Long-Term Vision & Medium-Term Management Policy

Transcription

1 Long-Term Vision & Medium-Term Management Policy Overview of 2015 Financial Results 2016 Business Strategy February 2016

2 Executive Summary Overview of Medium-Term Management Plan 2015 The ROE and EPS targets are achieved as a result of the growth of business focused on the strength and capital efficiency improvement Issues that remain to be addressed include the profit plans of mainly soft drinks and overseas business were unachieved in addition to further high value addition and creation of new demand Future Changes in the External Environment Diversification in consumption behavior as a result of escape from deflation and revision of tax regulations and large-scale global industry realignment occur Management approach and the perspective of stakeholders shifts toward the medium and long term in response to the Corporate Governance Code, etc. Formulation of the Long-Term Vision and Medium-Term Management Policy Long-Term Vision is revised adding business vision of the future ten years out Medium-Term Management Policy is reformed from the previous action plan format to a format with emphasis placed on the medium-term direction for realizing the business vision 1

3 Overview of Medium-Term Management Plan 2015 Achievements Achieved the ROE and EPS targets through steady business growth from focus on strengths and capital efficiency improvement Progress with development of a comprehensive alcohol beverages business through development of top brands and expansion of a strong brand foundation in each business Profit structure reform results exceeding targets and implementation of an optimal capital policy, including enhancement of shareholder returns Challenges Total profitability target not achieved due in part to a delay in achieving profit plans, mainly in the soft drinks and overseas businesses Innovation that leads to sustained growth, further high value addition, and creation of new value and new demand Acceleration of the strategies for growth of Oceania, Southeast Asia, and other existing overseas businesses and expansion of the global foundation for growth Operating Income Net Income Net Sales 1,579 1,714 1,785 1,

4 Progress of Medium-Term Management Plan s Quantitative Targets Key Performance Indicators (KPIs) 2012 Results 2015 Results CAGR Achievement vis-à-vis Target ROE 8.4% 8.8% - not met Adjusted ROE* 8.6% 10.4% - met Medium-Term Managemet Plan Targets Approx. 10% Adjusted ROE (Before Goodwill Amortization) 11.2% 13.1% - exceeded Approx. 12% EPS (growth rate) 123 yen 11.6% 10.6% met Average annual growth rate: 10% or higher *Adjusted ROE: Calculated by excluding foreign currency translation adjustments and valuation difference on available-for-sale securities from shareholders equity <KPIs Guidelines> (Billions of yen) 2012 Results 2015 Results CAGR Achievement vis-à-vis Target Net Sales % 5.6% met EBITDA** % 5.0% not met Net Income % 10.1% exceeded Medium-Term Managemet Plan Targets Average annual growth rate: 3% or higher Average annual growth rate: 6% or higher Average annual growth rate: 7% or higher Operating margin 6.9% 7.3% - not met 8% or higher Dividend payout ratio 22.8% 30.1% 30.6% met Approx. 30% Total return ratio 22.8% 56.1% 78.9% exceeded 50% or higher **EBITDA: Operating income (before goodwill amortization) + DepreciationApprox 3

5 The Future External Environment Future Changes in the External Environment Further diversification and value variation in consumption behavior as a result of escape from deflation and revision of tax regulations Emergence of a wide variety of risks and opportunities to result from slowing of growth in emerging economies and continuation of large-scale global industry alignment Shift in management approach and the perspective of stakeholders toward the medium and long term in response to the Corporate Governance Code and other factors Principal SWOT Factors in the Business Portfolio Top share in the domestic beer-type beverages market (market share of 50% for beer alone) Third in share in the domestic soft drinks market Category-leading food brands and businesses Powerful networks in Oceania, Southeast Asia, and China Value variation in consumption behavior due to escape from deflation, revision of tax regulations, and other factors Continuation of high value addition, including in health functional products and other categories Holding of the Tokyo Olympics and registration of Japanese cuisine as an intangible cultural heritage Growth in the alcohol beverages and soft drinks markets, mainly in emerging countries Increase in market entry opportunities due to factors including global realignment Strengths S O Opportunities Weaknesses W T Threats Blue text: domestic Brown text: overseas Maturation of the alcohol beverages and soft drinks markets due to the declining birthrate and aging population, among other factors Continuation of a fiercely competitive environment in a deflationary environment 14% sales contribution from the overseas business Increasing oligopolization by large global corporations Greater than expected market contraction resulting from factors including economic stagnation Increasingly difficult competitive environment due to tax regulation revisions Economic slowdown in regions in which the Group operates (Oceania, Southeast Asia, China) Intensification of competition due to an offensive by large global corporations, among other factors 4

