Main Q&As at FY2023 Q1 Financial Results briefing

A.Although costs continue to rise significantly, we have been able to implement the price revisions with the understanding of distributors and consumers in each country. In addition, the expansion of global brands such as "Asahi Super Dry" and "Peroni Nastro Azzurro" is progressing as planned and our " premium strategy" is on track. However, economic trends and the competitive environment in each region may change more than expected in the future, and we need to further enhance our adaptability. We will also continue our efforts to enhance cost management across the Group.

A.Energy and other costs that cannot be partially hedged in Europe and other regions may benefit from easing market conditions in the second half of this year. On the other hand, some raw materials such as sugar, coffee, and corn remain at high prices, so we are not optimistic. In addition, we have already hedged 80-90% of our major items that can be hedged, and we will continue to manage our business based on the scale we assumed at the beginning of the year. If current market conditions continue, there is a strong possibility that we will be able to reap the benefits of cost reductions in the next fiscal year and beyond

A.In Alcohol Beverages Business, reasons include a delay in the use of high unit-price raw materials and a change in the timing of advertising and sales promotions, but the main factors are efficiency gains in various costs, including advertising and sales promotion expenses. Major reasons for Non-Alcohol Beverages Business are better-than-expected price realization and efficiency improvements in fixed costs in general. Going forward, Alcohol Beverages Business will first aim to steadily achieve its annual plan, as there are still some uncertainties at this point, such as the prospect of higher variable cost. For Non-Alcohol Beverages Business, we are not optimistic because there are risks such as a drop in demand due to the price revision in May.

A.We had assumed -40% on-premise this year compared to 2019, but Q1 has recovered to the low -30% level of the same year. While we do not continue to expect a rapid recovery in demand to pre-COVID levels, there is an increasing likelihood of a recovery compared to our assumption at the beginning of the year.In Q1, competitors are launching new products and other companies are stepping up investment in beer, but we expect "Super Dry (canned)" to remain on par with the market despite the reactionary impact of last year's full renewal. However, we are maintaining the same level as the market for Super Dry (canned) despite the impact of last year's full renewal. We see no reason for pessimism, and are confident that we can further strengthen the foundation for our beer growth by strengthening our brands.

A.We targeted almost all products in last October's price revision, while we will target products with low profitability in this October's revision. Taking into consideration the fact that implementing the liquor tax revision and the price revision at separate times would increase the burden on our customers, we decided to implement the price revision in conjunction with the liquor tax revision.

A.We have not changed our outlook for annual cost increases of more than 20 billion yen because market conditions are still at a high level for many products, especially Non-Alcohol Beverages Businesses, that use sugar. As a countermeasure, we implemented price revisions for vending machine products and other products in May. Sales by channel were up 6.9% YoY for our vending machines and 9.0% YoY for CVS. Although sales at volume retailers were down 8.7% YoY, e-commerce sales continued to grow.

A.We see some differences among the countries. Romania and Hungary, which have raised unit prices significantly, have seen some impact.
However, after a certain period of time, we expect consumption levels to normalize. In Q1, the price revision from the beginning of the year affected Poland and other countries that had temporary demand at the end of the year, resulting in a temporary decline in volume, but since progress is on the planned line, the main scenario at this point is that demand will gradually return. However, we need to take a cautious approach, assuming the possibility of negative effects on consumption due to inflationary trends and other factors.

A.For the overall market in Q1, we estimate that on-premise sales were up in the high 10% YoY, while off-premise sales were up slightly YoY. For us, on-premise sales were up in the low 20% range and off-premise sales were up slightly, resulting in an overall market growth of about 3% YoY. In Australia, macroeconomic figures are not favorable, but beer consumption has not been significantly affected. Although we assume that overall market volume will not grow significantly, we are increasing our market share, which is at a record high level. We must be careful because the macroeconomic figures are not good, but we will aim to achieve sustainable top-line growth, including price realization, and achieve our annual plan.