2006 Group Business Strategy 2006 Group Business Strategy Group - - PowerPoint PPT Presentation
2006 Group Business Strategy 2006 Group Business Strategy Group Business Strategy 2006 2006 Group Business Strategy 2006 Group Business Strategy 2006 Group Business Strategy 2005 Results Overview & 2006 E arnings F orecasts 2005
2005 Results Overview & 2006 E arnings F
2005 Results Overview & 2006 E arnings F
February 13, 2006 URL http://www.asahibeer.co.jp
200 400 600 800 1000 1200
01 02 03 04 05
13000 14000 15000
■ ■ 2005 2005 Results (consolidated) Results (consolidated)
1
2004 Asahi Breweries 1,054.2 1,116.4
(-5.6%) Asahi Soft Drinks 225.1 204.0 21.1 (10.4%) Asahi Food & Healthcare 26.8 22.3 4.5 (19.9%) Other 123.9 101.5 22.4 (22.1%) Net sales 1,430.0 1,444.2
(-1.0%) Asahi Breweries 78.5 91.7
(-14.4%) Asahi Soft Drinks 9.5 8.1 1.4 (17.4%) Asahi Food & Healthcare 0.7
1.3
1.5 2.0
(-29.1%) Operating income 90.2 101.2
(-10.9%) Non-operating balance 1.2
6.8
91.4 95.6
(-4.4%) Extraordinary balance
21.6
39.9 30.6 9.3 (30.3%) 2005 (Jan-Dec） YoY (%) Net sales Operating income Net income （Billions of yen）
（Billions of yen）
1500 1400 1300 120 100 80 60 40 20
Business policy for 2005: Pursue a Business policy for 2005: Pursue a “ “Three Three-
pronged Growth” ” strategy strategy – – Domestic alcohol business Domestic alcohol business・ ・Group business Group business・ ・Overseas business Overseas business
2
■Appeal “freshness” of Super Dry and promote the “Umai Tarunama （tasty kegged beer) Project” → insufficient to revitalize demand for beer ■Launch “market-creating” products （happoshu Honnama Gold, new genre Shinnama and Shinnama 3) ■Other alcohol business：growth in core brands, such as Kanoka (shochu) and Cocktail Partner (RTD) → higher growth than the market average ■Asahi Soft Drinks：Growth in core brands, strong sales of new products, promotion of restructuring → record high profits ■Asahi Food & Healthcare：Growth of focused products, such as Mintia, and structural reforms → profitability restored ■ Stock acquisitions of Sunwell (healthcare foods) and LB Saitama/Nagoya (paper-packed chilled beverage) → stronger foundation of healthcare food and paper-packed chilled beverage operations ■Overseas alcohol business：Improve profitability in China, Europe and the US and explore new markets in the Asian region ■Overseas beverage business：Pursue group synergy with TAI Beverages (joint venture with Tingyi,China) and Haitai Beverage (south Korea) Significant growth in the beverage business in China ◆ ◆Domestic Alcohol Business
Domestic Alcohol Business
◆ ◆Group Business
Group Business
◆ ◆Overseas Business
Overseas Business
200 400 600 800 1000
02 03 04 05 06(E)
13000 14000 15000 16000
■ ■ 2006 2006 Full Full-
year Forecasts (consolidated)
3
2005 Asahi Breweries 1,095.0 1,054.2 40.8 (3.9%) Asahi Soft Drinks 232.0 225.1 6.9 (3.0%) Asahi Food & Healthcare 30.5 26.8 3.7 (13.8%) Others 137.5 123.9 13.6 (11.0%) Net sales 1,495.0 1,430.0 65.0 (4.5%) Asahi Breweries 90.0 78.5 11.5 (14.6%) Asahi Soft Drinks 10.0 9.5 0.5 (4.7%) Asahi Food & Healthcare 1.0 0.7 0.3 (40.8%) Others 4.0 1.5 2.5 (166.7%) Operating income 105.0 90.2 14.8 (16.3%)
Non-operating income/loss
1.2
104.5 91.4 13.1 (14.3%) Extraordinary income/loss
1.7
44.5 39.9 4.6 (11.6%) 2006 Forecast (Jan-Dec） YoY (%) Net sales Operating income Net income
（Billions of yen）
（Billions of yen）
1600 1500 1400 1300 100 80 60 40 20
