Coca-Cola East Japan
Q1 2016 Earnings Presentation
Calin Dragan, CEOJawahar S.K., CFO
May 16, 2016
(Posted to CCEJ Website May 13, 2016)
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www.ccej.co.jp

CCEJ Q1 2016

Forward-Looking Statements
The plans, performance forecasts, and strategies appearing in this material are based on the assumptions and judgment of the management ofCoca-Cola East Japan Co. Ltd. (CCEJ) in view of data obtained as of the date this material was released. These forecasts 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 “Yuka ShokenHoukokusho”.
• Intensification of price competition in the marketplace• Change in economic trends surrounding our business• Major fluctuations in capital markets• Fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen and the U.S. dollar• Increases in prices of raw materials• Change in the tax environment• CCEJ's ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management;• CCEJ's ability to market and distribute effectively• 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 oursecurities.
CCEJ 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.

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2CCEJ Q1 2016

Q1 2016 Earnings Presentation
Introduction•Overview and Key Messages
First Quarter Results•Volume, Share and Financial Results
Second Quarter and Full-Year 2016
•Key Milestones, Initiatives and Marketing PlanBusiness Integration MOU Between CCEJ & CCW

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CCEJ Q1 2016

Q1 2016 Overview and Key Message

 A solid start to the year; Positive trends from Q4 2015 continued in Q1
 Revenue grew 13%, driven by volume growth as well as the benefit of theintegration of Sendai Coca-Cola Bottling in April 1, 2015
 Volume and value share growth; Recovery after pricing initiatives in 2H 2015
 Delivered second consecutive quarter of positive gross profit from volume,
price and mix
 Gross profit margins improved, as we continue to deliver manufacturing andprocurement synergies in line with plan Announced MOU with Coca-Cola West (CCW) on April 26, 2016 to proceedwith discussions/review of business integration opportunities

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Q1 2016 Sales Results
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CCEJ Q1 2016

Growth Across Categories, Channels & Packages
Reported Volume
Q1 2016+15.8% (+5.9%*)

 Consumer-centric marketing activities
 Revenue-rich new launches across channels
Coca-Cola Global
Campaign“Taste The Feeling”+20%

Georgia
The PremiumCampaign+15%
Georgia

+14%
-+9%*
-+5%*

-+4%*

JanFebMar

DeepImpact

ThePremium
BitoCoffee
Bag

Café
BottleAyataka
Nigori
HonokaiLohasCider

Vending Machine
Exclusive* Comparison of volume growth
assuming Sendai was integrated
from January 2015

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CCEJ Q1 2016

Strategic Focus on Stabilizing Pricing Environment
Improved Wholesale PriceOTC Retail Pricing Trends• Minimize unprofitable promotions through PTC
initiatives• Pullback in heavy price promotions has continued
from prior year• CCEJ average retail price continues above market
average for both large and small packages

A Major CCEJ NST Brand
Wholesale Price per CaseA Major CCEJ Sparkling Brand
Wholesale Price per Case

vs. Market
Averagevs. Prior Year

Large PET

+11.9

-2.7

500ml PET

+0.7

-1.0

CCEJ OTC Retail Price(YTD, as of April 10, 2016)

Unit: JPY
Source: Intage, OTC channel, NARTD beverages

Supermarket

Drug & DiscounterQ1 2015

Supermarket

Drug & DiscounterQ1 2016

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CCEJ Q1 2016

Managing a Complex Pricing LandscapeConsumer
Behavior
ChannelMix

ProductPortfolio
Pricing &Competition
Trend

Q1 Trend

Impact on Q1Price/Mix• Polarization: Price conscious vs.
premium productsNeutral• Rapid expansion of online
channelNegative
Stabilize
NegativeContinue• Cycling of new outlet
acquisitions & customer
exclusive launches in PY

Negative

Ending inQ2/3• High value SKUs growing faster

Positive

Continue

Negative

Will depend
on industry
actions• Competitive environment
leading to price erosion

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CCEJ Actions• Strong Innovation pipeline

Continue• Vending channel trends• Growth in Supermarket andConvenience Store Channels

