Brasil Kirin

June 7, 2016 Tokyo Brasil Kirin CEO André Salles ブラジルキリン CEO アンドレ・サーレス Macroeconomics マクロ経済 Structurally, Brazil is a large and attractive market … 本来ブラジルは巨大で魅力的なマーケットであるが、

7th largest economy Natural resources Moderate growth • GDP U$2.2T in 2014 • #1 exporter sugar/ coffee • Average growth of 3.2% between 2004-2014 • 5th largest domestic • #2 exporter soybeans market • #3 producer of iron • Crisis resilience … but has been passing through a political/economic crisis 現在まで政治的・経済的危機に直面している

Economic crisis Political instability Consumption decline • Inflation reached 11% • Corruption scandal • Consumption decline for (2015) and unemployment leading to investigation of most industries is 11% (mar/16) many politicians • Beverages industry retail • Currency depreciated 42% • Impeachment of index declined 3% from vs. U$ dollar and 25% vs. President Dilma 2014-15 Japan Yen from 2014-15 Copyright © KIRIN HOLDINGS COMPANY, LIMITED All rights reserved 2 Brazil is one of the largest beverage markets ブラジルは、最大の酒類・飲料市場の一つ #3 BEER MARKET #3 CARBONATED DRINK MARKET

2015 Volume 2015 Volume (MHL) (MHL) CAGR CAGR HL/per CAGR CAGR HL/per (10-14) (14-15) capita (10-14) (14-15) capita

China 474 2.5% -5.3% 0.3 USA 488 -1.6% -1.9% 1.5

US 246 0.1% 2.5% 0.8 Mexico 160 0.7% 0.2% 1.2

Brazil 135 2.1% -2.6% 0.6 Brazil 156 0.2% -2.4% 0.7

89 Germany -0.7% -2.0% 1.1 China 131 2.1% 0.0% 0.1

82 Russia -4.0% -8.1% 0.6 77 Germany -0.1% -1.2% 1.0

• Acquisition of Eisenbahn • Launch of the first beer • Start of production of the brand: Schincariol • Kirin Holdings acquires soft drink Itubaína – still in • Launch of Skinka (fruit 100% of Schincariol Brasil Kirin’s portfolio punch) and Glacial (beer) Group 1939 1977 1989 1997 2002 2007 2008 2011 2016 • Soft drinks • Mineral water start of • Acquisition of production production Devassa and in large scale Baden Baden brands

Nationwide expansion through Strong brands in 3rd party reseller several regions model

特約卸による全国展開様々な地域で複数の強いブランド

Broadening brand Nationwide portfolio footprint NAB – Beer – Premium

清涼飲料、ビール、プレミアムと全国に広がる拠点ブランドポートフォリオを拡大

• 11% beer market share and 5% soft drinks market share Market position • Available in 550.000+ outlets

• # 2 beer brand in the Northeast (Schin) • Most complete craft beer portfolio (Eisenbahn, Ichiban and Baden) Portfolio • Full beverage portfolio (CSD, Water, Fruit Punch, Energy Drinks, etc.)

• National coverage through: - 170+ Independent Distributors (Non Direct Sales & Delivery) Distributors - 20 Owned Distribution Centers (Direct Sales & Delivery)

• 13 production plants located in 11 states producing relevant pack / brand mix Breweries • Breweries certified in TPM methodology

• Exame’s “best Sustainability practices” 2013 and 2014 Recognition • Several types of beer internationally awarded

• 10.000+ employees

People • One of the best companies to work for

Competitive position Portfolio Go to Market 競争上のポジションポートフォリオ市場へのリーチ • Strong market position in • Broad beverage portfolio • Nationwide distribution north and northeast, but (beer, CSD, water, juice, system through own and recent competitor entry etc.) underleveraged 3rd party operations led to some share loss offering significant 自社卸とサード・パーティーの特約卸による北部・北東部で強いポジションにあるものの growth opportunities 全国的なディストリビューションシステム