■ ■Progress to Date vs Medium Progress to Date vs Medium-
term Numerical Targets
4
Second Medium Second Medium-
term Plan: Progress of achieving numerical targets
Progress of achieving numerical targets
（Bilions of yen）
2003 vs 2003 vs 2003
Alcoholic beverages
1,107.0 1,095.0
1,200.0 93.0
Soft drinks
189.4 251.4 62.0 300.0 110.6
Food & healthcare
22.0 32.6 10.6 50.0 28.0
Overseas
13.2 60.0 46.8 50.0 36.8
Other
68.7 56.0
60.0
Net sales
1,400.3 1,495.0 94.7 1,660.0 259.7
Alcoholic beverages
72.4 90.0 17.6 90.0 17.6
Soft drinks
2.8 10.5 7.7 15.0 12.2
Food & healthcare
0.0 1.2 1.2 3.0 3.0
Overseas
0.0 1.5 2.0 3.5
Other
5.2 3.3
5.0
Operating income
78.9 105.0 26.1 115.0 36.1
Ordinary income
70.4 104.5 34.1 110.0 39.6
Net income
23.2 44.5 21.3 50.0 26.8
2006 Plan 2006 mid-term targets
3.8 5.9 7.5 8.9 2 4 6 8 10 12 02 03 04 05 06(E)
6.3 5.0 5.6 7.0 4 5 6 7 8 02 03 04 05 06(E)
■ROE （Mid-term target:10%） ■Operating Margin （Mid-term target:7%） ※Medium-term operating profit targets include profit increases (¥10bn) resulting from new investments.
（％） （％）
Business policy for 2006: Business policy for 2006: Establish solid earnings foundation and diversified growth struc Establish solid earnings foundation and diversified growth structure to complete ture to complete reforms reforms
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2006 2006 Strategies by Business Strategies by Business
◎Concentrate management resources into the core beer category to rebuild growth foundation for overall alcohol business ■Super Dry：Further reinforce freshness and kegged beer sales promotions and thereby revitalize demand for beer ■Improve quality of happoshu Honnama and foster brand strength of new genre Shinnama 3 ■Other alcohol business： Concentrate management resources into core brands to realize growth with a focus on profitability ■Asahi Soft Drinks：Strengthen structure to achieve sustained growth through core brand-led growth strategy and further structural reforms ■Asahi Food & Healthcare：Increase sales of major products and enter new fields of diet support foods & agri-related business ■Promote business investment to reinforce competitiveness of local beer companies, such as Beijing Breweries, and expand franchise ■Further accelerate growth in South East Asian and East Asian countries and establish an optimum supply chain
◆ ◆Domestic Alcohol Business Domestic Alcohol Business ◆ ◆Group Business Group Business ◆ ◆Overseas Business Overseas Business
【 【Strategies for Existing Businesses Strategies for Existing Businesses】 】
Beer cagetory Other liquors Soft drinks Food & Healthcare Overseas Other
Beer category Other liquors Soft drinks Food & Healthcare Overseas Other
2004: Established TAI Beverages (joint venture with Tingyi); converted Haitai Beverage to a consolidated subsidiary (total investment of around ¥40bn) 2005: Share acquisitions of Sunwell, LB Saitama and LB Nagoya (total investment of around ¥15bn) 2006 and beyond: ⇒Consideration and implementation of strategic business investment by a Business Development department under the direct oversight by the president 2004: Established TAI Beverages (joint venture with Tingyi); converted Haitai Beverage to a consolidated subsidiary (total investment of around ¥40bn) 2005: Share acquisitions of Sunwell, LB Saitama and LB Nagoya (total investment of around ¥15bn) 2006 and beyond: ⇒Consideration and implementation of strategic business investment by a Business Development department under the direct oversight by the president 6
