FY2008 Financial Results Presentation

20082008 FinancialFinancial ResultsResults BriefingBriefing

February 2009 ASAHI BREWERIES, Ltd.

URL http://www.asahibeer.co.jp Contents

Overview of 2008 Results………………….….……………… 1 Overview of 2008……………………………………………… 2 2009 Performance Forecast……………….…….…………… 3 Progress of Third Medium-Term Management Plan..….. 4 Beer-Type Beverages 2008 Sales…….……………...….. 5 Beer-Type Beverages 2009 Sales Targets………….…… 6 Beer-Type Beverages 2009 Brand Strategy….………...... 7 Other Alcoholic Beverages Results and Strategy………... Other Alcoholic Beverages Results and Strategy………... 8 Streamlining Marketing Costs………….……..….……. 9 Soft Drinks Business Overview and Strategy.…………… 10 Food and Healthcare Business Overview and Strategy … 11 Overseas Business Overview and Strategy…….….…… 12 Overseas Business M&As (1) ………………..……….……… Overseas Business M&As (1) ………………..……….……… 13 Overseas Business M&As (2) ………………….…..………… 14 Reference: Overseas Business and Capital Alliances… 15 Shareholder Return Policy ....….……....….……….……… 16 Overview of 2008 Results

billion yen (billions of yen) Operating income Net income (billions of yen) YoY （%） Net sales 2008 2007 Alcoholic Beverages 1,020 1,031 △11 △1% 1,464.1 1,462.7 1,444.2 1,446.4 Soft Drink +28 ＋11% 120.0 1,430.0 1,500.0 297 268 Food and Healthcare 82 69 +13 ＋18% Overseas 43 55 △12 △22% 100.0 101.2 1,400.0 Other 22 41 △19 △47% 94.5 90.2 Net Sales 1,463 1,464 △1 △0% 88.7 87.0 80.0 Alcoholic Beverages 91 80 +11 ＋14% 1,300.0 Soft Drink 5 8 △4 △44% Food and Healthcare 2 1 +1 ＋52% 60.0 Overseas △6 △6 △0- 1,200.0 Other 3 3 △0 △14% 40.0 Operating income 95 87 +8 ＋9%

Equity metod income 9 9 +0 ＋1% 44.8 44.8 45.01,100.0 20.0 39.9 Ordinary income 97 90 +6 ＋7% 30.6 Extraordinary profit and loss △14 △9 △5- Net income 45 45 +0 ＋1% 0.0 1,000.0 2004 2005 2006 20072008 2008 1

■ Medium-Term Business Strategy (2007 – 2009)

Alcoholic ● Reinforce the foundations of Asahi brands, focusing on Asahi Super Dry Beverages Business Î Produce stable, long-term cash flows

● Further growth of existing group companies ● Pursue synergies with new additions to our operating base acquired Group Business through M&As ● Continue to invest proactively

■ Overview of 2008 (Results and Issues) Results Alcoholic Beverages Business - Pressed forward with earnings structure reform by streamlining advertising and promotional expenses more than ever before to counter rising cost of raw materials - Reinforced brand foundations by nurturing core brands in each beer-type beverage genre Group Business - Achieved significant growth through growth of key Asahi Soft Drinks brands and integration of vending machine business - Supported sustained growth at Tingyi-Asahi-Itochu Beverages Holding Co., Ltd. - Acquired Amano Jitsugyo Co., Ltd., Schweppes Australia, and Tsingtao Brewery