競合参入によりシェアを奪われた広い商品ポートフォリオが活かしきれておらず • Long lasting exclusive 成長機会を逸している • Weaker market position relationship with in the Southeast within • Missing a beer brand in resellers beer but relevant non- the mainstream segment 特約卸と長期的に継続している専売関係 in the South & Southeast alcoholic portfolio • Volume loss imposed 南部・南東部でスタンダード価格帯のビール南東部では、ビールは比較的弱いポジショ financial challenges on ブランドがないンにあるが、清涼飲料のラインアップは適切 • Largest craft beer distribution operations • Opportunity to capture portfolio (Eisenbahn, 数量減による特約卸の経営難 efficiency gains in supply Baden, Ichiban) offering • Relationship and chain and back office growth opportunities engagement of resellers functions 成長機会を活かせるクラフトビールのブランド had to be improved ポートフォリオがあるサプライチェーンとバックオフィスを効率化する特約卸との関係改善が必要余地がある

Brasil Kirin has important strongholds and offers significant improvement opportunities over the coming years ブラジルキリンには、重要性の高い強みのある領域・地域と著しく事業を改善する余地がある Copyright © KIRIN HOLDINGS COMPANY, LIMITED All rights reserved 6 Brasil Kirin Medium-term Business Plan ブラジルキリン中期経営計画

LONG TERM VISION STATEMENT Quench the thirst of consumers with value brands and high performance services, engaging people to create shared value 価値あるブランドと質の高いサービスにより消費者の渇きを潤し、ステークホルダーと共有価値を創造する関係づくりを行う

Four strategic pillars 4本の戦略の柱

1 2 3 4 Execution/ Optimize Strengthen Brand equity distribution organization corporate enhancement capabilities and assets culture

Regional Commercial Concrete Customer & strategy by excellence actions to consumer brand program improve cost driven culture 顧客本位の企業文化地域別ブランド戦略営業力強化の取り組み efficiency

SEGMENTS ACTUAL SCENARIO FUTURE SCENARIO

CRAFT

0.3 MHL Strengthen International インターナショ Premium segment ナルプレミアム INTERNATIONAL の強化 PREMIUM SEGMENT 7.2 MHL Increase relevance in mainstream segment レギュラー価格帯 MAINSTREAM での接点を増やす 102.6 MHL Reduce dependence on the economy segment

低価格帯への依存度低減 ECONOMY

25.0 MHL

Market volume 市場での数量

Clear message North/ Northeast and focus: 北部・北東部 RR AP where & how to play - Sales volume recovery 販売数量回復 - Focus on Schin brand 「スキン」ブランドに集中 - Balanced prices RN AM 適切にバランスのとれた価格設定 PA MA CE PB PI PE Southeast 南東部 AL TO - Increase relevance in RO SE mainstream segment BA MT レギュラー価格帯での接点を増やす - Only pure malt GO mainstream beer MG レギュラー価格帯唯一の麦芽100%ビール - Tropical lager MS ES 「南国」のブランドイメージ SP RJ

PR South/ Southeast 南部・南東部 SC - Volume growth in RS premium portfolio 高価格帯の販売数量増加 - Profitable growth with Schin 「スキン」の採算性ある成長

Objectivity and focus • Occasion • Brand • Packaging Execution 戦略遂行 • Price • Channel 店頭装飾 POS dress-up

Sales force Price aligned automation to strategy 営業活動の戦略にオートメーション化沿った価格

テーブルやグラス等の Investment kit Focus on profitable 協賛品 (e.g. table and glass) SKUs (Returnable)

Copyright © KIRIN HOLDINGS COMPANY, LIMITED All rights reserved 収益性の高いSKU(リターナブル瓶)に集中 10 3 Optimize organization and assets 組織・資産の最適化 Corporate Cost items Distribution expenses and services centers 本社費用コストアイテム、委託業務自社ディストリビューション・センター

Company Raw material, Optimization of restructuring package and assets and and reduction of service contracts truck occupancy corporate renegotiation expenses