Rest of2016• Profitable expansion in onlinechannel• Vending task force startdelivering results• Focusing on value-added
activities; no end-quarter push
• Strong Innovation pipeline• Channel-specific products/SKUs• Revenue-rich new launches• Full deployment of PTC
activities across all channels• Category management projects

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CCEJ Q1 2016

Market Share Recovery and GrowthMarket Sharevs. Prior Year

Value
VolumeQ1 2016+0.2+0.5

Value Share vs. Prior Year

• Volume and value share growth after PTC initiatives in 2H 2015
• Share gains in Colas, Water, Teas and Coffee• Value share gains in Convenience Store, Supermarket, Drug &Discounter channels
Volume Share vs. Prior Year

Source: Intage, OTC channel, NARTD beverages

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9CCEJ Q1 2016

Performance by Channel
Q1 Volume by Channel

Channel Volume Growth(% of total)
Others Supermarket
(SM)
11%
20%
Vending (VM)
28%
Convenience Store
Eating &(CVS)
Drinking (E&D)
16%
14%Drug &Discounter(D&D)
11%

Volume YoY: Q1 +15.8%
Q1 Performance Drivers• Convenience Store growth led by coffee, water, NST• Drug & Discounter grew across categories• Supermarket recovery driven by NST, water and coffee• Vending supported by water, coffee• Eating & Drinking growth led by outlet expansion

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vs. PY

CVS

D&D

Nat’l
SM

Local
SMVM

E&D

Q1 2016+25%+32%+19%+13%+9%+14%Comparison of volume growth assuming Sendai wasintegrated from January 2015
vs. PYQ1 2016

Nat’l
SM

Local
SMVM

E&D

+13% +17% +4%+5%-1%+7%CVS

D&D

Volume YoY: Q1 +5.9%* NST (Non-Sugar Tea)

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CCEJ Q1 2016

Performance by Category
Q1 Volume by Category

Category Volume Growth(% of total)
Juice 5%
Sports 6%

Water
11%Others
13%Sparkling(SSD) 25%Coffee
19%

Teas
22%

Volume YoY: Q1 +15.8%
Q1 Performance Drivers

vs. PYNSTWaterCoffee

SSDSports

Juice

Q1 2016+18%+30%+21%+11%+9%+18%Comparison of volume growth assuming Sendai wasintegrated from January 2015

• Water growth fueled by ilohas Momo (peach) and newly
vs. PYNST Water Coffee
launched cider flavored water
Q1 2016 +10% +18% +8%• Tea (NST) growth driven by strong momentum of Ayataka green tea,accelerated by newly launched Ayataka Nigorihonoka
Volume YoY: Q1 +5.9%• Coffee led by The Premium. Growth across all channels* NST (Non-Sugar Tea)
• Sparkling soft drink recovery led by E&D and D&D channels• Juice growth driven by new outlet expansion
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SSDSports

Juice+2%-2%

+9%

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Q1 2016 Financial Results
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CCEJ Q1 2016

Drivers of Q1 2016 Operating Income
Supply Chain
Synergies

Q1 2015ComparableOperatingIncome

Gross Profit
Impact ofvolume,
price/mix

DME

OtherOPEX+1,558-1,598+789

Unit: Million JPY• Delivering
manufacturing &procurement
synergies in linewith plan

OtherSubsidiaries-1,351+666• Volume growth+5.9% (incl. Q1 2015Sendai) & newlaunches

Q1 2016
Comparable
OperatingIncome• Timing ofmarketing spend
heavier in Q1 withnew campaigns andlaunches. Will
moderate throughthe year• In line with full-year
plan• Labor expenses
decreased• Offset byDistribution
expenseincreases in linewith higher
volume-954

Depreciation-392+498• Adjusting for
impact of Q1
2015 Sendai OI• Also includesother subs

• Including benefitof change ofuseful lives forProductionequipment+ 1,206
vs PY

Successful integration of Sendai is driving value.
If Sendai’s results were included in our Q1 2015 results, the year-on-yearcomparable OI improvement in Q1 2016 would have been ~2 billion yen

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CCEJ Q1 2016

Q1 2016 Financial Results Summary• Volume and revenue growth • Improved gross margin driven by manufacturing and procurement efficiency inline with plan • SG&A increase led by marketing investment, logistics, Sendai integration, etc.