Issues - Unable to achieve profit targets in domestic soft drinks business and overseas business (consolidated) due to more intense competition 2

billion yen (billions of yen) Operating income Net income (billions of yen) Net sales 2008 2007 YoY （%） 1,490.0 1,464.1 1,462.7 Alcoholic Beverages 1,027 1,020 +7 ＋1% 120.0 1,446.4 1,500.0 Soft Drink 1,430.0 310 297 +13 ＋5% Food and Healthcare 96 82 +14 ＋18% Overseas 37 43 △6 △14% 100.0 94.5 1,400.0 Other 20 22 △2 △9% 90.2 92.0 88.7 87.0 Net Sales 1,490 1,463 +27 ＋2% 80.0 Alcoholic Beverages 83 91 △8 △9% 1,300.0 Soft Drink 7 5 +3 ＋61% Food and Healthcare +1 ＋28% 60.0 3 2 Overseas △3 △6 +3 - 1,200.0 Other 2 3 △1 △32% 40.0 Operating income 92 95 △3 △3% 44.8 44.8 45.0 50.0 Equity metod income 6 9 △3 △30% 39.9 1,100.0 20.0 Ordinary income 94 97 △3 △3%

Extraordinary profit and loss 5 △14 +18 - Net income 50 45 +5 ＋11% 0.0 1,000.0 2005 2006 2007 20082009(E) 2009 (E)

■ Evaluation of qualitative targets (1) Reinforce the brand foundations in the Alcoholic Beverages Business through measures including ++ earnings structure reform Î Produce stable cash flows (2) Further growth in existing group companies – (3) Pursue synergies with new additions to our operating base acquired through M&As – (4) Continue to invest proactively +

■ Achievement of quantitative targets by business (billions of yen) Operating Net sales Level of income Level of Index to symbols target achievement guideline achievement Symbol Level of Alcoholic beverages 1,110.0 × 90.0 ++ achievement Soft drinks 290.0 ++ 14.5 × ++ Excellent Food and healthcare 80.0 ++ 3.0 - + Good Overseas 70.0 × 1.5 × – Fair Total sales 1,600.0 × 110.0 × X Poor * Does not account for impact of special factors such as changes to accounting standards. Special factors attributable to changes to accounting standards Contents Consolidated Non-consolidated

Tax system revision: Residual value after depreciation of up to 5% to be depreciated 2008 equally over 5 years ¥2.0 bn ¥1.7 bn

Tax system revision: Review of useful life for depreciation of machinery (reduced from 14 years to 10 years) ¥6.0 bn ¥6.0 bn 2009 Changes to accounting standards: Change to valuation method for inventories (change to account title for loss on disposal) ¥2.0 bn ¥0.6 bn Increase in retirement benefit expenses ¥3.6 bn ¥3.6 bn 4

■ Beer and Beer-Type Beverages: Taxable Sales Volume (Jan – Dec 2008) (millions of cases) Industry total Asahi Breweries

Cases YoY change Composition Cases YoY change Market share Beer 256.12 (6.5%) 53.1% 129.27 (4.4%) 50.5% Happoshu 112.36 (7.7%) 23.3% 29.18 (13.5%) 26.0% New genre 114.20 13.8% 23.7% 23.86 24.0% 20.9% Of which: liqeuer-type 51.97 66.9% 10.8% 22.27 69.1% 42.9% Total 482.68 (2.7%) - 182.31 (3.2%) 37.8%

■ Asahi Breweries’ Market Share by Category

Beer Happoshu New genre

Company C Company C 8.2% 11.0% Asahi Company C Company B Company B Asahi 20.9% 5.2% 26.0% 23.3% 14.0% Asahi 50.5% Company B Company A 13.4% Company A 26.6% Company A 41.7% 56.8% 5

■ 2009 market outlook 09 vs 08 Around 1–2% decline Beer Approx -4-5% for beer-type Happoshu Approx -7-8% beverages overall New Genre Approx +8-9% ■ 2009 sales targets by brand (millions of cases) 2009 target 2008 YoY(%) Super Dry 122.50 125.30 (2.2%) Jukusen 2.20 2.01 9.5% Other 1.30 1.70 (23.4%) Beer total 126.00 129.01 (2.3%) Cool Draft 7.00 - - Style Free 15.00 11.38 31.8% Other 6.00 17.64 (66.0%) Happoshu total 28.00 29.02 (3.5%) Clear Asahi 20.00 14.12 41.6% Off 7.00 - - Other 2.00 16.74 (88.1%) New genre total 29.00 23.47 23.6% Total 183.00 181.50 0.8% 6

