Asahi Group Holdings, Ltd. has established its new long-term vision, “Long-Term Vision 2020”,
which articulates a vision for the Asahi Group in the year 2020, and new medium-term management
plan “Medium-Term Management Plan 2015”, a three-year action plan that establishes the
foundation to implement the Long-Term Vision.
In the Medium-Term Management Plan 2012, a three-year plan for the period until 2012, the Asahi
Group focused on raising the profitability of existing businesses, generating synergies among Group
companies andand establishing a new structure to enhance the corporate value of the Asahi Group as
a whole.
In the pursuit of improved profitability in existing businesses, the Group has exceeded the
expectation by implementing measures such as the strengthening and nurturing of core brands, the
development of optimal production and distribution systems, and the divestiture of unprofitable
overseas businesses.
Domestically, as part of efforts to establish a new growth structure, we acquired all shares in Calpis
Co., Ltd., the leading manufacturer of lactobacillus drinks. We expanded the foundation for growth
in Japan and overseas markets with the acquisition of five beverage business(soft drinks and
alcohol) operating business in Oceania and Southeast Asia.
The future outlook is for significant changes. In the business environment changes include the
potential impact of stagnation in the global economy originating from the debt crisis in Europe and
possible increases in the consumption tax from 2014 in Japan as the mature market. In addition,
diversifying stakeholder needs must be taken into account, along with changes in the Asahi Group’s
business structure and improvement in its financial standing as well as the above-mentioned changes
in the business environment.
Accordingly, Long-Term Vision 2015, which was established in 2009, has been revised. Long-Term
Vision 2020 articulates a revised vision for the entire Group and a vision for stakeholders looking
ahead to 2020 that the Group will pursue while following the management policies set forth up to
now. The Asahi Group has not established fixed quantitative objectives in the Long-Term Vision,
and has instead moved to a flexible framework enabling it to review business strategies and allocate
resources in accordance with changes in the business environment to maximize value enhancement.
Striving to be a corporate group trusted around the world through the Kando of food (deliciousness, happiness and innovation)
Our goal is to become a corporate group that consistently creates new value based on the strengths nurtured in Japan, obtains No1 customer satisfaction in each region, whose employees work with enthusiasm, and grows together with society.
| Vision for Stakeholders Customers: Continue to create new value creation based on strengths nurtured in Japan and achieve No.1 ranking for customer satisfaction in Japan and each region of the world. Business partners: Develop relationships with our business and alliance partners, that supports mutual growth and creates value for all parties. Society: Contribute to the resolution of social problems through the Group’s businesses in areas such as development of a wholesome food culture. Employees: Develop an environment in which employees can work vigorously and experience personal growth together with corporate growth. Shareholders: Enhance corporate value (stock value) through sustainable profit creation and shareholder returns. |
Seeking corporate value enhancement through Value and Network Management
In Medium-Term Management Plan 2015, the action plan for realization of Long-Term Vision 2020,
the Group seeks corporate value enhancement through Value and Network Management.
In Value and Network Management, the Asahi Group aims to create growth synergies and
efficiency synergies through focusing on strengths, such as the brands, technologies, and cost
competitiveness developed and acquired up to now. Growth will also be delivered via new avenues
of value creation and innovation that leverage those strengths. Furthermore, the Asahi Group
seeks to maintain a long-term stable growth trajectory by leveraging collaboration among Group
companies and the global network developed up to now coupled with further expansion of
networks in Japan and overseas.
In addition, in the “Medium-Term Management Plan 2015”, the Asahi Group has adopted return
on equity (ROE) and percentage growth in earnings per share (EPS) as key performance indicators
(KPIs). The Asahi Group seeks corporate value enhancement through capital efficiency
improvement to increase shareholder returns as benchmarked against global standards_ pursued
while placing the highest priority on sales and profit growth based on value and network
management.
| FY2012 | FY2015 Target | ||
|---|---|---|---|
| Before Goodwill Amortizaiton | |||
| R O E (Return on Equity) | 8.4％ | about 10％ | about 12％ |
| E P S (Net income per share) | ¥123 | CAGR 10％ or more | － |
| FY2012 (billion yen) |
FY2015 Guideline | ||
|---|---|---|---|
| Before Goodwill Amortizaiton | |||
| Net sales | ¥1,579.1 | CAGR 3％ or more | － |
| ＥＢＩＴＤＡ（※） | ¥171.0 | CAGR 6％ or more | － |
| Net income | ¥57.2 | CAGR 7％ or more | － |
| Operating margin | 6.9％ | 8% or more | 9% or more |
|---|
| Dividend payout ratio | 22.8％ | about 30％ | － |
|---|---|---|---|
| Total return ratio | 22.8％ | 50% or more | 40% or more |
（※）ＥＢＩＴＤＡ=Operating income + Depreciation and amortization (including goodwill amortizaiton)
The Group expects to generate free cash flow* of approximately 300.0 billion yen during the
three-year term of the “Medium-Term Management Plan 2015”. In utilizing free cash flow
utilization, the Asahi Group will place the highest priority on investments for expanding
growth in Japan and overseas. Moreover, when capital requirements that cannot be met from own
funds arise due to major investment projects or the like, the Asahi Group will assume financial
liabilities premised on a maximum D/E ratio of approximately 1 times.
