Coca-Cola Bottlers Japan
Q3 Year-to-Date 2017
Earnings Presentation
October 30, 2017

Tamio Yoshimatsu, President
Vikas Tiku, CFO
Head of Transformation(Posted to CCBJI Website October 27, 2017)Forward-looking statements
The plans, performance forecasts, and strategies appearing in this material are based on the assumptions and judgment of themanagement of Coca-Cola Bottlers Japan Inc. (CCBJI) in view of data obtained as of the date this material was released. Theseforecasts may differ materially from actual performance due to risks and uncertain factors such as those listed below.

Risks and uncertain factors are not limited to the items listed below. They are also included in our annual securities report, or “YukaShoken Houkokusho”.

••••
•
•
•

Agreements with The Coca-Cola Company and Coca-Cola (Japan) Company Limited.
The quality and safety of products
Market competition
Natural environment, such as climate, disaster, water resources, etc.
Legal environment
Leakage or loss of information
Change of economic conditions, such as personal consumption, currency exchange rates, prices of raw materials, fair value ofassets, etc.

• Business integration, streamlining and optimization of business processes, etc.
• Uncertain factors other than those above
The information in this presentation is provided for informational purposes and should not be construed as a solicitation of an investment
in our securities.
CCBJI undertakes no duty to update any statement in light of new information or future events. You should rely on your own
independent examination of us before investing in any securities issued by our company.
2

Coca-Cola Bottlers Japan
Q3 YTD 2017 earnings presentation

Year-to-date business update
Financial results and integration progress
Outlook for rest of the year and beyond
Q&A3CCBJI
2017 Q3 Year-to-datebusiness update

Q3 YTD: Making steady progress as a new company, deliveringon commitments, establishing a foundation for future growth
Financial performance; Making steady progress
Q3 YTD pro-forma operating income grew 2.6B vs. prior year
On track to achieve 2017 full-year target, despite ongoing topline pressure from weather
Focus on profitability; per case revenue continues to improve across channels, closely
monitoring volume share trend

Delivering integration commitments; Establishing growth foundation
Delivered 2B net integration synergies and benefits as of Q3 YTD; On track for full year2018 sales organization finalized
Integrating operating companies (CCW, CCEJ) into one company as of January 1, 2018
Investing appropriately for 2018 growth5Our Growth Roadmap for 2020 & Beyond
Financialframework

Focus ongrowthNew
operatingmodel

Integration
synergies
People &communities

6Committed to a growth agenda
Strategic Growth Pillars

Renewed Focus on
Revenue Growth

Re-imagine
Vending Business

Enrich Innovation
Pipeline

Customer Engagement
Best-in-Class Execution

In-depth Local Knowledge
7Putting our growth agenda into action
Renewed Focus on
Revenue Growth

Re-imagine
Vending Business

Enrich Innovation
Pipeline

Significant in-store
execution improvement
across all channels

End-to-end vendingtransformation project on
track, with initiatives togrow top-line and improve
operation efficiency

Keep focus and pricing
discipline on FOSHU and
FFC products

Balancing revenue andmarket share acrosschannels and categories
Sharing bestpractices

Accelerating Coke ON app> 200K VMs,
5.6M users
by September

Expanding innovation
centered on communityand customer; Seasonal
and regional launches ledby CCBJI

8FOSHU: Food for Specific Health Usage (Government approved); FFC: Food for Functional Claim

Disciplined approach to market share, focused on revenue
Developing strong plans with Coca-Cola Japan (CCJC) to ignite growthMarket ShareOTC Retail Price
Unit: PPMarket Share

Unit: JPY per bottle

OTC Retail Price (YTD 2017)

Vs. MarketAverage(vs. PY)

Q2

Q3

YTD 2017

Value-0.8

-0.4

-0.7

Large PET*+16.7-0.2

Volume-0.9

-0.6

-0.8

Small PET+1.8+1.5*2L PET

Q3 (July – September) summary

Strategy to balance value & volume

Coca-Cola Plus OTC Retail Price TrendConvenience
StoreMarket impacted by cool, rainy
weather in summer season