ExpandExpand marketmarketshare share byby launchinglaunching productsproducts inin eacheach segmentsegment andand buildingbuildingthem them intointo toptop brandsbrands

Beer Market

Super Dry: Boost brand value through the “Challenge and Commitment of No. 1” campaign Standard Happoshu Functional Market Happoshu Market Launch Cool Draft, a new product that Develop Style Free into the fulfills customers’ taste preferences leading brand in the functional (sharp) happoshu market Malt-Based New Genre Market (liqueur-type, wheat-based) Product strategy tailored to the wheat-based new-genre market Build Clear Asahi into the No. 1 brand in the wheat-based new-genre market Launch Asahi Off to create a wheat-based new- genre functional beverages market

■ 2008 overview

-- Sales Sales declineddeclined duedue toto reviewsreviews ofof termsterms ofof tradetrade forfor RTDRTD beverabeveragesges,, lacklack ofof significantsignificant introductionintroduction ofof newnew productsproducts ccompareomparedd withwith 2007,2007, voluntaryvoluntary recrecaallll ofof shochu,shochu, andand otherother factorfactorss -- Sales Sales ofof corecore brandsbrands KanokaKanoka,, BlackBlack NikkaNikka ClearClear BlendBlend,, andand Ste.Ste. NeigeNeige Natural Natural expandedexpanded -- Earnings Earnings structurestructure reformreform focusefocusedd onon efficientefficient useuse ofof advertisadvertisinging andand promotionalpromotional expensesexpenses (achieved(achieved thethe medium-termmedium-term plaplann operatingoperating marginmargin targettarget ofof 5%)5%)

■ Past performance and 2009 plan

(billions of yen) 売上高営業利益率 Sales Operating margin (billions of yen) 1500 6% 150 5% 2008 YoY 2009 target YoY 5% 4% Shochu 52.7 (4.0%) 52.7 0.0% 1000100 4% RTD 31.4 (12.1%) 31.4 0.0% 135.31353 136.4 3% Whisky 27.5 0.7% 26.4 (4.0%) 133.41334 2% 1364 129.71297 129.11291 50050 2% Wine 14.8 (2.8%) 15.3 3.1% 1% Other 3.2 0.0% 3.3 2.1% 0% Other alcohol total 0 0% 129.7 (4.9%) 129.1 (0.4%) 200505年 200606年 20007年7 200808年 092009年(E) (E)

- Build frameworks to deliver safe, high-quality products and establish a brand base that instills confidence - Aim to develop leading brands and create new value and new demand 8

■Advertising and sales promotion expenses by category

2002 2003 2004 2005 2006 2007 2008 YoY 2009 plan YoY Sales promotion 67.9 77.9 76.3 77.8 80.8 77.9 64.9 (13.0) 68.7 3.8 expenses Advertising 38.1 31.2 32.3 32.2 32.7 34.9 32.3 (2.6) 27.4 (4.9) expenses Total 106.0 109.1 108.6 110.0 113.5 112.8 97.2 (15.6) 96.1 (1.1)

Breakdown

Beer 66.0 60.3 58.0 54.9 58.6 59.5 50.1 (9.4) 49.4 (0.7) Happoshu 19.6 20.5 20.4 12.2 9.9 13.0 10.1 (3.0) 9.1 (1.0) New Genre - - - 9.2 13.0 10.0 10.9 0.9 11.1 0.2 Beer-type category (11.5) (1.4) total 85.6 80.8 78.4 76.3 81.5 82.5 71.0 69.6 Other alcoholic (4.1) 0.3 beverages total 20.4 28.3 30.2 33.7 32.0 30.3 26.2 26.5

- In 2008, Asahi prioritized its brands and adhered strictly to its own guidelines, which helped to significant improve efficiency. - In 2009, the Company will allocate advertising and sales promotion expenses with a focus on maintaining and expanding sales momentum, while rigorously controlling the overall budget and maintaining efficient operations. 9

Asahi Soft Drinks Co., Ltd.