6 Overview of Long-Term Vision Striving to be a corporate group trusted around the world through the Kando of food (deliciousness, happiness and innovation) As a comprehensive beverage and food business group whose core business is alcohol beverages, aim to be an industry leader in Japan with high value addition as a key area of focus and establish a unique position as a global player that leverages strengths originating in Japan. Future sales trend by business Overseas Foods Soft Drinks Alcohol Beverages Challenge to global players Industry leader in high value addition Seek sustained corporate value enhancement by pursuing satisfaction for all stakeholders. Customers Vision for Stakeholders Continue to create new value based on strengths nurtured in Japan and achieve the No. 1 ranking for customer satisfaction in Japan and each region of the world. Business Partners Society Employees Shareholders Develop relationships with our business connections and alliance partners that enable mutual growth through new value creation. Contribute to the resolution of social problems through the Group s businesses in areas such as development of a wholesome food culture. Develop an environment in which employees experience both personal and corporate growth and can work vigorously. Enhance corporate value (equity value) through sustained profit creation and shareholder returns. 5

7 Overview of Medium-Term Management Policy Aiming at Further Development of Management for Corporate Value Enhancement Strengthening of power of earnings generating by positioning the domestic profit base as the cornerstone of earnings and the overseas business as a growth engine Promotion of innovation and demonstration of leadership in the industry with high value addition and differentiation as key areas of focus Earning structure reforms and business model evolution through business integration and value chain sophistication Acquisition of foundations for growth, mainly in overseas markets, leveraging strengths originating in Japan Asset and capital efficiency improvement that takes into consideration capital cost Capital efficiency improvement with an emphasis on equity spread (ROE - cost of shareholders' equity) Business administration and business portfolio restructuring utilizing ROIC (rate of return on invested capital) as a performance indicator Reinforcement of ESG (environmental, social, and governance) initiatives to increase sustainability Upgrading of hidden capital assets such as nature, social and relationship capital, and personnel and its development toward a CSV (creating shared value) strategy Implementation of active corporate governance that contributes to the practice of management to enhance corporate value Promote constructive dialogue by setting above key priorities as engagement agenda 6

8 Medium-Term Management Policy Guidelines Key Performance Indicator (KPI) Concept and Guidelines Net Sales Operating Income 2015 Results 1,857.4 Billion yen Billion yen Guidelines for FY2016 to FY2018 Stable growth from main businesses Business restructuring + New M&As Existing businesses (Average annual growth rate in the high single digits) + Impact of new M&As EPS yen Average annual growth of approx. 10% ROE 8.8% Maintenance and increase to 10% or higher *The above indicators take into account the impact of IFRS transition at the end of FY2016. *The calculation basis excludes special factors such as foreign exchange impact and one-off extraordinary items Financial and Cash Flow Strategy FY2016 to FY2018 Cumulative Guidelines Cash Flow Growth investment Shareholder returns Generated cash flow: billion or more (Operating cash flow + Maximization measures + Assets review) Capital expenditures: to billion Active investment in M&As and alliances to acquire foundations for growth (Maximum D/E ratio of approx. 1.0 time acceptable if major capital demands arise) Stable dividend increases with the aim of a dividend payout ratio of 30% (IFRS basis) by FY2018 Flexible common stock buybacks taking into account an appropriate balance with growth investment 7

