Asahi Group Holdings Ltd · TSE:2502

Asahi — FY2018 Earnings Presentation

36 slides from Asahi's earnings presentation, February 2019

1. Slide 1: Update the Medium-Term Management Policy based on the new group philosophy

   Update the Medium-Term Management Policy based on the new group philosophy Financial Results 2018 Summary 2019 Forecast February 2019 Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

2. Slide 2: Financial Results for 2018 / Financial Forecast for 2019

   Financial Results for 2018 Financial Forecast for 2019 * We change the disclosure method to allocate the results of IFRS adjustment into each individual Business's revenue and core operating profit. In response to this change, the figures in 2018 and 2019 forecast in each Business include the impact

3. Slide 3: Financial Results Highlight for 2018

   Financial Results Highlight for 2018 (JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Alcohol Beverages Business 919.4 - 39.0 - 4.1% - 23.2 941.0 27.6 3.0% Soft Drinks Business 368.8 - 5.8 - 1.5% - 0.9 379.6 8.8 2.4% Food Business 116.0 2.2 1.9% 2.1 118.0 2.0 1.7% Ov

4. Slide 4: Alcohol Beverages Business (Sales Volume of Beer-type)

   Alcohol Beverages Business (Sales Volume of Beer-type) <Sales Volume> (Millions of cases) <Market Trend> 2018 2019 forecast 2018 2019 forecast YoY (Amount / %) Against target YoY (Amount / %) YoY YoY Beer 93.51 - 6.47 - 6.5% - 2.34 94.80 1.29 1.4% -5～6％ -1～2％ Happoshu 13.89 - 1.12 - 7.4% - 0.45 13.6

5. Slide 5: Alcohol Beverages Business (Revenue)

   Alcohol Beverages Business (Revenue) <Revenue> (JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Beer 519.8 - 26.2 - 4.8% - 14.0 Asahi Breweries Revenue 916.0 26.6 3.0% Happoshu 52.9 - 5.0 - 8.6% - 1.7 Other/elimination in segment 25.0 1.0 4.1% New Genre 131.8 - 10.6

6. Slide 6: Alcohol Beverages Business (Core Operating Profit)

   Alcohol Beverages Business (Core Operating Profit) <Core Operating Profit> (JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Beer-type - Change in sales volume - - 10.7 - 6.3 Change in sales, category and container mix - 11.2 Change in Beer-type - 0.6 - 0.9 Cost reduc

7. Slide 7: Soft Drinks Business (Sales Volume)

   Soft Drinks Business (Sales Volume) <Sales Volume> (Millions of cases) <Market Trend> 2018 2019 forecast 2018 2019 forecast YoY (Amount / %) Against target YoY (Amount / %) YoY YoY Carbonated drinks 67.26 5.19 8.4% 0.93 70.58 3.32 4.9% +2～3% Lactic acid drinks 49.53 5.16 11.6% 1.07 51.97 2.44 4.9% +

8. Slide 8: Soft Drinks Business (Core Operating Profit)

   Soft Drinks Business (Core Operating Profit) <Core Operating Profit> (Millions of cases / JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Sales Volume Total 266.13 10.15 4.0% 2.63 Sales Volume Total 269.20 3.07 1.2% Revenue Total 368.8 - 5.8 - 1.5% - 0.9 Revenue Tota

9. Slide 9: Food Business (Revenue/Core Operating Profit)

   Food Business (Revenue/Core Operating Profit) <Revenue> (JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Asahi Group Foods 128.6 2.5 2.0% 2.3 118.0 2.0 1.7% Other / elimination - 0.0 0.0 - - 0.0 - 0.0 - Corporate adjustment (IFRS adjustment) - 12.7 - 0.3 - - 0.2 - -

10. Slide 10: Overseas Business (Revenue)

    Overseas Business (Revenue) <Revenue> (JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Europe business 465.5 91.9 24.6% 16.0 464.5 - 1.0 - 0.2% Oceania business 174.7 1.5 0.9% - 2.5 176.4 1.7 1.0% Southeast Asia business 45.9 - 9.5 - 17.1% - 2.0 44.7 - 1.3 - 2.8% Chi

11. Slide 11: Overseas Business (Core Operating Profit)

    Overseas Business (Core Operating Profit) <Core Operating Profit> (JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Europe business 81.1 30.1 58.9% 4.6 84.5 3.4 4.2% Oceania business 14.8 0.8 5.5% - 0.4 15.3 0.5 3.5% Southeast Asia business 2.2 1.4 174.5% 0.1 2.8 0.6

