HITOSHI OGITA, PRESIDENT, ASAHI BREWERIES: Good afternoon. I am Ogita of Asahi Breweries. Thank you for attending our financial results briefing for fiscal year 2008 despite your demanding schedule. I would also like to take this opportunity to express my appreciation for your unchanging support to us, thank you very much.
I would now like to give you the overview of the 2008 results for the Group and the 2009 business strategy. First on the consolidated financial results. The details will be presented by our Financial Officer later but in net sales the Soft Drinks Company achieved results far about industry average and the food and healthcare business each contributed with their growth.
On the other hand there was volume reduction in the beer business and decreased sales in the overseas business caused by foreign exchange fluctuation thus resulting in the net sales of JPY1,462.7b almost the same as last year. In operating income, due to increase in goodwill and fixed cost, we unfortunately registered a decrease in the alcoholic beverages business. But through implementing aggressive cuts in advertisement and sales promotion expenses the total operating income stood at JPY94.5b up 9% year-on-year.
In ordinary profit China's Tingyi-Asahi-Itochu Beverages Holding continued to do well but due to the impact of yen appreciating against the dollar their contribution to the consolidated results remained almost the same as the previous year. On the other hand, although extraordinary items worsened by JPY5.1b year-on-year, from devaluation of investment securities caused by erosion in stock prices, net income registered JPY4.5b, slightly above the previous year. A record high profit for eight consecutive years.
Based on these financial results I will now speak on the overall Group management for 2008. The third medium term business strategy in the Alcoholic Beverages business aims to generate stable long term cash flows through reinforcing the brand foundations including the reform of the earnings structure. At the same time, the Group aims for further new growth through pursuing synergy effects from each other and through continuous aggressive investments.
The major result for 2008, the second year of this medium term business strategy, was that in the domestic Alcoholic Beverages business, despite a rise in raw material costs, through maximizing efficiency in advertisement and sales promotion expenses we have been able to advance our structural reform in earnings far exceeding the plan. Moreover, we believe that we have been able to reinforce our brand foundations such as for Super Dry, Style Free and Clear Asahi.
In the Group business, in addition to achieving substantial growth of its core brands, Asahi Soft Drinks Company Limited was able to secure significant expansion far exceeding industry average of the vending machine business last year as a result of consolidating this undertaking.
In the overseas business, we were able to support the continued growth of China's TAI Beverages Holding Company Limited. Furthermore, from the perspective of business investment we reached an agreement for capital tie up with a top freeze dried food company, Amano Jitsugyo Company Limited in June.
Outside of Japan, we reached a conditional agreement to acquire Schweppes Australia in December. And this past January we reached an agreement to acquire equity interest in China's Tsingtao Brewery Company from Anheuser-Busch InBev.
On the other hand, the challenges carried over from 2008 include the intensified competition of the domestic soft drinks business and the worsening profitability of the overseas business. I will explain this more in detail later.
Next, I would like to explain the specific business strategies for fiscal year 2009. Please refer to the performance forecast first. In net sales we are projecting a total of JPY1,490b, an increase of 2% year-on-year. In operating income we are expecting improved profits in the Soft Drinks and overseas business. But because of the anticipated decreased profits in the Alcoholic Beverages business of over JPY10b, based on the revision of the depreciation accounting system, we are forecasting a 3% reduction in total operating income of JPY92b.
In ordinary profit we are projecting a 3% decrease of JPY93.5b, reflecting TAI Beverages …