構造改革と本社費用削減原材料、委託業務の資産最適化、コスト低減交渉トラック積載量最大化

R$200M savings in 2016

2016年度に200百万レアルのコスト削減

CURRENT FOOTPRINT RATIONALE

RR AP • Sale of Macacu plant to Ambev マカク工場をambev社へ売却

RN AM PA MA CE - Pending antitrust PB PI PE regulation approval AL 公正取引規制の承認待ち TO SE RO BA - There is free capacity to MT absorb volume GO マカク工場カバー地域の販売数量を生産する MG 余力あり MS ES SP • Brasil Kirin would keep RJ PR nationwide presence Macacu SC 全土にわたるプレゼンスは維持可能 RS • Consumer market would not be affected 消費者への影響はなし

Additional operational savings 200百万レアルには含まれない追加の削減 Copyright © KIRIN HOLDINGS COMPANY, LIMITED All rights reserved 12 4 Culture Change 企業文化の変革 MARKET ORIENTED RESULTS FOCUS LEAN AND AGILE マーケット・イン結果重視ムダなく、スピーディ • Create market driven • Cultural transformation • Simplify processes mindset - Current culture mapping - 2 functions: you either sell - Design of “where we want to • Meritocratic culture or help to sell be” - Training & development - Clear understanding of our • Reduce bureaucracy brands value • Performance management - Empowerment of - Focus on customers needs - Performance evaluation management and and demands according to roles employees - Identifying and retaining high • Market day potentials - Leadership goes to market to better understand customers

• Improve relationship with resellers

Sales convention (may/16) focused on relationship with resellers

SALES VOLUME GROWTH IN BEER & CSD

Quarterly sales volume growth (vs year ago) Market share gain: Sales volume 20% -Beer +1,5pp & share -CSD +0,8pp 15% recovery 10%

Premium -5% growth -10% -15%

-20%

-25% Cost reduction & -30% efficiency gains 12-1Q 12-2Q 12-3Q 12-4Q 13-1Q 13-2Q 13-3Q 13-4Q 14-1Q 14-2Q 14-3Q 14-4Q 15-1Q 15-2Q 15-3Q 15-4Q 16-1Q Beer NABCSD Total

OUTLET PENETRATION INCREASE VOLUME GROWTH

POS premium outlet penetration Premium volume Sales volume increase (indexed in 1Q2015) +341% & share (in # of POS) 500 +305% recovery

405 400

Premium 300 growth

200

100 Cost 100 reduction & efficiency

gains 0 1Q2015 1Q2016

MEANINGFUL COST DECREASE SINCE 3Q15 DISTRIBUTION VARIABLE G&A DECREASE EXPENSES CONVERSION COSTS Sales volume 一般管理費削減運搬費変動加工費 & share Indexed in 1Q2015 value Indexed in 1Q2015 value Indexed in 1Q2015 value recovery (R$M) -1% (R$/HL) -13% (R$/HL) -3%

100 99 100 100 100 100 100 97 87

80 80 80 Premium growth 60 60 60

40 40 40 Cost reduction & 20 20 20 efficiency gains 0 0 0 1Q2015 1Q2016 1Q2015 1Q2016 1Q2015 1Q2016

How does the コミュニケーションはどのように communication work? 機能しているか？ • Brasil Kirin’s Mid Term Business Plan aligned to Kirin Holding strategy • Brasil Kirin’s board with four members from the holding • Monthly meetings in Japan or through conference system • Presence of Kirin Holdings executive officer designated to oversee Brasil Kirin in addition to resident representatives from Kirin Holding in Brazil

BACKGROUND • 15+ years experience in the beverage market

• Turnaround in different industries

• Experience in beer and carbonated drink

• Professional career with emphasis in distribution/commercial - Turnaround of Würth Argentina and Norsa (Coke bottler) - 2.7 p.p. market share growth and 48% profitability increase as CEO (Vonpar - Coke bottler) - Highest historical market share for Kaiser as commercial director (beer brand currently owned by Heineken)