12. Slide 12: Europe Business (Revenue/Core Operating Profit)

    Europe Business (Revenue/Core Operating Profit) <Revenue> (JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Western Europe 149.5 14.4 10.7% 4.2 154.4 4.9 3.3% Central Europe (consolidated from Apr. 2017) 316.1 77.5 32.5% 11.8 310.1 - 6.0 - 1.9% Europe business 465.5 9

13. Slide 13: Operating Profit/Profit Attributable to Owners of Parent

    Operating Profit/Profit Attributable to Owners of Parent (JPY billion) 2018 2019 forecast YoY (Amount / %) Against Target YoY (Amount / %) Revenue 2,120.3 35.4 1.7% - 19.7 2,153.0 32.7 1.5% Core operating profit 221.4 25.0 12.7% 1.4 230.0 8.6 3.9% Adjustment item - 9.6 3.6 6.4 - 13.0 - 3.4 Loss (gai

14. Slide 14: Formulation of new group philosophy / Medium-Term Management Policy Update

    Formulation of new group philosophy “Asahi Group Philosophy” The Medium-Term Management Policy Update

15. Slide 15: Executive Summary

    Executive Summary ◆Overview of the management over past three years ・ Strengthening brand equities in the three domestic businesses and improving profitability through making more progress than planed in reforming the earning structure ・ Expanding the foundation for growth significantly driven by ac

16. Slide 16: External Environment in the Future

    External Environment in the Future ◆External Environment in the Future ・ Development of further value diversification in consumer sentiment driven by factors including various tax revisions and development of digitalization ・ Expansion of various opportunities and risks including growing VUCA* envir

17. Slide 17: Asahi Group Philosophy

    Asahi Group Philosophy Copyright © ASAHI GROUP HOLDINGS. All rights reserved. 14

18. Slide 18: Overview of the Medium-Term Management Policy

    Overview of the Medium-Term Management Policy Enhancing "Glocal Value Creation Management" based on Asahi Group Philosophy ◆ Strengthening earning power driven by high added value enhancement and earning structure reform ・Enhancing high added value brands in Japan and overseas and achieving revenue

19. Slide 19: Guidelines of Key Performance Indicators

    Guidelines of Key Performance Indicators ◆ Key Performance Indicator (KPI) Concept and Guidelines 2017 results Guidelines for next 3 years out JPY2,084.9 Stable growth from existing businesses – Business Revenue billion restructuring + New M&As JPY196.4 Core OP CAGR : mid to high single digit billio

20. Slide 20: Financial and Cash Flow Strategy (2019 revised)

    Financial and Cash Flow Strategy (2019 revised) ◆ Financial and Cash Flow Guidelines Guidelines from 2019 onward Cash Flow FCF : above JPY170.0 billion (annual average) Investment for Prioritize M&As for expansion of foundations for growth and promote Growth debt reduction for enhancing investment c

21. Slide 21: Key Initiatives by Business

    Key Initiatives by Business Business Medium-Term Key Initiatives ◆Sophisticating structure for innovation and cost reduction and establishing the position as a leading company in the domestic alcohol industry 1) Implementing integrated marketing strategy for new market creation looking toward the fu

22. Slide 22: Results and Forecasts for Earning Structure Reform

    Results and Forecasts for Earning Structure Reform including Zero Based Budgeting (ZBB) impacts ◆ Results and Forecasts for Earning Structure Reform Note: The figures include the net impacts of ZBB 2019-2021 2016-2018 2016-2018 JPY billion Initiatives 3 year forecast Forecast Results Structure optim

23. Slide 23: Reinforcement of ESG Initiatives

    Reinforcement of ESG Initiatives Reinforcing ESG initiatives supporting sustainable value creation process ◆ Formulating "Asahi Group Environmental Vision 2050", improving sustainable activities through value creation leveraging the unique strength ・ Goals of Asahi Group Environmental Vision 2050 1)

24. Slide 24: Asahi Group Environmental Vision 2050

    Asahi Group Environmental Vision 2050 Asahi Group Environmental Vision 2050 We will work on to achieve the goals below by 2050 ・ Aiming to achieve zero environmental impact in the business activities ・ Endeavoring to create more environmental value to society by leveraging the Group’s unique technol

