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*Kando is an emotion experienced in various ways. It can be an extreme satisfaction, an extraordinary feeling beyond one’s expectations, and/or a sensitively touching and moving sensation. |
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Asahi Breweries, Ltd. has formulated a Long-term Vision for the six years through 2015 and, as a stepping stone toward the Long-term Vision’s realization, a new Medium-term Management Plan for the three years through 2012.
To realize the Long-term Vision, the Asahi Breweries Group has also adopted a common Corporate Brand Statement: “Share the Kando.” The Group aims to enhance its corporate brand value by promoting common values among all Group companies and clarifying its corporate identity.
Under its Third Medium-term Management Plan for the three years through 2009, the Group substantially exceeded the plan’s targets for reforming the Alcoholic Beverages Business’s profit structure. It also expanded its international network and solidified its operating foundation through M&As and capital and operating alliances, including acquisition of Schweppes Australia Pty Ltd. and an equity stake in Tsingtao Brewery Co., Ltd. However, the Group failed to achieve the plan’s targets for increasing the Alcoholic Beverages Business’s sales and improving the Domestic Soft Drinks and Overseas Businesses’ profitability.
With the domestic market reaching maturity and the domestic and overseas food industries undergoing major consolidation, the Group’s operating environment is changing dramatically. Other changes on the horizon include the pending adoption of International Financial Reporting Standards and an anticipated radical revision of Japan’s alcohol tax regime.
In light of such changes in the environment and the Group’s assessment of its current status, the Group has set new targets rooted in its Corporate Philosophy, which expresses its raison d’être. By pursuing these targets, the Group aims to continue growing and gaining consumer loyalty in perpetuity. |
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- Striving for transforming the bounty of nature into the “Kando”* of food while becoming a trusted company with global quality.
- Capitalizing on strong manufacturing capabilities that utilize natural ingredients, the Group will strive to upgrade the quality of its products, management, human resources, and all activities to a world-class level.
- The Group aims to increase its sales to ¥2–2.5 trillion and join the ranks of the top global food companies by size.
- In addition to stably growing existing businesses, the Group will expand investment in domestic and overseas operations.
- The Group aims to increase overseas operations’ share of total sales to 20–30%.
- The Group aims to increase its EBITDA margin to 12% or more.
- The Group will pursue improved profitability in existing businesses, mainly the Domestic Alcoholic Beverages Business.
- The Group is also targeting an EBITDA margin of 10% or more on new business investments.
*EBITDA = ordinary income + interest expense + depreciation + amortization (including amortization of goodwill, etc.)
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- The Group aims to increase the Domestic Alcoholic Beverages Business’s profitability to approximate parity with the world’s most profitable alcoholic beverage makers.
- The Group aims to increase the Domestic Alcoholic Beverages Business’s operating margin to 10% or more (18% before alcohol taxes).
- The Group aims to achieve a consolidated operating margin of around 8% (and operating margins to 5% or more in the Soft Drinks, Food and Healthcare, and Overseas Businesses).
The Group is targeting compound annual growth of 15% or more in income from investments in equity-method affiliates.
- The Group will help Tingyi-Asahi Beverages Holding Co. Ltd. and Tsingtao Brewery Co., Ltd., achieve growth in excess of their respective markets’ average growth rates.
Sales Guidelines for Existing Businesses (billions of yen, except percentages)
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2009 Forecast |
Compound Annual Growth Rate |
2012 Guidelines |
| Total sales |
1,005.0 |
approx. ±0% |
1,000.0 |
| Soft Drinks |
306.5 |
approx. 4% |
350.0 |
| Food |
97.5 |
approx. 6% |
120.0 |
| Overseas |
80.6 |
approx. 10% |
110.0 |
| Total sales |
1,508.0 |
approx. 2% |
1,600.0 |
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- (1) Domestic Alcoholic Beverages Business
In the beer business, the Group’s greatest strength, the Group intends to improve its market position by intensively allocating resources to strengthening its brands in the beer and new-genre categories as a top priority, focusing particularly on its core brands, Asahi Super Dry and Clear Asahi.
