Asahi August 2009

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2009 First-half Financial Results andFuture Business Strategy

August 2009ASAHI BREWERIES, LTD.

URL http://www.asahibeer.co.jp



Overview of Financial Results for the First Half of 2009Overview of Financial Results for the First Half of 2009.. ……………………....

20092009 FullFull--YearYear ForecastsForecasts………………………………………………………………………………………………

Overview of First Half 2009Overview of First Half 2009 ……………………………………………………..…………..…………………………

FirstFirst--half Sales of Beerhalf Sales of Beer--type Beveragestype Beverages…………………………………………………………..

Sales Forecasts for BeerSales Forecasts for Beer--type Beveragestype Beverages………………………………..……………………..

Beer Brand StrategyBeer Brand Strategy ………………………………..…………………………..…………………………………………....

HapposhuHapposhu and New Genre Brand Strategyand New Genre Brand Strategy……………………………………………………………………....

Other Alcohol Category Results and Future StrategyOther Alcohol Category Results and Future Strategy ………………………………

StreamliningStreamlining MarketingMarketing CCostsosts ………………………………………………....……..…………....................

Asahi Soft Drinks Business Overview and Future StrategyAsahi Soft Drinks Business Overview and Future Strategy …………………………

Food and Healthcare Business Overview and Future StrategyFood and Healthcare Business Overview and Future Strategy ………………....

Overseas Business Overview andOverseas Business Overview and FuturFuturee StrategyStrategy …………………………………………

Growth of TingyiGrowth of Tingyi--AsahiAsahi--Itochu Beverages Holding Co. Ltd.Itochu Beverages Holding Co. Ltd. ……………………

Acquisition of Schweppes AustraliaAcquisition of Schweppes Australia………………………………..……....……………………............

Investment in Tsingtao BreweryInvestment in Tsingtao Brewery……………………..………………..…………………………....................

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33

44

55

66

77

88

99

1010

1111

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ContentsContents



19.014.5 13.8

18.9

23.1

28.6

30.8

21.5

30.7

22.1

656.6

672.6666.1 670.2

664.4

0.0

10.0

20.0

30.0

40.0

50.0

2005 2006 2007 2008 2009

400.0

500.0

600.0

700.0

Ope ra ti n g p ro f i t Ne t pr o f i t S a l e s（billion yen）

2009

Overview of Financial Results for the First Half of 2009Overview of Financial Results for the First Half of 2009

Copyright © ASAHI BREWERIES,LTD. All rights reserved.

1

（billions of yen）

1H 2009

Results

1H 2008

ResultsInc./ Dec. YoY (%)

Alcoholic beverages 443.3 455.0 (11.7) (3)%

Soft drinks 144.9 142.0 2.9 2%

Food and healthcare

46.0 34.8 11.3 32%Overseas 28.7 23.4 5.3 23%

Other 7.2 11.0 (3.8) (34)%

Net sales 670.2 666.1 4.0 1%


Soft drinks 1.6 1.4 0.2 17%

Food and healthcare 0.4 0.1 0.3 225%

Overseas (4.8) (2.6) (2.2) -

Other 1.2 1.2 (0.0) (2)%

Operating profit 21.5 30.7 (9.2) (30)%

Equity metod income 5.6 5.9 (0.3) (6)%

Ordinary income 27.8 34.1 (6.3) (19)%

Extraordinary profit (loss) 14.0 (0.7) 14.8 -

Net income 22.1 18.9 3.2 17%

（billion yen）



90.2

39.9 44.8 44.8 45.0

94.588.087.088.7

50.0

1,430.01,464.1 1,462.71,446.4

1,508.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2005 2006 2007 2008 2009

1,000.0

1,100.0

1,200.0

1,300.0

1,400.0

1,500.0

1,600.0

Ope ra t i n g p ro f i t Ne t p ro f i t Sa l e s

2009(E)

FullFull--year Forecastsyear Forecasts


2

（billions of yen）

1H 2009

Results

1H 2008

ResultsInc./ Dec. YoY(%)

