2004 Interim Results Presentation Interim Results Presentation 2004 2004 Interim Results Presentation August 10, 2004 Asahi Breweries, Ltd. URL http://www.asahibeer.co.jp/english/index.html
2004 Interim Results Overview (consolidated) Interim Results Overview (consolidated) 2004 ■ 2004 ■ 2004 Interim Results (consolidated) Interim Results (consolidated) (Billions of yen) (Billions of yen) Interim Results (Jan - Jun) 680 YoY (%) 2004 2003 660 Sales Asahi Breweries 502.0 500.1 1.9 (0.4%) 92.5 4.7 (5.1%) Asahi Soft Drinks 97.2 640 Asahi Food & Healthcare 10.9 10.7 0.2 (2.1%) 620 Others 38.0 36.3 1.7 (4.5%) Operating 639.6 8.5 (1.3%) Net Sales 648.1 40 income 21.8 13.4 (61.7%) Asahi Breweries 35.2 Asahi Soft Drinks 2.8 0.1 2.7 - -0.3 -0.4 - Asahi Food & Healthcare -0.7 30 0.0 0.4 - Others 0.4 21.6 16.1 (74.5%) Operating Income 37.7 36.1 18.7 17.4 (93.2%) Ordinary Income 20 Net 8.2 7.2 (87.4%) Net Income 15.4 income ● Record interim earnings achieved 10 ・ Asahi Breweries: Substantial rise in earnings due to lower manufacturing and distribution costs, and cuts in fixed expenses 0 ・ Asahi Soft Drinks: Greater revenues and earnings from rise in sales and structural reforms that lowered costs 00 01 02 03 04 1
2004 Full Year Forecasts (consolidated) Full Year Forecasts (consolidated) 2004 ■ 2004 ■ 2004 Full Year Forecasts (consolidated) Full Year Forecasts (consolidated) (Billions of yen) Revised Estimate (Jan - Dec) (Billions of yen) YoY (%) 2004 Estimate 2003 Actual Sales 1500 Asahi Breweries 1,123.0 1,107.0 16.0 (1.4%) Asahi Soft Drinks 189.4 14.6 (7.7%) 204.0 1400 Asahi Food and Healthcare 22.0 1.9 (8.5%) 23.9 Others 84.1 81.9 2.2 (2.7%) 1300 Net Sales 1,435.0 1,400.3 34.7 (2.5%) 100 Operating Asahi Breweries 80.0 72.4 7.6 (10.6%) income Asahi Soft Drinks 2.8 4.2 (148.7%) 7.0 80 Asahi Food and Healthcare 0.0 -0.4 - -0.4 Others 3.7 -2.3 - 1.4 60 Operating Income 88.0 78.9 9.1 (11.4%) Ordinary Profit 84.0 70.4 13.6 (19.2%) Net 40 income 23.2 4.8 (20.6%) Net Income 28.0 20 ● Record figures forecast for sales, ordinary and net income ・ Overall rise in net sales of 2.5% led by Asahi Soft Drinks 0 00 01 02 03 04 ・ Operating profit forecast for Asahi Breweries and Asahi Soft Drinks each revised upward by ¥2.0 billion -20 2
2004 Interim: Summary of Group Management Interim: Summary of Group Management 2004 ◆ During the first year of the Second Group Medium ◆ During the first year of the Second Group Medium- -Term Business Plan, establish a new earnings structure Term Business Plan, establish a new earnings structure ● Secure position in the beer/happoshu business ● Secure position in the beer/happoshu business ⇒ Beer recovery and strengthening of happoshu brands further secures position ⇒ Beer recovery and strengthening of happoshu brands further secures position ● Expand sales and improve efficiency in the comprehensive alcohol division ● Expand sales and improve efficiency in the comprehensive alcohol division ⇒ Strengthen core brands, implement new proposals to unify the Group, improve marketing efficiency ⇒ Strengthen core brands, implement new proposals to unify the Group, improve marketing efficiency Alcoholic Alcoholic Beverages Beverages ● Streamline fixed expenses, including manufacturing, distribution, advertising and ● Streamline fixed expenses, including manufacturing, distribution, advertising and sales promotion costs. sales promotion costs. ⇒ Achieve cost and expense reductions that exceed original plan *Details follow ⇒ Achieve cost and expense reductions that exceed original plan *Details follow ● Establish a foundation for growth by strengthening key brands ● Establish a foundation for growth by strengthening key brands ⇒ Focusing on strengthening of Mitsuya Cider brand, achieve growth exceeding industry average (+5%) ⇒ Focusing on strengthening of Mitsuya Cider brand, achieve growth exceeding industry average (+5%) Soft Soft Drinks Drinks ● Lower costs through structural reform ● Lower costs through structural reform ⇒ Achieve cost reductions that exceed original plan (Original plan ¥1.4bn → ¥1.9bn) ⇒ Achieve cost reductions that exceed original plan (Original plan ¥1.4bn → ¥1.9bn) ● Improve the earnings structure of existing businesses Food & Health; Food & Health; ● Improve the earnings structure of existing businesses Overseas Overseas ⇒ New brewery at Beijing Beer Asahi in operation (May); begin rebuilding of existing Chinese business ⇒ New brewery at Beijing Beer Asahi in operation (May); begin rebuilding of existing Chinese business Business Business ⇒ Strengthen the direct marketing business of Asahi Food & Healthcare ⇒ Strengthen the direct marketing business of Asahi Food & Healthcare Supplier; Supplier; ● Strengthen Group competitiveness and implement restructuring ● Strengthen Group competitiveness and implement restructuring Support Support ⇒ Transfer of Nippon National Seikan Company; ⇒ Transfer of Nippon National Seikan Company; Business Restore operating profitability in restaurant business (improve by ¥0.3bn) Business Restore operating profitability in restaurant business (improve by ¥0.3bn) 3
