Asahi Group (2502) Q4 2023 earnings summary

Executive summary

• FY2023 revenue reached ¥2,769.1bn, up 10.3% reported and 6.8% at constant currency; Core Operating Profit rose 3.9% at constant currency to ¥263.7bn.

• Operating profit increased 12.9% to ¥245.0bn and profit attributable to owners rose 8.3% to ¥164.1bn.

• Pricing, premiumization and cost efficiencies supported growth; higher-than-expected free cash flow enabled debt reduction.

Financial highlights

• Gross profit was ¥998.9bn versus ¥921.8bn; profit for the period reached ¥166.0bn versus ¥151.7bn.

• Core Operating Profit margin was 9.5% versus 9.7%; operating profit margin was 8.8% versus 8.6%.

• Basic EPS increased to ¥323.82 from ¥299.10; ROE was 7.3% versus 7.9%, and ROA rose to 4.8% from 4.4%.

Outlook and guidance

• FY2024 revenue is forecast at ¥2,840.0bn, up 2.6% reported and 3.6% at constant currency; Core Operating Profit is forecast at ¥271.0bn, up 2.8% and 4.2%, respectively.

• Operating profit is forecast to rise 11.4% to ¥273.0bn and profit attributable to owners 16.1% to ¥190.5bn; adjusted profit attributable to owners is forecast to grow 6.3% to ¥176.0bn.

• Core Operating Profit growth is expected despite higher variable, marketing and other expenses, supported by revenue growth, pricing, product mix and cost management.

• Operating cash flow is forecast at ¥330.0bn and free cash flow at ¥225.0bn; Net Debt/EBITDA is forecast at 2.70x.