Coca-Cola PlusCompetitor A

Sequential improvement Q2 to Q3Supermarket

FOSHU & FFC driving share growthin sparkling and non-sugar tea

Vs. PY

Source: Intage SRIFOSHU: Food for Specific Health Usage (Government approved); FFC: Food for Functional Claim

Competitor B
9Channel volume performance in Q3 YTD 2017
Price discipline, strong market execution, improved mix driving better revenue per caseSupermarket, Drug & DiscounterQ3 YTD 2017 pro-forma volume -1%
By Channel
vs. PY

VolumeRevenueper Case(Yen)Supermarket (SM)Even+20

Drug & Discounter(D&D)

+2%

+32

Others1%

Retail &Food
22%

Vending
26%

Supermarket
23%

Drug &Discounter13%
Convenience
Store
15%

Convenience Store(CVS)-1%

Vending-5%+32

Retail & Food+2%

-4+13•

Decrease in sports and water offset by growth of sparklingand non-sugar tea led by FOSHU and FFC.

•Mix improvement contributed to per case improved
profitability•Large PET volume declined as we held revenue per caseevenConvenience Store•

Growth of sparkling and non-sugar tea led by FOSHU andFFC, decrease of water and coffee•Mix improvement contributed to per case improvedprofitability.

Vending•

Selling price and mix improvement continues despite
negative volume performance due to poor weather in peakseasonRetail & Food•

Retail per-case profit improvement; Food service volume
growthNote: Standardization of volume and revenue calculation is ongoing as a result of the integration.
Some inconsistencies with the data provided in past presentations may be expected.
FOSHU: Food for Specific Health Usage (Government approved); FFC: Food for Functional Claim

10

Category volume performance in Q3 YTD 2017
Value-added launches contributing to improved profitability
Q3 YTD 2017 pro-forma volume -1%
By Category
vs. PY Volume

Juice
4%

Others10%

Sparkling26%

Coffee
20%

Water
10%

Nonsugar tea
20%
Sports10%

Sparkling+5%

Non-sugar tea+3%

Sports

-5%

Water

-9%

Coffee-5%

Juice+1%• High-value added products such as Coca-Cola
Plus, Sprite Extra drove volume growth as wellas improved per case profitability in sparkling• Solid growth of Ayataka green tea as well as
newly launched FFC products led non-sugar
tea growth• Sports category impacted by poor weather.
Sports volume was even in D&D• Large PET volume decreased by pull-back ofdiscounting, which has improved per caseprofitability in water• Decline in coffee, with growth of bottle can;vending per case profitability improvement

11
Note: Standardization of volume and revenue calculation is ongoing as a result of the integration.
Some inconsistencies with the data provided in past presentations may be expected.
FOSHU: Food for Specific Health Usage (Government approved); FFC: Food for Functional ClaimCCBJI2017 Q3 Year-to-datefinancial results andintegration progress

Q3 YTD 2017 pro-forma results• Volume and revenue impacted by poor weather and vending channel• Operating Income growth on cost management and synergy capture
Unit: B JPY

Q3 YTD 2017(pro forma)
Revenue

Q3 YTD 2016(pro forma)

YoY

764.0

776.9

-2%

741.7

752.4

-1%

40.1

37.5

+7%

37.8

34.9+8%Net Income

24.3

21.8+12％

EBITDA

74.3

70.0+6%

Coca-Cola business revenue
Operating Income

Coca-Cola business OINet Income: Net income attributable to owners of parent.

13Pro-forma 2017 Q3 YTD Operating income drivers
Steady underlying synergy generation, pro-forma OI grew 2.6B yen YoYManufacturing••

VolumePrice & Mix• Volume impacted
by poor weather• Pricing and mix
improvements
driven by highvalue added
products (FOSHUand FFC)

37.5

-2.4

Procurement andsynergy savings
Strong performancein underlying
CCW/CCEJ
businessDME• Lower volumes inquarter• Disciplined spend:
Re-phase
investment plandue to poorweather in Q3+5.1

Other Opex+2.8• Decrease indepreciation,distribution,labor, etc.
offset byintegration
expenses.

