectives

medium to long term.

Going forward, we will work to incorporate the best aspects ofships we have with our employees are an essential part ofof our values, vision, supply chain, and human resources.

Additionally, in terms of human resource cultivation, theeach culture as we further promote our efforts to instill the

securing outstanding human resources. When I look for

Through the execution of the medium-term plan, we aim tosource of our competitive advantage, we value the careers of

AGP across our organization. In this way, we will create astaff, in addition to having the right skill set, I place empha-

help realize the Asahi Group Philosophy (AGP). We strive to

our employees and do everything we can to support theircorporate culture that better aligns with the direction of thesis on hiring people who can truly be team players. I also

reflect our management strategies, which are anchored bycareer development. We have partnered with LinkedIn, astrategies we aim to achieve.

seek to hire individuals who are passionate about our brands

our future vision, in our daily decision-making, and this issolutions provider for human resource development, to com-and AHA as a whole. The second core strength of AHA is­precisely what enables us to align our organization undermence online learning programs that help employees further

our portfolio of iconic brands in the Oceania region. This

the same approach and ensure that all our employees areenhance their knowledge and expertise. We also embrace

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202063Special Feature

Section 02

Success Driven by Regional Strengths

Southeast Asia

Erwin Selvarajah
CEO,
Asahi Holdings Southeast Asia Sdn. Bhd.

the Southeast Asia Business relies heavily on raw ingredi-

Instilling the Asahi Group Philosophy andRealizing Sustainability

ents such as sugar and raw milk, and the impact of theirAt AHSEA, the elements of the AGP are reflected in all

market volatility on business performance can be consider-aspects of our everyday work life, including all forms of com-

able. With Southeast Asia’s middle-income class projectedmunication, such as the CEO message and frontline

to double from its existing 50 million people over the next

resources, with the aim of instilling such values in all of our

10 years, we will look to draw on our expertise in premium

employees as well as in our daily interactions both internallybrands to continue to create and introduce high-value-

and with external parties. New employees joining the com-added products that emphasize health and wellness with apany must also take part in a program dedicated to raising

view to overcoming this challenge. Amid the constantly

awareness of the AGP. Accordingly, the AGP is inherent atdiversifying needs of consumers, the expansion of ourevery stage of our employees’ learning process. The AGP

product portfolio and the reinforcement of premiumization

serves as a foundation in all of our business activities, includ-

will serve as key strategies.

ing our management strategies, our desire for innovation incomponents remain similar across the globe. Furthermore,

The changes in consumer behavior influenced by the

product development, and our relationships with consumers,

COVID-19 pandemic have sparked a dramatic increase inbusiness partners, and suppliers. In order to ensure that thehousehold consumption. People are spending more time atelements of the AGP are reflected in our products and theirhome, and this is expected to spur demand not only for

quality, we conduct surveys each year with consumers andtakeout food but also for such products as coffee and milk

our employees.

powder. With this in mind, AHSEA has already begun the

AHSEA constantly strives to foster a culture thatprocess of launching premium products by leveraging tech-embraces diversity and inclusion, evidenced by our diverse

nology that enables products developed by the dairy prod-

mix of employees and the fact that the majority of ourStrengths of the Southeast Asia Businessexpansive business network with Malaysia at the core. In

ucts business, which remain fresh as they are delivered to

employees and over one-third of our management are

The operations of Asahi Holdings Southeast Asia (AHSEA)

addition, we have boosted our vending machine network in

the hands of consumers.

women. In addition, candidates for management positions

are centered on its soft drinks and dairy products busi-

Malaysia and Singapore into the industry’s largest network

nesses, which the Asahi Group acquired in 2011 and 2014,

through the acquisition of Advend Systems in January 2020,

machine business in all of Malaysia and Singapore. As we

Development Program, and AHSEA also has in place its own

respectively. Post-establishment of Southeast Asia Regional

springboarding to a vending machine footprint of approxi-

move forward, in addition to placing greater emphasis on theuniquely designed employee development programs and a

Headquarters in 2019, AHSEA succeeded in developing amately 10,000 machines across both countries. From an

expanding e-commerce market, we will look to boost sales at

highly competitive remuneration system. I take pride in therobust structure for business expansion throughout

R&D perspective, we’ve established a regional R&D andvending machines by partnering with convenience stores tofact that with these various programs designed to not only

Southeast Asia. Our main goal is to continue to grow ourinnovation hub with strong technical expertise and know-how

drive further growth. There are currently 3,500 and 600

cultivate but also retain our employees, we have an extraordi-

core businesses and eventually become an innovator of softin order to continuously innovate beyond consumers’ expec-

Japanese convenience stores in Malaysia and Singapore,nary team here at AHSEA. Meanwhile, we are also making

drinks and dairy products in this region. We have continued

tations and for all consumption occasions. We not only

respectively. However, as we currently operate over 10,000

great strides with our management succession plan. With

to grow from strength to strength in all of our markets

develop soft drinks and dairy products but are also conduct-

vending machines in these countries, we will draw on thisrespect to employee mobility, we have gradually begun trans-

despite the impact of the COVID-19 pandemic. From a

ing research to develop products for the global halal market.

strength with our sights set on innovating the retail business.

ferring personnel within Southeast Asia, one of whom

regional perspective, Malaysia accounts for around 65% ofWith this R&D hub and the leveraging of our halal-certified

Meanwhile, we are currently striving to reinforce oursales in Southeast Asia while the remaining 35% is covered

plants in Malaysia and Indonesia, we are poised to be Asahi’s

by the rest of the region. This is despite the fact that

global halal hub. On the marketing front, our employees are

Malaysia represents a mere 6% of Southeast Asia’s total

among the best in the industry, as exemplified by the best-in-

population of around 650 million people. In other words,

class differentiated marketing campaigns and record-break-arguably, Southeast Asia as a whole boasts tremendous

ing activations.

potential for further growth in the years ahead. Furthermore,

I stated earlier that AHSEA boasts the largest vending

can participate in the Asahi Group’s Global Leadership

includes the current head of the Indonesia business who wascost competitiveness by shifting toward a variable cost

formerly a member of the Malaysia business. In a nutshell,

model, allowing for us to be more agile and dynamic—apeople are our single most valuable asset, and we place great

critical need in the current VUCA world. This includes thecontracting of external services for logistics functions andthe outsourcing of human resources as well as accounting

importance on investing in our personnel and striving to bringmore fun to life for every one of our employees.
While our awareness of ESG in Southeast Asia still has
room for improvement, I believe that in the current age of theand other corporate functions in order to drive synergies

world. For that reason, we can expect significant growth in

Growth Strategies and Challenges to Overcome in
the Southeast Asia Businessboth the level of affluence, consumption and overall GDP of

The greatest challenge facing the Southeast Asia Businessthe promotion of digital transformation, one of our key

the region over the next 10 years. By leveraging our knowl-at the moment is price range. As a bottler for U.S. beverage

strategies, and the accelerated pace of decision-making

edly be reflected in the consumer behavior of this region inedge and presence in Malaysia and Indonesia, we also havecompany PepsiCo, AHSEA markets the Pepsi brand inwill facilitate timely responses to changes in consumer

the near future. With the strength of our sustainability strategy

high hopes for business opportunities with the Islamic

Malaysia and Singapore. However, despite the same brand,behavior and opportunities for sales growth.

at Southeast Asia Regional Headquarters, which was formu-

community, which is said to represent 2 billion of the global

the selling price in Southeast Asia is low compared withlated in line with the Asahi Group Sustainability Principles, wepopulation, as Asahi’s halal hub.

Japan, Australia, Europe, or the U.S. A low selling pricewill seek to attract greater attention from consumers toward

translates into comparatively lower profits as cost

our ESG and sustainability efforts.

the average age in Southeast Asia is 30, the youngest in the

Accordingly, AHSEA’s greatest strength lies in its

64

Improving the Sustainability of the Asahi GroupASAHI GROUP INTEGRATED REPORT 2020and sustain good governance across AHSEA. Furthermore,internet and social media coupled with the low average age ofthe region, such awareness will intensify quickly over a significantly short period. Both ESG and sustainability will undoubt-

ASAHI GROUP INTEGRATED REPORT 202065Section 03

Progress in Financial and Business Strategies

Message from the CFO

I will provide thorough support toalso include the generation of integration synergies in thethese obligations during fiscal 2020 through the accumula-

Oceania Business and the promotion of earnings structuretion of profits, the increase in cash-­generating capabilities,

reforms focused on improving the productivity of each busi-

and the issuance of common stock. During fiscal 2021, weness. In the event that restrictions are extended to curb the

expect to reduce debt by over JPY 150 billion by further

spread of COVID-19 and growth in sales volumes becomesincreasing our cash-generating capabilities, which in turn will

stagnant, we will implement cost-­saving measures to an even

improve net debt/EBITDA to around 4.5 times.

greater degree to limit the risk of downward pressure on reve-

Also, for shareholder returns, we were able to maintaindividend increases in fiscal 2020 even as our performance

management so that the Asahi Group cannue to the greatest extent possible.

promptly return on a course for growth andences in the progress of recovery for each business, not only

on the Medium-Term Management Policy, we will aim todue to the fact that the impact from the COVID-19 pandemic

achieve a dividend payout ratio of 40% in the future whiletackle the issues facing management.

differs by business and by region but also because the growthreferencing the dividend payout levels of other global compa-

trends in each business up until fiscal 2019 were different as

nies. However, for the time being, we will strive to maintain

Ryoichi Kitagawa

well. With that said, by fiscal 2022 we aim to have Group-wide

stable dividend increases with around a 35% payout ratio as

profits recover to the level attained in fiscal 2019 (including

we prioritize the allocation of cash for reducing debt.

Managing Director, Managing Executive Officerof the Company, CFO

In fiscal 2022, we can expect that there will be differ-significantly worsened due to the COVID-19 pandemic. Based

yearly estimated values of the CUB business), before the
COVID-19 pandemic began.

Reinvesting Funds Saved through Cost-Saving
Measures with a Focus on Future Growth

Financial Strategies for Enhancing Our Assets andAsset Efficiency

In accordance with the Medium-Term Management Policy,
which we revised in February 2021, over the next three years

We updated our financial and cash flow guidelines based on a

we aim to generate over JPY 50 billion from the impact ofvariety of factors, including the acquisition of the CUB

cost-efficiency efforts, which would be the largest amount we­business, the identification and sale of nonperforming assets,

have ever generated through such efforts. While some of thisand the increase in our cash-generating capabilities throughamount will be put toward realizing a recovery in our business

we were able to exceed the revised targets that we had forthe establishment of a global operating structure spanning

performance, we will also use this cash to reinvest in the key

We projected that fiscal 2020 would be a year in which weeach business. Moreover, as for the balance sheet, we took

three regions. In these updates, we upwardly revised thepriorities of “enhancing management resources” andwould achieve further earnings growth centered on thesteps to secure funding liquidity through such means as

average yearly target level of free cash flow from 2021 on“­reinforcing ESG initiatives,” which are essential to achieving

temporarily increasing the amount of cash on hand to twice its

from JPY 170.0 billion to JPY 200.0 billion. By prioritizing thesustainable growth. Specifically, in Japan, we expect to create

Oceania businesses would make significant earnings contri-

normal level. Additionally, we worked to reduce working capi-­allocation of the cash we generate toward reducing debt, thisover JPY 35 billion from the impact of cost-efficiency

butions. However, despite the positive impact of incorporating

tal and sell off non-operating assets. By promoting a wide

revised level of free cash flow will give us room to make­measures, including allocating resources in a manner that

the CUB business in Australia into the scope of consolidation

range of measures in this manner, I believe the Group was

growth investments in the future. Net debt/EBITDA rose to the

responds to the structural changes occurring in the sales

from June 2020, the negative impact from the COVID-19

able to demonstrate its ability to generate cash as well as its

level of around 6 times at the end of fiscal 2020, and we willchannels of the Alcohol Beverages Business and Soft Drinks

pandemic was significant, resulting in a year-on-year decrease

resilience and flexibility even amid the extremely challenging

strive to improve this level to around three times or less by

Business as well as reviewing the functions of the operationalin core operating profit on a Group-wide basis of 21.2%, toconditions of a rapidly fluctuating business environment.

2024, based on net debt after the deduction of 50% ofbases for our three domestic businesses. Overseas, we plan to­outstanding subordinated bonds. For outstanding financial

generate over JPY 15 billion by pursuing cost synergies

confidence, restrictions were placed on going to work andBusiness Targets and Forecasts for Fiscal 2021

obligations, which increased due to the fund-raising forthrough such means as consolidating logistics bases ingoing outside, and this dealt a blow to our performance as

In fiscal 2021, we expect to achieve a 13.2% increase inacquisitions, we were able to realize a significant decline in

Oceania and by enhancing the overall productivity of theeach business was greatly affected in terms of the areas

revenue, to JPY 2,296.0 billion, and a 29.6% increase in core

where they excel. For example, sales of the on-premise

operating profit, to JPY 217.5 billion. While it is difficult to­channel centered on beer declined significantly in the Alcohol

forecast a scenario in which the COVID-19 pandemic fully

Beverages Business, operating rates of the vending machines

resolves itself, if the vaccination efforts currently underway indecreased in the Soft Drinks Business, and sales of the main-

our areas of operation expand further, we can envision astay brand MINTIA were down in the Food Business. Whenscenario in which restrictions gradually ease and consumption

COVID-19 first began to spread, our No. 1 priority was torealizes a certain level of recovery. Over the course of 2021,

Overview of Fiscal 2020 Results

Overseas Business, with expectations that the Europe and

JPY 167.8 billion. In addition to a global decline in consumer

ensure the safety of our employees and the continuity of ourwe aim to pursue cost-efficiency efforts that will have an

business activities and plant operations. At the same time, we

impact of roughly JPY 16.0 billion on a Group-wide basis.

reviewed our marketing strategies and resource allocation and

These efforts will include realizing a recovery in sales volumes

accelerated reforms to our earnings structure to respond tofor core brands in each business centered on added-value

the rapid change in demand. As a result of such measures,proposals and working to improve our product mix. They will

Guidelines from 2021 Onward
Guidelines from 2021 Onward

Cash Flow• FCF*: Above JPY 200 billion (annual average)

Investment for Growth /Debt Reduction• Prioritize the allocation of FCF to the reduction of debt and work to enhance capacity
for growth investments• Aim for net debt/EBITDA of around 3 times or less by 2024 (calculated after deducting 50%of ­outstanding subordinated bonds from net debt)

Shareholder Returns• Stable dividend increases with the aim of achieving a dividend payout ratio of 35%(aiming for a ­dividend payout ratio of 40% in the future)* Free cash flow = Cash flows from operating activities – Cash used in investing activities (excluding M&A and other business restructuring)66

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202067Section 03

Progress in Financial and Business Strategies

Message from the CFO

Europe Business. Efforts to create synergies in the Oceania

funds and are realizing a reduction of fund surpluses within

including risk management, based on a scenario in which a

Business are proceeding as planned, and by fiscal 2024 wethe Group. Going forward, we will work to further reduce fundrisk occurs that is outside of our assumptions. At the sameof these meetings in an effort to remain in even closer com-

expect to achieve revenue of around JPY 5.0 billion and gen-surpluses and improve capital efficiency. We will also reducetime, we need to improve our flexibility and resilience towardmunication with these investors.

erate over JPY 10.0 billion from the impact of cost synergies.

risks by reorganizing our governance policies. While produc-change through rigorous business management and optimal

In addition, we will aim to further reduce working capitaling these results, we will work to further strengthen our cash-

cash allocation. We also need to strengthen our ability to(WACC) for its cost of capital metric. However, as the D/E ratio

generating capabilities.

realize a recovery when such risk occurs. I believe that, above

will remain at a high level for the time being, our WACC is also

all else, these efforts are the most important.

expected to remain at its current level. We intend to use athrough such efforts as optimizing our global supply chain
and reducing inventories utilizing DX. In terms of non-­

Furthermore, as part of our efforts toward “strengthening

The Asahi Group uses weighted average cost of capital

operating assets, in fiscal 2020 we sold off land that belonged

earnings power,” a key priority laid out in the Medium-Term

Additionally, we recognize that we are faced with evencertain amount of leverage to improve investment efficiency,

to the Alcohol Beverages Business as well as the former site

Management Policy, we have been working to enhance ourmore risks due to external factors, such as exchange rate andbut we are not aiming to maintain a high level of financial debt

of a distribution center for the Soft Drinks Business and theassets and asset efficiency through the rigorous monitoring ofinterest rate fluctuations, following our rapid overseas busi-

just to keep our WACC at a low level. In a similar manner, ourreduction of cross-shareholdings along with the sale of the

return on invested capital (ROIC). Unfortunately, Group-wide

ness expansion and increase in financial obligations. To thatpriorities would be backwards if we were to adopt a strategy

former plant of the Soft Drinks Business in fiscal 2021.

ROIC worsened significantly in fiscal 2020, as the decrease inend, we are working to reduce these kinds of risks throughwhere we refrain from investing in emerging markets and only

Turning to our reinvestment strategies, for “enhancing

core operating profit due to the COVID-19 pandemic and theexchange contracts and fixed interest rates. However, as we

invest in mature markets for the sake of curtailing volatility. I

management resources,” we will allocate funds to promoting

increase in invested capital to acquire the CUB business offset

are unable to curtail the risk of fluctuations in our businessbelieve it is important to realize continuous improvement in

R&D, human resource development, and DX. For “reinforcing

efforts to reduce working capital and sell off non-operating

performance when we convert the financial results of overseas

corporate value by lowering WACC through constructive dia-

ESG initiatives,” we will invest in efforts geared toward realiz-assets. However, in 2021 we expect to see a gradual recovery

subsidiaries denominated in foreign currency to yen, we arelogue with investors while achieving ROIC that exceeds WACC.

ing Asahi Group Environmental Vision 2050 and sustainable

in ROIC, supported by not only a recovery in the profitability ofworking to ensure appropriate and smooth communication

communities. We will also actively allocate funds toward

each business and an increase in core operating profit follow-

with stakeholders through such means as disclosing our

Future Vision for the Finance Department

enhancing our corporate governance.

ing the full-year contributions from the incorporation of theperformance indicators based on constant foreign exchange

Our finance department comprises a group of specialists with

CUB business into the scope of consolidation but also by

rates. Moreover, as we continue to expand our businesses

an extremely high level of knowledge and expertise and serves

Approach to Financial Management

ongoing efforts to sell off non-operating assets. By stepping up

overseas, we are now subject to the tax systems of not only

as the platform that underpins the Group’s management andUnder our global operating structure spanning three regions,

efforts to enhance capital efficiency underpinned by revenue

Japan but also of each respective country of operation.

business activities. As speed is even more important than ever

we are taking steps to establish fund management systems,

growth in each business, we aim to continue to improve our

Accordingly, we are unable to deny the risk of a significant

when it comes to management, we need to continue to be an

involving the visualization of cash flows and cash pooling, so

ROIC and increase our cash-generating capabilities.

and unexpected increase in our tax cost burden.

agile department that can promptly provide not only financial

While we cannot completely eliminate these kinds of risks,that we can leverage the cash we generate in each region on

Meanwhile, to date we have made risk assumptions while

a global basis. We aim to complete the establishment of suchmapping out various scenarios that could occur. However, thewe will update our Group ERM on a regular basis to moresound advice to management. Moreover, our business foun-a system within the next one to two years. We have already set

COVID-19 pandemic has caused us to completely change ourkeenly assess the level of impact when various risks material-

dation continues to expand across the globe. In light of this,up the necessary systems for the centralized management ofapproach to risk. We now need to enhance our ERM,

ize as well as the order of priority and importance of response

the finance department must become an organization thatmeasures that we must enact now. At the same time, based

has an even greater awareness of diversity. To that end, it ison the Asahi Group Risk Appetite Statement, we have clarified

my hope that the finance department can turn out individuals

risks we should take and other risks we should avoid. All of

who can provide in their own words a behind-the-scenes

these efforts will help us achieve the targets of the Medium-

explanation of the changes in financial figures, no matter theTerm Management Policy and improve our corporate value.

location where they work.