9 Strengthening of power of earnings (Key Priorities by Business) Medium-Term Key Priorities Alcoholic Beverages Business Soft Drinks Business Foods Business Overseas Business Maintain high profitability and improve profitability as the Group s largest cash cow business Demonstration of leadership in the industry in high value addition and increasing the profit pool of the industry as the No. 1 comprehensive alcohol beverages company Strengthening of new value creation proposals through innovation and development of strong core brands in each category Earnings structure reforms through value chain upgrading and collaboration, and business model evolution including e-commerce Realize growth with profit by establishing a differentiated position as the Group s second mainstay business Establishment of a distinctive, prominent position centered on reinforcement of the brand power of key products High value addition in response to consumer health consciousness and new value proposals through innovation, including in the chilled beverages business Earnings structure reforms such as maximization of integration synergies, sales channel and container mix improvement, and SKU reduction Develop the Group s next-generation foundations for growth by focusing on strengths and leveraging business integration Brand value enhancement and strengthening of high-value-added product proposals through focus on existing categories where our strength lies New value and new demand creation through innovation that leverages business integration in areas such as foods with function claims Business selectivity and creation of integration synergies, earnings structure reforms through value chain optimization Expand the global foundation for growth leveraging strengths and drive the Group s sustained growth Implementation of strategies for growth centered on brand reinforcement and development in existing businesses in Oceania, Southeast Asia, and other regions Earnings structure reforms and business portfolio restructuring by region through means including expansion of integration synergies Acquisition of new foundations for growth by leveraging strengths originating in Japan, such as brand power and cost competitiveness 8

10 Improvement in Asset and Capital Efficiency Capital efficiency improvement with an emphasis on equity spread (ROE - Cost of shareholders equity = Corporate value creation) ROE maintenance / improvement Asahi Group Holdings Operating Companies ROIC improvement Profit margin on sales Capital turnover ratio Promotion of investment for growth that emphasizes returns Greater efficiency in groupwide supply chain management Improvement in human productivity, such as optimal personnel allocation Business portfolio selectivity and focus Asset efficiency and business management that leverages IFRS application Review and reduction of investment assets Brand strengthening centered on high value addition and differentiation Review of businesses and the product portfolio Profit structure reforms such as integration within businesses (Three-year efficiency effects of from 20.0 to 30.0 billion) Working capital reduction (current cost of capital, inventory reduction) Improvement in capacity utilization by means including business integration Reduction of non-core and nonperforming assets Financial leverage Utilization of financial obligations taking into account the optimal capital structure Enhancement of shareholder returns by means including steady dividend increases - Cost of shareholders' equity reduction Fair and appropriate disclosure of information, including non-financial information such as medium- to long-term management strategies and resource allocation Building of relationships of trust through constructive dialogue with shareholders and investors based on appropriate information disclosure 9

11 Reinforcement of ESG Initiatives Reinforcement of ESG (environmental, social, and governance) initiatives aimed at increasing sustainability Upgrading of invisible capital, such as natural, social and relationship, and human capital, and its development toward a CSV (creating shared value) strategy Upgrading of natural capital and social and relationship capital with an emphasis on sustainability (Reduction of CO 2 emissions amount/per unit of output and water consumption amount/per unit of output, expansion of cocreation with local communities and business partners) Upgrading of human capital essential for sustained growth (Utilization and activation of Group personnel, development of management and global talent, diversity promotion) Development toward a CSV (creating shared value) strategy that leverages the strengths of each business (Business model evolution, strengthening of the health functional category, utilization of the Tokyo Olympics and Paralympics) Implementation of aggressive corporate governance that contributes to the practice of management to enhance corporate value Implementation of further reforms based on the Corporate Governance Guidelines and Corporate Governance Code (Review of officer remuneration linked to corporate value, formulation of a succession plan, Board of Directors effectiveness assessment) Strengthening of Group governance to strengthen strategic functions and build medium- to longterm growth drivers (Strengthening of Asahi Group Holdings strategic functions, review of the overseas business promotion structure and innovation organization) 10

