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Japan: Asahi shows growth despite first-half revenue being slightly lower than expected
Asahi shows growth despite revenue for the first half of the year being “slightly lower than expected” due to market conditions in Oceana, The Drinks Business reported on August 7.
In its first half results for 2024, the Japanese drinks giant reported that total revenue was up 3.8% year-on-year, due primarily to swift price revisions and efforts to premiumise managing to improve sales across all divisions..
Core operating profit rose 6.2%, while profit declined in Oceana, the overall profit figure was boosted by higher revenue and enhanced cost management across all business segments.
In a presentation unveiling its results, the business outlined that “compared to our plan, the revenue result was slightly lower than expected” but highlighted how “overall core operating profit came in above plan as the greater-than-expected decline in profits in Oceana in the face of deteriorating market conditions was more than offset by higher-than-expected profits in other regions”.
In terms of a full year forecast, revenue has now been revised down to +2.7% to “reflect H1 developments in Asahi’s different regional operations, and other factors,” however, the outlook for core operating profit remains unchanged at +4.3%.
Speaking about the results, Asahi Group Holdings president and group CEO Atsushi Katsuki said: “Our performance in the first half of the year grew steadily, thanks to sustained increase in unit sales prices driven by prudent pricing strategies and premiumisation.”
The move to adapt pricing across regions assisted in a sales uplift as Asahi moved quickly to adapt to demand, especially across Asia and Europe.
Katsuki explained that “in Japan, the shift in demand towards the beer category following tax revisions and the expansion of the premium category including our global brands in Europe, both contributed to higher unit sales prices”.
Notably, the flagship brand Asahi Super Dry, which celebrated a 35% lift last year, saw a “sales volume growth of +27% year on year outside Japan, fueled by sales expansion in major markets in Asia and Europe, especially in South Korea and the UK,” Katsuki revealed.
Earlier this year, Katsuki confirmed intentions to expand and outlined how Asahi is looking at M&A opportunities in emerging markets in Africa, Asia and South America, due to an absence of good US targets.
The business, which has no imtentions to stand still is also backing other drinks trends also burgeoning and Katsuki noted during the 2024 half year results presentation that “growth in the non-alcoholic beer and ready to drink alcohol beverage categories also contributed to the increase in earnings”.
Looking beyond beer, the results also hinted at the movements Asahi is making to broaden its reach from its core beer drinker demographic to show greater category flexibility for the future.
This spring, the cheif executive stated that no- and low-alcohol drinks will generate 50% of Asahi’s beverage sales by 2040 and also coincided with Asahi’s Australian branch acquiring gin distillery Never Never.
Kartsuki said that the results outside of the beer category had already been “promising” and admitted: “Asahi Group has been focusing on strengthening our beer adjacent categories initiative as one of our key growth strategies. Our first half results indicate that various efforts in this area, including the roll-out of innovative new products in each region, have already started showing promising results.”
Lastly, Asahi amplified intentions to continue to boost the business’s fiscal position by continuing to innovate and invest in its brands, irrespective of any challenges across regions. Katsuki added: “Going forward, while market conditions and consumer trends across various regions do not warrant optimism, we will continue to invest in our brands and innovation to expand our competitive advantage and bolster our profit base.”
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