Dialogue with Capital Markets

the COVID-19 pandemic remains profound. However, I have a

Dialogue with capital markets is an important initiative forpositive outlook for fiscal 2021 as a year in which the Asahi

gaining the confidence of shareholders regarding returns thatGroup will make a significant step toward the next stage forexceed shareholder equity costs. In addition to providing

growth. Going forward, I will provide thorough support to

explanations from our side, we also engage repeatedly inmanagement so that the Group can promptly return on aconstructive dialogue with investors, from which we gain

course for growth and tackle the issues facing management

advice and various recommendations. Incorporating what wethat I have explained in this message.

Efficiency Improvement Plan in Profit Structure Reforms
2021–2023
Three-year forecast

Initiatives

Alcohol Beverages• Improve efficiency of advertisement and sales promotion expenses and production
efficiency by concentrating on core brands and new value products• Optimize production and logistics systems to respond to shifts in demand between
containers and categories

Soft Drinks• Optimize inventory levels by improving SCM efficiency, such as through more ­sophisticateddemand forecasting• Improve total cost of goods sold and logistics costs by promoting in-house production

Over JPY 35 billion• Improve productivity by automating manufacturing equipment and improving­manufacturing processes• Reduce variable costs by improving the accuracy of supply and demand forecasts andoptimizing inventory levels and the number of SKUs

Food

Overseas

Over JPY 15 billion

Consolidated total

Over JPY 50 billion• Reduce fixed manufacturing costs using automated warehouses and increase e­ fficiency
through organizational integration (Europe)• Create synergies through business integration, including integration of logistics bases andreduction of procurement costs (Oceania)

Targeting the efficiency of improving earnings structure (total for 2021–2023): Over JPY 50 billion for reallocation toward businessperformance recovery and investments in the enhancement of management resources and reinforcing of ESG initiatives

68

However, we will take steps such as increasing the frequency

ASAHI GROUP INTEGRATED REPORT 2020

information but also other valuable information, including

I became the CFO in an environment where the impact oflearn through these dialogues into our management is an
essential part of enhancing our corporate value over the
medium to long term. Going forward, we will strive to enhanceinvestors’ understanding of the Asahi Group by not only disclosing information on our management policies and financial
strategies but also by engaging in direct dialogue with capital

Ryoichi Kitagawa

markets. Dialogue with overseas investors has unfortunately

Managing Director, Managing Executive

been limited to online meetings due to the pandemic.

Officer of the Company, CFO

ASAHI GROUP INTEGRATED REPORT 202069

Section 03

Progress in Financial and Business Strategies

Business Overview*1 The ratio of revenue in each business to total revenue is calculated by dividing the revenue in each business by total consolidated revenue, including adjustments (corporate/elimination).
*2	The ratio of core operating profit in each business to total core operating profit is calculated by dividing the core operating profit in each business by total consolidated core operating profit(excluding amortization of intangible assets occurring following acquisitions), including adjustments (corporate/elimination).

Alcohol Beverages Business
As the Group’s largest cash cow business, the Alcohol Beverages
Business offers a comprehensive lineup of alcohol beverages, startingwith beer-type beverages. In this business, we aim to establish a position as the leader in the domestic alcohol industry through the cultivation of strong brands in each product category and the strengthening of
proposals for new value through innovation.

Soft Drinks BusinessCentered on Asahi Soft Drinks Co., Ltd., the Soft Drinks Business offers
such products as MITSUYA CIDER, WILKINSON, CALPIS, WONDA,
Asahi Juroku-cha, and Asahi OISHII MIZU. Through this business, we
aim to become an industry-leading company through efforts to enhance
the intrinsic value of our products focused on core brands, including
100-year-old brands that originated in Japan, and establish a foundation
for future growth.

Food BusinessCentered on Asahi Group Foods, Ltd., the Food Business manufacturesand sells confectioneries, health foods, supplements, milk products for
infants and baby food, food and other products for nursing care, freezedried foods, and raw materials for food products. In this business, we
are working to establish a foundation for the next stage of growth byleveraging our core brands. Through this effort, we will strengthen proposals for new value in the form of “deliciousness with added value” inline with diversifying consumer needs and values.

Overseas Business
The Overseas Business is making efforts to establish a growth foundation in Europe, Oceania, Southeast Asia, and other regions. In thisbusiness, we are working to enhance our product portfolio centered on
the core brands in each region. In addition, we are expanding crossselling initiatives that leverage the brands and know-how we have cultivated to date. In these ways, the Overseas Business will drive thesustainable growth of the Group.

70

ASAHI GROUP INTEGRATED REPORT 2020

Revenue and Core Operating Profit Margin
Revenue Breakdown
by Business Segment (outside)*1

37.4 %

Core Operating Profit Breakdown
by Business Segment (inside)*2

Revenue by Category in 2020(¥ billion)

(%)

(%)

1,000

25

8,868

800

758.2

20

600

17.4

15

400

10.6

200

41.6 %

0

’10

’11

’12

’13

’14

’15

’16

’17

JGAAP

’18

’19

’20

6
19.9
7

10

17.4 %

Core Operating Profit Breakdown
by Business Segment (inside)*2(Left)

RevenueCore operating profit margin (including liquor tax)

15

353.3

400
300

7.9

200

0

0

’14

’15

’16

’17

JGAAP

RevenueCore operating profit margin

6.1 %Core Operating Profit Breakdown
by Business Segment (inside)*2

5.7 %

’18

’19

’20

150

15

123.4

120
90

8.9

60
30

’11

’12

’13

’14

’15

’16

’17

JGAAP

(Left)

Revenue(Right)Core operating profit margin

6
8.8

’18

’19

Core Operating Profit Breakdown
by Business Segment (inside)*2

48.7 %

’20

792.9

600

15.0

400

11.9

200

’11

’12

’13

Mineral water
Fruit drinks

14

Others17(%)

MINTIA

12

Freeze-dried miso soups
Nutrition support foods,­confectioneries, etc.

96Baby foods and goods

3H ealthcare and senior
Consumer businessFood ingredients and otherbusiness

0

(%)
25
20
15
10

(%)

6,995
17.7

’14

’15

’16

JGAAP

(Left)

Revenue(Right)Core operating profit margin (including liquor tax)

’17

’18

’19

’20

5

10

Europe business
Oceania business

43

14.6

5

’10

RTD tea

Revenue by Business in 2020

800

0

RTD coffee

IFRS(¥ billion)

39.1 %

Lactic acid bacteria drinks

14

Revenue and Core Operating Profit Margin
Revenue Breakdown
by Business Segment (outside)*1

31

Revenue by Category in 2020
(%)

’10

Carbonated drinks

7

IFRS

(¥ billion)

0A
 lcohol-taste beverages(Non-alcohol)

3,762 11

Revenue and Core Operating Profit Margin
Revenue Breakdown
by Business Segment (outside)*1

Shochu(%)

6
3(Left)

Wine

7

12

100

(Right)R eady-to-drink (RTD)
beverages

18

9

’13

Whisky and spirits

49

Sales Volumes by Category in 2020

500

’12

New genre

Core operating profit margin (excluding liquor tax)

(%)

’11

Happoshu0(¥ billion)

’10

Beer

IFRS

(Right)14.4 %

5

11.9

5

Revenue and Core Operating Profit Margin
Revenue Breakdown
by Business Segment (outside)*1

4

3

Southeast Asia businessAsahi International, Ltd.

42

0

IFRS

Core operating profit margin (excluding liquor tax)

Reference: Revenue by business based on business portfolio restructuringfrom fiscal 2021 (fiscal 2020 results)
Europe business
Oceania business

52%
43%

Southeast Asia business

5%

ASAHI GROUP INTEGRATED REPORT 202071Section 03

Progress in Financial and Business Strategies

Strategy by Business2020 Results

Alcohol Beverages
Business

In beer-type beverages, we encouraged consumers to rediscover the value of beer andprovided special drinking experiences based on the Asahi Super Dry brand message of“Beer tastes great. I always look forward to this moment!” Efforts were also made to increase our market presence in conjunction with the release of Asahi THE RICH, which
offers the same sense of quality and luxury as a premium beer.
In alcohol beverages other than beer-type beverages, we stepped up efforts to solicit

Asahi Super Dry

Asahi THE RICH

Zeitaku Shibori

Nikka Session

Asahi Super Dry
Nama Jokki Can(Draft Beer Can)

Clear Asahi

Asahi
The Lemon Craft

Asahi BEERY

new proposals to customers. For example, we bolstered our lineup of core Zeitaku Shibori
brand products in the ready-to-drink (RTD) beverages category and launched Nikka
Session, a beverage that blends Scottish and Japanese malt liquors, in the whisky andspirits category. We also took steps to expand our user base in the non-alcohol beverages

Operating Environment (Opportunities and Risks)

category by proposing various settings for enjoying Asahi Dry Zero.

The domestic beer market has been declining since its peakAt the same time, the COVID-19 pandemic has been driv-

in 1994 due to a myriad of factors including population

ing a shift in demand toward off-premise consumption while

aging, birthrate decline, and the diversification of alcohol

the increase in health consciousness has been stimulating

consumption, and this trend is projected to continue goinggrowth in demand for products with reduced carbohydrates orforward. Meanwhile, consumers have been returning to beerother function claims. We are also witnessing lifestyle chang-

category beverages following the October 2020 revision of thees, such as the popularization of teleworking and the trend

liquor tax. We anticipate further changes to the structure of

toward staying at home, which are resulting in the diversifica-demand following the institution of a standardized tax rate fortion of situations and ways in which alcohol is enjoyed. These

all beer-type beverages in October 2026, and these changes

trends are creating new growth opportunities for the Asahi

are projected to accelerate the invigoration of the beer mar-Group.

Size of Domestic Market for Other Drinks*(%)(Thousand kl)

100

4,000
3,000

Beer

Happoshu

’10

3,033

3,111

3,190

’15

our brand value in the new genre beer-type beverage market.

We look to foster new beverage categories by capitalizing on the launch of Asahi BEERY, a0

ShochuSake

low-alcohol beverage (0.5%) that features the rich, flavorful taste of barley that is only
’16

’17

’18

’19

Ready-to-drink (RTD) beverages

Wine

(Yen)

(Yen)

Retail price

241

Beer

50

Liquor
tax

70

0

Beer

77

70

Retail price

138

138

Liquortax

Liquortax

38

47

Happoshu

New genre

Note: T he top figures are the retail prices for a major convenience store chain(includes consumption tax, at the end of 2020).

ASAHI GROUP INTEGRATED REPORT 2020

Happoshu

New genre

Sales Composition by Container Type (2020)

Sales Composition by Marketing Channel (2020)

(%)

(%)

14

37.8

28

7

12

Beer-typebeverage

54.25

46.99
28

cept of smart drinking, which proposes a more diverse range of drinking patterns.
Whisky and spirits

63.35

176

171

100

77

made possible by using 100% beer ingredients. This new offering was shaped by the con-

’20

Revision of Liquor Tax (Tax per 350 ml)

150

sifying consumer needs and proposals of new consumption patterns.

ing RTD beverage brands on Zeitaku Shibori, Taru Hai Club, and Asahi The Lemon Craft.

Comparison of Liquor Tax (Tax per 350 ml)

185

also seeking to create new markets by bolstering our lineups of products matched to diver-In alcohol beverages other than beer-type beverages, we will focus efforts for cultivat-*	Based on taxable shipment volumes, in-house estimation

200

72

’20

New genre

Retail priceIn 2021, we will concentrate investments on core brands in all beverage categories whileon core brands such as Clear Asahi and Asahi THE RICH as part of our efforts to enhance

3,346

3,359

*	Based on taxable shipment volumes of five major manufacturers in Japan. Figures havebeen estimated in-house since 2019, as the announcement of taxable shipment volumes
by the Brewers Association of Japan and the Society to Consider the Happoshu Tax
System stopped in 2018.

250

2021 Targets

home. In addition, we will ramp up advertisement and sales promotion activities centered

1,000

’05

23.8%, to ¥80.4 billion, owing to lower revenue and other factors.

demand for an easy way to enjoy the draft beer available at bars and restaurants while at

2,000

50

’00

forts to reform our earnings structure, core operating profit also saw a decline, fallinglaunch Asahi Super Dry Nama Jokki Can (Draft Beer Can), a new offering that responds toMarket Share of Beer, Happoshu, and New Genre*’95

drop in sales to restaurants as a result of the COVID-19 pandemic. Although we made ef-

In beer-type beverages, we will begin developing our home server business andket and the consolidation into strong brands.

0

As a result, despite year-on-year growth in sales of new genre beer-type beverages and
RTD beverages, revenue declined 14.5% year on year, to ¥758.2 billion, due primarily to a

25

13
Beer

63

79

46.99

Can
October

October

October

2020

2023

2026

Keg

Bottle17

Beer-typebeverage
18

Can

Keg

Bottle

16

32

10

10

Supermarket
Convenience store
Drugstore
Discount store
Commercial liquor store
Others

29

24
Beer
15

10
6

Supermarket
Convenience store
Drugstore
Discount store
Commercial liquor store
OthersASAHI GROUP INTEGRATED REPORT 202073Section 03

Progress in Financial and Business Strategies

Strategy by Business2020 Results

Soft Drinks
Business

We pursued increased brand value in relation to the carbonated beverages category,
which is enjoying strong performance amid increased demand for household consumption, alongside aggressive marketing activities pertaining to core brands MITSUYA and
WILKINSON. We also sought to build upon the CALPIS brand by actively promoting diluted
versions of CALPIS products in response to demand related to staying at home.
Meanwhile, marketing strategies tailored to changing consumer needs were advanced with

MITSUYAHOUJUN RINGO

WILKINSONTANSAN MUSCATCALPIS

Asahi OISHII MIZU
label-less PET bottle

MITSUYA CIDERWILKINSONCALPIS Light Blue

Asahi Juroku-cha

regard to products that create new value. Specific examples of these strategies included
the launch of GREEN CALPIS, a plant-derived product made by fermenting soy milk, andthe deployment of label-less bottle products for the e-commerce market.
As a result, despite the strong performance of carbonated beverages, revenue de-Operating Environment (Opportunities and Risks)clined 6.2% year on year, to ¥353.3 billion, as the COVID-19 pandemic caused sales fromThe domestic beverage market has grown by around 1% on

Meanwhile, social pressure is being placed on the bever-average over the five years leading up to 2019. However, theage industry to ramp up efforts to reduce waste centered onmarket took a downturn in 2020 as a result of decreases in

PET bottles, labels, and other container materials in order tosales from vending machines stemming from the COVID-19

address environmental issues that are also becoming social

pandemic. The market is expected to undergo a gradualissues, such as those related to plastic waste. We therefore

recovery going forward while consumption structures trans-

anticipate that there will be new growth opportunities to takeform in conjunction with the diversification of lifestyles

advantage of regarding the rising need for products with­exemplified by such trends as the increases in sales of

reduced environmental impacts including initiatives to­unsweetened carbonated beverages seen amid increasing­recycle plastic resources.

vending machines to drop. Core operating profit fell 16.9%, to ¥27.8 billion, due to the
reduced revenue and the less profitable product and container mix that resulted fromlower sales from vending machines. These negative factors outweighed the benefits ofstreamlined advertising and sales promotion costs and reduced manufacturing costs
achieved through in-house production and improved capacity utilization.

2021 Targets
The brand value centered on core brands will be further heightened in 2021 as we seek tobolster our lineups of products matched to lifestyle changes and proposals for resolvingsocial issues.

health consciousness.

The brand value fostered over the course of more than a century with regard to
MITSUYA, WILKINSON, and CALPIS will be leveraged in ground efforts to deploy new

Japan’s Soft Drink Market by CategoryMarket Share by Company in 2020

(Million cases)(%)

products matched to lifestyle changes and to conduct new sales promotion activities that
employ digital technologies. In this manner, we will seek to heighten our ability to solicit
our products to consumers. In addition, the Juroku-cha brand will be reinvented based on

2,400
1,800

1,896.0

1,898.0

1,940.0

1,902.5

1,778.5

15

AsahiCompany A
Company B
Company C
Company D
Others

11

1,200

12

600
0

the theme of friendliness toward both people and the environment. By using new materials

26

’16

’17

’18

’19

23

14

’20

and manufacturing methods together with new, small-sized containers made from ecofriendly materials, we aim to improve the value of the Juroku-cha brand in the growing
unsweetened tea category.
Efforts will also be made to help resolve social issues by expanding sales of label-less
PET bottle products, which enjoyed impressive sales growth in 2020, to include vending
machines. We thereby aim to create new value by reducing environmental impacts while

Source: Inryo Soken

improving customer convenience.

Distribution of Soft Drink Market by Marketing Channel

Distribution of Soft Drink Market by Container TypeSales Volume of Asahi Group Holdings (2020)

Sales Volume for Six Core Brands

(%)

(%)

(%)

(Million cases)

RTD tea
RTD coffee
Vegetable and fruit drinks
Other soft drinks

Carbonated drinks
Mineral water
Lactic acid bacteria drinks

Source: Inryo Soken

100

13

80

80

22

60

40

41

20

’16

Supermarkets

’17

’18

Vending machines

’19

74

ASAHI GROUP INTEGRATED REPORT 2020

20
0

’20

Convenience storesSource: Inryo Soken

72

OthersPET bottles

2

16

60

24

40

0

5
2
21

100

20

By
marketingchannel
19

’16

’17

Cans

Glass bottles

Source: Inryo Soken

’18

’19

45

27

3

200

By
container
type

45

23

’20

Paper and other materials

Supermarkets
Vending machines
Convenience stores
Others(%)

250

Small PET bottles (up to 660ml)
Large PET bottles (up to 2L)
Cans
Glass bottles
Others

71.8

71.8

72.4

71.7

72.2

100.0
80.0

150

60.0

100

40.0

50

20.0

0

’16

’17

’18

WILKINSON(Left)	MITSUYAOISHII MIZUCALPIS(Right)

’19
WONDA

’20

0

Asahi Juroku-cha

Composition of six core brands in total sales

ASAHI GROUP INTEGRATED REPORT 202075Section 03

Progress in Financial and Business Strategies

Strategy by Business2020 Results

Food BusinessIn regard to MINTIA breath mint tablets, we sought to stimulate demand by launching new
products and proposing new use patterns in responses to changes in demand stemmingfrom trends such as the popularization of teleworking. In freeze-dried miso soups, we­solicited the value of freeze-dried foods, namely convenience and authentic flavors, with
our Itsumono Miso Soup lineup by redesigning packages and stepping up advertisements
MINTIA Breeze

Itsumono Miso Soup

Ippon Manzoku Bar

Dear-Natura

Goo Goo Kitchen

Wakodo Lebens Milk
Hi Hi

Balance Kondate

Ebios

and sales promotions.
We sought to improve the brand image and acquire new users of our Dear-Natura lineof dietary supplements through enhanced advertising campaigns tailored to the rise inhealth consciousness. We also bolstered our lineup of baby food proposals by launching
new product lineups in response to demand related to handmade snacks.

