[Top Page]

Link to other pages

[first sentense]

Overview by segment and business for fiscal 2017

Japan Integrated Beverages

Note: Figures in parentheses are comparisons with the previous fiscal year.

Kirin Brewery

Amid a sluggish beer market that declined 2.6%, Kirin Brewery reviewed its trading conditions from January onward in anticipation of the enforcement of the Standard for the Fair Trade of Alcohol accompanying the revision of the Liquor Tax Act in June. As a result, the review found that the effects of continued high retail prices over a certain period compared with competitors' products caused beer sales volume to decline 4.2%. By brand, Ichiban Shibori dropped 2.4%, in line with the overall market decline, but sales of cans were strong after conducting intensive sales promotion activities in September to upgrade the product, pushing sales volume upward (up 0.6%) for the year. On the other hand, sales volume of the Nodogoshi brand declined (down 4.9%), leaving Kirin Brewery the challenge of recovering market share in the new genre category.
  RTD increased 8.4%, centering on Hyoketsu and Honshibori, and sales of non-alcohol beer-taste beverage increased 58.7% with the launch of Kirin Zero ICHI.
  Although revenue declined due to decreasing sales volume of beer products, unit sales and product mix improved thanks to a review of trading conditions and a rising ratio of can sales. Moreover, cost reductions were successful and normalized operating profit increased.

Kirin Beverage

Gogo-no-Kocha increased 2%, recording its highest-ever volume of sales, and the sales volume of Nama-cha, including the effects of last year's product renewal, increased 5%. Meanwhile, Kirin Beverage's total sales volume decreased 2%, falling below the market average of ±0% due to the termination of contract manufacturing agreements, as well as declining sales volume of FIRE (down 8%). The functional beverages category was up 11% on strong performance of new products under the Supli brand.
  While revenue decreased due to declining sales volume, normalized operating profit increased substantially on the rising composition ratio of Gogo-no-Kocha and Nama-cha, as well as cost reduction effects.

Mercian

Products centered on domestically produced and imported wines fared well, and the sales volume of wine increased (+2%). Although revenue declined because of an increase in low-priced imported wine for daily drinking, normalized operating profit rose due to cost reductions and the rationalization of marketing expenses.

About Japan Integrated Beverages(836KB)

Overseas Integrated Beverages

Note: Figures in parentheses are comparisons with the previous fiscal year.

Lion

Lion Beer, Spirits and Wine business concluded its beer distribution agreement in Australia with Anheuser-Busch InBev (ABI) in September 2016. However, the changes offer an opportunity to focus more investment behind Lion's retained portfolio of owned and licensed brands. While sales volume sharply declined (down 10.5%) due to the loss of the ABI brands, volumes of core Lion beer brands remained solid, particularly in growth categories such as contemporary, and craft. Excluding the impact of the loss of the ABI brands, revenue and normalized operating profit were largely unchanged from the previous year.
  In the Lion Dairy & Drinks business, raw material costs increased due to sharply rising Australian orange prices, impacting sales volumes of juice. Despite the short-term set-backs, the underlying performance of the business was solid and normalized operating profit increased only slightly due to the loss recognized in 2016 on inventory revaluation. The turnaround program has laid the foundation to return the business to growth in FY18.

Myanmar Brewery

Taking advantage of demand for low-priced and can products, the sales volume of Andaman Gold increased sharply (up 85%), and the promotion of bottled Myanmar Beer was also successful, rising 4%, causing total sales volume to increase a substantial 17%. Although the product mix deteriorated due to a considerable increase in the economy category, revenue increased on a local currency basis on a significant jump in sales volume and the effects of a price revision carried out in the previous and current fiscal years. Raw material expenses increased due to the effects of foreign exchange rates, but efforts to reduce supply chain costs had a beneficial effect, pushing normalized operating profit up on a local currency basis.

About Overseas Integrated Beverages(516KB)

Pharmaceuticals & Bio-chemicals

Despite a decline in sales due to the impact of generic drugs in Japan, the pharmaceuticals business saw sales and profits increase due to higher technology licensing revenue and lower SG&A expenses including R&D expenses. In R&D, global strategic product development advanced steadily.
  In the bio-chemicals business, raw material sales for pharmaceuticals and health foods and online sales remained steady both in Japan and overseas, and revenue remained unchanged from the previous year. Normalized operating profit increased year on year due to a higher composition ratio of highly profitable products.

About Pharmaceuticals & Bio-chemicals(190KB)

[footer]

© 2007 Kirin Holdings Company, Limited.

Back to top