Healthcare& Skincare
Business OI

Unit: B JPY

Goodwill,etc.

-0.3• Timing of newproductlaunches• Flat in Q3-3.2

40.1

+0.6
2016 Q3 YTD
pro forma
CCBJI OI

• 2B net integration synergies & benefits• Coca-Cola Business OI grew 2.9B yen

FOSHU: Food for Specific Health Usage (Government approved); FFC: Food for Functional Claim

2017 Q3 YTD
pro forma
CCBJI OI

14

Delivering synergies and investing for growth
Q3 YTD net integration
synergies and benefits

2 B JPY• Manufacturing• Procurement• Accounting
harmonization

CAPEX & Depreciation (pro forma)

Q3 YTD2017

2017PlanCapex

33.6

57.0

Depreciation*

31.4

42.0

Unit: B JPY

Investing in upgraded production
capacity, quality sales equipment
placement, CokeOne+ ERP system
deployment
Revised (-9B yen) full-year capex
plan after review
ERP: Enterprise Resource Planning*Pro forma depreciation doesn’t include amortization of goodwill, etc.

152017 Q3 YTD results (Reported)
Consolidated CCEJ from Q2. Prior year CCW consolidated
2017 Q3 YTD

2016 Q3 YTDvs PY

Revenue

645,088353,710+82.4%

COGS

310,837

170,213+82.6%

Gross Profit

334,250

183,497+82.2%

SG&A

295,644

164,471+79.8%

Operating Income

38,606

19,025+102.9%

Income Before Tax

37,73017,232+118.9%

Net Income

23,797

10,627+123.9%

JPY143.17

JPY97.37+JPY45.8

EPS
Coca-ColaBusiness2017
Q3 YTD2016
Q3 YTDvs PY

Health Care & Skin
Care Business

Revenue

622,837

329,261+89.2%

Operating Income

36,341

16,509+120.1%

Unit: Million JPY except EPS
Net Income: Net income attributable to owners of parent.

2017
Q3 YTD2016
Q3 YTD

Revenue

22,251

24,449-9.0%

Operating Income

2,264

2,516

-10.0%vs PY

16

Outlook and modeling guidance for Q4
2017 Full-Year
Reported plan

Q4 Outlook
Continued poor weather impacting volumeand revenue

Revenue

906,500

Operating Income

40,100Re-phased DME investment plan due to poor
weather in Q3. Investing for good start to2018

Ordinary Income

38,100Net Income

21,500EPS

122.85

Sequential CAPEX Increase in Q4 vs Q3 as
we invest for growth in 2018 and beyond

DPS

44Consolidated CCEJ from Q2.
Unit: Million JPY except EPS and DPS
Net Income: Net income attributable to owners of parent.

Steady generation of net integration
synergies and benefits; 2B yen in Q4
17

Integrating at a fast pace
~ September 2017
• 8 Town Halls to 1,500 • Business Systems
CCBJI leaders across organization
Japan, covering
establishedcompany vision,• Integrate strategy &strategy & newplanning for all
operating model
functions to create• CCBJI HQ offices
opened• Integrated IT,
Procurement andCommercial
planning functions

2018 plan as one
company

By end of 2017

Q1 2018• Integrate CCW &• 2018 commercial
CCEJ, expect toregional structurechange holding
finalized
company name• Key Account(January 1, 2018)
Managementorganization• Integrate systemestablished, manage companies
national customers• Start operation
integrally with
under new regional
CCCMC
structure for• Announce
Commercial andIntegration of
Supply Chain
subsidiary bottlers(CCW & CCEJ)

By end of 2018
• Integration
complete- Optimizeorganization & legal
entity structure- Integrate HR system- ERP deployment
and expansion
underway- Integrated Shared
Services org
operational18

CCBJI
Outlook for rest-of-year
and beyondDelivering integration benefits across our businessSupply Chain

Commercial

Network integration to reducetransportation expense• “Community based” & “Customer focused”• Identify new opportunities by collaboratingwith key regional customers