12 Overview of 2015 Financial Results and 2016 Business Strategy

13 Alcohol Beverages Business Strategy (Billions of yen) 2015 Overview 2015 Result YoY Change (Amount/%) Against Target 2016 Target YoY Change (Amount/%) Net Sales % 99.8% 1, % Operating Income % 100.1% % Note: 2016 target and YoY change amount/% reflect the impact of change due to business transfers. Achievement of sales and profit increases from progress in developing top brands and other initiatives to develop a comprehensive alcohol beverages business and implementation of profit structure reforms Shipments target for beer-type beverages not achieved due in part to a reactionary decline in Dry Premium sales, despite expansion of koto consumption (consumption based on intangible values) proposals for Super Dry Overall sales increase for alcohol beverages on growth in the domestic whiskey Taketsuru and wine sales and strong sales of the Dry Zero brand Overall profit increase for alcohol beverages thanks to the sales increase, product mix improvement for whiskey and other products, and greater efficiency in fixed costs overall 2016 Strategy Aim to be the leader in comprehensive alcohol beverage proposals by enhancing brand value and promoting innovation Further expand koto consumption proposals for beer-type beverages and reinforce new value and new demand creation proposals such as The Dream. Reinforce comprehensive alcohol beverage proposals by strengthening top brands, including Santa Helena Alpaca and Dry Zero, and introducing new brands. Implement beer-type beverage category mix improvement and profit structure reforms and boost brand investment with a view to the upcoming Olympics and Paralympics. 11

14 Beer-type Sales Results and Full Year Target Sales Result and Target by Brands (Millions of cases) 2015 Result 2016 Target YoY Change (Amount/%) Against Target YoY Change (Amount/%) Super Dry Total % 97.0% % Beer Total % 98.3% % Style Free Total % 113.7% % Happoshu Total % 101.9% % Clear Asahi Total % 98.6% % New genre Total % 97.5% % Total % 98.4% % <Market Outlook> 2015 Result 2016 Forecast Beer 0~-1% 0~-1% Happoshu 0~+1% -4~-5% New genre -2~-3% The same level of 2014 Total 0~-1% Approx. -1% 12

15 Beer Initiatives Proposal of new value of Super Dry Proposal for Koto consumption utilizing brand power <Expansion of Extra Cold (Number of Restaurants)> (Number) 15,000 10,000 5,000 Limited Package for Special Package Olympics and Launch on Feb. 2 Paralympics Challenge for creating new beer market Launch Asahi The Dream Maximum Richness and Sharpness Use 20% more malt than ordinary beer Adopt advanced yeast control technology 50% less carbohydrates Launch on March 23 Sales Plan:4 million cases Reconstruction of Premium Beer Strategy Product Strategy based on Achievements and Challenges Achievements Approx. 30% share of premium gift market Market expansion through the buzz when launched Challenges Satisfaction with richness and taste Prominent features differentiated from other products 13

16 Initiatives of Clear Asahi, Functional Beer-type Beverages Expansion of Clear Asahi Maximize the Clear Asahi brand asset (Million Cases) <Clear Asahi brand sales performance> Clear Asahi Total Sale Ratio in New Genre (Asahi) 73% 74% 65% % 82% Expansion of the presence in Functional Beer-type Beverages Market Beer Happoshu Zero Carbs 24Kcal (per 100ml) Sakura no Utage Launch on Feb. 2 New genre Zero carbs 6% Alcohol (Million cases) (E) <Functional Beer-type Beverages Market Trend> Beer Happoshu New genre Sales ratio in beer-type market 12% 13% 14% 16% 17% 50% less Carbs Maximum richness and sharpness Zero purine Zero carb 6% Alcohol Zero purine Zero carbs (E) 14

