This segment, which spans two decades, could in many respects be described as a success. Proof of this can be seen in a ninefold increase in dividends per share between 2006 and 2025, alongside a few sporadic but perfectly executed share buybacks.
The main strategic objective has been to break into international markets to offset the difficult dynamics of a structurally declining Japanese market. These costly initiatives were carried out without depressing margins thanks to rigorous management. Adjusted for inflation, however, they have "earned" the group a decade-long period of stagnation on the stockmarket.
Japan has seen a notable rise in institutional activism in recent years. Rumors were swirling that Asahi could become a target in turn, but the group took the initiative: it modernized its governance, implemented an ESG strategy, and accelerated its debt reduction, which enabled it to announce a share buyback plan last month.
H1 results mark a setback to the strong growth momentum of recent years. In H1, volumes were down on all continents. While price increases partially offset this decline, consolidated revenue fell 1.2% compared to the same period last year, while operating profit has declined 5.4%.
In Japan, where the fall in volumes is has been the worst, the strategy of transitioning to non-alcoholic beverages—excluding non-alcoholic beers—is currently producing mixed results, with volumes in this segment down 0.4% in H1, a decline that is expected to accelerate significantly in Q2.
As with many other listed companies in Japan, a very unfavorable currency effect has led to a major underperformance for foreign shareholders. In yen terms, Asahi increased its revenue by 58% over the last decade (2016-2025) and doubled its operating profit over the period. In US dollars, revenue growth was only 21%, while growth in operating profit was only half this.
With its balance sheet now healthy, and provided that the decline in volumes does not worsen, Asahi appears capable of generating between $2.1bn and $2.3bn in free cash flow on an annual basis. This earnings capacity should be viewed in relation to a market capitalization of $18bn at current exchange rates.
Based on enterprise value, as a multiple of its operating profit before investments, or EBITDA, the group is currently trading at a multiple of ten, which is bang in line with its long-term average. This is as much as a comparable company such as Heineken, and significantly higher than another peer, such as MolsonCoors, sending a clear message from investors who value the international dimension of large brewers.
Beyond developments in its domestic Japanese market, it is therefore in this international niche that Asahi will continue to be closely watched.