Cross-docking for
improved inventory
efficiency at sales centers

Bottler led innovations

Limited edition bottle

Omotenashi
VM outsideTokyo

Expand area
specific products
Expand Olympic
support VM

Common/Corporate•••

New bottle can filler
at Tama plant

Sharing and expanding best practices
Personnel exchange
Harmonize and standardize data and KPIs

Standard new productcommercialization processacross CCBJICoke One+ ERP- CCBJI wide
deployment plan
- Phase 2
deployment in CCEJ

CCBJI corporate branding activities
Interaction with global Coca-Cola bottlers
Investment in capability development

20

Solid marketing plan sets stage for 2018 growthDriving profitable IC package growth, focusing on Coca-Cola and Georgia coffee
Coca-Cola Winter Campaign

Georgia Winter Campaign

Coke ON x Georgia

iLohas Campaign

Newlaunches
Ribbon Bottles for
Coca-Cola,
Coca-Cola Zero,
Coca-Cola Zero
Caffeine

Real Gold Kaki Ukon
TM Coca-Cola
New year design slim bottle

iLohas Tappuri Lemon21Commercial organization
Focus on Kanto region and Tokyo; centrally manage national customers
Regional sales organization (from 1/2018)

Tokyo Focus

Strengthen dynamic Kanto Region, specifically inTokyo, ahead of Tokyo 2020 Olympic Games- Building regional strategy based on characteristics by area
- Investment for driving value share growth

Key account management organization (from 10/2017)
Centrally manage planning for national customers,aligned with CCCMC* and CCJC
*CCCMC: Coca-Cola Customer Marketing Co. One of Coca-Cola system related companies
established by Coca-Cola bottler in Japan including CCBJI and Coca-Cola (Japan) Co., serving as asales negotiation window for national chain retailers and food service chains.

22

Operating as one enterprise
Integrate Coca-Cola business operating companies
January 1, 2018~

Now
Coca-Cola Bottlers Japan
Coca-Cola Coca-ColaWest
East Japan
Coca-Cola BusinessCoca-Cola Bottlers Japan Holdings

Q’sai

Coca-Cola
Bottlers Japan

Q’sai

Healthcare &Skincare Biz.

Coca-Cola Business

Healthcare &Skincare Biz.

*Change of current CCBJI trade name subject to approval of extraordinary shareholders meeting to be held on December 5, 2017.

23

Wrap-up
The heart of the decision to form CCBJI
Bringing together a proven leadership team committed to growth, partneringwith our communities and customers, and driving shareholder value
CCBJI organization mostly in place with clear functional mandate,delivering on 2017 plans
Strengthened National Key Account capability to better serve key customers
Empowered region structure for Commercial, Supply Chain functions toensure focus on growth
Legal entity simplification/consolidation on track
Coke One+ ERP rollout plans for CCBJI in place
Synergy targets 25B+ yen by 2020 with high impact initiatives, currently inexecution phase24

Toward 2018
Sustainable growth and synergy capture based on solid foundation from 2017

2017

2018

Speedy integration

GrowthProfitability focus

Synergy generation

Establishingfoundation for growthLeadership25

Q&AAppendix

Q3 2017 pro-forma volume performanceQ3 2017 pro-forma volume -1% (July +3%, August -4%, September -1%)
By Channel
Others1%
Retail &Food
22%

Vending24%

By Category
vs PY

Supermarket
25%

Drug &
Discounter14%
Convenience
Store14%Supermarket

Volume+1%

Drug &
Discounter+3%

Convenience
Store+1%

Vending-6%

Retail & Food+1%

Revenueper Case(Yen)

Juice
4%

Sparkling
26%+13+24

Coffee17%+14+38+8vs PY

Others9%Non-sugar
tea
21%

Water
10%

Sports13%

VolumeSparkling+3%

Non-sugar tea+5%Sports-6%

Water-6%

Coffee-5%

Juice+2%

Note: Standardization of volume and revenue calculation is ongoing as a result of the integration. Some inconsistencies
with the data provided in past presentations may be expected.