17 Other Alcohol and Dry Zero Overview Sales and Operating Margin Performance in other than Beer-type Beverages (Billions of yen) OP margin 6% % 10% % % 13% (E) Note: Wine figure in 2016 includes ENOTECA business Strengthening Non-alcohol Beer-taste Beverages Achieve No.1 sales in Non-alcohol Beer-taste Beverages in 2015 Non-alcohol Shochu RTD Wine Whiskey (Millions of cases) 25 <Non-alcohol Beer-taste Beverages market trend> 20 32% Dry Zero MarketVolume Share of Dry Zero 33% 38% 42% 43% Asahi Dry Zero brand 2015 result 7.34 million cases (+16% YoY) 2016 target 7.50 million cases (+2% YoY) Healthy Style (FOSHU) Launch on Feb (E) 15

18 Soft Drinks Business Overview & Strategy (Billions of yen) 2015 Result 2016 Target YoY (Amount/%) Against Target YoY (Amount/%) Asahi Soft Drinks * % 100.5% % Calpis % 97.1% LB % 97.6% % Net Sales % 100.0% % Asahi Soft Drinks * % 88.2% % Calpis % 147.0% LB % 95.8% % Operating Income % 95.4% % 2015 Overview Note: 2016 target and YoY change amount/% reflect the impact of the integration of Calpis into Asahi Soft Drinks. Achievement of a sales increase from enhancement of the value of main brands, but a profit decrease due to factors including higher sales promotion expenses Achievement of shipments growth above the industry average through concentration of management resources on main brands and strengthening of new value proposals, such as health functional products Cooperative synergies created in every aspect of supply chain management, such as building optimal production and distribution systems together with Calpis Profit decrease partly attributable to category and container mix deterioration and active advertising and sales promotion expenses 2016 Strategy Achieve sales growth and establish a robust profit structure through development of strong brands. Aim for sales growth for a 14th consecutive year through resource allocation focused on six core brands and product development centered on health. Cultivate an image of a company with strengths in the field of health by taking maximum advantage of unique technologies in areas such as products for specified health use and foods with function claims. Establish a robust profit structure through initiatives such as channel and container mix improvement, building of an optimal production and distribution structure, and improvement in capacity utilization. 16

19 Strategy for Growth and Earning Structure Reform in Asahi Soft Drinks Sales and Operating Profit Margin Composition of major 6 brands Sales (Billions of yen) 2.6% 4.1% 5.5% Operating Profit Margin 5.7% 4.8% Mitsuya WONDA Jurokucha Wilkinson Mineral Water Calpis Composition % 77.2% (Millions of cases) 73.4% % 78.9% (E) (E) Proposal of New Value for Health Consciousness Integrated Synergy with Calpis FOSHU Foods with Function Claims Water Billions of yen 2015 results results plan plan Total higher 6.5 higher Enhancement of group procurement of raw materials Reconstruction of optimum production and logistics system through all 6 factories Enhancement of integration of marketing and sales system Optimization of whole non-current assets like personal cost and indirect materials 17

20 Foods Business Strategy (Billions of yen) 2015 Result YoY (Amount/%) Against Target 2016 Target YoY (Amount/%) Sales % 102.1% % Operating Income % 120.2% % 2015 Overview Over-performance of overall business targets through focus on strong brands and implementation of cost reductions Achievement of targets at Asahi F&H as a result of strengthening of Mintia, offering of foods with function claims, and production cost reductions, among other factors Achievement of targets at Wakodo thanks to reinforcement of sales of commercial-use products and implementation of cost reductions centered on raw materials Targets not achieved at Amano Jitsugyo due to factors including stagnation in the corporate sales business for commercial-use products, despite channel expansion in the mass merchandiser sales channel 2016 Strategy Practice business and brand selectivity and focus and generate integration synergies as Asahi Group Foods Ltd. Although sales will decrease due in part to a business portfolio review, implement a strategy for growth involving fusion of strong brands and technologies. Further strengthen top brands such as Mintia and baby food and step up development of high-value-added products. Generate integration synergies by means including implementation of group procurement through business integration and restructuring of distribution bases. 18