Alcoholic beverages 1,005.0 1,019.6 (14.6) (1)%

Soft drinks 306.5 296.6 9.9 3%

Food and healthcare 97.5 81.7 15.8 19%Overseas 80.6 43.3 37.3 86%

Other 18.3 21.5 (3.2) (15)%

Net sales 1,508.0 1,462.7 45.3 3%


Soft drinks 7.3 4.5 2.7 61%

Food and healthcare 2.6 2.0 0.6 31%

Overseas (4.2) (5.8) 1.6 -

Other 1.3 2.8 (1.4) (53)%

Operating profit 88.0 94.5 (6.5) (7)%

Equity metod income 7.8 9.1 (1.3) (14)%

Ordinary income 92.0 96.5 (4.5) (5)%

Extraordinary

profit (loss) 3.9 (13.5) 17.4 -

Net income 50.0 45.0 5.0 11%

（billion yen）（billion yen）



SoftSoft

DrinksDrinks

BusinessBusiness

◆Due to growth in core brands, achieved growth (3%) above theindustry average (-2%)

◆Achieved earnings growth despite the increase in costs of ingredientsand increased competition

ResultsResults

IssuesIssues

Overview of First Half 2009Overview of First Half 2009


3

AlcoholicAlcoholic

BeverageBeverage

BusinessBusiness

◆Achieved sales targets for happoshu and new genre due to impact of new

products and other factors

◆Cost controls offset the decline in beer-type beverage sales due todeteriorating economic conditions

Food andFood andHealthcareHealthcare

BusinessBusiness

◆Both Asahi Food and Healthcare Co., Ltd. and Wakodo Co., Ltd.continued to show sustained growth

◆Amano Jitsugyo Co., Ltd., which became a consolidated subsidiary in the second

half of fiscal 2008, achieved strong growth attributable to Group synergies

OverseasOverseasBusinessBusiness

◆We supported the sustained growth of Tingyi-Asahi-Itochu Beverages

Holding Co. Ltd. (Chinese soft drinks business) amid intensifying competition◆Started new business development with Schweppes Australia and

Tsingtao Brewery Co.

◆Responded to the shift in demand from beer and happoshu to new genre

due to the economic slowdown◆Failed to achieve profit targets in existing overseas businesses

(Chinese beer business, Korean soft drinks business)



Asahi

49.7%

Compnay B

26.8%

Company C

14.0%

Company D

8.6%

(millions of cases)

Cases YoY change Composition Cases YoY change Market share

Beer 106.61 (5.5)% 49.1% 53.01 (5.8)% 49.7%

Happoshu 47.38 (12.7)% 21.8% 13.27 (3.7)% 28.0%

New genre 63.26 27.4% 29.1% 13.81 24.0% 21.8%

217.24 0.2% - 80.09 (1.3)% 36.9%

Asahi Breweries

Total

Industory total

■

Beer and Beer-Type Beverages: Taxable Sales Volume (Jan. – Jun. 2009)

■

Asahi BreweriesAsahi Breweries’’ Market Share by CategoryMarket Share by Category (Jan.(Jan. －Jun. 2009)Jun. 2009)

HapposhuHapposhu New genreNew genreBeerBeer

FirstFirst--half Sales of Beerhalf Sales of Beer--type Beveragestype Beverages


4

Asahi

21.8%

Company B

39.6%

Company C

15.2%

Company D

22.5%Asahi

28.0%

Company B

58.7%

Company C

3.5%

Company D

8.8%



・・Sales momentum recovered in the second quarter, and we will stepSales momentum recovered in the second quarter, and we will step

up efforts to raise brand value to maintain this momentum throup efforts to raise brand value to maintain this momentum throughugh

the second halfthe second half

80%

85%

90%

95%

100%

105%

1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009

Bottles Cans Kegs Total

Refreshingly Sustainable Project Comparison of Super Dry Sales by Container(quarterly comparison)

Beer Brand StrategyBeer Brand Strategy


6

Boost brand value through theBoost brand value through the ““ Challenge and Commitment of No. 1 BrandChallenge and Commitment of No. 1 Brand”” campaigncampaign

Refreshingly Sustainable Project

Second Half 2009Second Half 2009Second Half 2009First Half 2009First Half 2009First Half 2009 201020102010

Donated 1 yen per can of Super Dry manufactured between late Marchand late April

・Donated a total of around 220million yen

・Sales during period were up 8% versus previous year

・Improved brand image(“Fun,” “Try Something New,” etc.)