28

2017 Q3 (July – September) results (Reported)
Consolidated CCEJ from Q2. Prior year CCW consolidated
2017 Q3

2016 Q3

YoYRevenue287,251

134,403＋113.7%

COGS

138,178

64,391＋114.6%Gross Profit

149,073

70,012＋112.9%

SG & A

127,564

59,869＋113.1%

Operating Income

21,508

10,142＋112.1%

Income Before Tax

21,372

9,356＋128.4%Net Income

14,104

5,993＋135.3%

Unit: Million JPY
Net Income: Net income attributable to owners of parent
2016 actual results are former Coca-Cola West and YoY calculated on former Coca-Cola West results.

29

We are a Total Beverage Company“Beverages for Life”
Offering 50+ brands, 600+ SKUs
for all life’s stages and for each day of your life

30CCBJI at a glance

Number of Employees

About

The world’s third largest*
Coca-Cola bottler by revenue

25,000

Sales Area

Tokyo, Osaka, Kyoto
andTotal Beverage Company,
offering 50+ brands, 600+SKUs*Including temp staff

35 prefectures
Annual Revenue

About

1 trillion yen
351 centers*As of January 2017, including distribution centers

Manufacturng Plants

17 plants*As of December 2016

740,000*As of end of 2016

Number of Consumers

50 million households
112 million consumers
Annual Sales Volume*Aggregation of CCW and CCEJ 2016 results

Sales Centers

Represents ~90% of totalsales volume for theCoca-Cola system in Japan

Number of Vending Machines

More than500*Actual 2016

million cases

Customer Outlets

320,000 outlets*As of end of 2016

Number of Fleets

16,300 vehicles*As of end of July 201631

We are part of the global Coca-Cola system
An enduring and effective partnership

Coca-Cola (Japan) Company•••••

BrandsInnovation
Global perspective
Consumer focus
Superior insight••••••

Customer focus
Local expertise
Best-in-class execution
Finished goods production
Logistics and distribution
Cost optimization
32

Glossary of key termsDME

Abbreviation of Direct Marketing Expenses. Sales promotion-related expenses, including advertisement, rebates, sales, salescommissions, etc.

FC

Abbreviation of Future Consumption. Purchase or sell beverage for future consumption in home, etc. It also means theproducts / SKUs for FC (for example, single packages 1L or more and multi-pack of IC packages) and channels that consumers
purchase the beverages for FC. (for example, supermarket, drug & discounter channels, etc.).

HORECA

Abbreviation of Hotel, Restaurants and Cafeteria. Generally means sales channels of these kinds.

IC

Abbreviation of Immediate Consumption. Purchase or sell beverage for consuming it immediately. It also means the products/ SKUs for IC (for example, single packages less than 1L as well as fountain) and channels that consumers purchase thebeverages for IC (for example, vending machines, convenience store channel, etc.).

OBPPC

Abbreviation of Occasion, Brand, Package, Price, Channel. A segmentation strategy tailored to consumption opportunities todrive revenue growth in five areas: occasion, brand, package, price and channel.

Pro forma

Assuming the business integration of CCW and CCEJ from January 2017 and estimating 2016 results using the same standard

PTC

Abbreviation of Price, Terms and Conditions, an internal guideline for setting appropriate transaction conditions withcustomers, frequently used in conjunction with RGM.

RGM

Abbreviation of Revenue Growth Management, an overall strategy and process to grow revenue and profit

RTM

Abbreviation of Route-to-Market. A framework, a process, a philosophy, a proven approach for driving profitable growth.

Channel Definitions

Vending

Retail sales to consumers through vending machineSupermarket

Wholesale to supermarket chains customers

Drugstore & Discounter

Wholesale to drugstore and discounter chains customers

Convenience Store

Wholesale to convenience store chains customers

Retail & Food

Wholesale to grocery store, liquor store, eating & drinking establishments(HORECA), online sales channels customers, etc.

OthersWholesale to customers other than above33

INVESTOR RELATIONS
ir@ccbji.co.jp+81-3-5575-3797
https://en.ccbji.co.jp/ir/
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