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Main Q&As at FY2019 Year-end Financial Results briefing

Why is performance below the Key Performance Indicator Guidelines in the Medium-Term Management Policy?
Progress including this year’s targets will fall slightly short of the mid to high single-digit compound annual growth rate guideline, even when foreign exchange impact is excluded. The main reason for this is a decline in profits from Alcohol Business due in part to a greater-than-expected contraction of the beer-type beverage market, despite strong performance by the Overseas Business, particularly in Europe. Although we plan to review the Medium-Term Management Policy Guidelines after completion of the Australian beer business acquisition, even on the existing business basis we will aim for stable profit growth from recovery of the Alcohol Beverages Business and Soft Drinks Business and positioning of the Overseas Business as a growth engine.
How does Asahi intend to transition from volume-focused to value-focused management in the domestic Alcohol Beverages Business?
In accordance with the Asahi Group Philosophy, we will shift away from our traditional emphasis on volume by establishing mechanisms and a corporate culture that emphasize value and profit. Specifically, we will promote reforms through the sharing of a medium- to long-term vision that includes key performance indicators (KPIs) that emphasize brands value and product mix improvement.
What was the background to the reorganization of the overseas beer business?
In addition to separating the roles of the global and local operations and clearly defining the mission of each business, we will pursue optimization of “glocal” management though integration of duplicated functions. In the integrated Europe business, we will promote premiumization of the entire brand portfolio focused on the seven countries in which we have breweries. The premium brand export business and marketing functions will be consolidated into Asahi International, Ltd. in order to increase our global presence.
Given that the speed of growth is different in Japan and overseas, will Asahi review allocation of management resources?
We will not over-emphasize either the Domestic or Overseas businesses. Overseas, where growth continues, we will boost investment targeting sustained growth, such as investment in production capacity expansion and new production line construction in Central Europe. In Japan, we will increase investment focused on profitability improvement, such as investment in hybridization of soft drink production and distribution at Asahi Breweries’ Nagoya Brewery. We will also create sources of sustained sales growth by boosting investment in new value and new market creation in areas such as R&D and digital transformation.