Operating Environment (Opportunities and Risks)

As a result, revenue fell 4.2% year on year, to ¥123.4 billion, as the decrease in sales

The domestic food product market is evolving in conjunction

tablet market has been impacted by the reduction in demandwith the spread of new lifestyles as people increasingly stayassociated with setting, such as that related to commuting tohome and engage in teleworking in response to the COVID-

work and workplace environments. Nevertheless, we antici-

19 pandemic. These changes in consumer lifestyles are giv-

pate the rise of new growth opportunities for mint breath tab-ing rise to diverse growth categories.

lets as people seek sources of refreshment when wearing

Demand for nutrient support foods, such as dietary sup-masks or when at home. The Group also projects growth inplements and protein-added products, is growing in thethe market for products catering to senior citizens in con-

Asahi Group’s business amid rising health consciousness.

junction with population aging and people ­remaining healthy

We are also witnessing growth in the freeze-dried food mar-for longer portions of their life. This market is expected toket due to rises in demand for convenient processed foods as

represent a new growth field.

of MINTIA products resulting from reduced rates of office attendance outweighed the benefits of year-on-year increases in sales of freeze-dried miso soups. Despite measures for
streamlining fixed costs, core operating profit was also down, decreasing 19.9%, to ¥10.9
billion, reflecting the decline in revenue.

2021 Targets
In 2021, we will work to build sustainable growth foundations by creating value tailored to
new lifestyles and enhancing each category in response to market structure changes.
Improvements to the value of the MINTIA brand will be pursued by promoting newuse proposals, such as products designed especially for use when wearing a mask, products that come in large-volume containers, and products with nutritional function claims

people increasingly stay home. Meanwhile, the breath mintthat address rising health consciousness. As for freeze-dried miso soups, we will accelerate our deployment of high-end products using unique ingredients that respond to

Breath Mint Tablet Market Scale

Share of Breath Mint Tablet Sales in 2020­demand for eating at home and of products sold in large-volume packs that cater to(¥ billion)(%)­demand for large-volume purchases. Meanwhile, our Dear-Natura product lineup geared

40
30

28.9

29.4

32.5

34.8

toward self-care needs will be enhanced through the expansion of our lineup of products

26.4

with function claims that employ lactic acid bacteria, vitamin D, and raw materials borne
51

20

Asahi

Furthermore, Asahi Calpis Wellness Co., Ltd., which operates a mail-order health100foods business, was merged with Asahi Group Foods, Ltd., to create a new organizational
structure for growing sales of dietary supplements and other products.
’16

’17

’18

’19

’20

Source: INTAGE Food SRI, Candy (Candy Tablet Market), Nationwide(excluding Okinawa), All Industries,
January 1, 2016–December 31, 2020, INTAGE Inc.

Source: INTAGE Food SRI, Candy (Candy Tablet Market),
Nationwide (excluding Okinawa), All Industries,
January 1, 2020–December 31, 2020, INTAGE Inc.

Baby Food Market Scale

Share of Revenue in Baby Food Market in 2020

Freeze-dried Miso Soup Market Scale(¥ billion)(%)(¥ billion)

30

24.6

26.3

27.8

28.8

27.8

7.5

55

20

Asahi

5.0

5.2

6.3

7.4

8.1

Share of Revenue in Freeze-dried Miso Soup Market
in 2020
(%)

65

Asahi

2.5

10
0

9.9

10.0

40

’16

’17

’18

’19

ASAHI GROUP INTEGRATED REPORT 2020

0’20

Source: INTAGE Food SRI, Baby Food, Nationwide (excluding Okinawa),
All Industries, January 1, 2016–December 31, 2020, INTAGE Inc.

76

from research on CALPIS lactic acid bacteria.

Source: INTAGE Food SRI, Baby Food, Nationwide(excluding Okinawa), All Industries,
January 1, 2020–December 31, 2020, INTAGE Inc.

’16

’17

’18

’19

’20

Source: INTAGE Food SRI, Freeze-dried Miso and Clear Soup, Nationwide(excluding Okinawa), All Industries, January 2016 to December 2020

Source: INTAGE Food SRI, Freeze-dried Miso and Clear Soup, Nationwide(excluding Okinawa), All Industries, January 2016 to December 2020

ASAHI GROUP INTEGRATED REPORT 202077

Section 03

Progress in Financial and Business Strategies

Strategy by Business2020 Results

Overseas BusinessIn the Europe Business, we worked to bolster our brand image in response to diversifying
customer needs. Specific efforts included enhancing marketing activities pertaining to
Pilsner Urquell and other premium beers in the Czech Republic and broadening our rangeof flavor offerings for non-alcohol beverages like Lech Free in Poland.
In the Oceania Business, we began solidifying our sales structure by integrating theoperations of the CUB business into our existing operations. We also redoubled efforts tosolicit brands such as Great Northern and Asahi Super Dry. Non-alcohol beverage initia-

Peroni Nastro Azzurro(UK)

Pilsner Urquell(Czech Republic)

Asahi Super Dry

Lech Free(Poland)Great Northern(Oceania)

Victoria Bitter(Oceania)

Cool Ridge(Oceania)

Wonda(Southeast Asia)

tives included deploying unsweetened products in the carbonated beverage and othercategories to improve our market presence.
As for the Southeast Asia Business, we ramped up our efforts in Malaysia pertaining toOperating Environment (Opportunities and Risks)high-value-added products such as WONDA Zero Max, a product that requires no sugar

The global alcohol and non-alcohol beverage markets suf-other premium category products are growing rapidly in thefered a temporary decline in sales volumes in 2020 as a re-off-premise channel. In the Oceania market, the trend toward

sult of the restrictions imposed by countries around the world

premium products is expected to continue against a back-in response to the COVID-19 pandemic. Nevertheless, thesedrop of medium- to long-term economic growth and consis-

markets are expected to experience ongoing growth centered

tent increases in the price of goods.

on high-value-added beverage categories going forward as aRegulations on alcohol and sugar content present risks inresult of economic recovery and the diversification of con-each region. However, the Asahi Group is expected to have

sumption patterns.

access to an expanding range of growth opportunities as

In the European market, the COVID-19 pandemic­rising consumer health consciousness drives increases in­resulted in significant depressed demand from restaurants

demand for non-alcohol, low-alcohol, unsweetened, andwhereas sales of premium beers, non-alcohol beverages, and­low-sugar products.

and which was launched in response to rising health consciousness. As a result, revenue
increased 13.5% year on year, to ¥792.9 billion, despite the restrictions instituted bycountries around the world in response to the COVID-19 pandemic, largely because of thebenefits of the consolidation of the CUB business. Core operating profit was down 8.0%,
to ¥94.1 billion, as the reduced profitability resulting from changes in the channel mix offset the benefits of streamlined fixed costs.

2021 Targets
In 2021, we will advance premium strategies focused on core brands and non-alcohol
beverages in local markets while strengthening global premium brand sales channels.
In the Europe Business, we will conduct aggressive marketing campaigns for Pilsner
Urquell, Peroni Nastro Azzurro, and other premium beers in major markets of operation
while boosting our brand value in the growing non-alcohol beverage market. In addition,

Market Share by Price Segment and Composition by Channel (2020)
Czech RepublicMarket total: 14.9mhL

CAGR
2014 –2019

Asahiʼs market share: 47%
Super Premium
35%

45%

Premium
20%

24%

47%

10%

30%
Asahi

+ 2% (–9%)

15%

22%

UK

Molson Coors–3% (–13%)

Mainstream
45%± 0% (–14%)

Discount
24%

21%

Others+ 1% (–11%)

CAGR
2014 –2019

Premium
24%

11%

Mainstream
48%

21%

8%

13%

23%

8%

32%

(2020/2019)± 0 % (–10%)39%+ 19% (–8%)

19%

51%

35%

36%

6% 8% – 2% (–10%)31%

Heineken

Australia

9% + 3% (–9%)

32%

31%

Carlsberg– 3% (–10%)± 0 % (–9%)

33%+ 1% (–11%)

Asahiʼs market share: 17.0 mhL

CAGR
2014 –2019

40%
19%

17%

Discount
2%(2020/2019)+ 1% (–10%)+ 12% (–8%)

Premium39%– 1% (–9%)

Mainstream
51%

51%

– 4% (–8%)

Discount
10%

54%

38%

16%

the global market.
In the Oceania Business, we will redouble advertising campaigns for core brands
such as Great Northern and Victoria Bitter; accelerate the growth of Asahi Super Dry
and Peroni Nastro Azzurro using the reinforced sales structure built through businessintegrations; and pursue further cost synergies. Non-alcohol beverage initiatives will
include the enhancement of our brand portfolio centered on unsweetened products. As
for the Southeast Asia Business, we will grow non-alcohol beverages with health function in Malaysia.

Molson Coors(2020/2019)

21%

28%

CAGR
2014 –2019

89%

Asahi
OthersAsahiʼs market share: 5 %14%

Super Premium
10%6%Premium
25%

Market total: 41.8 mhL

Super Premium
26%

Market total: 33.5mhL

Asahiʼs market share: 34%

7% + 9% (–8%)

65%
Heineken

Poland(2020/2019)+ 1% (–11%)

43%

54%

Mainstream
40%
Discount
5%

5% 7%

our partnership with global events will be utilized to heighten awareness of our brands in+ 1% (–11%)

6% 5%

35%

35%

Revenue Composition by Country
in the Europe Business (2020)

Alcohol Beverage/Soft Drink Revenue
Composition in the Oceania Business (2020)+ 4% (–8%)

14%
45%

+ 2% (–10%)– 5% (–10%)

Czech Republic & Slovakia
PolandRomania
Italy– 7% (–14%)

27
73

Alcohol beverage
Soft drink

UK
OthersAsahi
AB InBev

Heineken

Carlsberg

Molson Coors

OthersAsahi

Heineken

Kirin Group

Molson Coors

Others

Notes: 1. The price of the leading brand in the most popular pack type = 100
Super Premium > 151 150 > Premium > 115 114 > Mainstream > 91 90 > Discount		 2. Based on volumes, in-house estimation

78

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202079

Section 04

		 Akiyoshi Koji

Independent Outside Audit & Supervisory

As of March 2021

Board Member

Significant concurrent positions

As of March 2014

• Outside Director of Imperial Hotel, Ltd.

Significant concurrent positions

President and CEO, Representative Director
As of March 2021

		 Ryoichi Kitagawa

Yasushi Shingai

Tatsuro Kosaka

Keizo Tanimura

Taemin Park

• Outside Director of Imperial Hotel, Ltd.

		 Yumiko Waseda
Independent Outside Audit & Supervisory
Board Member
As of March 2015

Officer of the Company, CFO

Significant concurrent positions

As of March 2021

• Partner and Attorney at Law of Tokyo Roppongi Law& Patent Offices

Director and Executive Officer,
CAO (Chief Alliance Officer)
As of March 2020

		 Yutaka Kawakami
Independent Outside Audit & Supervisory
Board Member
As of March 2017

		 Keizo Tanimura
Director and Executive Officer,
CHRO (Chief Human Resources Officer)

Significant concurrent positions• Certified Public Accountant• Outside Audit & Supervisory Board Member of
Mitsubishi Research Institute, Inc.

As of March 2020

(As of March 25, 2021)

In order to realize the Asahi Group Philosophy, the management of the Asahi Group comprises a diverse group of
members with ­abundant experience, a high level of insight,
and advanced expertise.
Guided by this management, the Group aims to realize­sustainable growth and enhance corporate value over the
medium to long term through ongoing efforts by the Board of
Directors to conduct highly effective decision-making andbusiness supervision.

•A dviser to The Dai-ichi Life Insurance Company, Limited

Managing Director, Managing Executive

		 Taemin Park

The Asahi Group’s
Management Team		 Katsutoshi Saito

Chairman of the Board

		 Atsushi Katsuki

Christina L. Ahmadjian

Corporate Governance		 Tatsuro Kosaka
Independent Outside Director
As of March 2016

		 Noboru Kagami
Managing Executive Officer

Managing Executive• Representative Director, President of Chugai
Pharmaceutical Co., Ltd.

Officer*Independent Outside Director

		 Yutaka Hemmi
Managing Executive
Officer*

As of March 2018
Significant concurrent positions

Akiyoshi Koji

Atsushi Katsuki

Ryoichi Kitagawa• Outside Director of Mitsubishi UFJ Financial Group, Inc.

Executive Officer

Significant concurrent positions• Professor of Graduate School of Business Administration,
Hitotsubashi University• Outside Director of Mitsubishi Heavy Industries, Ltd.

Executive Officer

		 Yoshihide Okuda
Standing Audit & Supervisory Board Member
As of March 2019

Executive Officer

		 Wayne Angus
		 Yoshinori Ito		 Atsushi Kagaya
Executive Officer

		 Manabu Sami
Executive Officer

		 Tatsushi Akita
Executive Officer

		 Tatsuhito Chiku
Executive Officer• Outside Director of Japan Exchange Group, Inc.
• Outside Director of Sumitomo Electric Industries, Ltd.

		 Osamu Ishizaka

Executive Officer*

		 Tomomasa Kanda

Independent Outside Director
As of March 2019

Executive Officer

Executive Officer		 Yukitaka Fukuda• Outside Director of Dai-ichi Life Holdings, Inc.

		 Christina L. Ahmadjian

Executive Officer

		 Kazuo Matsuyama 		 Shunjiro Sakano

Significant concurrent positions

		 Yasushi Shingai

		 Kazuhiko Nomura

		 Yoshio Chikayasu
Executive Officer*

		 Kazuma Kohno
Executive Officer

		 Masatoshi Ampo
Executive Officer*

		 Kaoru Sakita
Executive Officer

		 Tomoyuki Negoro
Executive Officer*

		 Naoko Nishinaka
Standing Audit & Supervisory Board Member
As of March 2020

		 Akira Tanaka
Executive Officer

		 Satoshi Mori
Executive Officer*

		 Satoshi Akiba
Executive Officer

		 Hikaru Sato
Executive Officer*

		 Kazutomo 		

Yutaka Kawakami

80

ASAHI GROUP INTEGRATED REPORT 2020

Yumiko Waseda

Katsutoshi Saito

Yoshihide Okuda

Naoko Nishinaka

		Tamesada* Appointed on March 25, 2021

Executive Officer

ASAHI GROUP INTEGRATED REPORT 202081

Section 04

Corporate Governance

The Asahi Group’s Governance— Governance Systems for Rapidly Accelerating Global Management

Basic Policy

Board of Directors Skill Matrix
The Asahi Group works to ensure an overall balance of

Directors, possessing a wealth of experience, extensive

Based on this policy, we are fully aware that enhancing

knowledge, experience, and ability as well as diversity of theknowledge, and superior expertise based on the Board ofand medium- to long-term increases in corporate value. In

the effectiveness of the Board of Directors and establishing

Board of Directors, which are imperative to realizing sustain-

Directors Skill Matrix, which specifies the requirements fororder to bring such goals to fruition, we have been proactive

more substantial corporate governance will be critical toable growth and medium- to long-term increases in corporate

Directors based on the Asahi Group Philosophy, the Asahi

in our efforts to strengthen Group management, build solid

realizing sustainable growth and medium- to long-termvalue. Accordingly, the Company’s Board of Directors is

Group’s Corporate Governance Guidelines, and management

relationships of trust with society, and enhance our socialincreases in corporate value. For that reason, we constantly

composed of persons suitable to serve as the Company’s

strategies of the Company.

presence and transparency, while positioning the reinforce-

strive to realize more substantial corporate governance byment of the Group’s corporate governance at the top of man-evaluating the effectiveness of the Board of Directors and theagement priorities. Accordingly, we fully endorse the core

Audit & Supervisory Board and by analyzing these results asconcept of Japan’s Corporate Governance Code of contribut-

well as identifying and addressing issues to ensure further

ing to all stakeholders and, ultimately, to the growth of theenhancement of their effectiveness.

Corporate Governance Policy and System (Asahi Group Holdings corporate website):https://www.asahigroup-holdings.com/en/company/governance/policy.html

Framework for Enhancing Effectiveness of the Board of Directors
The Board of Directors at Asahi Group Holdings believes that a highly effective board is one that continues to pursue increases incorporate value over the medium to long term.

Medium- to long-term increases in corporate value

Akiyoshi
Koji

Name

Decision-Making Skills

economy as a whole.

Group Holdings is committed to realizing sustainable growthSupervisory Skills

With the establishment of the Asahi Group Philosophy, Asahi

Atsushi
KatsukiRyoichi
Kitagawa

TaeminPark

Keizo
Tanimura

TatsuroKosakaYasushiShingai

Christina L.
AhmadjianLong-Term
Outlook andStrategic Mindset
GlocalManagement
SkillsConsideration of
Sustainability
Management
Promotion of
Discontinuous
GrowthManagement of
the Company’s
Business
Finance,
Accounting, andInternal Control
Human Resource
Management

Enhancement of effectiveness of the Board of Directors

Highly effective decision-making

Highly effective supervision

Timely decision-making

Timely supervision of businessexecution

Measures to enhance
effectiveness

Substantive discussions

DecisionMaking Skills

Substantive discussions
Selection of appropriate themes
Selection of appropriate themes• Provide information• Ensure adequate time
Etc.