Will carry out Phase 2 this fall

Embody Bold Flavor Project

The Master



・・Build a product portfolio that meets diversifying consumer needsBuild a product portfolio that meets diversifying consumer needs

・・Bolster initiatives aimed at makingBolster initiatives aimed at making Style Free Style Free andand Clear Asahi Clear Asahi leading brandsleading brands

Clear Asahi primary consumer share (%)

HapposhuHapposhu and New Genre Brand Strategyand New Genre Brand Strategy


7

DevelopDevelop Style Free Style Free into the leading brand in the functionalinto the leading brand in the functional happoshuhapposhu marketmarket

Obtain further trials forObtain further trials for Cool Draft Cool Draft and promote its sharp tasteand promote its sharp taste

Second Half 2009Second Half 2009Second Half 2009First Half 2009First Half 2009First Half 2009 201020102010

For Clear Asahi , tout its No.1 spot in the wheat-based new genre market, and further solidify thebrand

Continue touting Asahi Off as the only functional product in the wheat-based new genre market

Meet the needs of consumers seeking morerich and satisfying flavors in the expandingnew genre market

Sep. 15 launchSep. 15 launch

Mugishibori N e w g e n r e

H a p p o s h u

Characteristics required of new genre products in future

Style Free CoolDraft

Clear

Asahi

Asahi Off

00.3

2.32.8

4.2 4.3 4.3 4 3.9 3.8 4.2

4.7

5.76.3 6.5 6.3

0

1

2

3

4

5

6

7

Mar . Ap r. May Jun . Jul . Aug . Sep . Oct. Nov. Dec . Jan . Feb. Mar . Ap r. May Jun . 34.6

32.6

32

31.5

31.5

26.8

23.8

23.1

19

18.7

17.8

17.5

14.8

0 10 20 30 40

Rich taste

Interesting flavor

Satisfying

Beer-like taste

Refreshing flavor

Has a kick

Easy to drink

Solid flavor

Good af tertasteCan drink in big gulps

Light flavor

Zero sugar

High alcohol content

* Source: Surveys by Asahi,N = 400, Conducted duringthe middle of every month

* Source: Surveys byAsahi, N = 1000

*Barley-based new genre: Liqueur (happoshu) (1)



・ Sales declined due to the voluntary shochu recall, revision of the imported wine product

portfolio, and other factors

・

Strong sales of new products Slat (RTD beverages) and Black Nikka Clear Blend whisky

・Continued earnings structure reform focused on streamlining advertising and promotional expenses

■

Past performance and 2009Past performance and 2009 targettarget

••Promote efficiency in production and sales with priority on imprPromote efficiency in production and sales with priority on improving profitabilityoving profitability

••Aim to develop leading brands and create new value and new demanAim to develop leading brands and create new value and new demandd

■ Overview of the First Half 2009Overview of the First Half 2009

(billions of yen)

2008 YoY 2009 target YoY

Shochu 52.7 (4.0)% 51.7 (1.9)%

RTD 31.4 (12.1)% 29.3 (6.7)%

Whisky 27.5 0.7% 25.7 (6.6)%

Wine 14.8 (2.8)% 12.6 (15.1)%

Other 3.2 0.0% 4.2 29.8%

Other alcohol total 129.7 (4.9)% 123.5 (4.8)%

(billions of yen)

Other Alcohol Category Results and Future StrategyOther Alcohol Category Results and Future Strategy


8



・Advertising expenses increased due to the launch of new beer-type products, but overall

advertising and promotional expenses were curbed by 1.4 billion yen versus plans due to a

decrease in variable expenses in the Other Alcohol Category.

