Asahi half-year financial updates in summary
- Asahi reported H1FY2025 revenue of JPY1.36tn (US$9.25bn), up 0.6% YoY.
- Core operating profit fell 3.2% YoY to JPY109.7bn (US$746.2m).
- Despite profit decline, Asahi raised its full-year profit forecast
- Beer demand is rebounding in Japan
- Asahi Super Dry grew 11% YoY in overseas markets, especially China and the UK.
- Asahi has no major expansion plans for the US
Japanese beverage heavyweight Asahi recently announced its H1FY2025 financial results, reporting a 0.6% year-on-year growth in revenue to JPY1.36tn (US$9.25bn) but a -3.2% year-on-year decline in core operating profits to JPY 109.7bn (US$746.2m).
But despite the drop in half-year profits, Asahi has made the incongruent move of revising its forecast for full-year profits upwards, attributing this move to the current and predicted positive movements in the Japanese alcohol category.
“We have revised our full-year profit forecast upward based on strong performance in the alcohol business in Japan and East Asia [and] outlook for other regions,” Asahi Group Holdings President and Group CEO Atsushi Katsuki told the floor at the firm’s most recent investor meeting.
“There is a clear revival of the beer trend in Japan [and Asahi’s momentum] in the expanding beer market is gradually increasing, driven by the impact of various promotions appealing the crisp chill of Asahi Super Dry and strong sales of THE BITTER-IST.”
Beer is also a major focus for Asahi in overseas markets where Asahi Super Dry is considered its major global brand.
“Asahi Super Dry is a top priority in our global brand portfolio and has achieved strong growth, with sales volumes increasing 11% year-on-year outside Japan,” he added.
“This has been supported by rising brand awareness through global partnerships and strong performance in markets such as China and the UK.”
The firm also plans to emphasise Beer Adjacent Categories (BAC) including non-alcoholic beers and RTD alcoholic beverages as part of its growth strategy.
“BAC is a key part of our growth strategy and has continued to expand steadily, led by the ready-to-drink (RTD) alcohol beverages and non-alcohol adult beverages (beer taste),” he said.
“Sales volumes for BAC increased by 1% overall in H1, with [products such as] Mirai no Lemon Sour RTD, Dry ZERO non-alcohol beer, and other drinks proving strong especially in Japan.”
Rising costs a major challenge
Outside of Japan, the rest of the Asia Pacific region has fared less well due to lower demand and higher input costs.
The firm has had to downgrade expectations for revenues coming in from South and South East Asian regions, and is planning reforms to better support its local businesses.
“Asahi will rebuild foundations to support Asia Pacific growth, primarily through our Multi Beverage strategy and global brands strategy – this will see increased focus on new products like RTD alcohol brand Hard Rated as well as energy drink brands Solo and Fast Twitch,” the firm stated.
“We are still aiming to achieve our overall plan by stimulating growth primarily in the Oceania Alcohol Beverages category where sales volumes of Australian beer are now recovering after bottoming out in Q3FY2024, [driven by] Great Northern, Carlton Dry, and other contemporary beers.”
No major plans for the US
Asahi has a steady business in Europe, where it gained a lot of recognition for Asahi Super Dry by forming a partnership with the Arsenal Football Club.
In contrast, it has less presence in the United States apart from producing Asahi Super Dry at its Octopi Brewing facility, and it appears that Asahi does not currently have plans for large-scale penetration into this market.
“The US market is attractive, but demand trends in the beer market and the competitive landscape are changing – we would need to pursue large-scale acquisitions to enter the market on a large scale, but we do not see any opportunities at the moment that would fit with our targets,” the firm stated.
“Having said that, we do intend to expand our business base and could consider investments and alliances in BAC for instance because that would not have a significant impact on our capital policy.”