Supervisory
SkillsLong-Term Outlook and Strategic Mindset

Ability to assess societal changes over the long term and manage business through abackcasting-focused strategic mindset

Glocal Management Skills

Ability to comprehensively manage business at the global and regional level by taking a
globally minded management approach and optimizing management locally

Consideration of Sustainability Management

Ability to manage business by viewing sustainability and management as one and thesame and integrating medium- to long-term strategies with resolutions to social issues

Promotion of Discontinuous Growth

Ability to manage business by promoting discontinuous growth through technologicalinnovation and business restructuring

Management of the Company’s Business

Ability to accurately assess the status of business execution and raise issues in accordance with the Medium-Term Management Policy on the basis of the AGP

Finance, Accounting, and Internal Control

Ability to perform finance and accounting duties from a managerial perspective andimplement internal control that facilitates more substantial Group governance

Human Resource Management

Ability to manage diverse human resources and maximize the potential of each
employee—key elements for glocal value creation

Business execution (targets andprogress) and supervisory skills

Decision-making skills

Members of the Nomination Committee and the Compensation Committee (for fiscal 2021)
Board of Directors Skill Matrix

Long-term
outlook andstrategic mindset

Glocal (global andlocal) management skills

Consideration ofsustainability
management

Promotion of
discontinuous
growthManagement of
the Company’sbusiness

Finance,accounting, andinternal control

Name

Human resource
management

ASAHI GROUP INTEGRATED REPORT 2020

Akiyoshi Koji

Atsushi Katsuki Ryoichi Kitagawa Keizo Tanimura

Tatsuro Kosaka

Yasushi Shingai

Christina L.
Ahmadjian

Katsutoshi Saito Yumiko Waseda

Nomination
Committee
Compensation
Committee
Note:

82

Audit & Supervisory Board Members

Directors

Essential skills for enhancing effectiveness of the Board of Directors

denotes Outside Directors/Outside Audit & Supervisory Board Members

denotes committee chairpersons

denotes committee members

ASAHI GROUP INTEGRATED REPORT 202083

Section 04

Corporate Governance

The Asahi Group’s Governance— Governance Systems for Rapidly Accelerating Global Management

Reasons for the Selection of Independent Directors and Audit & Supervisory Board Members
Based on the Company’s Criteria for Independence ofindependent directors and auditors as defined by the Tokyo

Outside Directors and Outside Audit & Supervisory Board

Stock Exchange, the Company has reported them as inde-

Members, the Company has deemed that its Outsidependent directors and auditors to said exchange. Information

Directors and Outside Audit & Supervisory Board Memberson the Criteria for Independence of Outside Directors andmaintain sufficient independence with no potential conflicts

Outside Audit & Supervisory Board Members can be found in

of interest occurring between them and general sharehold-the Company’s Corporate Governance Guidelines.

ers. Moreover, as they meet the requirements for

Reasons for the Selection of Outside Directors and Outside Audit & Supervisory Board Members
Name

Tatsuro Kosaka
Tenure (as of March 31)

5 years
Number of meetings attended
Board of Directors 12/12

Yasushi Shingai
Tenure (as of March 31)

3 years
Number of meetings attended
Board of Directors 12/12

Christina L. Ahmadjian
Tenure (as of March 31)

2 years
Number of meetings attended
Board of Directors 12/12

Katsutoshi Saito
Tenure (as of March 31)

7 years
Number of meetings attended
Board of Directors 12/12
Audit & Supervisory Board 13/13

Yumiko Waseda
Tenure (as of March 31)

6 years
Number of meetings attended
Board of Directors 12/12
Audit & Supervisory Board 13/13

Yutaka Kawakami
Tenure (as of March 31)

4 years
Number of meetings attended
Board of Directors 12/12
Audit & Supervisory Board 13/13

Succession Plan and Training
The Company regards the succession plan for its CEO andFeedback in-house. The Nomination Committee regularly

Directors as a matter of utmost priority, and accordingly

monitors and reviews such plans as necessary.

formulates such succession plans pursuant to the require-

For Directors and Audit & Supervisory Board Members,

ments of the CEO and Directors and the composition of thethe Company provides the training required for their roles

entire Board of Directors.

and responsibilities on a regular basis. The Company pro-Based on the succession plan, the Company makes

vides Outside Directors and Outside Audit & Supervisory

appointments and assignments according to plan, conducts

Board Members with information relating to the overview ofcoaching of successor candidates, and carries out training,

the Asahi Group including its businesses, financial affairs,

etc., for successors of future generations. Meanwhile, theand organizations, and implements measures, such as office

Company arranges professional assessments by external

visits, as necessary to facilitate their understanding of theorganizations and makes use of such means as 360-Degree

Group and human resources.

Reasons
Tatsuro Kosaka has utilized his extensive experience, including as a CEO of a global company, to appropriately oversee business execution
by actively providing opinions and recommendations. In particular, he has contributed to increasing the effectiveness of the Board of
Directors by providing opinions and recommendations based on his experience and insight, and through dialogue from the perspectives ofglobal management, Group governance, and ESG. Furthermore, as the chairperson of the Nomination Committee, he has played a leadingrole in making fair and transparent decisions on succession plans for the management team, including the CEO, and on personnel affairs ofofficers. He sufficiently possesses the high level of insight, expertise, and ability required as an Outside Director of the Company due to his
extensive experience in corporate management over many years. Accordingly, we deem that Tatsuro Kosaka is essential to our organization
and an indispensable member of the Board of Directors, mainly for his ability to provide a supervisory function from a management
perspective based on his high level of corporate management skills.

Skill Set of the CEO

Yasushi Shingai has utilized his extensive experience, including as Executive Deputy President, Deputy CEO, and CFO of a global company
and Deputy CEO of an overseas business headquarters, to appropriately oversee business execution by actively providing opinions andrecommendations. In particular, he has contributed to enhancing the effectiveness of the Board of Directors by providing opinions andrecommendations based on his experience and insight, and through dialogue from the perspectives of Group governance, ESG, and management strategies focused on the ultra-long term. Furthermore, as the chairperson of the Compensation Committee, he has played a leadingrole in making fair and transparent decisions in regard to verifying the appropriateness and effectiveness of the executive remuneration plan
(determining bonus amounts, among other matters) as well as its implementation. He sufficiently possesses the high level of insight, expertise, and ability required as an Outside Director of the Company, due to his extensive experience in corporate management accumulated overmany years. Accordingly, we deem that Yasushi Shingai is essential to our organization and an indispensable member of the Board of
Directors, particularly for his ability to provide a supervisory function from a progressive and wide-ranging global management perspective.

appropriately implementing the CEO succession plan throughCompany’s internal and external business environment as ofa fair and transparent process.

now and five years into the future, and is therefore subject to

The Company has formulated its “Skill Set of the CEO,” a list

role of CEO from the perspective of assuming ultimateof essential and valuable skills required of the CEO, with the

responsibility for business execution.

purposes of enhancing management sustainability and

The Skill Set of the CEO consists of skills distinctive to the

The appointment, reappointment, and succession plan ofof CEOs in general, and specifies the skills necessary for the

the CEO are examined on the basis of the Skill Set of the CEO.

Personal Image
Ideal perceptions from inside and outside the Company, and ideal presence

Necessary• A leader who, as a representative of Asahi Group, thinks the most deeply about AGP, embodying a sense of mission and an
ethical code
• A leader who, regardless of any business environment, always exhibits a clear vision that leads employees, and unshakeable
code of values• A leader who actively encourages different thinking and achieves growth of employees and the Company through maximizing
the capabilities of employees

Skills of CEO

Owing to many years as a practicing attorney, Yumiko Waseda possesses expert knowledge on corporate law and intellectual property, as
well as a high level of insight into auditing management from the perspective of compliance. As an Outside Audit & Supervisory Board
Member, she has actively provided opinions and recommendations at Audit & Supervisory Board and Board of Directors’ meetings of theCompany, and carried out appropriate auditing of the duties of the Directors of the Company. She has also provided specific opinions andrecommendations and contributed to raising the level of transparency and objectivity of the remuneration structure for the Company’s
Directors as a member of the Compensation Committee. Accordingly, we deem that Yumiko Waseda is an indispensable member of the
Audit & Supervisory Board, particularly for her ability to enhance its functions with the aim of helping the Company realize sustainablegrowth and medium- to long-term increases in corporate value.
Yutaka Kawakami has years of experience as a certified public accountant at global corporations and is an expert in accounting audits. He
possesses expert knowledge related to corporate accounting—an essential skill for the Company’s Audit & Supervisory Board Members—
and a high level of insight into auditing management through his wealth of auditing experience both in Japan and overseas. As an Outside
Audit & Supervisory Board Member, he has actively provided opinions and recommendations at Audit & Supervisory Board and Board of
Directors’ meetings and carried out appropriate auditing of the duties of the Directors of the Company. Accordingly, we deem that Yutaka
Kawakami is an indispensable member of the Audit & Supervisory Board, particularly for his ability to enhance its functions with the aim ofhelping the Company realize sustainable growth and medium- to long-term increases in corporate value.

review in the event of environmental changes and other factors.

role of CEO of the Company, in addition to the skills required

Christina L. Ahmadjian has utilized her extensive experience as a university professor and an expert in the fields of corporate governanceand organizational culture to appropriately oversee business execution by actively providing opinions and recommendations. In particular,
she has contributed to enhancing the effectiveness of the Board of Directors by providing opinions and recommendations, and throughdialogue from the perspectives of ESG, which encompasses all matters related to the environment, society, and governance, organizational
culture, and global management. Furthermore, as a member of the Compensation Committee, she has contributed to making fair andtransparent decisions in regard to verifying the appropriateness and effectiveness of the executive remuneration plan (determining bonus
amounts, among other matters) as well as its implementation. She possesses the high level of insight, expertise, and ability required as an
Outside Director of the Company due to her scholarly research into corporate governance and organizational culture and her experience
serving as an outside director at multiple companies. Accordingly, we deem that Christina L. Ahmadjian is essential to our organization andan indispensable member of the Board of Directors, particularly for her ability to provide a supervisory function from the perspective of anexpert on global organizational culture and other matters.
Katsutoshi Saito has a wealth of experience and wide-ranging knowledge from having served as a corporate manager of a global corporation and institutional investors for many years. He has actively provided opinions and recommendations at Audit & Supervisory Board andBoard of Directors’ meetings as an Outside Audit & Supervisory Board Member, along with appropriate auditing of the duties of the
Directors of the Company. As a member of the Nomination Committee, he provides specific opinions and recommendations from amanagement perspective. Accordingly, we deem that Katsutoshi Saito is essential to our organization for his efforts in helping the Company
promote global business management and realize sustainable increases in corporate value.

The chart below has been prepared in view of the

Personal traits

Capabilities

Performance record

Personality, attitude and stance
conductive to serving duties

Knowledge, ability, expertise
required to accomplish duties

Necessary experienceand successes• Sincerity and humility• Mental toughness• Open-mindedness

Skills Required
as Director

Long-term Outlook &Strategic Mindset• Foresight, decisiveness, competency• Organizational leadership• Learning skills

Glocal Management
Skill

•E
 xperience as a top management ofoperating company or RHQ•E xperience in international operations•E xperience in addressing
discontinuous growthManagement of theCompany’s Business

Finance, Accounting &Internal Control

Note: The number of Board of Directors’ and Audit & Supervisory Board meetings attended refers to those in fiscal 2020.

84

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202085

Section 04

Corporate Governance

The Asahi Group’s Governance— Governance Systems for Rapidly Accelerating Global Management

Corporate Governance System (As of April 1, 2021)

Characteristics of Our Corporate Governance System

Corporate Governance System Chart

Outside dvisory committees have been established voluntarily.
A
Nomination Committee (chaired by Outside Director) /Compensation Committee (chaired by Outside Director)

Directors and the Board of Directors

Meetings in 2020

General Meeting of Shareholders

12With its sights set on the ultra-long term, the Board of Directors is promoting discussions on
long-term megatrends for the purposes of strengthening foresight with respect to medium- tolong-term changes in the business environment and further reinforcing its proactive and decisive
management. The Board of Directors has also established important corporate strategies, such as
the Medium-Term Management Policy, and monitors its implementation. Regular meetings of theBoard of Directors are held once a month, in principle, and special meetings are held as necessary. In fiscal 2020, the Board of Directors met 12 times and the rate of attendance by Outside
Directors was 100%. In regard to the composition of the Board of Directors, Outside Directors are
selected from among corporate managers, experts, and other professionals who possess thenecessary experience, insight, and professional expertise required by the Company. In addition,
the Company makes it its policy to have Outside Directors account for one-third or more of theentire Board of Directors. This approach is taken to ensure an overall balance of knowledge,
experience, and ability as well as the diversity of the Board of Directors. Furthermore, Directors areappointed based on their experience, insight, and professional background with reference to theBoard of Directors Skill Matrix, which specifies the requirements for Directors based on the AGP,
the Asahi Group’s Corporate Governance Guidelines, and management strategies of the Company.

Audit & Supervisory Board Members
and the Audit & Supervisory Board

Meetings in 202013

Meetings in 2020

48

The Corporate Strategy Board discusses matters pertaining to the evaluations of the legality,
objectiveness, and rationality of important issues related to business operations. The board
comprises the president, other executive directors, and Standing Audit & Supervisory Board
Members, with the president and representative director serving as the chair. The board met
48 times in fiscal 2020 and primarily discussed matters pertaining to the establishment ofbusiness strategies and operational execution at Group companies.

86

ASAHI GROUP INTEGRATED REPORT 2020

Electing /Dismissing

Electing /Dismissing

ReportAudit &
Supervisory Board
Three outside
members andtwo internal
members

Electing /Dismissing

The Nomination Committee discusses matters pertaining to the candidates for Directors and Audit & Supervisory Board Members. The committee consists of two Outside Directors, one Outside Audit &Supervisory Board Member, and two Internal Directors. The two Outside
Directors on the committee select which one of them will serve as thechairperson. The committee met nine times during fiscal 2020 andprimarily reported to the Board of Directors on matters such as theappointment of officers based on the Board of Directors Skill Matrix, theSkill Set of the CEO, and succession plan and its planning, as well as
officers and representatives of principal subsidiaries. The rate of attendance by committee members was 98%.

Proposal /ReportNomination Committee
Auditing

Board of Directors

ReportThree
OutsideDirectors
Chairman(internal)

Two outside
members

Inquiry /ReportChair

FourInternal
Directors(outside)(one Outside Director and
one Outside Audit &Supervisory Board Member)

Two internal
members

5(two Directors)

Appointment / Dismissal /Supervision

Cooperation

Compensation Committee

Deliberation /ReportCompensation Committee
Independent
Accounting
Auditor

Auditing

Inquiry /ReportRepresentative
Directors
Inquiry / Report regarding
important matters

ReportAuditing

Corporate
Strategy Board
Delegation of authority /Supervision

Cooperation

Auditing

Two outside
members
Chair(outside)(one Outside Director and
one Outside Audit &Supervisory Board Member)

Two internal
members(two Directors)

Meetings in 2020

The Compensation Committee discusses matters pertaining to the remuneration systems and amounts for Directors and Audit & Supervisory Board
Members. The committee consists of two Outside Directors, one Outside
Audit & Supervisory Board Member, and two Internal Directors. The two
Outside Directors on the committee select which one of them will serve as
the chairperson. The committee met five times during fiscal 2020 andprimarily reported to the Board of Directors on matters such as the individual evaluations of officers and bonus amounts based on such evaluations.
The rate of attendance by committee members was 100%.

Deliberation /ReportCommittees

ReportBy combining the information held by the Standing Audit & Supervisory Board Members and thehigh level of expertise of the Outside Audit & Supervisory Board Members, the Company’s systemenables Audit & Supervisory Board Members to exercise their authority freely and decisively,
making appropriate judgments and taking action from an independent and objective standpoint.
In fiscal 2020, the Audit & Supervisory Board met 13 times and the rate of attendance by Outside
Audit & Supervisory Board Members was 100%. To ensure balance in terms of knowledge,
experience, and ability, as well as diversity for the entire Audit & Supervisory Board, the Company
has decided that the Audit & Supervisory Board be composed of suitable members who fulfill therequirements of officers as based on the AGP, the Asahi Group’s Corporate Governance
Guidelines, and management strategies of the Company. Specifically, the Audit & Supervisory
Board appoints at least one member with a sufficient knowledge of finance and accounting. Three
Outside Audit & Supervisory Board Members shall be elected from among accounting experts,
lawyers, and corporate managers who have a wealth of experience and broad insight in theirrespective fields and who fulfill the requirements for independent officers as stipulated by theCompany. The Standing Audit & Supervisory Board Members attend important meetings such as
those of the Corporate Strategy Board, examine important documents for approval, and collectinformation from the Directors, the sections in charge of internal audits, and other divisions. The
collected information is reported at Audit & Supervisory Board meetings, where discussions areheld between the Standing Audit & Supervisory Board Members and the Outside Audit &Supervisory Board Members to enable the conducting of appropriate audits on management.

Corporate Strategy Board

Meetings in 2020

Nomination Committee

The chairman serves as a non-executive director.
Over one-third of Board of Director members are Outside Directors.

9

Internal

Global Sustainability

Corporate Officers

Cooperation

Information Disclosure

Global Sustainability Committee

1

Meetings in 2020

Risk Management
Audit Section

Internal Auditing

Compliance Committee

ALCOHOL
BEVERAGES

Meetings in 2020

SOFT
DRINKS

4The Compliance Committee discusses matters related tocorporate ethics, compliance promotion, and businesssupervision. The Compliance Committee consists of thepresident and representative director, who also serves as
the chairperson, and other executive directors, as well as
corporate officers who are appointed by the committee
chairperson. The Standing Audit & Supervisory Board
Members also attend the meetings. The committee met
four times in fiscal 2020 and held discussions on matters such as the statuses of compliance promotion plans
and the Group’s level of compliance and the operational
status of internal whistleblower systems.

FOOD

OVERSEAS

Risk Management Committee

The Global Sustainability Committee was established on April 1, 2020 as anorganization for discussions on matters related to the formulation and monitoring of sustainability strategies. The Global Sustainability Committee is chairedby the president and representative director and consists of officers in chargeof sustainability at Asahi Group Holdings, CEOs of regional headquarters, andother members. The committee met once during fiscal 2020 and held in-depth
discussions on strengthening measures against climate change, in addition to
discussions on matters such as raising the 2030 interim target for Asahi
Carbon Zero, an initiative aimed at achieving zero CO2 emissions by 2050.

Compliance

Meetings in 2020

The Risk Management Committee holds discussions related to thepromotion and oversight of ERM for the entire Asahi Group. The Risk
Management Committee consists of the president and representative
director, who also serves as the chairperson, and other executive
directors, as well as corporate officers who are appointed by the committee chairperson. The Standing Audit & Supervisory Board Members
also attend the meetings. The committee met four times in fiscal 2020and held discussions on matters such as identifying and evaluating
critical risks throughout the entire Group, including tail risk (a low-probability, high-impact risk), and formulating and assessing the status ofaction plans, as well as risk appetite initiatives for proposal to the Boardof Directors.

4
Information Disclosure Committee

Meetings in 2020

15

The Information Disclosure Committee manages and oversees the disclosure ofcorporate information in an integrated manner and carries out discussions fromthe perspective of unbiased, swift, and far-reaching information disclosure. The
Information Disclosure Committee consists of the president and representative
director, who also serves as the chairperson, and other executive directors, aswell as corporate officers who are appointed by the committee chairperson.
The committee met 15 times in fiscal 2020. Meetings were used to analyze
information details and determine the information to be disclosed as well as thecontent and means of disclosure while referencing the Timely Disclosure Rulesof the Tokyo Stock Exchange.

ASAHI GROUP INTEGRATED REPORT 202087Section 04

Corporate Governance

The Asahi Group’s Governance— Governance Systems for Rapidly Accelerating Global Management

III. Evaluation Method

Evaluation of the Effectiveness of the Board of Directors

The evaluation of the effectiveness of the Board of Directors in fiscal 2020 was carried out in a manner that shifted the focus fromThe effectiveness of the Board of Directors in fiscal 2020 wasCompany’s corporate governance in a more substantive way informalities to substance. From December 2020 to January 2021, three types of evaluations were carried out and opinions were

evaluated based on actual evaluations by the Board oforder to realize sustainable growth and medium- to long-term

received from a third party. Based on these evaluations and opinions, in March 2021 the Board of Directors held numerous discus-

Directors itself, a formal evaluation by the Secretariat of the

improvement in corporate value. An overview of the results

sions to finalize the evaluation of its effectiveness for fiscal 2020 and determine developing issues to be addressed in fiscal 2021.