◆ ◆M&A/Strategic Business Investment (Total budget under medium M&A/Strategic Business Investment (Total budget under medium-
term plan : ¥ ¥100bn) 100bn)
Progress of Progress of “ “Business Structure Reforms Business Structure Reforms” ” and Future Policies and Future Policies
Alcoholic beverages 79% Alcoholic beverages 73%
■ ■Sales Breakdown Sales Breakdown
2006 2006 Plan Plan 2003 2003 Results Results Mid Mid-
term Target 72% 72%
Progress of Progress of “ “Earnings Structure Reforms Earnings Structure Reforms” ” and Future Policies and Future Policies
■Alcoholic beverages： Promote faster improvement in efficiency relative to the three-year medium- term cost reduction plan (¥14bn) (Reduction of production/distribution costs and fixed costs related to personnel, depreciation, sales promotion and other ） ■Soft drinks：Implement a structural reform plan (¥5bn: establishment of optimum production systems, efficiency improvement in vending machines and SCM-related measures) 7 ■ Asahi Soft Drinks started production of RTD alcoholic drinks at Kashiwa and Akashi factories (from April/May 2004) ■Divestiture of Nippon National Seikan Company, Ltd. (April 2004) ■Winemaking operations consolidated into a single subsidiary, Sainte Neige （September 2005） ■Merger between Nikka Whiskey and Asahi Kyowa Liquor Manufacturing Co, Ltd. and transfer of function of the Tsuchiura factory (January 2006) ■Restructuring of five logistics subsidiaries into Asahi Logistics and two specialist large truck haulage companies (January 2006) ■Full recognition of impairment losses as planned under the impairment loss recognition program (¥30bn; through 2006)→ improve net profit levels.
◆ ◆Enhance Cost Competitiveness Enhance Cost Competitiveness
◆ ◆Build Optimum Production and Logistics Systems Build Optimum Production and Logistics Systems ◆ ◆Improve Extraordinary Balance Improve Extraordinary Balance
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◆ ◆Increase Returns to Shareholders (Guideline value for medium Increase Returns to Shareholders (Guideline value for medium-
term returns : ¥ ¥60bn) 60bn)
Progress of Progress of “ “Shareholder Return Policy Shareholder Return Policy” ” and Future Policies and Future Policies
Dividend payout ratio 48.1% 45.0% 27.8% 24.0% 20.7%
to shareholders 49% 101% 65% 46% 46%
7.3 6.4 6.5 6.6 10.0 6.8 8.6 8.4 13.6 14.8 23.2 30.6 39.9 44.5 100 200 300 400 500 01 02 03 04 05 06(E) 自己株取得 配当総額 当期純利益
（Billions of yen）
2004 2004：Dividend increase (from ¥13 to ¥15 per share) Acquisition of own shares (¥6.8bn) 2005 2005：Dividend increase (from ¥15 to ¥17 per share) Acquisition of own shares (¥10bn) ＜Retirement of own shares（20mn shares）＞ 2006 onward 2006 onward： 【Shareholder Return Policy】 Asahi aims for an increase of at least 20% in consolidated payout ratio while at the same time upholding its basic shareholder return policy that dictates stable and sustained dividend payment. In addition, we will enhance overall returns to shareholders through timely execution of share buyback program. Asahi aims for an increase of at least 20% in consolidated payout ratio while at the same time upholding its basic shareholder return policy that dictates stable and sustained dividend payment. In addition, we will enhance overall returns to shareholders through timely execution of share buyback program.