・・Left initial annual advertising and promotional budget unchangedLeft initial annual advertising and promotional budget unchanged to bolster brand investmentto bolster brand investment

aimed at maintaining, and increasing, sales momentum in the fiscaimed at maintaining, and increasing, sales momentum in the fiscal secondal second halfhalf

・・Continue striving to efficiently use of marketing expenses whileContinue striving to efficiently use of marketing expenses while focusing investment onfocusing investment onraisingraising Super Dry Super Dry ’’s brand value and on the expanding new genre markets brand value and on the expanding new genre market

Streamlining Marketing CostsStreamlining Marketing Costs


9

Advertising and sales promotion expenses by categoryAdvertising and sales promotion expenses by category

(billions of yen)2004 2005 2006 2007 2008 1H 2009 YoY 2009 target YoY

76.3 77.8 80.8 77.9 64.9 29.1 (1.6) 64.4 (0.5)

32.3 32.2 32.7 34.9 32.3 19.5 2.8 31.7 (0.6)

T o t a l

108.6 110.0 113.5 112.8 97.2 48.61.2

96.1(1.1)

Breakdown

Beer 58.0 54.9 58.6 59.5 50.1 24.9 0.4 50.5 0.4

Happoshu 20.4 12.2 9.9 13.0 10.1 5.5 0.9 8.5 (1.5)

New genre - 9.2 13.0 10.0 10.9 6.2 1.1 12.6 1.7

78.4 76.3 81.5 82.5 71.0 36.6 2.4 71.6 0.6

30.2 33.7 32.0 30.3 26.2 12.0 (1.2) 24.5 (1.7)

Sales promotion

expenses

Advertising

expenses

Beer-type categorytotal

Other alcoholic

beverages total



Asahi Soft Drinks Co., Ltd.Asahi Soft Drinks Co., Ltd.

Asahi Soft Drinks Business Overview and Future StrategyAsahi Soft Drinks Business Overview and Future Strategy


10

1H 2009 YoY 2009 target YoYSales volume (million cases) 71.49 +2.9% 150.00 +3.2%

Net sales (billions of yen) 134.1 +2.3% 282.0 +3.1%

Operating income 2.6 +2.2% 9.0 +27.8%

■ Asahi Soft Drinks 1H 2009 results and 2009 target

◆ Growth Strategies, Structural Reform, and Taking on New Areas

・Total sales volume rose 3% versus previous year, exceeding the industry average (-2%)

Mitsuya brand product sales increased 13% from previous year due to launch of Mitsuya Cider All Zero

・Despite a deterioration in product mix and higher advertising and promotional expenses, profits turned

upward due to increased sales and larger-than-planned cost reductions.

⇒ Aim for 3% annual growth with priority placed on further

strengthening core brands

⇒Step up structural reforms, including development of optimal production

and distribution systems and fixed-cost streamlining



◆Strengthened Base for Growth Targeting Higher Profitability

・Expanded core businesses (milk powder for infants, baby food) through enhanceddifferentiation based on new value-added features

・Sales and profits increased, reflecting reduced raw materials costs and high-profit-marginproducts’ increased share of sales

⇒

Step up brand enhancement efforts based on the “best for baby” brand strategy

◆ Accelerate growth strategies and structural reform

・Achieved significant sales growth due to strong sales of Mintia , Balance Up and other mainstay

products as well firm sales in mail-order business

・Achieved profit targets despite up-front investment in advertising during second quarter

⇒Bolster mainstay brands, expand mail-order business and pursue further streamlining

Asahi Food and Healthcare Co., Ltd.

Wakodo Co., Ltd.

Amano Jitsugyo Co., Ltd.