Board of Directors, and the opinions of a third party. Thisand the issues recognized through the evaluation are as fol-evaluation was carried out with a view toward enhancing thelows. Please refer to the following website for more details.

Overview of the results of the evaluation of the Board of Directors’ effectiveness (March 25, 2021)
https://www.asahigroup-holdings.com/en/company/governance/pdf/210325_board_of_directors_result_en.pdf

I. Overview of the Results of the Evaluation of the Board of Directors’ Effectiveness for Fiscal 2020
The evaluation concluded that the Company’s Board of Directors was functioning effectively in fiscal 2020. Although many issues

Evaluation by Directors and Audit &Supervisory Board Members

Evaluation by the Secretariatof the Board of Directors

In a survey, all Directors were asked to provide their opinions
regarding a small number of evaluation items that focused on
substantive matters. The Directors were also interviewed by athird party. A survey of the Audit & Supervisory Board Members
was also conducted using the same evaluation items as the
Director survey. The results of these surveys and interviews werecompiled and subsequently analyzed by a third party.

The Secretariat of the Board of Directors,
together with a third party, assessed formal
evaluation items pertaining to the Board’s
effectiveness.

Third-party opinion
The Company received the opinions of a third
party based on the evaluation by Directors
and Audit & Supervisory Board Members andthe evaluation by the Secretariat, as well as
on materials such as the minutes from Boardof Directors’ meetings.

were pointed out in the evaluation, overall, the Board was evaluated highly, as it was deemed to have the necessary level of effectiveness to achieve sustainable growth and medium- to long-term improvement in corporate value.

Perspectives of the Evaluation

The Board of Directors held discussions and carried out an evaluation based on these third-party opinions,
thereby identifying issues to be addressed in order to further improve its effectiveness.
Conclusion

1. Identifying necessary themes and establishing them as the topics
of discussions and targets of monitoring activities
In fiscal 2020, the Board of Directors made progress in terms of the introduction anddiscussion of important issues for improving corporate value over the long term,
including megatrends, global governance, and sustainability, and other importantmatters that had not been sufficiently addressed in previous years.

The Board of Directors concluded that theBoard of Directors in fiscal 2020 has theeffectiveness necessary for realizing sustainable growth and increasing the corporate
value of the Company over the medium tolong term, and continues to improve thefoundation of that effectiveness.

(Reference) Overview of Directors’ Opinions on the Key Points of the Evaluation• Beginning discussions on megatrends, and having a rolling annual plan, constitutes major progress.
• We need to commit more time to discussing the optimization of the business portfolio.
• There has been an increase in discussions related to governance, and things that were not seen before have now become visible.
• We need to return to the discussion of what constitutes optimal governance for a globalizing business.

2. Discussion and monitoring issues under the appropriate structureof the Board of Directors
In fiscal 2020, the Board of Directors put in place the appropriate structure for decision-making and monitoring (PDCA) through such efforts as establishing an agenda forpriority initiatives. As a result, discussions on important matters proceeded in an
appropriate and timely manner.

Future Initiatives
The Board of Directors determined that it
must make efforts to address the issues
pointed out in the evaluation and ensurethat those efforts lead to the further
enhancement of its effectiveness.

• With regard to building long-term policies, discussions need to be even more closely integrated with management strategy.

IV. Issues Recognized in Fiscal 2019 and Status of Response
Through the evaluation of its effectiveness in fiscal 2019, the Board of Directors recognized the following five items as issues tobe addressed, and worked to respond to these issues under its annual activity plan for fiscal 2020. As a result, the Board
received a certain level of praise for the progress it made toward addressing all of these issues. However, the majority of evaluations stated that further efforts should be made toward each issue, and, as such, the Board recognized that it must continue to

II. Developing Issues to Address in Fiscal 2021
After considering the results of the evaluation, the Board of Directors recognized the following four items as issues to address.

work toward addressing these issues.

By responding to these issues under its annual activity plan for fiscal 2021, the Board of Directors will strive to further
enhance its effectiveness.

IssuesIdentified for
Fiscal 2020

88i) Deepening discussions on strategies andbusiness portfolios that anticipate ultralong-term and long-term megatrends• In addition to continuing to engage in discussions on ultra-long-term and long-term megatrends, the Board needs to promote discussions on management strategies from ultra-longterm and long-term perspectives. The Board must also promote discussions on its futurebusiness portfolio.

ii) P romoting discussions on further
enhancing Group global governance andcrisis management• The Board must move forward with discussions on further enhancing Group governance.

Issues• The Board needs to promote discussion on establishing an operating structure that cananticipate the emergence of risks and other potential crisis situations.

Recognized iniii) P romoting discussions and monitoring
activities for integrating sustainability
strategies and management strategies• The Board must further promote the integration and unification of its sustainability strategies and management strategies. In addition, taking into account megatrends, it is imperative that the Board engages in discussions on integrating sustainability themes into
management strategies as well as on activities to monitor the progress of such integration.

iv) Promoting discussions on enhancing
the functions of the Board of Directors
as a global company• The Board needs to hold discussions on the future of Asahi Group Holdings as a global
company originating in Japan. Furthermore, the Board must discuss its own vision for the
future as a board of directors of a company at which the proportion of overseas businesses
is expected to continue to increase.

ASAHI GROUP INTEGRATED REPORT 2020

Fiscal 2019

Issues recognizedStatus of responsei)	Deepening discussions that contribute tomedium- to long-term improvement incorporate value

The Board of Directors held discussions in light of megatrends and other factors, anda certain amount of progress was made in these discussions.

ii)	Monitoring activities that contribute toGroup governance

The Board of Directors held discussions on global governance, and many opinions
were expressed. Also, improvement was made toward individual risk management
measures.

iii)	Enhancing the transparency of theNomination Committee and theCompensation Committee

The Nomination Committee and the Compensation Committee reported the results of
their examination of the Board of Directors Skill Matrix, among other matters. The
Board then held discussions based on this report.

iv) Accelerating ESG initiatives

The Board of Directors held discussions on various matters related to sustainability
and made progress with efforts to address these matters.

v)	Strengthening the provision of information
to enhance the effectiveness of the Boardof Directors

Due to the impact of the COVID-19 pandemic, there were fewer opportunities for
dialogue and communication with investors and other stakeholders.

ASAHI GROUP INTEGRATED REPORT 202089Section 04

Corporate Governance

The Asahi Group’s Governance— Governance Systems for Rapidly Accelerating Global Management

Evaluation of the Effectiveness of the Audit & Supervisory Board

Composition of Remuneration

or role, taking into account such factors as changes in busi-

Remuneration for the Directors of the Company comprises

ness operations and the status of remuneration levels.

The Company’s Audit & Supervisory Board has been evaluat-

to become even more effective so that it can demonstratebasic remuneration, bonuses (annual and medium-term),

ing its own effectiveness since fiscal 2018 as an ongoingbest practices among companies in Japan in terms of playing

and stock compensation. Remuneration for Outside Directors

Variable Remuneration

its role in corporate governance to contribute to corporate

consists solely of basic remuneration. Based on the principle

As a basic policy for further strengthening the incentive toation focusing on the status of efforts to respond to the mat-value enhancement and support efforts to prevent harm tothat remuneration for Internal Directors should be closely

strive for the Company’s sustainable growth and enhance-ters that were identified in fiscal 2019 as needing to be

the Company.

linked to performance, the percentage of variable remunera-

ment of corporate value over the medium to long term, thetion (bonus and stock compensation) in the annual income

system for Director bonuses has been designed in consider-for the president and representative director is set to be more

ation of increasing the percentage of variable remuneration

than 60%. In addition, the percentage of stock compensa-(incentive) within Directors’ annual income as well as contrib-tion, which is a form of remuneration that shares benefits

uting to the Company’s sustainable growth (short-term,

and risks with shareholders, is set at around 15%. For othermedium-term, and long-term) and enhancing corporate

Internal Directors, the percentage of variable remuneration isvalue (in terms of both financial value and social value)

Conclusion

set at 40% or more and is designed in accordance with thethrough the incentive system as a whole.

• The Company’s Audit & Supervisory Board concluded that it functioned effectively in fiscal 2020.

Director’s position and role.

initiative. In fiscal 2020, it conducted an effectiveness evalu-

addressed. The Company’s Audit & Supervisory Board aims
Overview of the results of the evaluation of the Audit & Supervisory Board’s effectiveness (March 25, 2021)
https://www.asahigroup-holdings.com/en/company/governance/pdf/210325_audit_and_supervisory_board_result_en.pdf

I. Summary of Results of Analysis and Evaluation

Method for Determining Remuneration

In conducting the evaluation of the Audit & Supervisory Board’s effectiveness, each member of the Audit & Supervisory Board
completed a survey regarding the board’s effectiveness. In addition, the evaluation involved administering a survey and con-

Remuneration Level

Director remuneration is set in line with a resolution at aducting interviews of standing Audit & Supervisory Board Members of Group companies and members of the internal audit

The remuneration for Directors is set at a level that aims formeeting of the Board of Directors and within the total amountsection of the Company and conducting interviews of the accounting auditors, upon gaining advice from a third party.

the achievement of performance targets, taking into consid-

for remuneration determined in advance at the General

Opinions of the evaluation were received from a third party and the aforementioned results were obtained. From the results,

eration the level of remuneration that is effective for continu-

Meeting of Shareholders. When remuneration-related resolu-

the Audit & Supervisory Board identified items to be considered in order to further improve its effectiveness in fiscal 2021.

ing to secure outstanding human resources with diverse

tions are being made by the Board of Directors, theskills. Other Japanese companies of the same scale as theCompensation Committee, which is made up of a majority ofCompany (a top 100 company in market capitalization) are

Outside Directors and Outside Audit & Supervisory Board

used as benchmarks for determining remuneration levels.

Members, acts as an advisory body to the Board of Directors,

II. Initiatives Going Forward
After having engaged in discussions on the evaluation and analysis for fiscal 2020, the Audit & Supervisory Board recognized
the following four points as issues to be addressed going forward.
1. Further strengthening of Group governance
2. Reviewing and enhancing the information collection system
3. Maintaining and strengthening the audit and supervisory board systems at all Group companies, including the Secretariatof the Audit & Supervisory Board

evaluating the content of said resolutions in the interest of

Basic Remuneration

greater transparency and objectivity through fair processes.

Basic remuneration is determined based on the significanceIn addition, the Compensation Committee utilizes objectiveof the position and role of the Director. Revisions to basic

external data, when necessary, to ensure fair decision-­making

remuneration are determined based on changes in position

related to director remuneration.

4. Examining long-term strategy for developing audit personnel

Remuneration for Directors, Audit & Supervisory Board Members, and the Independent Accounting Auditor
Director Remuneration
Basic Policy
The Company’s basic policy on Director remuneration has been established and operated based on the following concepts.

Composition of Remuneration (Model remuneration set when business performance targets are achieved in 2021)
President and Representative
Director, CEO

35%

35%
49%

Senior Managing Director

55%

Director

15%
33%

15%
9%

33%

9%

6% 6%

• To further strengthen the incentive to strive for the Company’s sustainable growth and enhancement of corporate value over the
medium to long term
• To offer remuneration of a nature and level that is effective in continuing to secure outstanding human resources with diverse skills• To base remuneration on the role and magnitude of responsibilities of the Directors and their contribution to performance

Basic remuneration

Annual bonus

Medium-term bonus

Stock compensation

Note: Listed based on the expected amounts at the beginning of fiscal 2020

• To offer remuneration that fluctuates greatly in accordance with performance related to management strategies• To offer remuneration in which benefits and risks are shared with shareholders and which provides incentive to management fromthe standpoint of shareholders• To offer remuneration that is determined in reference to external data and based on a transparent and fair process

90

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202091Section 04

Corporate Governance

The Asahi Group’s Governance— Governance Systems for Rapidly Accelerating Global Management

Comparison of Director Incentives

Policy of Reducing Cross-Shareholdings

Annual bonus

Medium-term bonus

Stock compensation

Objective

Strengthen incentive to strive for theCompany’s sustainable and steady growth,enhancement of financial value, andachievement of targets

Strengthen incentive to strive for theCompany’s discontinuous growth andachievement of medium-term operating
results

Strengthen incentive to strive for theCompany’s long-term sustainable increasein corporate value and align interests andrisks with those of shareholders

PeriodSingle fiscal year

Three years

Three years

Payment method

Cash

Cash

Stock

Payment period

Every March

Following March after the end of period

Upon resignation

Individual evaluation

Yes

Yes

No

Clawback provision(return of incentive
compensation)

No

No

Yes

Medium-term bonus

Linked to KPIs in annual business plans, aims for steady andcontinuous improvement in financial value

Linked to KPIs in medium-term business plans, aims to enhance CF management
and improve social value

50%

Item

50%

Consolidated core
operating profit

Profit attributable toowners of parent

Target/Previous year

¥147.0 billion /¥213.0 billion¥80.0 billion /¥142.2 billion

Results¥167.8 billion¥92.8 billion

60%

40%

Financial value indicators

Social value indicators

FCF

EBITDA¥242.3 billion ¥315.7 billion——

CDP (Climatechange, Water)

FTSE4GoodMSCI sustainability rating

A ListContiguous
adoption

BBB

—

—

—

84.94%—

FormulaRole-specific basic remuneration × (Target ratio forconsolidated core operating profit × Coefficient + YoYchange × Coefficient) × 50% + (Target ratio for profit
attributable to owners of parent × Coefficient + YoY change
× Coefficient) × 50% × Individual evaluation coefficient* Fluctuation of +/- 30% depending on individual evaluationRole-specific basic remuneration × (Target ratio for financial value indicators ×
60% + Target ratio for social value indicators × 40%) × Medium-term
individual evaluation coefficient* Fluctuation of +/- 30% depending on individual evaluation

Notes: 1. In consideration of the global spread of COVID-19, the 2020 target for annual bonus KPIs uses the figures announced in August 2020 (30% change in target ratio coefficient inaccordance with this revision).
2. As the medium-term bonus is paid once every three years, there was no performance evaluation for 2020. Also, there are no KPIs for stock compensation as it is provided based on a
fixed amount per specific role.

Supervisory Board Members in accordance with job responsibilities and member status as inside or outside. Survey data

Members and within the total amount for remuneration deter-from external professional organizations is also utilized in thismined in advance at the General Meeting of Shareholders.

process.

Remuneration for Audit & Supervisory Board Members

Reference: Amount of the Remuneration for Directors and Audit & Supervisory Board Members (2020)(Millions of yen)Fixed remuneration

Directors (of whom,
Outside Directors)

Audit & Supervisory
Board Members(of whom, Outside Audit &Supervisory Board Members)

92

9 (3)

6 (3)

Variable remuneration
Annual bonus

Total

Number ofpeople343 (51)

6 (—)

116 (40)ASAHI GROUP INTEGRATED REPORT 2020

For shareholdings during the period under review, strategic necessities such as maintaining and strengthening busi-

In addition, the Company gives thorough consideration toness relationships and facilitating smooth business activities

such factors as the appropriateness of the purpose of holding

were verified, and the appropriateness of holding shares inshares and the impacts of holding shares from the perspec-

terms of risks and other factors was examined based on thetive of the level of contribution to business performance andabove policy. The results of the examinations were reported

risks. The Company also investigates specific elements suchto the Board of Directors, and the appropriateness of holding

as how holding shares measures against capital cost. The

the shares was confirmed. The total amount recorded on the

results of the examinations of major shareholdings, includingbalance sheet and the ratio of total equity as of the end of

the significance of the holding, are reviewed every year byfiscal 2020 are as follows.

the Board of Directors.
to the Company’s sustainable growth or to increases in its
corporate value over the medium to long term, the Company,
as a shareholder, engages in the necessary dialogue with the

Total equity (a)¥1,517,816 million

Total amount recorded onbalance sheet (b)¥126,111 million

Ratio (b ÷ a)

8.3%

counterpart entity. Shareholdings that are deemed not capa-

Also, in its efforts to accelerate the reduction of cross-ble of being improved, even after engaging in such dialogue,

shareholdings, the Company decided on the sale of shares

are sold in a timely and appropriate manner.

held in Ting Hsin Holding Corp. (¥27,381 million recorded

For each target agenda item, the Company appropriately

on the balance sheet, with a ratio of total equity of 1.8%).

exercises voting rights attached to the shares it holds byAccordingly, the Company signed a definitive sale andcomprehensively weighing factors such as whether proposals

purchase agreement with Ting Hsin in the first quarter ofcontribute to the sustainable growth of the Company andfiscal 2021.

Measures for Enhancing Corporate Governanceand is determined through discussions by the Audit &through discussions by the Audit & Supervisory Board

Number ofpeopleinvestee’s shareholders.

consists only of basic remuneration (a fixed monthly amount)

Remuneration for Audit & Supervisory Board Members is set

Basic remuneration

shares that it deems as neither contributing to the sustain-

In the event a shareholding is deemed not to contribute

CoefficientRemuneration for Audit & Supervisory Board
Members

and whether they contribute to the common interests of thevalue over the medium to long term.

Annual bonus

Percentage

increases in corporate value over the medium to long term,

and capital efficiency, the Company refrains from holding
able growth of the Company nor increasing its corporate

KPIs and Formulas for Variable Remuneration

Reason for selection

In consideration of its goal to pursue improvement in asset— (—)

Medium-term bonus

Total

Number ofpeople205 (—)

6 (—)

— (—)

— (—)

Stock compensation

Total

Number ofpeopleTotal

81 (—)

6 (—)

82 (—)

— (—)

— (—)

— (—)

Total

2000

2007

• Terms of Directors were shortened to one year.

2011• The Company transitioned to a pure holding
company structure.

2013• Takeover defense measures were abolished.

2015• Corporate Governance Guidelines were formulated.
• Evaluations of the effectiveness of the Board of Directors
were commenced.

2017• Performance-Linked Stock Compensation Plan was introduced for Internal Directors.

2018• Title of CEO was transferred from Chairman of the Board to
President and Representative Director to improve theeffectiveness of management supervision from an operational execution perspective.
• Third-party evaluations with respect to the effectiveness of
the Board of Directors were introduced.

711 (51)

116 (40)• Corporate Officer System was introduced.
• Nomination Committee and Compensation Committee
were established.
• Number of Outside Directors was increased from one
to three.

2018• Evaluations of the effectiveness of the Audit &Supervisory Board were commenced and third-party
evaluations were introduced.
• Majority of officers appointed as members of theNomination Committee and Compensation Committee arefrom outside the Company. Both committees are chairedby an Outside Director.

2019• The Company transitioned to a structure in which the
Chairman of the Board of Directors does not serve concurrently as a Representative Director.
• Standards and guidelines were formulated for the resignation of the CEO, the appointment of Representative
Directors, and the clarification of terms of office for officers.
• The number of Outside Directors on the Board of
Directors was raised, now constituting one-third of total
Board members.
• The overall functions of remuneration systems were
strengthened to provide an incentive to Internal Directors.