◆Growth Strategies, Structural Reform, and Taking on Challenges in New Areas - Key brands Wonda and Mitsuya achieved sales of 30 million cases (two consecutive years for Mitsuya) Total sales volume rose 11%, outperforming the industry average which fell 1%, and we posted record sales - Profit declined owing to higher fixed costs reflecting the surge in raw material prices, aggressive investment in sales promotion, and integration of vending machine business, despite sales growth and cost reductions through development of optimal production structure ⇒Aim for 3% growth with priority on growth by strengthening key brands ⇒Continue with efforts to reduce fixed costs, including in the vending machine business, and implement structural reform aimed at improving cost competitiveness

■ Asahi Soft Drinks 2008 results and 2009 plan 2008 YoY 2009 target YoY Sales volume (million cases) 14.53 10.9% 15.00 3.2% Net sales(billions of yen) 273.6 11.0% 285.0 4.2% Operating income 7.0 (17.8%) 9.0 27.8% Net income 1.7 (60.2%) 3.8 122.5%

Asahi Food and Healthcare Co., Ltd.

◆ Accelerate growth strategies and structural reform - Strong sales of core products including Mintia, Balance Up, and Dear Natura. Mail order sales also have been brisk - Achieved four consecutive terms of growth in sales and profit due to higher sales and improved operating rates ⇒ Work to further reinforce mainstay brands and improve efficiency

Wakodo Co., Ltd.

◆ Reinforce operating base to improve profitability and promote growth - Sales of mainstay brands expanded as we added new value to our products to differentiate them from competitors' - Sales and profits increased reflecting reduced cost of raw materials and distribution ⇒ Drive forward the “best for baby” brand strategy and across-the-board cost

reductions Amano Jitsugyo Co., Ltd. ◆ Business and capital alliance with Japan’s leading freeze-dried foods manufacturer (June 2008) - Although the mail order business led overall sales growth, reflecting active investments in advertisements, profits were hurt by sharp increases in raw material prices ⇒ Collaborate with various group companies and work on development of new products and optimal production and sales structures 11

Chinese beer business - Did not achieve sales targets due to more intense competition from national brands. Profits improved on the year thanks to streamlining efforts ⇒Work continuously to curb cost of goods manufactured and to reduce fixed costs, including SG&A expenses ⇒Improve profitability through measures that include introducing new schemes to drastically overhaul manufacturing and marketing structures

Haitai Beverage of South Korea - Sales of mainstay Sunkist brand products declined. Did not achieve targets, despite efforts to curb GA expenses, due to sharp increases in ingredient prices caused by weaker won ⇒Streamline promotional expenses and reduce fixed costs by consolidating plants, branches, and distribution centers ⇒Expand sales and improve profitability by strengthening core brands and launching high margin products

Tingyi-Asahi-Itochu Beverages - Growth continues to outpace market growth but has slowed slightly because of the economic slowdown and more intense competition ⇒While reinforcing strengths in tea and water, work to build fruit juice etc., which is expected to be the third pillar of the business ⇒Strengthen support systems in production technology, distribution, and marketing 12

Acquisition of Schweppes Australia (million AUD) 2007 results Cadbury Schweppes (Australia) Sales 749 Confectionary division Beverage division EBITDA 78 Total business assets 636 Split No. 2 Australian beverage maker

Schweppes Australia

Cost of acquisition: AUD1,185m ± cash and deposits and interest-bearing debt Size of Australian soft drink market ◆Objectives and significance of the Schweppes (million AUD)

Australia acquisition Household use Commercial use (1) To acquire an operating base in Oceania, where 12,000

stable growth is expected, and to accelerate 10,000 2,972 2,839 2,905 2,714 2,774 overseas expansion of the soft drink business. 2,624 2,661 8,000 2,453 2,515 (2) To promote joint procurement, R&D, and SCM streamlining across the entire group, including Asahi 6,000 7,369 7,604 7,827 8,048 Soft Drinks, Tingyi-Asahi-Itochu Beverages, and 4,000 6,489 6,732 6,928 7,141 Haitai Beverage. 6,415 2,000 (3) To acquire marketing expertise in the global 0 beverage business and to secure a platform for 2004 2005 2006 2007 2008(E) 2009(E) 2010(E) 2011(E) 2012(E) forays into new markets.