◆Working to Establish Strong Position in Freeze-dried Food Products Market

(Formed capital and business tie-up in June 2008)

・Achieved higher sales and profits reflecting strong mail-order business and SCM

cooperation throughout the entire Group⇒

Expand scope of collaboration with other Group companies, work on product

development and build an optimal production and sales framework

Food and Healthcare Business Overview and Future StrategyFood and Healthcare Business Overview and Future Strategy


11

http://www.wakodo.co.jp/



◆ Failed to meet targets due to delay of Yantai Beer’s earnings structure reforms andincreased competition with major beer companies

⇒Aim to achieve targets forAim to achieve targets for YantaiYantai Beer by getting back on schedule with licensedBeer by getting back on schedule with licensed

production of Tsingtao beerproduction of Tsingtao beer

⇒Aim to improve profitability by bolstering cost controls at eachAim to improve profitability by bolstering cost controls at each company and expandingcompany and expandingthe alliance with Tsingtao Brewerythe alliance with Tsingtao Brewery

Chinese beer business

◆Streamlined fixed costs by consolidating manufacturing plants and sales offices

◆Failed to meet targets due to the weak won driving up raw materials prices and a decline

in sales of the core Sunkist brand⇒Reform earnings structure, e.gReform earnings structure, e.g.,., by curbing raw materials cost increases and reducingby curbing raw materials cost increases and reducing

fixed costsfixed costs

⇒Aim for steady rise in profitability by renewing the core SunkisAim for steady rise in profitability by renewing the core Sunkist brand and launching newt brand and launching new

productsproducts

New Business Investment

◆ Made Schweppes Australia a wholly-owned subsidiary, completed investment in Tsingtao Brewery Co.

⇒Schweppes: Accelerate growth of overseas soft drink business inSchweppes: Accelerate growth of overseas soft drink business in Australian market whereAustralian market where

stable growth can be expectedstable growth can be expected⇒Tsingtao Brewery Co.: Strengthen base for Chinese beer businessTsingtao Brewery Co.: Strengthen base for Chinese beer business by buildingby building

strategic partnershipsstrategic partnerships

Overseas Business Overview and Future StrategyOverseas Business Overview and Future Strategy


12

Haitai Beverage of South Korea



479702

1,0931,519

1,924

525

04年 05年 06年 07年 08年 09年1Q

Teabeverages

60%FruitJuice

17%

Bottledwater

23%

■ Tingyi sales in the beverages segment(US$ millions)

Tingyi-Asahi-Itochu Beverages Holding Co. Ltd.

(equity-method subsidiary)

◆ Support for stronger performance: Production technology, financial management,support for strategy building, etc.

◆ Success in category strategies focusing on tea and bottled water

(No. 1 in both tea and water)◆ Steadily expanded both sales and profits by streamlining costs and actively investingin advertising and promotion

⇒Support additional growth through technological collaboration anSupport additional growth through technological collaboration and byd byexpanding scope of collaboration, e.gexpanding scope of collaboration, e.g.,., to include marketing etc.to include marketing etc.

■ Sales breakdown and market share

Market share:

22.0%←

→ Market share:

44.5%

YoY137%

↓

No.1No.1

No.3No.3

No.1No.1

Growth of TingyiGrowth of Tingyi--AsahiAsahi--Itochu Beverages Holding Co. Ltd.Itochu Beverages Holding Co. Ltd.


13

Market share:

15.5%←

Source:Market composition based on value of sales for Jan.-Dec.Market share: AC Nielsen (July 2008-June 2008)

InvestmentInvestment

from Asahifrom Asahi

BreweriesBreweries

A i iti f S h A t liA i iti f S h A t li



1. Aim for growth that exceeds growth rate in Australian soft dr1. Aim for growth that exceeds growth rate in Australian soft drink market, focusing onink market, focusing on

bolstering the carbonated beverages businessbolstering the carbonated beverages business・・

LaunchLaunch Monster Monster in the energy drink market, the No.1 new product in the U.S.in the energy drink market, the No.1 new product in the U.S.