Progress of Cash Flow Strategies Progress of Cash Flow Strategies ● Treasury stock acquisition (¥6.8 billion) ● Treasury stock acquisition (¥6.8 billion) Shareholder Shareholder ● Increase full year dividends by two yen (¥13 → ¥15) to provide ● Increase full year dividends by two yen (¥13 → ¥15) to provide Returns Returns shareholder returns in line with the business plan shareholder returns in line with the business plan ● Launched joint beverage venture with Tingyi (Cayman Islands) Holding Corp (a major ● Launched joint beverage venture with Tingyi (Cayman Islands) Holding Corp (a major Business Business Chinese food company) Chinese food company) Investment Investment ● Haitai Beverage Co. (a major Korean beverage company) made a consolidated subsidiary ● Haitai Beverage Co. (a major Korean beverage company) made a consolidated subsidiary ★ Beverage joint venture launched with ★ Beverage joint venture launched with Tingyi Tingyi (Cayman Islands) Holding Corp. (Cayman Islands) Holding Corp. 【 2003 Results 】 AI China Breweries Co., Ltd. Tingyi-Asahi-Itochu Beverages Holding Co., Ltd. Investment from Sales $379mn (Consolidated subsidiary) Japan: ¥38bn Net income $6.8mn (Equity-method affiliate) (goodwill ¥29.7bn) ＜ Asahi 80% Itochu 20% ＞ （ 2002: $45.9mn ） ＜ AI Bev. 50 ％ Tingyi 50 ％＞ ・ Chinese soft drinks business: Expand business scale utilizing know-how of the Asahi Group ・ China beer business: Find ways to generate synergies 2002 2003 ★ Haitai ★ Haitai Beverage Co. made a consolidated subsidiary Beverage Co. made a consolidated subsidiary KRW 366.7bn KRW 351.8bn Sales ● Haitai Beverage (Increased holding 20 ％ ⇒ 41 ％ : ¥2.6bn invested) ( \ 36.7bn) ( \ 35.2bn) KRW 17.8bn KRW 10.3bn Operating ・ Full-scale entry into the steadily growing Korean beverage market Income ( \ 1.8bn) ( \ 1.0bn) ・ Strengthen management with technology and expertise KRW 5.5bn KRW 1.9bn Net Income from Japanese beverage business ( \ 0.5bn) ( \ 0.2bn) * Calculated at 1KRW = JPN 0.1 ◆ Continue to formulate and implement investment strategies to enh ◆ Continue to formulate and implement investment strategies to enhance competitiveness of the Group ance competitiveness of the Group 4
2004 Interim Results (non Interim Results (non- -consolidated) consolidated) 2004 ■ 2004 ■ 2004 Interim Results (non Interim Results (non- -consolidated) consolidated) (Billions of yen) (Billions of yen) 520 Sales Interim Results (Jan - Jun) 500 YoY (%) 2004 2003 480 Beer 353.1 -12.7 340.4 (-3.6%) 460 Happoshu 86.4 12.5 98.9 (14.5%) Operating 40 Other 60.6 2.0 62.6 (3.3%) income 500.1 1.9 Net sales 502.0 (0.4%) 30 21.8 13.4 Operating Income 35.2 (61.7%) 20.0 14.2 Ordinary Income 34.2 (71.0%) 5.8 9.7 Net Income 15.6 (166.1%) 20 Net income ● Record interim earnings achieved 10 ・ Decline in beer sales offset by rise in happoshu and other alcohol beverages 0 ・ Substantial rise in earnings due to lower production and 00 01 02 03 04 distribution costs, and cuts in fixed expenses 5
2004 Full Year Forecasts (non Full Year Forecasts (non- -consolidated) consolidated) 2004 ■ 2004 ■ 2004 Full Year Forecasts (non Full Year Forecasts (non- -consolidated) consolidated) (Billions of yen) (Billions of yen) 1200 Revised Estimate (Jan - Dec) Sales YoY (%) 2004 Estimate 2003 1100 Beer 784.4 -8.7 775.7 (-1.1%) Happoshu 195.6 16.7 212.3 (8.5%) 1000 Other 127.0 8.0 135.0 (6.3%) 90 Operating income 1,107.0 16.0 Net Sales 1,123.0 (1.4%) 80 72.4 7.6 70 Operating Income 80.0 (10.6%) 62.8 6.2 60 Ordinary Income 69.0 (9.8%) 50 16.4 7.6 Net Income 24.0 (46.5%) 40 Net income 30 ● Record figures forecast for sales and earnings 20 ・ Decline in beer sales will be offset by rise in 10 happoshu and other alcohol beverages 0 ・ Operating income revised upward following additional 00 01 02 03 04 -10 reductions in costs and fixed expenses 6
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