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In the alcoholic beverages other than beer-type beverages business, the Group aims to improve profitability as its top priority. Toward this end, the Group will strengthen manufacturing subsidiaries’ cost competitiveness and develop and strengthen its core brands across all product categories.
The Group will pursue reform of the overall Alcoholic Beverages Business’s profit structure by endeavoring to boost marginal profit ratio through such means as reducing raw materials costs through Group procurement. The Group will also cut fixed costs through such means as restructuring production and sales operations and reducing depreciation by right-sizing capital spending. Through these measures, the Group aims to realize a total of ¥25–30 billion of efficiency gains relative to 2009.
- (2) Domestic Soft Drinks Business
Asahi Soft Drinks Co., Ltd., the core company of the Group’s soft drinks operations, aims to achieve compound annual growth of around 4% by further strengthening its core brands (e.g., Mitsuya, Wonda), establishing new brands, expanding its installed base of vending machines, and boosting average sales per machine.
In terms of profit structure reform, the Soft Drinks Business will pursue improved profitability and operating efficiency throughout its entire value chain through such means as increasing the share of PET bottles produced internally.
The two LB companies aim to solidify their operating foundations as a top priority and improve their profitability to play a core role in consolidating the chilled beverage business.
- (3) Food Business
Asahi Food and Healthcare Co., Ltd., plans to strengthen its core brands (e.g., Mintia) and expand its yeast extract and natural seasonings business in pursuit of future growth.
Wakodo Co., Ltd., aims to grow its baby food business as Japan’s top baby food brand and to develop new businesses, including businesses targeted at the elderly, to usher in its next growth phase.
Amano Jitsugyo Co., Ltd., aims to expand new channels and regional sales channels and grow its mail order business. It also aims to achieve further growth by creating new product categories through expanded application of its industry-leading freeze-drying technologies.
In addition to these companies’ respective initiatives, the Group intends to improve the overall Food Business’s profitability by pursuing synergies throughout the value chain.
- (4) Overseas Alcoholic Beverages Business
In China, the Group’s existing beer business aims to early achieve profitability. It intends to do so by partnering with Tsingtao Brewery Co., Ltd., (e.g., joint procurement, reciprocal outsourcing of production) to improve profitability. Additionally, the Group aims to increase its income from equity-method affiliates by comprehensively supporting Tsingtao Brewery’s growth.
Elsewhere, the Group aims to expand Asahi Super Dry’s presence through such means as local production in cooperation with prominent local companies and licensing of production and sales rights.
- (5) Overseas Soft Drinks Business
Schweppes Australia Pty Ltd. aims to expand sales and improve profitability by further growing sales of its major brands, developing new brands, and cultivating new sales channels.
Tingyi-Asahi Beverages Holding Co. Ltd. aims to further expand its market share by concentrating resources in key product categories. The Group will endeavor to increase its income from equity-method affiliates by stepping up support in the aim of making Tingyi-Asahi Beverages China’s top soft drink maker.
In Korea, Haitai Beverage Co., Ltd., aims to grow its core brands in addition to further reforming its profit structure.
Additionally, the Group intends to strengthen its overall competitiveness by utilizing its network in Asia and Oceania and collaborating with strategic partners across all functions, including product development, procurement, production, and marketing.
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During the new Medium-Term Plan’s three-year term, the Group aims to generate cumulative cash flow to ¥360 billion or more. In allocating this cash, the Group plans to place top priority on forming capital and operational alliances and making investments that contribute to strengthening the foundation for future growth. While actively investing in environmental mitigation and improvement of existing businesses’ operating efficiency, the Group plans to limit its total capital investment to an essential minimum level of approximately ¥100 billion. If internally retained funds are insufficient to meet funding needs (e.g., for a large investment), the Group will flexibly utilize debt financing. |
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To promote common values among its constituent companies and clearly express its corporate identity heading into the next phase of its history, the Asahi Breweries Group has adopted a Group-wide Corporate Brand Statement: “Share the Kando.”
This new Brand Statement encapsulates the Group’s aspiration to be a corporate group that strive to offer products and services that can provide 'Kando' to people throughout the world.
We strive to share that 'Kando' with our customers while aiming for continued growth within the Asahi Breweries Group. |
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