・・

Leverage product development technologies and knowLeverage product development technologies and know--how to develop new brands and new categorieshow to develop new brands and new categories

2.2. Leverage Asahi Breweries GroupLeverage Asahi Breweries Group’’s knows know--how to increase efficiency of SCM and to rebuildhow to increase efficiency of SCM and to rebuild

sales strategysales strategy・・

Promote higher manufacturing efficiency by introducing productioPromote higher manufacturing efficiency by introducing production and quality management technologies,n and quality management technologies,

and raise distribution efficiency by consolidating distributionand raise distribution efficiency by consolidating distribution basesbases・・

Enhance sales towards the commercialEnhance sales towards the commercial--use market as well as the CVS and general store channels, whichuse market as well as the CVS and general store channels, whichwere a low priority before the acquisitionwere a low priority before the acquisition

Acquisition of Schweppes AustraliaAcquisition of Schweppes Australia


14

◆ 1H 2009 results and 2009 target (*billion of yen(*billion of yen , Comparisons with previous year are based on AUD)

◆

Breakdown of acquisition costsBreakdown of acquisition costs

1H results 2-4Q target Ref. full-year YoY

Net sales 12.3 44.6 60.3 +8%

Operating income (0.4) 2.3 3.7 +4%

Goodwill, amortization of intangible assets (0.8) (2.4) (3.2) -

Impact on financial performance for the

fiscal year (0.7) (0.7) (0.7) -

◆

Schweppes AustraliaSchweppes Australia Future StrategyFuture Strategy

*We are currently finalizing the acquisition; changes may be made

*Effect of marking inventory to market when assessing the value of goodwill

(million AUD)

Amount 備考

Total Investment 1,176 1AU＄＝68yen（date of acquisition）

7161AU＄＝68yen（date of acquisition）

Amortize over 4-20 years depending on itme.

Goodwill and amortization of

intangible assets

I t t i T i t BI t t i T i gt Br r



285 307448

539

734520 526 561 579

654

1,007

1,179

222 245

6,1956,714

7,703

10,020

11,677

13,530

15,781

0

200

400

600

800

1,000

1,200

2002 2003 2004 2005 2006 2007 2008

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Operating profit Net income Net sales

Tsingtao Brewery performance trendsTsingtao Brewery performance trends

Investment in Tsingtao BreweryInvestment in Tsingtao Brewery


15

(million yuan) (million yuan)

◆Capital Relationship with Tsingtao Brewery Co.Capital Relationship with Tsingtao Brewery Co.

*Percentages indicate equity stakes

51％

51％29％

39％

19.99％

Yantai Beer Tsingtao Asahii

Total acquisition cost

USD666.5 million(approximately 65.0 billion yen)

Shenzhen Tsingtaobeer Asahi

◆

Heading towards the conclusion of a comprehensiveHeading towards the conclusion of a comprehensive

alliancealliance

1.1. Improve profitability of existing beer business in ChinaImprove profitability of existing beer business in China

→→Scheme for receiving OEM orders and providing salesScheme for receiving OEM orders and providing sales

outsourcing, joint procurement of ingredientsoutsourcing, joint procurement of ingredients

2.2. Support Tsingtao BrewerySupport Tsingtao Brewery’s growth strategys growth strategy

→→Cooperation and support in manufacturing technology, qualityCooperation and support in manufacturing technology, qualitymanagement, and asset managementmanagement, and asset management

3.3. Raise the presence of the Asahi Beer brand in ChinaRaise the presence of the Asahi Beer brand in China→→Consider business development leveraging Tsingtao BreweryConsider business development leveraging Tsingtao Brewery’’ss

manufacturing bases and sales networkmanufacturing bases and sales network



Information in this material is not intended to solicit sale or purchase of shares in Asahi Breweries.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 such information. This information is subject to changewithout notice.The company and its officers and representatives accept no responsibility or liability for any damage or inconvenience that maybe caused by or in conjunction with any part of these materials.

Asahi August 2009

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