2020• The CXO system was introduced to enhance
global governance.

ASAHI GROUP INTEGRATED REPORT 202093

Section 04

Corporate Governance

The Asahi Group’s Governance— Governance Systems for Rapidly Accelerating Global Management

Risk Management

Risk Type

Details

Projected Impact on the Asahi GroupThe Asahi Group’s Response• Decrease in domestic working population as a result of declining birthrate andaging population• Greater demand for personnel andchanges in and enhancement ofnecessary skill set stemming fromexpansion of global business• Further strengthening of businesscompetitiveness• Lack of capability to achieve medium- tolong-term targets in light of inadequate andunstable workforce• Development of initiatives for cultivating candidates for future
management positions to coincide with formulation of succession plan
• Global promotion of optimal placement of personnel• Promotion of diversity through the revitalization of interaction
between personnel across all regions and the hiring of personnel regardless of gender or nationality• Widening supply–demand gap of truck
drivers as a result of declining working
population associated with the declining
birthrate and aging population andgrowth of e-commerce• Stagnant supply of products• Increase in transportation costs• Promotion of local-production-for-local-consumption logistics
model• Reduction of logistics-related labor through introduction oflogistics devices and systems• Establishment of modal shift and other new trunk transport
schemes• Achievement of highly efficient transport through collaboration
with companies in other industries• Improvement of workplace environment via measures toenhance logistics efficiency• Rise in average temperatures, shift inprecipitation patterns, and intensificationof abnormal weather• Tightening of regulations associated withgreenhouse gas emissions• Tightening of water resource-related
regulations• Change in customer behavior• Incurrence of losses from product waste,
opportunity loss, and damaged equipment
and facilities due to the intensification ofabnormal weather• Higher operating costs reflecting rising costof key raw materials• Higher operating costs associated withtightening supply and demand for water andincreased water costs caused by severe
droughts• Higher product prices reflecting implementation of carbon tax• Impact of water use regulations on business
continuity• Impact of higher ethical standards on sales• Reduction of CO2 emissions by 50% in Scope 1 and 2 by 2030
(compared with 2019)• Reduction of CO2 emissions to zero by 2050 in Scope 1, 2, and
3 and becoming carbon neutral• Curbing of basic water consumption to 3.2 m3/kl or less by
2030 through streamlining of water usage and expansion ofrecycling system•E ndorsement of TCFD recommendations, proactive efforts toanalyze and respond to risks and opportunities presented byclimate change that impact our business, and enhanced
disclosure of such details• Alcohol-related tax laws such as the
Liquor Tax Act, Food Sanitation Act,
Product Liability Act, Labor Standards
Act, Anti-Bribery Act, Unfair Competition
Prevention Act, environmental laws, andvarious other legal restrictions• Unexpected implementation of new laws
and regulations• Boycott movements related to activities
that violate human rights and otherforms of corporate ethics• Disciplinary measures and filing of legal
action due to violation of laws andregulations• Social sanctions• Impairment of Asahi’s reputation andbrand value and resulting decline in sales
stemming from loss of stakeholder trust• Promotion and supervision of Group-wide corporate ethics andcompliance by the Compliance Committee• Implementation of training programs to ensure strict adherence
to and raise awareness of the Asahi Group Code of Conduct
among employees• Formulation of Asahi Group Human Rights Principles inaccordance with the United Nations Guiding Principles on
Business and Human Rights• Implementation of human rights training programs for employees and business partners• Establishment of human rights due diligence to address humanrights risks facing suppliers and employees• Development of mechanisms to provide access to remedy• Strengthening of regulations on plastic
waste and on imports of plastic products• Strict social views on products made fromlarge amounts of plastic in light of plastic
waste contribution to marine pollution• Drastic decline in demand for products usinglarge amounts of plastic materials incontainers and packaging• Impairment of Asahi’s reputation due toinadequate response• Higher recycling expenses and sharp
increase in production costs through use ofalternative materials• Promotion of 3Rs• Effective use of plastic containers• Conversion to use of eco-friendly materials for plastic containers• Development of new eco-friendly materials and discussions on
the adoption of sales methods that do not involve the use ofplastic containers and packaging• Political uncertainty, economic crisis,
retaliatory tariffs, threats of boycott overtreatment of refugees, racial discrimination, tightening of regulations, tax reform,
natural disasters, and emerging infectious
diseases• Reduced cost competitiveness due tounfavorable conditions for foreign-capitalcompanies, lower profits, business closures
attributable to political, military, and socialpressure, safety concerns of employees,
failure to achieve management targets,recording of medium- to long-term losses,
and business withdrawals• Early detection and effective prevention of risks through collectionof information at Group companies and appointment of external
consultants• Formulation of BCP designed to cope with major incidents• Dispersion of revenue streams through continuous globalization• Increasingly severe market conditions for
raw materials utilized in products• Bankruptcy and acquisition of suppliersand cornering of markets by competitors• Adverse impact of production of key raw
materials on local environment andcommunities• Higher prices of raw materials• Halt to operations stemming from inability to
procure raw materials• Impairment of Asahi’s reputation spurredby emergence of social issues alongsupply chain• Procurement at stable prices through use of fixed rates, multiyear contracts, and financial products•A lleviation of impact of rising prices and dispersion of procurement
risk through purchase of raw materials from multiple suppliers andestablishment of competitive landscape• Prevention of procurement risk and curbing of costs by considering transition to alternative materials• Conducting of procurement activities that respect the global
environment and local communities

15 Quality• Potential threats to customers’ health
posed by quality-related accidents arisingfrom contingencies• Impairment of business results, company
reputation, and brand value triggered by lossof customer confidence• Promotion of efforts to identify, examine, and address mattersrequiring special attention and tasks that may impact quality
throughout each process, from product design to sales• Advancement of quality assurance technology through introduction of AI and other leading technologies• Development of latest analytical technologies for ensuring foodsafety• Adoption of international approaches to quality and food safety
management systems and acquisition of external certification

16 Other Risks• Financial risk (including exchange rate,interest rate, rating, and asset pricefluctuation risks)• Tax risk
• Litigation risk

• Increased costs, increasingly severe
competition, restrictions to businessactivities, and impact on operating results
and financial condition• Utilization of various risk-hedging strategies

8 Securing ofAt the Asahi Group, we control overall risk effectively and efficiently through our enforcement of enterprise risk management (ERM), while
promoting appropriate risk-taking by clearly specifying the risks to be accepted or minimized based on the Asahi Group Risk Appetite
Statement. The Group has identified the following major risks as likely to have a significant impact on its corporate value over the medium
to long term.

Risk Type1 Impact

Associated
with
COVID-19

2 Expansion ofBusiness
Operations

3 Emergence of

New Business
Models via
TechnologicalInnovation

4 Information

Security

5 Social Values

Pertaining toAlcohol
Consumption

6 Operating

Environment

7 Large-Scale

NaturalDisasters

94

DiverseTalented
Personnel
9 Widening

Details

Projected Impact on the Asahi GroupThe Asahi Group’s Response• Adverse effects on the global economy
stemming from a downturn in the foodservice industry and governmentimposed stay-at-home restrictions• Increasing tendency to save money• Increased focus on health and theenvironment and greater emphasis on
trusted, secure brands• Extended use of digital services bystandardizing the use of online channels• Continuously sluggish sales centered onbeer for on-premise market• Deterioration of profitability as a consequence of sales mix comprising productswith relatively low profit margin• Decline in effectiveness of conventional
strategies and competitiveness of the Group
as a result of irreversible changes to
consumers, markets, and society• Strengthening of Medium-Term Management Policy from thestandpoint of “reforming the earnings structure in response tochanges in the business environment”• Timely responses to constantly changing consumer behavior• Planning and development of business strategies that anticipatechanges to market landscape• Development of new operating model• Development of global management
platform centered on the three coreregions of operation: Japan, Europe, andOceania, and expansion of growth
foundation– 2009: A cquisition of Schweppes
Australia– 2016: A cquisition of beer business inWestern Europe– 2017: A cquisition of beer business inCentral and Eastern Europe– 2020: A cquisition of CUB business inAustralia• Impairment loss resulting from changes inbusiness environment and competitive
landscape, a sharp rise in interest rates, andmarket contraction• Continued use of management resources from external sources
directed toward business growth• Pursuit of more-effective Group governance• Provision of new value through use of
the latest digital technology incorporating
IoT and AI• Streamlining of supply chain throughutilization of AI• Emergence of alcohol-alternative
products• Rapid growth in adoption of remote
workstyles and use of e-commerce andother online channels• Reduction of industry presence andcompetitiveness• Establishment of market dominance andcreation of new markets through the Asahi
Group’s leadership in innovation• Disruption to business activities as aresult of power outages, disasters,
defective software and devices, andcyberattacks; loss and leakage ofconfidential information; loss of personal
information; fraud; and violation of theEuropean Union’s General Data
Protection Regulation (GDPR) and otherregulations in various countries• Interruption of business• Cash outflow due to compensation andclaims for damages, etc.
• Imposition of fines due to GDPR violations• Decline in operating results, financial
condition, and corporate brand value• Monitoring of cyber security incidents through ASAHI-CSIRT
and other IT systems• Development of system for timely and optimal prevention andprotection against recurring incidents• Security measures associated with software and devices• Implementation of employee training and development
programs• Examinations regarding possible
implementation of global alcohol sales
regulations• Decline in alcohol consumption stemming from increased focus on alternatives and health worldwide• Expenses associated with regulatorycompliance• Deterioration in operating results of Asahi’score Alcohol Beverages Business• Impairment of reputation• Collaboration with alcohol industry and industry groups such as
IARD• Promotion of responsible drinking awareness campaigns andhealth-conscious products• Establishment of sales and marketing-related voluntarystandards• Strengthening of employee training programs on responsible
drinking• Market trends characterized by shifts indemand resulting from deteriorating
economy, intensifying competition,changing consumer preferences,
population decline, and declining
birthrate and aging population• Decline in sales due to drop in consumptionof alcohol beverages, soft drinks, and food• Deterioration of profitability arising from
intensifying competition and consequential
decrease in unit sales prices• Enhancement of value of high-value-added brands and creationof new markets• Acceleration of earnings structure reforms that anticipate futurechanges in business environment• Reinforcement of product lineup for all alcohol beverages• Pursuit of areas that address increased focus on health of
consumers and aging society• Rising number of risks related toearthquakes, tsunamis, typhoons, floods,
and other natural disasters in Japan andoverseas• Halt to product manufacturing anddeliveries• Inability to procure raw materials andresources• Interruption and halt to business activities• Decline in consumer sentiment• Implementation of safety confirmation system and strengthening of emergency communications system• Prevention of secondary disasters by reinforcing production
plants with earthquake-resistant construction, ensuring safety ofequipment, etc.
• Formulation of BCP by reflecting on past performance andexperience in large-scale disasters• Establishment of backup facility at data center

ASAHI GROUP INTEGRATED REPORT 2020

Supply–Demand Gap
in Domestic
Logistics

10 Risks Related

to Climate
Change11 Compliancewith Laws andRegulations
and Soft Law• Strengthening of investment in intangible assets (including R&D
and human resource development) directed toward innovationand new value creation• Development of a new operating model by increasing investment in digital transformation• Creation of unique value via the establishment of Asahi Quality
and Innovations, Ltd., a Group base for innovation• Creation of new value through customer experience incorporating open innovation and generation of ideas based on design
thinking

12 Use of

Plastics

13 Country Risks

Associatedwith Global
Business
Development
14 Risks

Associated with
Procurementof Key Raw
Materials

ASAHI GROUP INTEGRATED REPORT 202095

Section 05

Fact Data

Our History
Extensive Experience That
Transforms Challenge andInnovation into Growth

2001•	Asahi enters the happoshu market.
•	Asahi captures top share of the Japanesebeer and happoshu markets.*2•	Asahi makes The Nikka Whisky DistillingCo., Ltd. a wholly owned subsidiary.

The Asahi Group has achieved growth throughout the years by cherishing

2002•	Asahi acquires MINTIA.

three values: “challenge and innovation” that creates new value, such as2006•	Asahi acquires stock in Wakodo Co., Ltd.,
Japan’s largest baby food company.

2008•	Asahi acquires stock in Amano JitsugyoCo., Ltd., Japan’s largest freeze-dried
food company.

the release of Asahi Super Dry, which at the time completely changed theway people thought about beer, and the cultivation of brands loved by all
generations; “excellence in quality” that the Group delivers to its custom-

2009•	Asahi enters the Oceania market in earnest.

2011•	Asahi enters the Southeast Asia market in earnest.

Group Revenue in2012•	Asahi acquires stock in Calpis Co., Ltd.

Fiscal 20202016

•	Asahi acquires SABMiller plc’s beer businessin Western Europe.

2017•	Asahi acquires SABMiller plc’s beer business
in Central Europe.

2019• The Asahi Group Philosophy (AGP) is enacted.

2020•	Asahi reorganizes its overseas beer businesses.
• Asahi acquires Australian businessof Anheuser-Busch InBev.

2,027.7¥

billion*1 Revenue figures for the period from1937 to 1945 were calculated basedon production volumes.
*2 Based on taxable shipment volume offive major Japanese breweries

ers; and “shared inspiration” that the Group enjoys with its stakeholders.
Drawing on these values as its foundation, the Group will leverage
strengths such as its long-cultivated brands and human resources

1989•	Asahi celebrates its 100th anniversary.

in Japan and overseas to deliver premium value to an even

1992

•	Asahi Beer Foods Co., Ltd. (now Asahi
Food & Healthcare Co., Ltd.) isestablished.

1994•	Asahi enters the Chinese market.

1996•	Asahi begins exports of Asahi Super Dry
to the United Kingdom.

1998•	Asahi claims top share ofJapan’s beer market.*2

greater number of customers around the world.

1884• Hiranosui (now MITSUYA CIDER)
is launched.

1958•	Asahi launches Japan’s first cannedbeer, Asahi Beer.

1889•	Osaka Beer Brewing Company isestablished.

1969•	Asahi pioneers the practice of putting
expiry dates on product labels.

1892• Asahi Beer is launched.

1971

1900

•	Japan’s first bottled draft beer islaunched.
• Asahi Beer wins a gold medal at
the 1900 Paris Expo.

1930• EBIOS is launched.

1982

1985

•	Asahi launches Japan’s first aluminumcanned beer.

2001–
Expanding our businessportfolio and strengthening
our brands by leveraging
synergies•	Mitsuya Foods Co., Ltd. (now Asahi Soft
Drinks Co., Ltd.) is established.
•	Asahi introduces a corporate identityand bolsters brand strength.

In 2001, Asahi entered the happoshu market
and captured the top share in Japan’s beer and

Trend in Revenue

*1

1889–

1949–

The starting point for “thehighest level of quality” and“challenge and innovation”

A second start andfurther innovation

The Company was founded in 1889 with the aimof producing authentic Japanese beer that is
made by Japanese people. Winning awards at
expos and exhibitions both domestically andabroad, we are constantly striving for “thehighest level of quality,” which has been a partof our corporate culture since our founding.

96

happoshu markets. Vigorous M&A activity in the

ASAHI GROUP INTEGRATED REPORT 2020

1987–
An incredible leap brought
about by years of innovation

Alcohol Beverages (excluding beer-type), Soft
Drinks, and Food businesses made the Asahi
brand a top name in each respective category.

2009–

2018–

Making strategic moves
toward global growth
In Japan, Asahi continued its cultivation of new

Fortifying our global­business foundation in the
pursuit of further growthbrands, such as Clear Asahi, WILKINSON, andTo establish its business foundation—which now

MINTIA, which created new demand for drinking
and eating to drive growth of their respective
markets, and acquired CALPIS, a popular lactic
acid bacteria beverage. Overseas, Asahi took on
a new challenge as a global player, entering
markets in Oceania and Southeast Asia andcarrying out a large-scale acquisition ofEuropean beer businesses.

spans the globe with the entry of the European
business into the Group—as a driver for further
growth, Asahi is striving for unique value creation underpinned by its newly formulated Asahi
Group Philosophy (AGP). In 2020, Asahi
acquired the Australian business Carlton &United Breweries Pty. Ltd. (CUB) of AnheuserBusch InBev SA/NV, thereby establishing a
structure focused on three core regions of operations: Japan, Europe, and Oceania. By combining its strengths such as the brands and humanresources in these three regions, Asahi aims tobecome a Glocal (global and local) Value
Creation Company.

Furthermore, as Asahi expanded its portfolio, theCompany worked to enhance the brand strengthin each of its businesses by developing synergies
across their entire range.

In 1987, Asahi launched Japan’s first dry draft
beer, Asahi Super Dry, which was brought toIn 1949, Asahi Breweries, Ltd. was established,fruition by ideas that went beyond the common

a product of a corporate breakup brought on by

ways of thinking within the beer industry at that

post-war economic decentralization in Japan.

time. Since then, Asahi has worked to spur

Thereafter, Asahi continued to expand its busi-

innovation in its overall supply chain manage-

ness foundation, centered on its whisky andment in such ways as establishing quality

spirits and soft drinks businesses, and worked tostandards for freshness. In 1998, these efforts

create new drinking opportunities, including thewould culminate in Asahi capturing the top

introduction of canned beer in Japan.

share of Japan’s beer market.

ASAHI GROUP INTEGRATED REPORT 202097Section 05

Fact Data

Financial Highlights
Asahi Group Holdings, Ltd. and Consolidated Subsidiaries
Years ended December 31

Revenue / Liquor Tax ¥

2,027.7 billion

Cash Flows (¥ billion) Revenue

2,500

Revenue

2,000

Total revenue, despite the benefits of the consolidation of Carlton & United Breweries Pty. Ltd. (CUB),
was down as on-premise and other sales of beer
dropped around the world due to the impacts of the
COVID-19 pandemic. The amount of liquor tax paid
declined in conjunction with revenue.

1,500

Liquor tax

2,027.7

1,000

’10

’11

’12

’13

’14

’15

’15

’16

JGAAP

’17

’18

’19

’20

IFRS

167.8

billionCore operating profit

200

Despite reductions in fixed costs, core operating
profit was down following reduced revenue in existing
operations and a less profitable channel mix.

150

Core operating profit(%)(Right)  Core operating profit margin (including liquor tax)
Core operating profit margin (excluding liquor tax)

20

167.8
10.7
8.3

100

16
12
8

50

4

0

0

’10

’11

’12

’13

’14

’15

’15

’16

JGAAP

’17

’18

’19

’20

196.5

EPS (post-adjustment)

Profit attributable to owners of parent decreased dueto the lower core operating profit as well as one-time
expenses incurred as a result of the COVID-19 pandemic. Post-adjustment earnings per share (EPS)
also decreased.

ROE (post-adjustment)

Return on equity (ROE) after adjustment decreased
due to lower profit attributable to owners of parent
coupled with a rise in total equity attributable toowners of parent, due to increased retained earnings
and increased issued capital and share premium,
which rose as a result of a public offering.

