Asahi Group Holdings, Ltd. ANNUAL REPORT 2011 Still Refreshing CORPORATE PHILOSOPHY The Asahi Group aims to satisfy its customers with the highest levels of quality and integrity, while contributing to the promotion of healthy living and the enrichment of society worldwide. CORPORATE BRAND STATEMENT Share the “Kando”* Always creating new value moves people’s hearts and forms a strong bond. Always imagining a fresh tomorrow moves people’s hearts and helps them shine. Sharing these emotional experiences with as many people as possible—this is the mission of the Asahi Group. * Kando is an emotion experienced in various ways. It can be an extreme satisfaction, an extraordinary feeling beyond one’s expectations, and/or a sensitively touching and moving sensation. CONTENTS 02 04 06 14 Financial To Our Interview with Review of Highlights Shareholders the President Operations and Friends Asahi Group at a Glance 16 22 Alcoholic Feature: Beverages Asahi Super Dry 2012 Brand Strategy 23 26 Soft Drinks Food 28 31 Overseas Feature: Operations Growth strategy of the Oceania Operations 32 41 91 Group Management Financial Section Fact Sheets 32 Corporate Governance 36 Risk Management and Compliance 37 Board of Directors, Auditors and Corporate Officers 38 Corporate Social Responsibility (CSR) FORWARD-LOOKING STATEMENTS The current plans, forecasts, strategies and performance presented in this annual report include forward-looking statements based on assumptions and opinions arrived at from currently available information. Asahi Breweries cautions readers that future actual results could differ materially from these forward-looking statements depending on the outcome of certain factors. All such forward-looking statements are subject to certain risks and uncertainties including, but not limited to, economic conditions, trends in consumption and market competition, foreign exchange rates, tax, and other systems influencing the company’s business areas. Annual Report 2011 01 FINANCIAL HIGHLIGHTS Asahi Group Holdings, Ltd. and Consolidated Subsidiaries For years ended December 31, 2011, 2010 and 2009 Thousands of Millions of yen % U.S. dollars Change 2011 2010 2009 (2011/2010) 2011 For the year: Net sales ¥1,462,736 ¥1,489,461 ¥1,472,469 –1.8 $18,815,745 Alcoholic beverages*1 921,657 966,331 958,155 –4.6 11,855,634 Soft drinks*1 324,782 306,719 355,162 +5.9 4,177,798 Food (“Food and pharmaceuticals” in 2009) 98,033 95,440 92,399 +2.7 1,261,037 Overseas 94,220 97,674 – –3.5 1,211,989 Others 24,044 23,297 66,751 +3.2 309,287 Operating income (loss) 107,190 95,349 82,777 +12.4 1,378,827 Alcoholic beverages 101,025 87,250 78,879 +15.8 1,299,524 Soft drinks*1 11,389 8,330 694 +36.7 146,501 Food (“Food and pharmaceuticals” in 2009) 4,158 3,594 2,744 +15.7 53,473 Overseas (2,913) (5,138) – – (37,471) Others 760 1,145 889 –33.7 9,776 Elimination and/or corporate*2 (7,229) 168 (430) – (92,989) Operating income ratio (%) 7.3 6.4 5.6 +0.9 point Net income 55,093 53,080 47,645 +3.8 708,683 Net cash provided by operating activities 108,513 125,609 106,358 –13.6 1,395,845 Capital investments*3 40,225 36,737 62,376 +9.5 517,430 At year-end: Total assets ¥1,529,908 ¥1,405,358 ¥1,433,653 +8.9 $19,679,804 Interest-bearing debt 390,092 311,423 391,876 +25.3 5,017,906 Total net assets 643,799 612,670 577,703 +5.1 8,281,438 Per share data (in yen and U.S. dollars): Net income ¥ 118.36 ¥ 114.10 ¥ 102.49 +3.7 $ 1.52 Diluted net income 118.28 114.00 102.42 +3.8 1.52 Cash dividends applicable to the year 25.00 23.00 21.00 +8.7 0.32 Total net assets 1,378.19 1,315.51 1,233.25 +4.8 17.73 Key ratios: ROE (%) 8.8 9.0 8.7 ROA (%) 7.6 7.1 6.6 Total assets turnover (times) 1.0 1.1 1.1 Equity ratio (%) 41.9 43.6 40.0 Interest coverage ratio (times) 32.4 30.7 23.1 Debt-to-equity ratio (times) 0.61 0.51 0.68 *1 Overseas operations results are included in these segments in fiscal 2009. *2 Due to a reorganization of business segments in 2011, figures for 2010 have also been restated in line with the new business segments. *3 Includes effects accompanying changes in accounting standards for lease transactions and trademarks of an Australian subsidiary at time of acquisition. 