With regard to shareholder returns, and given a history to now of strong cash generation,
improving debt to equity ratio and investment funding position, the Asahi Group aims for stable
dividend increases, taking as a guideline a dividend payout ratio of 30% (25% to 35%). The
Asahi Group will strive for enhancement of total shareholder returns, with a total return ratio,
including share repurchases, of 50% or higher as a guideline.
*Free cash flow: Operating cash flow minus capital expenditures
- (1) Alcohol Beverages Business
In the alcohol beverages business, the Asahi Group aspires to be the leading integrated alcohol beverages company with an emphasis on market innovation through the creation of added value by focusing on the 3Cs (consumers, channels and competitors).
To this end, the Group will strive to strengthen “Asahi Super Dry” and other core brands, and maximize brand assets with means including brand extension, and new value proposals. The Group will also accurately identify potential consumer needs by leveraging of the Group’s strengths to create new value and new demand, and strengthen solutions-driven marketing based on sales channel needs. In addition, the Asahi Group will pursue world-class cost competitiveness through reforms to its profit base such as improvement of production efficiency (efficiency improvement target: 10billion yen).
Reference information: Guidelines for 2015: Average annual net sales growth of 0% to 1% / Operating margin of 12.5% or higher - (2) Soft Drinks Business
In the soft drinks business, the Asahi Group aims to focus resources on strong core brands and firmly establish an industry-leading profit foundation through powerful sales capabilities and network expansion.
Asahi Soft Drinks will seek profitable growth with improved sales expense efficiency and pursue continued expansion of its market position by strengthening its three core brands: MITSUYA, WONDA, and Juroku-cha. In addition, Calpis will undertake value enhancement for the Calpis brand and brand asset expansion in Japan and overseas, and the Asahi Group will strive for collaborative synergies and further efficiency improvement in the Soft Drinks Business overall （efficiency improvement target: 10.0billion yen or more). Furthermore, the Asahi Group will pursue additional capital and operating alliances in the soft drinks business, leveraging its network development capabilities in Japan as a key strength.
Reference information: Guidelines for 2015: Average annual net sales growth of 10% or higher / Operating margin of 5.5% or higher - (3) Food Business
In the food business, the Asahi Group will pursue selection and concentration by identifying strong and promising brands and businesses and seek to develop the next-generation Group profit foundation.
The Asahi Group will work to strengthen industry-leading products and businesses such as Asahi Food and Healthcare Co., Ltd.’s “MINTIA”, Wakodo Co., Ltd.’s baby food business, and Amano Jitsugyo Co., Ltd.’s freeze-dried foods, and to develop businesses that leverage Group strengths, such as yeast. In addition, the Asahi Group will continue reforming its profit structure (efficiency improvement target: 3billion yen or more) and leverage its global network to expand overseas development of strong brands and businesses.
Reference information: Guidelines for 2015: Average annual net sales growth of 5% or higher / Operating margin of 5.5% or higher - (4) Overseas Business
In the Overseas Business, the Asahi Group seeks to leverage strengths such as brand power, technological capabilities, and cost competitiveness and strengthen its growth foundation by utilizing its global network and further expanding networks.
In Oceania, the Asahi Group will undertake growth portfolio rebuilding that reflects structural changes in the market and work to maximize synergies through the integration of group operations under a local holding company (efficiency improvement target: 6.0 billion yen or more). In addition, the Asahi Group will aim for network expansion in Southeast Asia centered around Permanis, the joint venture in Indonesia and a business foundation expansion that leverages the Asahi Group’s strong network in China. Furthermore, the Asahi Group will strengthen area marketing aimed at driving Asahi Super Dry to become Asia’s No. 1 premium brand (10 million cases or more). Reference information: Guidelines for 2015: Average annual net sales growth of 5% or higher / Operating margin of 9% or higher - (5) Enhancement of Social Value
Under the “Medium-Term Management Plan 2015”, which seeks to enhance corporate value, the Asahi Group will strive to enhance social value by applying the strengths of its businesses to help solve social issues through its business activities. Specifically, the Asahi Group will prioritize its actions and boost socially beneficial activities in three areas: food and health, the environment, and people and society.
In the area of food and health, the Asahi Group will discharge its responsibility as an alcohol beverage company through activities such as addressing problems associated with alcohol, contributing to food safety and security, and engendering wholesome approach to food and tradition of alcohol culture. The Asahi Group will boost activities to be an environmentally advanced company in Japan and around the world by contributing to the development of low-carbon and recycling societies and biodiversity preservation. In the area of people and society, the Asahi Group will contribute to the realization of healthy living and the enrichment of society through respect for humanity and activities to build safe, prosperous societies and ensure sustainable water resources.
Furthermore, with regard to corporate governance, the foundation of business management, the Asahi Group will seek to enhance corporate value in the way set forth in the Medium-Term Management Plan 2015. In addition, to promote corporate value enhancement, the Asahi Group plans to abolish the anti-takeover measures at this year’s general meeting of shareholders with the relatively lower need for the Group’s anti-takeover measures introduced in 2007.