* The acquisition is to be made by the end of April. 13

Tsingtao Brewery Investment in Tsingtao Brewery performance trends Operating income Net income Sales (million yuan) (million yuan) Anheuser-BuschAnheuser-Busch InBevInBev 13,530 1,200 13,074 14,000

11,677 Tsingtao Brewery Co. 12,000 1,000 10,020 Equity stake: 19.99% 10,000 Total acquisition cost: USD666.5m 800 8,621 Shenzhen Tsingtaobeer 8,000 Asahi 6,714 1,007 1,002 Yantai Beer Tsingtao 6,195 Asahi 600 654 6,000 ◆ Objectives and significance of Asahi's stake in 400 Tsingtao 591 579 4,000 521 526 539 563 448 (1) To improve profitability of the Chinese beer business by 200 285 307 2,000 further strengthening strategic partnerships in China. 222 245 (2) To create synergies in joint procurement of ingredients, streamlining of SCM, product development, and 0 0 marketing by exploiting the strengthsstrengths of both companies. 02 03 04 05 06 07 08(1-9) (3) To gain more opportunities to develop Asahi Breweries’ brand over the medium to long term by strengthening the alliance with Tsingtao Brewery.

* The acquisition is to be made in mid-March. 14

Tingyi-Asahi-Itochu Beverages Holding 40% ★ Investment in No. 2 Chinese soft drinks maker

Tsingtao Brewery 20%

Baltica (Russia) ★ Investment in No.2 Chinese beer maker

Beijing Beer Asahi 47% Molson Coors (Canada) Shepherd Neame (U.K.) Yantai Beer Tsingtao Asahi 51%

Staropramen (Czech) Hangzhou Xihu Beer Asahi 55%

Shenzhen Tsingtaobeer Asahi 29%

Haitai Beverage 41% Khonkaen Brewery (Thailand)

Investment in beer manufacturer Schweppes Australia 100% Investment in soft drinks manufacturer ★ Investment in No. 2 Australian soft drinks maker Production base

Equity investment

% Ownership interest 15

■ Net income and total dividends ■ Policy on returns to shareholders

EnhanceEnhance totaltotal shareholdershareholder returnsreturns byby aimingaiming toto Share buybacks increaseincrease dividendsdividends (target(target coconsolidatednsolidated payoutpayout ratioratio (billions of yen) Total dividends 50.0 ofof 20%20% oror more)more) basedbased onon aa policypolicy ofof continuouscontinuous 50.0 Net income 44.8 44.8 450 andand stablestable dividendsdividends whilewhile carryingcarrying outout shareshare buybacksbuybacks wheneverwhenever appropriate.appropriate. 39.9 2008: Dividends (up from 19 yen per share 40.0 Æ 20 yen per share） 30.6 Share buybacks (15.0 billion yen) 30.0 23.2 Total returns to shareholders: 54％ (as a percentage of net income) 20.0 15.0 13.0 2009: 10.0 - Aim to increase dividends in line with net income 10.0 8.6 6.8 - Source funds for business investment (around 130 billion yen) with own funds and external 9.3 9.3 6.4 7.3 8.2 9.0 9.0 borrowings 0.0 (financial liabilities to increase by 85.7 billion yen) 2003 2004 2005 2006 2007 2008 20082009(E)

Total returns to shareholders 65% 46% 46% 49% 20% 54% － Returns to shareholders, (% of net income) including share buybacks, to be Dividend payout ratio 27.8% 24.0% 20.7% 20.2% 20.0% 20.8% － decided in light of financing Dividend per share 13 yen 15 yen 17 yen 19 yen 19 yen 20 yen 20 yen requirements 16

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