■ ■Net Profits and Gross Returns to Shareholders Net Profits and Gross Returns to Shareholders
Acquisition of own shares Total dividend paid Net income
50 40 30 20 10
Pursuit of shareholder value
9
“ “Reduction in Financial Liabilities Reduction in Financial Liabilities” ” and Future Policy and Future Policy
◆ ◆Reduction of Financial Liabilities Reduction of Financial Liabilities (Guideline value for medium-term reduction ：¥40bn)
0.64 0.73 0.84 1.04 1.08 1.41 2,000 4,000 6,000 00 01 02 03 04 05 06(E) 株主資本 金融債務 ＤＥレシオ
（Billions of yen）
Mid Mid-
term Target Target ¥ ¥300bn 300bn DE Ratio DE Ratio （ （Roughly 0.7 Roughly 0.7） ）
⇒Reduction of financial liabilities to be pursued flexibly by also taking other policy
business investment and shareholder return. 2004: 2004: ¥33.2bn reduction (¥336.3bn⇒¥303.1bn） 2005: 2005: ¥13.9bn reduction (¥303.1bn⇒¥289.2bn) 2006: 2006: ¥5.8bn increase (¥289.2bn⇒¥295.0bn)
600 400 200 Shareholders’ equity Financial liabilities DE ratio
（Millions of cases）
◆ Beer Category Taxable Volume
10
Beer Category 2005 Overview Beer Category 2005 Overview
Cases
YoY (%)
Beer 282.34
(-7.9%) 56.4% (-2.9%) Happoshu (low-malt beer) 139.26
(-24.8%) 27.8% (-8.0%) New genre (no-malt beer) 79.42 53.94 (211.8%) 15.8% (11.0%) Happoshu+New genre 218.68 7.95 (3.8%) 43.6% (2.9%) 501.02
(-3.1%) 100.0%
Industry Overall 2005 (Jan-Dec)
Breakdown (% change)
（Millions of cases）
【Industry Overall】 【Asahi Breweries】
Cases
YoY (%)
Beer 139.28
(-7.5%) 49.3% (0.2%) Happoshu (low-malt beer) 39.99
(-26.4%) 28.7% (-0.6%) New genre (no-malt beer) 15.19 15.19
(19.1%) Happoshu+New genre 55.18 0.87 (1.6%) 25.2% (-0.5%) 194.46
(-5.1%) 38.8% (-0.8%) Asahi Breweries 2005 (Jan-Dec)
Market Share (% change)
Total
（Millions of cases）
■ ■ Beer/Happoshu/New Genre: Sales Plan Beer/Happoshu/New Genre: Sales Plan
◆ Beer ： roughly 1% decline ◆ Happoshu ： roughly 8% decline Market Total: roughly 1% decline overall ◆ New genre ： roughly 14% growth
2005 YoY Super Dry 137.90 135.80 +1.5% Others 5.10 3.10 +64.5% Beer 143.00 138.90 +3.0% Honnama 19.50 18.40 +6.0% Aqua Blue 11.80 12.30
Gold 6.60 8.70
Others 0.10 0.30
Happoshu (low-malt) 38.00 39.70
Shinnama 3 19.00 3.00 +533.3% Shinnama － 11.80 － New genre (no-malt) 19.00 14.80 +28.4% Total 200.00 193.40 +3.4% 2006 Targets
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Beer Category 2006 Sales Plan Beer Category 2006 Sales Plan
Happoshu+New genre 57 million cases （up 4.6% YoY）
■ ■ 2006 2006 Market Outlook Market Outlook
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in-store sales campaigns at volume retailers and companywide sales activities
*An advice and training program for restaurants and bars, demonstrating how to improve the quality and taste of draft beer
Super Dry Super Dry
Beer: Future Efforts Beer: Future Efforts
◆Brand Indicators for Super Dry (research by company) 2001 2002 2003 2004 2005
Launch of Honnama （％）
20 22 24 26 28 30 32 34 Feb Jun Oct Feb Jun Oct Feb Jun Oct Feb Jun Oct Feb Jun Oct
一位購入意向率 最頻飲用率
Ratio of becoming beer of choice Ratio of most frequent buyers
13
Honnama/Shinnama 3
Happoshu/New Genre: Future Efforts Happoshu/New Genre: Future Efforts
2 4 6 8 10 12 14 11.7 11.14 11.21 11.28 12.5 12.12 12.19 12.26 1.2 1.9 1.16 Shinnama 3
◆Improve quality to enhance their brand image as happoshu with taste of real draft beer (from the end of January) ◆Implement advertising campaigns that covey the sense of casualness and happiness
◆Rollout advertising and sales campaigns that draw media attention.