25. Slide 25: Overview of Business Results for 2018 & Future Business Strategy

    Overview of Business Results for 2018 & Future Business Strategy

26. Slide 26: Alcohol Beverages Business (Beer Initiatives)

    Alcohol Beverages Business (Beer Initiatives) Asahi Super Dry Brand Theme: The JAPAN BRAND Increasing loyal users through integrated marketing and improving brand equities Brand Communication Strategy Ad Strategy Enhancing Appeal of Brand Equity Emotional Value Appeal Corporate Innovation Establish

27. Slide 27: Alcohol Beverages Business (New Genre)

    Alcohol Beverages Business (New Genre) ◆ Sales Volume Trend of New Genre (Millions cases) <Challenge in 2018> Contraction of Clear Asahi brand due to new product launches impacts in competitors Delay to tackle the change of consumption trend <Strategy in 2019> Improving added value of Clear Asahi br

28. Slide 28: Alcohol Beverages Business (Other Alcohol Beverages)

    Alcohol Beverages Business (Other Alcohol Beverages) ◆ Revenue Trend in Other Alcohol Beverages (JPY billion) Non-alcohol Shochu Wine RTD Whiskey Note : Revenue figures are based on J GAAP ◆ RTD: Revenue and Market Share Trend (JPY billion) (Millions cases) New Launch: Wilkinson Hard Nine New Launch

29. Slide 29: Soft Drinks Business Overview

    Soft Drinks Business Overview ◆ Revenue and Core OP Margin Trend ◆ Sales Volume Trend of WILKINSON and CALPIS （Million cases） (CAGR) ＋7.2％ ＋17.5％ <J GAAP> ＜IFRS＞ ◆ Key Profitability Improvement Drivers ◆ Enhancement of Health Functional Field Contribution for tackling the social issues linked to hea

30. Slide 30: Food Business Overview

    Food Business Overview ◆ Revenue and Core OP Margin Trend ◆ Revenue and Market Share Trend in Baby Food (JPY billion) (CAGR) ＋7.6％ <J GAAP> ＜IFRS＞ Source : Intage ◆ Core Brands Revenue Trend (JPY billion) Freeze Dried Miso Soup Baby Food Infant Formula Dear Natura MINTIA Copyright © ASAHI GROUP HOLD

31. Slide 31: Western Europe Business Overview

    Western Europe Business Overview ◆ 2018 Results and 2019 Forecast (excluding foreign exchange impacts associated with conversion of local currencies into Euro) khl、million Euro 2018 Against 2019 YoY*2 YoY*4 Results Target*3 Forecast Sales Volume 9,351 6% 3% 9,318 0% Net Sales (exl. Alcohol tax) 929

32. Slide 32: Central Europe Business Overview

    Central Europe Business Overview ◆ 2018 Results and 2019 Forecast (excluding foreign exchange impacts associated with conversion of local currencies into Euro) khl、million Euro 2018 YoY*2 Against 2019 YoY*4 Results （Full year basis) Target *3 Forecast Sales Volume 33,531 4% 1% 33,442 0% Net Sales (e

33. Slide 33: Expansion of Global Brands

    Expansion of Global Brands ◆ Cross-selling Strategy for Global Premium Brands ◆ Brand: Asahi Super Dry, Peroni Nastro Azzurro, Pilsner Urquell ◆ Area: Super premium beer markets other than home markets including UK ◆ Basic Strategy: Strategy focused on portfolio utilizing brand equities and key citi

34. Slide 34: Oceania Business Overview

    Oceania Business Overview ◆ Revenue and Core OP Margin Trend ◆ Cost Reduction (including integration synergies): (based on local currency: AUD) Result 2016-2018 JPY billion 2016 2017 2018 3 yr forecast Cost 1.8 3.2 2.3 Over 5.0 Reduction ◆ Initiatives in Growing Categories (Australia) <Non/Law Sugar

35. Slide 35: <Reference> Impact of Foreign Exchange Rate

    <Reference> Impact of Foreign Exchange Rate ◆ Key Currencies and the Company’s ◆ Impact of Foreign Exchange Rates on Average Exchange Rates Trend Statement of Profit or Loss (JPY billion) (yen) 2018 2019 Business Currency Reference result forecast Europe Euro 8.5 -16.0 Oceania AUD -7.3 -10.3 Southea

36. Slide 36: Information in this material is not intended to solicit sale or purchase of shares

    Information in this material is not intended to solicit sale or purchase of shares in Asahi Group Holdings. The views, estimates and other information expressed in this document are based on the company's judgment at the time of publication, and no guarantees are provided regarding the accuracy of s

Asahi Group Holdings — FY2018 Earnings Presentation on 6ix