(¥ billion) 
200

(Yen)

(Left)
Profit attributable to owners of parent(Right)  EPS (pre-adjustment)
EPS (post-adjustment)

196.5
196.5
92.8

150
100

320
240
160

50

80

0

0

’10

’11

’12

’13

’14

’15

’15

’16

’17

’18

’19

’20

IFRS

196.8

-150
-1,300

’10

’11

’12

’13

’14

’15

’15

’16

’17

JGAAP

’18

’19

–1,243.3

’20

IFRS

6.03

times

Net Debt/EBITDA(¥ billion) 
2,000(Left)

Interest-bearing debt

(Right)Net Debt/EBITDA

1,823.6
6.03

1,500

Interest-bearing debt increased due to bond issuances
and a rise in short-term borrowings associated with theacquisition of CUB. Net debt/EBITDA increased due tohigher interest-bearing debt and decreased EBITDA asa result of the COVID-19 pandemic.

(¥ billion) 
1,600

1,516.1(Left)
Total equity attributable to owners of parent(Right)  ROE (pre-adjustment)
ROE (post-adjustment)

1,200

7.5
6.7

800
400
0

53.9

3.0

500

1.0

’10

’11

’12

(Left)

120

Dividend payout ratio (post-adjustment)

’13

’14

’15

’15

’16

’17

’18

’19

IFRS

53.9
53.9
106

Dividend per share(Right)  Dividend payout ratio (pre-adjustment)
Dividend payout ratio (post-adjustment)

100

0

’20

80

The dividend per share was increased by ¥6 year on
year, to ¥106 per share, based on the Company’s
shareholder returns policy of pursuing stable dividend increases. The consolidated dividend payout
ratio rose in conjunction with the drop in profit attributable to owners of parent.

5.0

2.0

(Yen) 

%

7.0
6.0

4.0

1,000

0

(Times)

(%)
60
50
40

60

30

40

20

20

10

0

’10

’11

’12

’13

’14

’15

’15

’16

’17

JGAAP

’18

’19

’20

0

IFRS

Capital Investment / Depreciation and Amortization*5 
(%)

¥

12.0

Capital investment

80

9.0

Overall capital investment was down as the reductions
in nonessential and nonurgent investments attributable
to the COVID-19 pandemic outweighed the rise ininvestments associated with the acquisition of CUB.

60

6.0
3.0

’10

’11

’12

’13

JGAAP

’14

’15

’15

’16

’17

’18

’19

84.4

’20

IFRS

Core operating profit = Revenue – (Cost of sales + Selling, general and administrative expenses)*2	Both pre-adjustment and post-adjustment figures are provided for EPS, ROE, and the dividend payout ratio. Post-adjustment figures exclude one-time special factors such as the impacts of0billion(¥ billion) 

15.0*1	Core operating profit is the reference indicator for normalized business performance.

business portfolio restructuring and foreign exchange movements.

275.8

0

JGAAP

ROE*2 / Total Equity Attributable to Owners of Parent 

7.5

Free cash flow

Dividend per Share / Dividend Payout Ratio*2 


JGAAP

%

Cash flows from operating activities
Cash flows from investing activities

IFRS

EPS*2 / Profit Attributable to Owners of Parent ¥

300Interest-Bearing Debt / Net Debt/EBITDA*4 (¥ billion) (Left)250(¥ billion) 150

Despite a decline in profit before tax that followed thedecrease in core operating profit, free cash flow*3
rose as cash was generated through reductions inworking capital and sales of non-business assets.
Meanwhile, net cash flows used in investing activities
increased due to the acquisition of CUB.

Core Operating Profit*1 / Core Operating Profit Margin ¥

196.8 billion

Free cash flow

463.7

500
0

¥

100

Capital investment

Depreciation and amortization

84.4
76.1

40
20
0

’10

’11

’12

’13

’14

’15

’15

’16

’17

JGAAP

’18

’19

’20

IFRS

*3	For 2020, Free cash flow = Cash flows from operating activities – Cash used in investing activities (excluding M&A and other business restructuring)
For 2019 and prior years, Free cash flow = (Cash flows from operating activities + Proceeds from sales of property, plant and equipment) – Purchase of property, plant and equipment*4	Under IFRS, EBITDA = Core operating profit + Amortization of intangible assets + Depreciation; under JGAAP, EBITDA = Operating income + Amortization of goodwill + Depreciation
Figures for 2020 have been calculated by excluding 50% of the amount of ¥300.0 billion for outstanding subordinated bonds from net debt.
*5	The above capital investment and depreciation and amortization amounts do not include lease assets or trademarks at the time of acquisition of subsidiaries.

98

ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 202099

Section 05

Fact Data

Sustainability Highlights
Asahi Group Holdings, Ltd. and Consolidated Subsidiaries
Years ended December 31

CO2 Emissions / Per Basic Unit 

Ratio of Female Managers (Kilotons)

We adopted Asahi Carbon Zero as a medium- to long-termtarget for reducing CO 2 emissions with the aim of achieving
zero CO 2 emissions by 2050. We increased our CO 2 reduction target for 2030 from 30% to 50%, and acquired SBT
1.5ºC verification.

1,000
800
600

623

441

416

297

800
600

409

400

200

200

0

0

2016

2017

2018

2019

2020

	Scope 1, 2 (Japan)
	Scope 1, 2 (Overseas)*1	Per basic unit
(Net sales and revenue)

People12 %Photo credit: BayWa r.e. renewable energy

Sales Volume for Unlabeled Products / Reduction of Resin Volume 

13.5

10
0

259

2018

2,400
1,800
1,200

1,081

1.4

3,000

600

2019

0

2020

	Reduction of resin
usage volume	Unlabeled product sales
volumeCommunities

Environment

42.6
2,227

50

40
30

Water Consumption / Per Basic Unit (Thousand m )(m /kl)
40,00010.0
36,42034,46630,00020,00022,3497.5

22,0633.9

10,000034,162

3.9

2016

2017

3.5
2018

3.6
2019

3.5

	Water consumption (Japan)

5.0	Water consumption (Overseas)*1

2.5

	Per basic unit
(per production volume [kl])2020

At The Nikka Whisky Distilling Co., Ltd. and Asahi Holdings(Australia) Pty Ltd, we produced hand sanitizer at our
in-house manufacturing facilities and, as COVID-19
spread, we donated a total of 72.2kl to healthcare workers
on the front lines.

In RTD products in Malaysia, we achieved a rate of 82%
for products with a sugar content of six grams or less per
100ml. By doing so, we greatly surpassed our goal of 70%
by 2021, well ahead of schedule.

0

Reduce Grain Usage through CALSPORIN ® 

15.4

16.0
14.0

2016

2017

2018

2019

2020

Attendance Rate for Human
Rights and LGBT e-Learningin Fiscal 2020

86.3 %

Hand Sanitizer Provided to
Healthcare Individuals

72.2 klRate of RTD Products with
Reduced Sugar Content*3(AHSEA)

82.0 %

Number of Participants in e-Learning Sessions on “Responsible Drinking” (Thousand tons)
800

600

600

400

400

200

200

0

0

620

2019

620

2019

In 2020, we expanded the scope of our responsible drinking training from domestic alcohol beverage operatingcompanies to all 35 Group companies in Japan, with a
97.5% attendance rate.*4 *5

630 630

2020

2020

*2 Asahi Holdings South East Asia
*3 Established standard of six grams or less per 100ml*4 Applicable to employees with a company email address*5 In 2018 and 2019, training targeted domestic alcohol beverage operating companies. In 2020, training targeted all Group companies in Japan.

Responsible Drinking

800*1 The targets of overseas Scope 1 and Scope 2 are for Oceania for 2015–2017; Oceania and Europe for 2018; and Oceania, Europe, and Southeast Asia for 2019–2020.

ASAHI GROUP INTEGRATED REPORT 2020

18.9

3

HealthWe have established the target of achieving a basic unit ofwater consumption of 3.2 m3/kl or less by 2030, and areworking to reduce water consumption by cutting back onwater use at manufacturing bases and promoting the reuseof water to achieve these targets. We are also working tominimize the environmental burden associated with water
intake and exhaust.

100

17.5

18.0

21.0

Percentage of RTD Products with Reduced Sugar Content (AHSEA)*2 
3Through the utilization of CALSPORIN®, a probiotic used
for livestock production, Asahi Biocycle Co., Ltd. has
improved the efficiency of feed grain and reduced theamount of feed grain needed to rear livestock.

20.0

20.4

Providing Hand Sanitizer for Healthcare Individuals (t)(Thousand cases)

20

22.0

Attendance Rate for Human Rights and LGBT e-Learning 
Executives and employees of operating companies inJapan took part in e-learning courses on human rights andthe LBGT community, with a total of 9,974 people participating. Due to the impact of the COVID-19 pandemic, wewere unable to reach our attendance rate goal of 90%.
However, we will continue to promote employees’ understanding of human rights and LGBT issues going forward.

Rate of Sustainable
Energy Use

At Asahi Soft Drinks Co., Ltd., we are developing unlabeled PET bottle products. Through these products, we
aim to eliminate the time and effort spent removing labelsfrom PET bottles when disposing of them, while lessening
the burden on the environment by decreasing the amountof waste.

(%)

0

Usage Volume / Usage Ratio for Sustainable Energy We joined RE100 in 2020. By 2050, we aim to have arenewable energy electricity usage rate of 100% and arepromoting the proactive introduction of renewable electric
power into our business activities.

We have specific goals for promoting the success of female
employees at each major operating company and are
advancing initiatives for accomplishing these goals. As aresult, the ratio of female managers has been steadily
increasing. A new female auditor was appointed in 2020.

1,000

619
365

400

830

921

881

(kg/¥ million)(Participants)

13,50015,00012,000
9,000
6,000

5,694

6,312

2018

2019

3,000
0

2020

Sales Composition of Non-Alcohol Beverages (AEI) 
At Asahi Europe and International (AEI), 6.0% of our sales
were for non-alcohol beverages. Due to the impact of the
COVID-19 pandemic and the reduction in restaurant
meals, which are a key NAB consumption occasion, wewere unable to achieve our goal of 6.4%. Nevertheless,this maintains a positive share of mix growth versus 2019,
and we are continuing to drive initiatives to achieve ourgoal of 20% by 2030.

(%)
8.0
6.0
4.0

4.9

6.0

3.5

2.0
0

2018

2019

2020

ASAHI GROUP INTEGRATED REPORT 2020101Section 05

Eleven-Year Financial and Non-Financial Summary

Fact Data

Information about This Page
• The Company’s consolidated financial statements have been prepared based on JGAAP for the years up to the fiscal year ended December 2015
and based on International Financial Reporting Standards (IFRS) from the fiscal year ended December 2016 onward. The line items have been
prepared based on IFRS.
• The IFRS line item “revenue” corresponds to “net sales” under JGAAP, while “core operating profit” corresponds to “operating income”; “profit
attributable to owners of parent” corresponds to “net income”; and “equity attributable to owners of parent” corresponds to “shareholders’ equity.”

Asahi Group Holdings, Ltd. and Consolidated Subsidiaries
Years ended December 31

IFRS

JGAAP
(Billions of yen)%(Billions of yen)

YoY Change(2020/2019)

2010

2011

2012

2013

2014

2015

2015

2016

2017

2018

2019

2020

Revenue
Cost of sales
Selling, general and administrative expenses
Core operating profit*1
Profit attributable to owners of parent—pre-adjustment—post-adjustment*2
EBITDA*3
Capital investment
Depreciation and amortization
Research and development expenses
Financial Position (At year-end):¥ 1,489.4
943.3
450.7
95.3

¥ 1,462.7
907.2
448.3
107.1

¥ 1,579.0
974.7
495.9
108.4

¥ 1,714.2
1,032.8
563.9
117.4

¥ 1,785.4
1,073.4
583.7
128.3

¥ 1,857.4
1,100.5
621.7
135.1

¥ 1,689.5
1,102.8
445.9
140.6

¥ 1,706.9
1,098.1
460.2
148.4

¥ 2,084.8
1,295.3
593.1
196.3

¥ 2,120.2
1,303.2
595.6
221.3

¥ 2,089.0
1,297.3
578.7
212.9

¥ 2,027.7
1,283.1
576.7
167.8

–2.9
–1.1
–0.3
–21.2

53.0

55.0

57.1

61.7

69.1

76.4

75.7

89.2

157.6
27.8
54.6
9.3

166.8
30.6
50.7
8.9

170.9
41.1
48.5
9.6

183.6
48.4
47.7
10.8

192.3
59.8
44.5
10.7

197.9
52.0
46.6
10.3

197.2
53.5
50.8
10.3

205.8
63.4
51.0
9.5

141.0
120.1
285.3
89.5
69.8
11.6

151.0
150.6
318.4
78.2
75.0
12.3

142.2
142.2
304.8
86.1
70.6
12.8

92.8
92.8
269.4
84.4
76.1
13.1

–34.7
–34.7
–11.6
–1.9
7.7
2.8

Total assets
Interest-bearing debt
Total equity
Cash Flows:
Cash flows from (used in) operating activities
Cash flows from (used in) investing activities
Cash flows from (used in) financing activities
Cash and cash equivalents at end of period
Per Share Data (In yen):
Profit attributable to owners of parent—pre-adjustment—post-adjustment*2
Dividends
Equity attributable to owners of parent
Financial Ratios:Core operating profit margin (%)
ROE (Ratio of profit to equity attributable to owners of parent) (%)—pre-adjustment—post-adjustment*2
ROA (Ratio of profit before tax to total assets) (%)
Total asset turnover (Times)
Equity attributable to owners of parent ratio (%)
Net debt/EBITDA (Times)*3, 4
ESG:
Number of employees at year-end
Number of directors (Total) (At year-end)
Number of directors (Outside) (At year-end)
Water consumption (Thousand m3)*5
CO2 emissions (Kilotons)*5, 6
CO2 emissions (Scope 3) (Kilotons)*7¥ 1,405.3
311.4
612.6

¥ 1,529.9
390.0
643.7

¥ 1,732.1
456.2
726.8

¥ 1,791.5
403.7
827.4

¥ 1,936.6
434.7
896.5

¥ 1,901.5
414.9
891.8

¥ 1,804.6
414.4
803.6

¥ 2,086.3
570.3
846.1

¥ 3,346.8
1,261.9
1,152.7¥ 3,079.3
1,027.3
1,149.6¥ 3,140.7
943.2
1,248.2¥ 4,439.3
1,823.6
1,517.8

41.3
93.3
21.6

¥   125.6(41.7)(90.8)
10.8¥   108.5(171.2)
67.0
16.1¥   109.2(134.3)43.0
34.3¥   157.2(65.7)(84.9)
41.1¥   146.7(92.1)(35.8)
62.2¥   112.7(75.5)(73.0)
43.2¥   116.4(77.0)(75.2)
43.2¥   154.4(268.5)119.5
48.4¥   231.7(885.8)661.8
58.0¥   252.4
22.5(270.5)57.3¥   253.4(103.6)(158.8)48.4¥   275.8(1,243.3)
956.7
48.4

8.8
—
—
–0.0

¥  114.10¥  118.36¥  122.75¥  135.73¥  148.92¥  166.25¥  164.82¥  194.75

23.00
1,315.51

25.00
1,378.19

28.00
1,553.35

43.00
1,772.47

45.00
1,904.64

50.00
1,916.69

50.00
1,723.97

54.00
1,825.57¥  307.78
262.2375.00
2,499.62¥  329.80
328.9599.00
2,502.67¥  310.44
310.44100.002,720.76¥   196.52
196.52106.002,992.06

6.4

7.3

6.9

6.9

7.2

7.3

8.3

8.7

9.4

10.4

10.2

8.3

9.0

8.8

8.4

8.0

8.1

8.8

9.7

7.1
1.05
43.6
1.90

7.6
1.00
41.9
2.24

7.0
0.97
41.8
2.47

7.0
0.97
45.7
1.97

7.1
0.96
45.5
1.92

7.6
0.97
46.2
1.85

6.5
0.93
43.7
1.86

16,71213
219,130740—

16,75911
318,966728—

17,95610
3
19,532815—

18,00111
3
23,664855—

21,1779
323,615613—

22,1949
323,933621
2,960

Operating Results (For the year):

14.2

13.2

11.9

6.7

13.7
7.2
0.77
34.2
4.22

15.2
6.5
0.66
37.2
3.05

13.0
6.3
0.67
39.7
2.93

7.5
3.3
0.54
34.2
6.03

23,61910
323,889623
3,169

30,86410
323,723619
2,912

28,05510
338,623881
2,899

29,3279
340,292921
3,084

29,8509
337,673830
5,497*1	Core operating profit is the reference indicator for normalized business performance. Core operating profit = Revenue – (Cost of sales + Selling, general and administrative expenses)*2	Post-adjustment figures exclude one-time special factors such as the impacts of business portfolio restructuring and foreign exchange movements.
*3	Under IFRS, EBITDA = Core operating profit + Amortization of intangible assets + Depreciation
Under JGAAP, EBITDA = Operating income + Amortization of goodwill + Depreciation*4	In 2020, calculated based on net debt after the deduction of 50% of outstanding subordinated bonds (¥300.0 billion)*5	Please refer to the following link for information on the scope of calculation regarding water consumption and CO2 emissions.
Sustainability website: https://www.asahigroup-holdings.com/en/csr/editing.html*6	Results up to 2013 are for Scope 1, 2, and 3 in Japan. Results from 2014 on are for Scope 1 and 2 in Japan and overseas.
*7	Applicable companies up to 2019 were Asahi Breweries, Ltd. and Asahi Soft Drinks Co., Ltd. Applicable companies in 2020 were Asahi Breweries, Ltd., Asahi Soft Drinks Co., Ltd., Asahi Europe
and International Ltd., and Asahi Holdings (Australia) Pty Ltd.

Trend in Revenue

Trend in Core Operating Profit

Trend in Total Assets(¥ billion)(¥ billion)(¥ billion)

240

4,500

2,027.7

2,200

160

1,400
1,000
0

167.8

200

1,800

’10

’11

’12

’13

’14

’15

’15

JGAAP

102

11.0
11.2
7.7
0.88
39.9
2.52

ASAHI GROUP INTEGRATED REPORT 2020

’16

’17

’18

IFRS

’19

’20

3,700

2,100

80

1,300

’10

’11

’12

’13
JGAAP

’14

’15

’15

’16

’17

’18

IFRS

’19

’20

0

Trend in the Number of Employees at Year-End(Employees)

29,85032,00026,000

2,900

120

0

4,439.3

20,00014,000

’10

’11

’12

’13
JGAAP

’14

’15

’15

’16

’17

’18

’19

’20

0

’10

’11

’12

’13

’14

’15

’16

’17

’18

’19

’20

IFRS

ASAHI GROUP INTEGRATED REPORT 2020103

Section 05

Fact Data

Discussion and Analysis of 2020 Business Results

Analysis of Business Results
Overview of Businessexecuted marketing strategies catering to the changes in the

In 2020, although the global economy showed a gradualmarket environment and consumer needs. At the same time,

recovery at the start of the year, it deteriorated rapidly due in

the Group strove to secure financial soundness through suchpart to the impact of restrictions on economic activities

measures as curtailing capital investment and fixed costs andfollowing the global spread of COVID-19, and remained in an

enhancing the efficiency of working capital. The Group also

extremely difficult condition. The Japanese economy also

took steps to fulfill the responsibility it has to its stakeholders,experienced tough conditions as consumer spending andincluding promoting efforts to support its business partners

exports declined owing to the spread of COVID-19 in Japanand local communities.
Despite these initiatives, the Group posted revenue ofand the worsening situation in the global economy.
Under these conditions, the Asahi Group continued to¥2,027.7 billion, down 2.9% year on year, owing mainly to themove forward with Glocal (global and local) Value Creation

negative impact of economic stagnation brought about by theManagement as described in the Medium-Term

downturn in the food service industry and the enactment ofManagement Policy while being guided by the Asahi Group

stay-at-home restrictions worldwide. Furthermore, core oper-

Philosophy (AGP). The Group also worked to enhance theating profit*1 was ¥167.8 billion, down 21.2%, and operating

value of its core brands in each business and strengthen

profit came to ¥135.1 billion, down 32.9%. Profit attributableproposals for new value, while simultaneously implementing

to owners of parent was ¥92.8 billion, down 34.7%.

measures to combat the COVID-19 pandemic.

