Main Q&As at FY2021 Q3 Financial Results briefing

A.Since the amount of cost increase may change in the future, we would like to refrain from mentioning specific figures. In terms of regions, Europe and Japan (including Alcohol Beverages and Soft Drinks Business) are expected to account for 70-80% of the total, with Oceania accounting for most of the remainder.

A.Globally, our competitors have announced plans to raise prices in some regions, and we have been flexible in implementing price increases in line with inflation. In the future, we will consider how to respond to this situation including price increase, taking into account the competitive environment and market conditions in each region and utilizing the knowledge of revenue management.

A.Since cost efficiencies were already programmed, it is difficult to increase anything further significantly. However, in light of changing circumstances, we will consider flexible advertising and sales promotion expenses as well as efficiency improvements related to working style innovation. Although the scale is not large enough to compensate for the increase in raw material costs that we are currently anticipating, we would like to build up our efficiency improvement measures one by one.

A.Regarding aluminum cans, it is true that there are concerns about shortages in the procurement of aluminum as a raw material in some areas, but it is believed that the impact on us is small at this point.
Going forward, we will work to reduce risk by raising inventory levels and strengthening investment in sales promotion for other container products during periods of heightened risk, such as the peak season.

A.At this point, it is very difficult to make a forecast for the on-premise market, but if the market starts to recover, it will be a major driver of profit recovery. In the off-premise market, we are gradually seeing results in marketing, and we would like to further strengthen our canned products in order to accelerate the momentum.
Although there will be an increase in the cost of raw materials, we will continue our efforts to achieve sustainable top-line growth.

A.Sales volume for the July-September period decreased by 3% YoY. In terms of the breakdown by channel, sales volume for on-premise channel increased in the high single digits YoY, while sales volume for off-premise channel decreased in the mid single digits YoY. As a result of the improvement in the channel mix due to the recovery of on-premise channel, sales revenue increased by 5% YoY and unit sales prices improved, resulting in higher business profit. The previous forecast for the full year was based on the assumption that the on-premise channel would recover significantly in the July-September period. However, due to poor weather conditions during the peak season, the channel mix did not improve as much as expected, and the forecast was revised downward this time.

A.The plan includes a rebound effect from the significant decrease in sales volume in the October-December period of the previous fiscal year due to lockdown impact.
Although the target for the full year is a high level, we will maintain the sales momentum and aim to achieve the target, as we have been performing better than the market in major markets by investing in our core brands there.

A.In Australian Alcohol Beverages for July-September, the total sales volume was down mid single digits YoY, and by channel, volume for on-premise was down about 30% YoY, while volume for off-premise was down low single digits YoY. Revenue was down about 10% YoY due to a decline in unit sales caused by a deteriorating channel mix from a decline in the on-premise sales under lockdowns.
We estimate the market volume fell mid 30% for on-premise and fell low single digits for off-premise, as a result, we slightly outperformed the market for on-premise and made progress almost on par with the market for off-premise.

A.We have set the revenue plan considering the rebound from the large increase in October-December last year due to strategically strengthened brand investment after the acquisition of CUB, mainly in the contemporary beer Great Northern. We aim to achieve the Core Operating Profit plan by rebounding from last year's marketing investment, improving efficiency, and creating synergies.

A.There is now a possibility that another JPY 15 billion or more in cost increases will be added to the forecast at the time of the interim announcement. We will try to reduce the impact of cost increases by implementing revenue management through flexible pricing policies in each market, in addition to accumulating cost reductions through self-help efforts, but it is becoming difficult to achieve the level of Core Operating Profit that we initially set.

A.In the current few months alone, the commodity market prices have changed significantly, and price increases are occurring in a variety of industries both in Japan and overseas. The environment is changing rapidly, so we need to keep a close eye on changes in consumer sentiment. As for the post-Covid-19 recovery, although the state of emergency has been lifted in Japan, the return of beer consumption in Japan is different from that in Europe and Australia. We will continue to monitor the recovery situation in each region and consider countermeasures. There is no change in the core policy of the Group's growth strategy of sustainable top-line growth and improving profitability through premiumization strategies.