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 Results Overview & 2006 E arnings F orecasts February 13, 2006 URL http://www.asahibeer.co.jp
Overview of Group Operations and Overview of Group Operations and 2006 Business Strategy 2006 Business Strategy
2005 Results Overview (consolidated) Results Overview (consolidated) 2005 ■ 2005 ■ 2005 Results (consolidated) Results (consolidated) （ Billions of yen ） （ Billions of yen ） 15000 2005 (Jan-Dec ） 1500 Net sales YoY (%) 2004 14000 1400 Asahi Breweries 1,054.2 1,116.4 -62.2 (-5.6%) Asahi Soft Drinks 225.1 204.0 21.1 (10.4%) 1300 13000 Asahi Food & Healthcare 26.8 22.3 4.5 (19.9%) 120 1200 Other 123.9 101.5 22.4 (22.1%) Operating Net sales 1,430.0 1,444.2 -14.2 (-1.0%) 1000 100 income Asahi Breweries 78.5 91.7 -13.2 (-14.4%) 800 80 Asahi Soft Drinks 9.5 8.1 1.4 (17.4%) Asahi Food & Healthcare 0.7 -0.6 1.3 - 600 60 Other 1.5 2.0 -0.5 (-29.1%) Operating income 90.2 101.2 -11.0 (-10.9%) 400 40 Net income Non-operating balance 1.2 -5.6 6.8 - Ordinary income 91.4 95.6 -4.2 (-4.4%) 200 20 Extraordinary balance -37.3 21.6 - -15.7 0 0 Net income 39.9 30.6 9.3 (30.3%) 01 02 03 04 05 1
2005 Overview by Business Overview by Business 2005 Business policy for 2005: Pursue a Business policy for 2005: Pursue a “ “Three Three- -pronged Growth pronged Growth” ” strategy strategy – – Domestic alcohol business ・ Group business ・ Overseas business Domestic alcohol business ・ Group business ・ Overseas business ◆ Domestic Alcohol Business Domestic Alcohol Business ◆ ■ 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 ◆ Group Business Group Business ◆ ■ 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 Business Overseas Business ◆ ■ 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 2
2006 Full Full- -year Forecasts (consolidated) year Forecasts (consolidated) 2006 ■ ■ 2006 2006 Full Full- -year Forecasts (consolidated) year Forecasts (consolidated) （ Billions of yen ） （ Billions of yen ） 2006 Forecast (Jan-Dec ） 16000 1600 Net sales YoY (%) 2005 15000 1500 Asahi Breweries 1,095.0 1,054.2 40.8 (3.9%) 1400 14000 Asahi Soft Drinks 232.0 225.1 6.9 (3.0%) 1300 13000 Asahi Food & Healthcare 30.5 26.8 3.7 (13.8%) Operating income Others 137.5 123.9 13.6 (11.0%) 1000 100 Net sales 1,495.0 1,430.0 65.0 (4.5%) 800 80 Asahi Breweries 90.0 78.5 11.5 (14.6%) Asahi Soft Drinks 10.0 9.5 0.5 (4.7%) 600 60 Asahi Food & Healthcare 1.0 0.7 0.3 (40.8%) Net Others 4.0 1.5 2.5 (166.7%) 400 income 40 Operating income 105.0 90.2 14.8 (16.3%) Non-operating income/loss 200 -0.5 1.2 -1.7 - 20 Ordinary income 104.5 91.4 13.1 (14.3%) 0 0 Extraordinary income/loss -14.0 -15.7 1.7 - 02 03 04 05 06(E) Net income 44.5 39.9 4.6 (11.6%) 3
Progress of achieving numerical targets term Plan: Second Medium- -term Plan: Second Medium Progress of achieving numerical targets ■ Progress to Date vs Medium ■ Progress to Date vs Medium- -term Numerical Targets term Numerical Targets （ Bilions of yen ） ■ Operating Margin （ Mid-term target:7% ） 2006 Plan 2006 mid-term targets 2003 8 vs 2003 vs 2003 （％） Alcoholic beverages 1,107.0 1,095.0 -12.0 1,200.0 93.0 7 7.0 Soft drinks 189.4 251.4 62.0 300.0 110.6 6 6.3 5.6 22.0 32.6 10.6 50.0 28.0 Food & healthcare 5 5.0 Overseas 13.2 60.0 46.8 50.0 36.8 4 68.7 56.0 -12.7 60.0 -8.7 Other 02 03 04 05 06(E) 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 ■ ROE （ Mid-term target:10% ） 12 2.8 10.5 7.7 15.0 12.2 Soft drinks （％） 10 Food & healthcare 0.0 1.2 1.2 3.0 3.0 8.9 8 -1.5 0.0 1.5 2.0 3.5 Overseas 7.5 6 5.9 5.2 3.3 -1.9 5.0 -0.2 Other 4 3.8 Operating income 78.9 105.0 26.1 115.0 36.1 2 70.4 104.5 34.1 110.0 39.6 Ordinary income 02 03 04 05 06(E) Net income 23.2 44.5 21.3 50.0 26.8 ※ Medium-term operating profit targets include profit increases (¥10bn) resulting from new investments. 4
2006 Strategies by Business Strategies by Business 2006 Business policy for 2006: Business policy for 2006: Establish solid earnings foundation and diversified growth structure to complete ture to complete reforms reforms Establish solid earnings foundation and diversified growth struc 【 Strategies for Existing Businesses 】 【 Strategies for Existing Businesses 】 ◆ Domestic Alcohol Business ◆ Domestic Alcohol 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 ◆ Group Business ◆ Group Business ■ 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 ◆ Overseas Business ◆ Overseas 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 5
Progress of “ “Business Structure Reforms Business Structure Reforms” ” and Future Policies and Future Policies Progress of ◆ ◆ M&A/Strategic Business Investment (Total budget under medium M&A/Strategic Business Investment (Total budget under medium- -term plan : term plan : ¥ ¥100bn) 100bn) 2004: Established TAI Beverages (joint venture with Tingyi); converted Haitai Beverage to a 2004: Established TAI Beverages (joint venture with Tingyi); converted Haitai Beverage to a consolidated subsidiary consolidated subsidiary (total investment of around ¥40bn) (total investment of around ¥40bn) 2005: Share acquisitions of Sunwell, LB Saitama and LB Nagoya (total investment of around ¥15bn) 2005: Share acquisitions of Sunwell, LB Saitama and LB Nagoya (total investment of around ¥15bn) 2006 and beyond: 2006 and beyond: ⇒ Consideration and implementation of strategic business investment by a Business ⇒ Consideration and implementation of strategic business investment by a Business Development department under the direct oversight by the president Development department under the direct oversight by the president ■ Sales Breakdown ■ Sales Breakdown Overseas Other Overseas Other Food & Healthcare Food & Healthcare Soft drinks Soft drinks Other liquors Beer category Beer cagetory Other liquors Alcoholic Alcoholic Mid- Mid -term Target term Target beverages beverages 72% 72% 79% 73% 2003 Results 2003 Results 2006 Plan 2006 Plan 6
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