When excluding the impacts of foreign exchange influ-

In terms of COVID-19 countermeasures, while prioritizing
the safety of its employees and their families, the Group

ences, revenue declined by 2.6% and core operating profit by
21.1%.* 2*1 Core operating profit is the reference indicator for normalized business performance. Core operating profit = Revenue – (Cost of goods sold + General andadministrative costs)

Major Trends in Business Performance

(¥ billion)

2020

2,089.0

2,027.7(61.2)

Alcohol Beverages

886.8

758.2

(128.5)

Soft Drinks*3

376.8

353.3

(23.4)

value-oriented management, aiming to create value for cus-

Food*4

128.9

123.4

(5.4)

tomers and new markets—we worked to create special value

Revenue

Overseas*

3

Other*

4

Adjustment(corporate/elimination)
Core operating profit

698.5

792.9

YoY Change

94.4

97.7

93.1

(4.5)

(99.9)(93.4)

6.4

212.9

167.8

(45.1)

Revenue
In the Alcohol Beverages Business, under the newly established long-term management policy—transform towardand experiences for our customers, centered on beer-type
beverages. Although these efforts boosted sales of new genre
beer-type beverages and sales of RTD beverages exceeded
the previous year’s sales by capturing demand for drinking athome, revenue in the Alcohol Beverages Business declined
overall as a result of the significant decrease in sales of beercaused by reduced sales via vending machines. Core operat-

reduced work hours in the office.

ing profit was also down in the Food Business as a result of

In the Overseas Business, we accelerated our efforts

the decline in revenue, which outweighed an improvement in

toward further growth by expanding our premium beer brands

overall fixed costs. In the Overseas Business, despite the risein the global market and pursuing the premiumization of ourin revenue, core operating profit declined owing primarily tobrand portfolio in respective local markets, among otherthe deterioration of profitability caused by the changes inmeasures. As a result of these efforts, revenue from thesales mix per marketing channel and the incurrence of one-Overseas Business rose mainly due to the effects of newly

time expenses resulting from the acquisition of the CUB

incorporating the CUB business into the scope of consolida-

business.

tion, which helped offset the impact of market contraction

which includes a decline in profit from the Other Business,

19 pandemic as well as other factors.

decreased 21.2%, or ¥45.1 billion, to ¥167.8 billion.

As a result of the above, consolidated revenue, including
the decline in revenue from the Other Business, amounted toOperating Profit¥2,027.7 billion, down 2.9%, or ¥61.2 billion, year on year.

Operating profit decreased 32.9%, or ¥66.2 billion, to ¥135.1
billion, year on year, as a result of the decline in core operat-Core Operating Profit

ing profit and an increase in other expenses.

In the Alcohol Beverages Business, core operating profit
declined due to lower revenue, which offset such efforts as

Profit Attributable to Owners of Parent

reducing manufacturing costs and reforming our earnings

Profit attributable to owners of parent was ¥92.8 billion, down

structure. In the Soft Drinks Business, core operating profit

34.7%, or ¥49.3 billion, year on year, due to a decline in profit

declined owing mainly to the impact of declining revenue andbefore tax.

the deterioration in the mix of product type and container type

Analysis of Financial Position
Total assets stood at ¥4,439.3 billion on December 31,

billion, up ¥269.5 billion from the previous year-end. This

2020, an increase of ¥1,298.5 billion from a year earlier,outcome was a result of increases in issued capital and sharedue in part to an increase in goodwill and trademarks follow-

premium due to the issuances of new shares through public

ing the newly incorporation of the CUB business*5 into theoffering, the disposal of treasury shares through public offer-scope of consolidation.

ing, and an overall increase in retained earnings owing to the

Total liabilities came to ¥2,921.5 billion, up ¥1,029.0

recording of profit attributable to owners of parent. As a result,billion from the previous year-end, mainly as a result of an

the equity attributable to owners of parent ratio declined 5.5increase in financial liabilities centered on short-term loans

percentage points, to 34.2%.

that accompanied the acquisition of the CUB business.

Furthermore, the adjusted equity attributable to owners of

Total equity at the end of the year stood at ¥1,517.8

105.5

80.4

(25.0)

Soft Drinks*3

33.4

27.8

(5.6)

In the Soft Drinks Business, we aimed to establish a solid
business foundation for further growth by revitalizing the soft

Factors Contributing to Change in Core Operating Profit

drinks market via reinforcement of the carbonated beverage(¥ billion)

for restaurants due to the COVID-19 pandemic.

Food*4

13.7

10.9

(2.7)

Overseas*3

102.2

94.1

(8.1)

1.5

1.3

(0.2)

and by strengthening initiatives to enhance social value,

Adjustment(corporate/elimination)(43.5)(46.8)(3.3)

among other efforts. While these efforts led to a year-on-year

Core operating profit margin(including liquor tax)

10.2%

Core operating profit margin(excluding liquor tax)
Profit attributable to ownersof parent

category and investment in products that create new value,

increase in sales volumes of carbonated beverages, revenue
8.3%(1.9pts)

13.2%
142.2

10.7%
92.8

(2.5pts)(49.3)*3 Transfer of Calpis Beverage U.S.A. Inc., which was previously included in Other/elimination in the Overseas Business, to Asahi Soft Drinks Co., Ltd. in the Soft
Drinks Business*4 Transfer of certain businesses of Asahi Calpis Wellness Co., Ltd., which werepreviously included in the Other Business, to Other/elimination in the Food Business

ASAHI GROUP INTEGRATED REPORT 2020

250

230

in the Soft Drinks Business declined overall as vending
machine sales decreased owing to the COVID-19 pandemic.

Core
Operating
Profit(2019)

212.9

Alcohol
Beverages– 25.0Soft Drinks
190

brands in response to diversifying lifestyles. Although theseendeavors led to year-on-year increases in sales of suchparent ratio, which is calculated using profit attributable to210

In the Food Business, we worked to build a sustainablegrowth foundation through new value proposals for our core

As a result of the above, consolidated core operating profit,

caused by restrictions in various countries during the COVID-

Alcohol Beverages

Other*4104*2 The figures in 2020 are converted by the previous year’s local currency rate.

2019

the significant decrease in sales of MINTIA resulting from

170

– 5.6

Food

– 2.7

Adjustment

Overseas

– 8.1

Other

– 0.2

(corporate/elimination)

– 3.3

Core
Operating
Profit(2020)

167.8

products as health and beauty foods and freeze-dried miso
soup, revenue in the Food Business declined overall due to

150

ASAHI GROUP INTEGRATED REPORT 2020

105

Section 05

Fact Data

Discussion and Analysis of 2020 Business Results

owners of parent and equity attributable to owners of parent
ratio excluding one-off special factors including businessportfolio restructuring and exchange rate influences, stood at*5 Regarding the acquisition of the CUB business, the amount of goodwill and theassets acquired and liabilities assumed at the acquisition date are provisional asof the end of the year because the review to verify the identifiable assets andliabilities at the acquisition date is still in progress and the allocation of acquisition costs is yet to be completed.

7.5% (compared with 13.0% in the previous year).

Analysis of Cash Flows

Capital Investment
Capital investment during 2020 decreased ¥1.6 billion, tomachines. In the Food Business, we implemented strategic¥84.4 billion. In the Alcohol Beverages Business, we focusedinvestments to boost production capacities with a view toon strategic investment to improve profitability as well as

expanding sales. In the Overseas Business, our focus was on

investments for bolstering whisky production capacity. In thea strategy of continuous profitability improvement, based on

Soft Drinks Business, we carried out investments for aug-which we conducted capital investments for heightening

Cash Flows from Operating Activities

an increase of ¥1,115.6 billion from the previous year, result-menting our production capacities in order to increase theefficiency as well as investments for increasing the production

Net cash provided by operating activities amounted to ¥275.8

ing from the issuance of new shares and an increase in finan-

ratio of in-house production as well as investments for improv-

capacities of beer manufacturing facilities in Europe.

billion, an increase of ¥22.3 billion from the previous year,

cial liabilities due to the procuring of short-term loans.

ing profitability through the capitalization of vending

resulting from the cash inflow of profit before tax of ¥125.3

As a result of the above, cash and cash equivalents at thebillion, a rise in non-cash items such as depreciation andend of the period stood at ¥48.46 billion, a decrease of ¥29

amortization, and an increase in working capital efficiency.

million from the end of the previous year.

Cash Flows from Investing Activities

Cash Flow Indicators

Net cash used in investing activities came to ¥1,243.3 billion,
an increase of ¥1,139.7 billion from the previous year, due inpart to the acquisition of the CUB business.

2019

Cash flow to interest-bearing debt
ratio (annual)

36.9

YoY Change

7.1

3.0 percentage
point increase

27.5

9.4 percentage
point decrease

4.1

Interest coverage ratio (times)

Cash Flows from Financing Activities

2020

Net cash provided by financing activities was ¥956.7 billion,

R&D Expenses
Group-wide R&D expenses in 2020 increased ¥0.3 billion, toenvironmental changes caused by the COVID-19 pandemic.

¥13.1 billion. In our R&D activities, we are promoting productWe are also working to establish a structure under which wedevelopment focused on creating unprecedented new value

can utilize remote workstyles in our R&D activities to thein the Alcohol Beverages, Soft Drinks, and Food businesses.

greatest extent possible. By doing so, we will achieve results

At the same time, we are pursuing innovative technologicalthat meet the needs of the new generation. To promote R&D

development to realize a sustainable society that gives consid-

activities that are not constricted by conventional frameworks,

eration to the environment and contributes to people’s well-

we are actively leveraging cutting-edge technologies and open

being. Furthermore, we are reviewing our R&D strategies in a

innovation and harnessing Group-wide synergies.

swift and flexible manner so that we can better respond to the

Liquidity and Capital Resources
Profit Distribution Policy and Dividends
We acquire our capital resources principally through cash flows

the quick recovery of the Company’s financial position, main-

generated by operating activities, loans from financial institu-

taining current credit ratings, and minimizing refinancing risks.

Regarding the use of free cash flow, we have given priority totions, and the issuance of bonds. As a management policy, we

We are focusing on reducing overall capital and interest costs ininvestments for growth such as M&As and other initiatives while

per share, up ¥6 from the previous year, based on our con-regard the reduction of interest-bearing debt as a priority issue.

this financing endeavor. Meanwhile, we meet working capitalworking to enhance our capital investment capacity by reducing

solidated financial position and full-year results. For 2021, we

Nevertheless, we make flexible use of financial liabilities accord-needs, in principle, through short-term loans and the issuancedebt based on the Medium-Term Management Policy. Fromplan to pay a full-year ordinary dividend of ¥109 per share,of commercial paper.

2021, we will prioritize the allocation of funds toward reducing

comprising an interim dividend of ¥54 per share and a year-

ing to the need for capital resources to invest. Potential investments include capital investment to strengthen and streamline

In addition, the Company and its major consolidated

debt, which has increased following the acquisition of the CUB

end dividend of ¥55 per share, up ¥3 from 2020.

our business foundations and strategic investments such as

subsidiaries have introduced a cash management system thatbusiness in Australia, while enhancing our capacity to execute

M&As. In regard to the acquisition of the CUB business, whichchannels the excess funds of Group companies to thegrowth investments. Moreover, concerning shareholder returns,*2 The dividend payout ratio is calculated based on the figure for profit attributableto owners of parent, which excludes one-off special factors such as the impactsof business portfolio restructuring and foreign exchange influences.

was completed on June 1, 2020, funds have been procured

Company so that we can centrally manage these funds. Thiswe will continue to aim for steady dividend increases with thethrough a combination of debt financing, with the goal of mini-

system enables us to both improve capital efficiency andgoal of reaching a payout ratio of 35%.*2

mizing interest costs, and equity financing, aimed at facilitating

minimize financing costs.

Cash Flows

Interest-Bearing Debt / Net Debt/EBITDA

275.8
196.8

(¥ billion)
300
0(¥ billion)

1,823.6

2,000

6.03

1,500
−300
−600

(Times)
8.00

6.00

4.00

1,000

Capital Investment by Business

R&D Expenses(¥ billion)(¥ billion)

120

4.1
1.9

90

4.2

60

17.9
3.6
13.0

−900
−1,200−1,500–1,243.3
’16

’17

’18

’19

’20

500

2.00

30

0

0

0

IFRS

Cash flows from operating activities

Cash flows from investing activities

Free cash flow
Note: For 2020, Free cash flow = Cash flows from operating activities – Cash used in investing
activities (excluding M&A and other business restructuring)
For 2019 and prior years, Free cash flow = (Cash flows from operating activities + Proceedsfrom sales of property, plant and equipment) – Purchase of property, plant and equipment106

For 2020, we paid a full-year ordinary dividend of ¥106

ASAHI GROUP INTEGRATED REPORT 2020

’16

’17

’18

’19

’20

0.4

Interest-bearing debt (Right)

4.7

2.3
36.9

0.6 48.2

3.1
12.0

21.4

4.0
16.3

24.4

23.4

23.1

23.9

25.1

’16

’17

’18

’19

’20

IFRS

Net debt/EBITDA

Notes: 1. EBITDA = Core operating profit + Amortization of intangible assets + Depreciation
2. In 2020, calculated based on net debt after the deduction of 50% of outstanding
subordinated bonds (¥300.0 billion)

Alcohol Beverages
Other

Soft Drinks

13.1

5.7
45.1

5.5

15

7.3

23.0

IFRS

(Left)

35.8

0.5

4.5

10

5

0

’16

’17

’18

’19

’20

IFRS

Food

Overseas

Other Adjustment (corporate/elimination)

ASAHI GROUP INTEGRATED REPORT 2020107Section 05

Fact Data

Company Profile / Investor Information (As of December 31, 2020)

Promoting Engagement through IR Activities

Corporate Profile

Number of shares
held(in hundreds)

Percentage ofshares held(%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)544,610

10.7

Custody Bank of Japan, Ltd.
(Trust Account)

222,510

4.4

The Dai-ichi Life
Insurance Company, Limited

160,000

3.2

Name of shareholder

Major IR Activities in 2020

Date of establishment

September 1, 1949

Issued capital¥220,044 million

Quarterly briefing sessions (first-, second-, and fourth-quarter briefing
sessions by the president and relevant officers and third-quarter session by
the IR and finance sections)

Number of employees

313 (consolidated: 29,850)

Number of Group companies

Consolidated subsidiaries: 206
Equity-method affiliates: 25

Approx. 260 times

IR interviews, teleconferences, and online meetings for analysts and­institutional investors

Total number of issued shares

507,003,362

SMBC Nikko Securities Inc.

115,575

2.3

Trading unit

100 shares
129,324

2.0

Approx. 30 times

Number of shareholders

100,000

Interviews, teleconferences, and online meetings with shareholders andinvestors in Japan conducted by the president and other corporate officers

Fukoku Mutual Life
Insurance Company

Stock exchange listing

Tokyo Stock ExchangeInterviews, teleconferences, and online meetings with overseas shareholders
and investors conducted by the president and other corporate officers

Securities code

2502

Fiscal year-end date

December 31

JPMorgan Securities Japan Co., Ltd.

84,289

1.7

Sumitomo Mitsui Banking Corporation

80,280

1.6

Annual general meeting ofshareholders

March

Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd.

75,6271.5

Administrator ofshareholder registry

Sumitomo Mitsui Trust Bank, Limited

1,567,143

30.9

Independent­accounting auditor

KPMG AZSA LLC

ActivityFrequency

Financial results briefings for analysts and­institutional investors

4 times

IR interviews for analysts andinstitutional investors
Interviews with institutional investors in Japan
Interviews with overseas institutional investors

Approx. 80 times

Details

300

Stock Price(Index)250
Total Shareholder Return (TSR)

Asahi Group
2016/12200

Major Shareholders

2017/122018/122019/12TOPIX

TOPIX Foods

2020/12

Asahi Group

98.6

150.5

118.4

139.8

123.1

TOPIX Foods (including dividends)

100.3

122.6

103.0

121.7

130.7

GIC PRIVATE LIMITED – C

96,399

1.9Asahi Kasei Corporation

87,853

1.7

Total

Notes: 1. The treasury shares (177,512) exclude the Company’s shares (110,442) heldby Custody Bank of Japan, Ltd. as trust property of the stock compensation
system.
2. Shareholding percentages are calculated based on the total number ofissued shares less the number of treasury shares.

Breakdown of Shareholdings by Investor Type

Breakdown of Shareholdings by Number of Shares Held

Brokerages

1,000 or more

150

Treasury shares

7.7%

100

0.0%

5.4%
10,000 or more

Other corporations

8.7%

50
2015/122016/122017/122018/122019/12Financial institutions

38.8%

2020/12

Note: The closing price on December 30, 2015 has been indexed to 100.

100,000 or more

15.9%

Individuals, other

9.6%

4.0%

Foreign corporations, etc.

35.2%

1,000,000 or more

100 or more

3.2%
Less than 100

0.1%
5,000,000 or more

44.4%

27.0%

External Recognition
Inclusion in ESG Indices

Evaluations of Environmental Initiatives

Interest in investment focusing on environmental, social, and governance (ESG) factors has been rising in recent years. This investment approach, seen primarily in the asset management activities of domestic and overseas institutional investors, entails using bothfinancial data and non-financial initiatives in evaluation standards for investment decisions. ESG evaluations are conducted by numerous domestic and overseas institutions. Asahi Group companies are included in a number of ESG indices.

A survey by international NPO CDP placed Asahi Group
Holdings, Ltd. on the A List, its highest rating, in the category ofclimate change, for the third consecutive year. Also, the survey
placed the Company on the Supplier Engagement Leaderboard,the highest rating in the category of supplier engagement.

Evaluations of Diversity and Employee HealthManagement Initiatives
The Asahi Group has long been aspiring to develop workplace environments that allow all employees to remain
healthy and feel empowered in their work. These initiatives
have been highly evaluated, resulting in the Group receiving
several honors from external bodies.

Note: The inclusion of ASAHI GROUP HOLDINGS, LTD in any MSCI Index, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship,endorsement or promotion of ASAHI GROUP HOLDINGS, LTD by MSCI or any of its affiliates. The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI index names andlogos are trademarks or service marks of MSCI or its affiliates.

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ASAHI GROUP INTEGRATED REPORT 2020

ASAHI GROUP INTEGRATED REPORT 2020109