Beer and Beer-Type Beverages: Taxable Sales Volume (Jan
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2009 First-half Financial Results and Future Business Strategy August 2009 ASAHI BREWERIES, LTD. URL http://www.asahibeer.co.jp Contents Overview of Financial Results for the First Half of 2009. …………1.. 2009 Full-Year Forecasts………………………………………………2 Overview of First Half 2009 ………………………….…….……………3 First-half Sales of Beer-type Beverages…………………………….4 Sales Forecasts for Beer-type Beverages……………….………….5 Beer Brand Strategy ……………….…………….……………………6 .. Happoshu and New Genre Brand Strategy…………………………………7 .. Other Alcohol Category RResultsesults and Future Strategy ………………8 Streamlining Marketing Costs ………………………..….……..........9 Asahi Soft Drinks Business OverviewOverview and Future Strategy ……………10 Food and Healthcare Business Overview and Future Strategy ………11.. Overseas Business Overview and Future Strategy ……………………12 Growth of Tingyi-Asahi-Itochu Beverages Holding Co. Ltd. …………13 Acquisition of Schweppes Australia……………….…..…………......14 Investment in Tsingtao Brewery………….……….……………..........15 Overview of Financial Results for the First Half of 2009 (billion yen) (billion yen) (billions of yen) Operating profit Net profit Sales 1H 2009 1H 2008 Inc./ Dec. YoY (% ) 50.0 700.0 Results Results 672.6 670.2 664.4 666.1 Alcoholic beverages 443.3 455.0 (11.7) (3)% 656.6 Soft drinks 144.9 142.0 2.9 2% Food and healthcare 46.0 34.8 11.3 32% 40.0 Overseas 28.7 23.4 5.3 23% Other 7.2 11.0 (3.8) (34)% 600.0 Net sales 670.2 666.1 4.0 1% 30.0 30.8 30.7 Alcoholic beverages 23.1 30.7 (7.6) (25)% 28.6 Soft drinks 1.6 1.4 0.2 17% 21.5 Food and healthcare 0.4 0.1 0.3 225% 20.0 23.1 Overseas (4.8) (2.6) (2.2) - 500.0 Other 1.2 1.2 (0.0) (2)% Operating profit 21.5 30.7 (9.2) (30)% 22.1 Equity metod income 5.6 5.9 (0.3) (6)% 10.0 19.0 18.9 14.5 13.8 Ordinary income 27.8 34.1 (6.3) (19)% Extraordinary profit (loss) 14.0 (0.7) 14.8 - Net income 3.2 17% 0.0 400.0 22.1 18.9 2005 2006 2007 20082009 2009 1 Copyright © ASAHI BREWERIES,LTD. All rights reserved. Full-year Forecasts (billion yen)(billion yen) (billions of yen) Operating profit Net profit Sales 1H 2009 1H 2008 Inc./ Dec. YoY(% ) 140.0 1,600.0 Results Results Alcoholic beverages 1,005.0 1,019.6 (14.6) (1)% Soft drinks 306.5 296.6 9.9 3% 120.0 1,508.0 1,464.1 1,462.7 1,500.0 Food and healthcare 97.5 81.7 15.8 19% 1,446.4 1,430.0 Overseas 80.6 43.3 37.3 86% 100.0 Other 18.3 21.5 (3.2) (15)% 1,400.0 Net sales 1,508.0 1,462.7 45.3 3% 94.5 90.2 Alcoholic beverages 81.0 91.1 (10.1) (11)% 80.0 88.7 87.0 88.0 Soft drinks 7.3 4.5 2.7 61% 1,300.0 Food and healthcare 2.6 2.0 0.6 31% 60.0 Overseas (4.2) (5.8) 1.6 - Other 1.3 2.8 (1.4) (53)% 1,200.0 40.0 Operating profit 88.0 94.5 (6.5) (7)% Equity metod income 7.8 9.1 (1.3) (14)% 50.0 1,100.0 Ordinary income 92.0 96.5 (4.5) (5)% 20.0 39.9 44.8 44.8 45.0 Extraordinary profit (loss) 3.9 (13.5) 17.4 - 0.0 1,000.0 Net income 50.0 45.0 5.0 11% 200520062007200820092009(E) 2 Copyright © ASAHI BREWERIES,LTD. All rights reserved. Overview of First Half 2009 Results Alcoholic ◆Achieved sales targets for happoshu and new genre due to impact of new products and other factors Beverage ◆Cost controls offset the decline in beer-type beverage sales due to Business deteriorating economic conditions Soft ◆Due to growth in core brands, achieved growth (3%) above the industry average (-2%) Drinks Drinks ◆Achieved earnings growth despite the increase in costs of ingredients Business and increased competition ◆Both Asahi Food and Healthcare Co., Ltd. and Wakodo Co., Ltd. Food and continued to show sustained growth Healthcare ◆Amano Jitsugyo Co., Ltd., which became a consolidated subsidiary in the second Business half of fiscal 2008, achieved strong growth attributable to Group synergies ◆We supported the sustained growth of Tingyi-Asahi-Itochu Beverages Overseas Holding Co. Ltd. (Chinese soft drinks business) amid intensifying competition Business ◆Started new business development with Schweppes Australia and Tsingtao Brewery Co. ◆Responded to the shift in demand from beer and happoshu to new genre Issues due to the economic slowdown ◆Failed to achieve profit targets in existing overseas businesses (Chinese beer business, Korean soft drinks business) 3 Copyright © ASAHI BREWERIES,LTD. All rights reserved. First-half Sales of Beer-type Beverages ■ Beer and Beer-Type Beverages: Taxable Sales Volume (Jan. – Jun. 2009) (millions of cases) Industory total Asahi Breweries Cases YoY change Composition