21 Overseas Business Overview & Strategy (Billions of yen) 2015 Result YoY Change (Amount/%) Against Target 2016 Target YoY Change (Amount/%) Oceania % 100.4% % Southeast Asia % 89.5% % China % 94.2% % Net Sales % 97.0% % Oceania % 102.3% % Southeast Asia % 101.7% % China % 96.4% % Operating Income % 99.4% % 2015 Overview Total overseas business achieved profit target through increased focus in brands and driving earnings structure reform primarily in Oceania Oceania delivered both its sales and profit target driven by sales increase of growing categories and benefits realized through integration synergy South East Asia delivered its profit target driven by solid performance from Permanis, covering the under delivery of Indonesia China finished behind target due to increase in promotional expense, despite sales volume growth of Super Dry and initiatives around cost efficiencies 2016 Strategy Note: 2016 target and YoY change amount/% reflect the impact of change due to business transfers. Establish a solid business structure that generate stable growth in Oceania and strengthen growth structure in China and South East Asia In Oceania, reinforce its profit base through increased focus in growing categories and driving integration synergy In South East Asia, establish a mid-term growth platform through developing and strengthening the core brands and expanding sales channels In China, improve profitability through expanding Super Dry sales channels whilst maintaining low manufacturing cost and improving product mix 19

22 Oceania Business Overview & Strategy (1) Oceania Business 2015 Result & 2016 Target (based on local currency: AUD) (Million AUD) 2015 Result 2016 Target YoY Change (Amount/%) Against Target YoY Change (Amount/%) Net Sales 1, % 101.4% 1, % Operating Income % 103.3% % 2015 Overview Over delivered against both sales and profit target driven by core categories growing ahead of market and realizing synergy benefit Non-Alcohol business delivered its target through significant growth in water volume, enhanced focus in CSD and increased synergy benefit Australian Alcohol business delivered its target driven by core RTD brands and growing categories expanding ahead of market, driving the overall sales New Zealand Alcohol business successfully improved its profitability through growing the sales volume of core brands and effective pricing strategy Oceania business as a total delivered its profit target through driving supply chain efficiency, reducing fixed costs and driving synergy 2016 Strategy Aim for target delivery through increasing brand power and category value and driving further synergy across the business Non-Alcohol business will focus on water and NPD process for CSD that reflects the market trend to achieve sales growth ahead of market Australian Alcohol business will focus on enhancing its portfolio around its core brands and categories to expand its growth platform New Zealand Alcohol business will focus its management resources in core brands to improve product mix and deliver target Raw material cost is expected to rise given the weak Australian dollar against US dollar but this will be managed by reinforcing the earnings structure through production and warehouse footprints optimisation and vertical integration of supply chain 20

23 Oceania Business Overview & Strategy (2) Net Sales & Operating Income (based on local currency: AUD) Cost Reduction (incl. Integration Synergy Benefit): Result & Target (Billions of yen) 2015 Result Cost Reduction Result (Accumulated) Result (Accumulated) Target (Accumulated) Over 6.0 Over 5.0 Initiatives in Growing Categories (Graph: Jan-Nov Volume basis / Brackets: Jan-Dec growth rate) <Australia: Water Market Share> <Australia: Cider Market Share by Company> <Australia: Super Dry Sales Performance> A company 14% Others 14% Asahi 19% Private Labels 53% Asahi accounts for approx. 80% of Private Labels share (+23%) (+31%) Others C company 13% Asahi 8% 35% B company 12% A company 32% Source: Nielsen Source: Aztec Total Asahi Super Dry Total Asahi Soukai Total Asahi Black +51% +31% +42% Source: Aztec, MAT 21