02 Asahi Group Holdings, Ltd. FINANCIAL HIGHLIGHTS Net Sales Operating Income/Net Income (¥ billion) (¥ billion) 1,600 1,472.5 1,489.5 1,462.7 120 1,464.1 1,462.7 24.0 107.2 94.2 98.0 94.5 95.3 87.0 1,200 324.8 90 82.8 921.7 55.1 800 60 53.1 44.8 45.0 47.6 400 30 0 2007 2008 2009 2010 2011 0 2007 2008 2009 2010 2011 ■ Alcoholic Beverages*1 ■ Soft Drinks*1 *1 Overseas operations results are included in ■ Operating Income ■ Net Income ■ Food*2 ■ Overseas these segments prior to 2011. ■ Others *2 For years up to and including 2009 this segment was called “Food and pharmaceuticals” Total Assets/ROA Capital Investments*/Depreciation* (¥ billion) (%) (¥ billion) 1,529.9 1,600 10.0 80 1,433.7 1,405.4 1,324.4 1,299.1 62.4 7.6 58.4 59.7 58.1 1,200 7.5 60 7.1 6.9 7.4 47.4 6.6 45.3 44.5 40.2 36.1 36.7 800 5.0 40 400 2.5 20 0 2007 2008 2009 2010 2011 0 0 2007 2008 2009 2010 2011 ■ Total Assets (Left Scale) ■ ROA (Right Scale) ■ Capital Investments ■ Depreciation * Includes effects accompanying changes in accounting standards for lease transactions and trademarks of an Australian subsidiary at time of acquisition. Shareholders’ Equity/ROE Interest-Bearing Debt/D/E Ratio (¥ billion) (%) (¥ billion) (Times) 391.9 390.1 800 9.0 9.0 10 400 1.2 8.7 8.7 8.8 641.7 332.5 612.2 302.3 311.4 573.5 8 600 300 0.9 514.7 521.6 6 0.61 400 200 0.65 0.6 0.58 0.68 0.51 4 200 100 0.3 2 0 2007 2008 2009 2010 2011 0 0 2007 2008 2009 2010 2011 0 ■ Shareholders’ Equity (Left Scale) ■ ROE (Right Scale) ■ Interest-Bearing Debt (Left Scale) ■ D/E Ratio (Right Scale) Annual Report 2011 03 TO OUR SHAREHOLDERS AND FRIENDS In the fiscal year ended December 31, 2009, the Asahi Group drafted its Long-Term Vision 2015 and assembled the Medium-Term Management Plan 2012 as a set of milestones for achieving this vision. During the fiscal year ended December 31, 2011, the second year of the plan, the Japanese economy showed signs of improvement, spurred by spiking demand from recovery efforts in the wake of the Great East Japan Earth- quake. The operating environment, however, remained challenging, largely due to sluggish global economic perfor- mance and the protracted strength of the yen. In this climate, we sought to push forward with the full-scale rollout of Group global management by transitioning to a pure holding company structure on July 1, 2011. In parallel, we saw steadily emerging benefits from efforts to boost profitability in the Group’s existing businesses, which has the highest priority in our medium-term management plan, as well as from capital and business alliances overseas. For existing businesses, we moved to enhance and cultivate core brands. At the same time, we reviewed our framework for producing beer-type beverages in Japan, and improved production processes in the alcoholic beverages and soft drinks businesses. The resulting profit structure reforms exceeded our initial plan objectives. In overseas opera- tions, we continued to streamline unprofitable operations in South Korea and China. Elsewhere, we moved in Oceania to acquire part of the operations of Australia’s third-largest soft drinks manufacturer, and purchased New Zealand’s top producer of ready-to-drink beverages. In Malaysia, we acquired the country’s second-largest soft drinks maker. Through these actions, we effectively expanded the Group’s business base in overseas operations. Under Long-Term Vision 2015, we are striving for transforming the bounty of nature into the “Kando” of food while becoming a trusted company with global quality. This vision embodies our goals for the Asahi Group in 2015: to pursue customer satisfaction by leveraging our strong manufacturing capabilities that utilize natural ingredients, and to earn the trust of customers by striving to upgrade the quality of all products and activities to a world-class level. In the final year of the Medium-Term Management Plan 2012, the Group will strive to steadily complete the plan by continuing to boost profitability in our existing businesses and develop our new growth portfolio. As we take decisive action, we hope you will continue to support the Asahi Group. Hitoshi Ogita Naoki Izumiya Chairman of the Board (Left) President and Representative Director (Right) 04 Asahi Group Holdings, Ltd. TO OUR SHAREHOLDERS AND FRIENDS Annual Report 2011 05 INTERVIEW WITH THE PRESIDENT To achieve our Medium-Term Management Plan 2012, we steadily implemented our strategies and created an organizational structure to support full-scale globalization of management. Long-Term Vision 2015 Striving for transforming the bounty of nature into the “Kando” of food while becoming a trusted company with global quality.