（％）
◆In-store Sales Share of Shinnama 3 （CVS：Research by the Company）
◆Other Alcohol Business 2005 Sales
（Billions of yen）
14 Overall Market 2005 2004
(Company Estimate)
Shochu
55.1 51.8 3.3 (6.4%) +1%
Low-alcohol drinks
32.1 28.3 3.7 (13.1%) +5%
Spirits
28.2 29.5
(-4.4%)
Wine
15.1 14.4 0.7 (4.7%)
Others
2.9 3.1
(-4.2%)
133.4 127.1 6.3 (4.9%)
YoY (%)
Other Alcohol Business: 2005 Overview Other Alcohol Business: 2005 Overview
◎Increased Sales of Core Brands
sweet potato varieties)
・Foster Kanoka into a major brand, with a shipment target of 3.3mn cases ・Strengthen product proposals for premium shochu brands, such as Satsuma Tsukasa and Ichibanfuda.
・Foster Kanoka into a major brand, with a shipment target of 3.3mn cases ・Strengthen product proposals for premium shochu brands, such as Satsuma Tsukasa and Ichibanfuda.
・Further reinforce core brands ： Cocktail Partner, Shunka Shibori ・Develop unique brands ： HiLiki, Hon Chu-Hi, Fauchon
・Further reinforce core brands ： Cocktail Partner, Shunka Shibori ・Develop unique brands ： HiLiki, Hon Chu-Hi, Fauchon
・Further reinforce Black Nikka Clear Blend for the home market and Taketsuru for commercial market. ・Promote Black Highball and other new-concept products among the entry-level users.
・Further reinforce Black Nikka Clear Blend for the home market and Taketsuru for commercial market. ・Promote Black Highball and other new-concept products among the entry-level users.
・Consolidate domestic brands into the Sainte Neige brand to expand sales
・Consolidate domestic brands into the Sainte Neige brand to expand sales
Other Alcohol Business Sales Target: Other Alcohol Business Sales Target: ¥ ¥144.6bn (Up 8.4% YoY) 144.6bn (Up 8.4% YoY)
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Shochu Shochu Whisky & Whisky & Spirits Spirits RTD RTD Wine Wine
Cultivate brands through selective concentration by region and b Cultivate brands through selective concentration by region and business type to usiness type to achieve growth with profitability achieve growth with profitability
Other Alcohol Business Other Alcohol Business： ： 2006 Efforts 2006 Efforts
16
■ ■Sales Promotion Expenses by Category Sales Promotion Expenses by Category
2006 2006 Plan: A shift to beer, profitability improvement in the other al Plan: A shift to beer, profitability improvement in the other alcohol business cohol business
（Billions of yen）
Alcoholic Beverage Business: Marketing Costs Alcoholic Beverage Business: Marketing Costs
2001 2002 2003 2004 YoY YoY Beer 75.4 66.0 60.3 58.0 54.9
57.7 2.8 Happoshu (low-malt) 15.8 19.6 20.5 20.4 12.2
10.4
New genre (no-malt) － － － － 9.2 9.2 7.1
91.2 85.6 80.8 78.4 76.3
75.2
Other alcohol business 10.7 20.4 28.3 30.2 33.7 3.5 32.6
101.9 106.0 109.1 108.6 110.0 1.4 107.8
Sales promotion premiums 61.0 67.9 77.9 76.3 77.8 1.5 78.8 1.0 Advertising expenses 40.9 38.1 31.2 32.3 32.2
29.0
2005 2006 Plan Beer/Happoshu/New genre total Total
Information in this material is not intended to solicit sales or purchases of Asahi Breweries stock shares. The comments and estimates in this document are based on the company’s judgment at the time of publication and their accuracy is not guaranteed. They are subject to change without notice in the future. The company and its officers and representatives hold no responsibility for any damage or inconvenience that may be caused by any part of this material.