24 Chinese Beer Business and Equity-Method Affiliates (Based on local currency) (Millions of yuan) 2015 Result 2016 Target <2015 Overview and 2016 Strategy> YoY Change (Amount/%) Against Target YoY Change (Amount/%) Net Sales 1, % 95.5% 1, % Operating Income % 97.8% % Profit decrease due to factors including a decrease in contract production volume at Yantai Beer, despite efforts to increase the Asahi brand s presence in all channels Although a decrease in contract production volume at Yantai Beer is forecast, pursue expansion of the Asahi brand and overall cost efficiency improvements. Tsingtao Brewery Co. <Jan-Sep Overview and Strategy> 6% decrease in sales despite efforts to strengthen core brands 20% decrease in net income due to factors including the impact of the sales decrease and escalation of sales promotion expenses Strengthen investment in the Tsingtao and Laoshan brands and aim for sales growth from an increase in the sales contribution from high-priced products. Improve profitability through product mix improvement from the introduction of high-value-added products and control of fixed costs. Tingyi-Asahi Beverages Holding Co. Ltd. <Jan-Sep Overview and Strategy> 9% decrease in sales despite concentration of investment on core tea and carbonated soft drinks 23% decrease in profit due to the impact of the sales decrease, despite efforts to improve fixed cost efficiency Aim for sales growth by focusing effort on tea and carbonated soft drinks and bolstering the functional beverage initiative. Improve profitability by reinforcing production cost and fixed cost reduction and further promoting generation of synergies with Pepsi. 22

25 Reference Information

26 Performance Overview of Equity Method Affiliates in China Tsingtao Brewery Performance Overview (Millions of Yuan) Q Q Q Q Total Result YoY Result YoY Result YoY Result YoY Result YoY Net Sales 3, % 7, % 8, % 8, % 27, % Operating Income % % % 1, % Net Income % % % 1, % (Millions of Yuan) Q Q Q Q Total Result YoY Result YoY Result YoY Result YoY Result YoY Net Sales 4, % 7, % 9, % 8, % 29, % Operating Income % 1, % 1, % 2, % Net Income % % % 1, % Tingyi (Cayman Islands) Holding Corporation <Soft Drinks Segment> Performance Overview (Millions of USD) Q Q Q Q Total Result YoY Result YoY Result YoY Result YoY Result YoY Net Sales % 1, % 1, % 1, % 5, % Operating Income % % % % Net Income % % % % (Millions of USD) Q Q Q Q Total Result YoY Result YoY Result YoY Result YoY Result YoY Net Sales % 1, % 1, % 1, % 5, % Operating Income % % % % Net Income % % % % 23

27 Exchange rate impact Key Currencies and the Company s Average Exchange Rates Impact of Exchange Rates on Income Statement (Yen) (Billions of yen) 140 USD AUD MYR RMB 12US Business Currency 2015 Result 2016 Target Oceania AUD Remarks 120 Southeast Asia China RMB Others Net Sales Oceania AUD Before amortization of goodwill etc Southeast Asia Before amortization of goodwill etc. China RMB Before amortization of goodwill etc. Other Overseas Amortization of Goodwill AUD Oceania Amortization of Goodwill Southeast Amortization of Goodwill Others Operating Income Equity in net income of unconsolidated subsidiaries USD Tingyi-Asahi Beverages Holding Equity in net income of unconsolidated subsidiaries RMB Principally Tsingtao Brewery 20 Equity in net income of unconsolidated subsidiaries Others /01 14/01 15/01 16/01 Non-Operating Income or Expenses Net Income

28 Information in this material is not intended to solicit sale or purchase of shares in Asahi Group Holdings. The views, estimates and other information expressed in this document are based on the company's judgment at the time of publication, and no guarantees are provided regarding the accuracy of such information. This information is subject to change without notice. The company and its officers and representatives accept no responsibility or liability for any damage or inconvenience that may be caused by or in conjunction with any part of these materials.