Cases YoY change Market share Beer 106.61 (5.5)% 49.1% 53.01 (5.8)% 49.7% Happoshu 47.38 (12.7)% 21.8% 13.27 (3.7)% 28.0% New genre 63.26 27.4% 29.1% 13.81 24.0% 21.8% Total 217.24 0.2% - 80.09 (1.3)% 36.9% ■ Asahi Breweries’ Market Share by Category (Jan. -Jun. 2009) Beer Happoshu New genre Company D Company D 8.8% 8.6% Company D Asahi Company C Asahi Company C 22.5% 21.8% 3.5% 28.0% 14.0% Asahi 49.7% Company C Compnay B Company B 15.2% Company B 26.8% 58.7% 39.6% 4 Copyright © ASAHI BREWERIES,LTD. All rights reserved. Sales Forecasts for Beer-type Beverages ■ 2009 Market outlook 09 vs. 08 Approximately 1–2% Beer Approx. -6-7% decline Happoshu Approx. -15-16% for beer-type New genre Approx. 21-22% beverages overall ■ 2009 Sales Targets by Brand (millions of cases) 2009 target 2008 YoY Super Dry 117.80 125.30 (6.0)% The Master 2.10 - - Other 2.60 3.71 (29.9)% Beer total 122.50 129.01 (5.0)% Style Free 12.00 11.38 5.4% Cool Draft 6.00 - - Other 9.00 17.64 (49.0)% Happoshu total 27.00 29.02 (7.0)% Clear Asahi 19.00 14.12 34.6% Asahi Off 8.00 - - Mugishibori 3.10 - - Other 1.90 9.35 (79.7)% New genre total 32.00 23.47 36.3% Total 181.50 181.50 0.0% 5 Copyright © ASAHI BREWERIES,LTD. All rights reserved. Beer Brand Strategy FirstFirst HalfHalf 20092009 SecondSecond HalfHalf 20092009 20102010 Boost brand value through the “ Challenge and Commitment of No. 1 Brand” campaign Refreshingly Sustainable Project Embody Bold Flavor Project The Master Comparison of Super Dry Sales by Container Refreshingly Sustainable Project (quarterly comparison) 105% Donated 1 yen per can of Super Dry Bottles Cans Kegs Total manufactured between late March and late April 100% ・Donated a total of around 220 95% million yen ・Sales during period were up 8% versus previous year 90% ・Improved brand image (“Fun,” “Try Something New,” etc.) 85% Will carry out Phase 2 this fall 80% 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 ・Sales momentum recovered in the second quarter, and we will step up efforts to raise brand value to maintain this momentum through the second half 6 Copyright © ASAHI BREWERIES,LTD. All rights reserved. Happoshu and New Genre Brand Strategy FirstFirst HalfHalf 20092009 SecondSecond HalfHalf 20092009 20102010 Develop Style Free into the leading brand in the functional happoshu market Obtain further trials for Cool Draft and promote its sharp taste For Clear Asahi, tout its No.1 spot in the wheat-based new genre market, and further solidify the Happoshu Style Free Cool brand Draft Continue touting Asahi Off as the only functional product in the wheat-based new genre market Sep. 15 launch Sep. 15 launch Meet the needs of consumers seeking more Mugishibori rich and satisfying flavors in the expanding New genre Clear Asahi Off new genre market Asahi *Barley-based new genre: Liqueur (happoshu) (1) * Source: Surveys by Asahi, * Source: Surveys by N = 400, Conducted during Clear Asahi primary consumer share (%) Characteristics required of new genre products in future Asahi, N = 1000 the middle of every month 7 6.3 6.5 6.3 5.7 High alcohol content 14.8 6 Zero sugar 17.5 4.7 Light flavor 17.8 5 4.2 4.3 4.3 4.2 Can drink in big gulps 4 3.9 3.8 18.7 4 Good aftertaste 19 2.8 Solid flavor 23.1 3 2.3 Easy to drink 23.8 Has a kick 26.8 2 Refreshing flavor 31.5 Beer-like taste 1 0.3 31.5 0 Satisfying 32 0 Interesting flavor 32.6 Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Rich taste 34.6 0 10203040 ・Build a product portfolio that meets diversifying consumer needs ・Bolster initiatives aimed at making Style Free and Clear Asahi leading brands 7 Copyright © ASAHI BREWERIES,LTD. All rights reserved. Other Alcohol Category Results and Future Strategy ■ Overview of the First Half 2009 ・ Sales declined due to the voluntary shochu recall, revision of the imported wine product portfolio, and other factors ・ Strong sales of new products Slat (RTD alcohol segment) and Black Nikka Clear Blend whisky ・Continued earnings structure reform focused on streamlining advertising and promotional expenses ■ Past performance and 2009 target (billions of yen) (billions of yen) 2008 YoY 2009 target YoY Shochu 52.7 (4.0)% 51.7 (1.9)% RTD 31.4 (12.1)% 29.3 (6.7)% Whisky 27.5 0.7% 25.7 (6.6)% Wine 14.8 (2.8)% 12.6 (15.1)% Other 3.2 0.0% 4.2 29.8% Other alcohol total 129.7 (4.9)% 123.5 (4.8)% •Promote efficiency in production and sales with priority on improving profitability •Aim to develop leading brands and create new value and new demand 8 Copyright © ASAHI BREWERIES,LTD.