Q1 2016

Q1 2016

Q1 2016

Q1 2015

Reported

One-time
items

Comparable

Comparable

in million yen

Sales Volume

Vs. PYDiff%

68,349-68,34959,009+9,340+15.8

Net Revenue

124,522-

124,522

110,220+14,302+13.0

COGS65,818-65,81858,846+6,972+11.8

Gross Profit

58,703-58,70351,374+7,329+14.3

SG&A

59,145-50

59,09552,972+6,123+11.6

Operating Income-442

50-392-1,598+1,206-

Profit Before Tax-1,105(BAPC) (,000 cases)

Net Income

Capital Expenditure: 3,702 M JPY / Reported Depreciation and Amortization: 5,543 M JPY-838

Note: Previous year volume shown above may be slightly different from what we shared in the previous year, as part of the implementation andstandardization for the new ERP system, CokeOne+.

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Milestones/Initiatives
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CCEJ Q1 2016

Key Milestones/Initiatives Rest of the Year
• Keep focusing on delivering results•

Continue working to improve profitability toward peak season•

Vending task force fully deployed•“Coke ON” App and smart phone enabled vending machine deployment of 44K machines in2016 to deploy loyalty program for consumers• Manage and optimize working capital• Planned integration of Coca-Cola East Japan Products, Co. into
CCEJ as of October 1, 2016
•Wholly owned subsidiary of CCEJ in charge of manufacturing, logistics, distribution andequipment maintenance•Continue effort to optimize and simplify legal entity structure

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CCEJ Q1 2016

Q2 2016 Strong Marketing & Innovation Plan
New Products/Revenue-rich Innovations
YOGURSTAND
Pineapple/PeachCoca-Cola TM
Global Campaign“Taste The Feeling”

GeorgiaEuropean
Bito Black

Georgia Cold Brew
Black/Café Latte

Glaceau
SleepwaterCore Brands Renewal/Innovations
Fanta
Renewal &New Flavor

Georgia European
Kaoru Black/Jukuren Blend
RenewalSokenbicha
RenewalReal Gold Works

Schweppes
Grapefruit
Blend

Sprite Renewal

Kochakaden
Royal Milk Tea
Momoiro Clover Z
Special Design

Customers/Channel Specific Launches
Goergia Private Reserve
Renewal & new
introduction (Café au lait)

Canada Dry
Sparkling
Peach
Renewal

HajimeRenewal

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illy Latte
Macchiato

Kochakaden
Ice MilkTea (VM)
Fanta Hojun
AppleRenewal(VM)

Karadameguricha
Jasmine Tea Blend(CCEJ VM exclusive)

Skal(CCEJ VM exclusive)17

Business Integration MOU
Between CCEJ and CCW
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CCEJ Q1 2016

Summary of the MOU Announcement on April 26• MOU agreed between CCEJ and CCW to proceed withdiscussions/review of a business integration opportunities• MOU supported and signed by The Coca-Cola Company• Background & objective of proposed business Integration:•• Better positioned to drive future growth in the industry• React to changes in the market environment, respond to customerand consumer needs, and accelerated market competition• Build competitive advantage through the integration andaccelerate the transformation of the Coca-Cola system in Japan•Combined Sales Territories:
Covering Tokyo and 37 prefectures,representing a population ofapproximately 111 million
Combined Annual Revenue:
Approximately 1 trillion JPY

CCWCCEJ• Maximize the enterprise value of the combined entity andestablish one of the leading Coca-Cola bottlers in the world

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19Appendix
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CCEJ Q1 2016

The Coca-Cola System
A powerful partnership driving growth of the Coca-Cola business
The Coca-Cola system in Japan consists of the Coca-Cola (Japan) Company (CCJC), bottlers and other related companies.
CCJC, as the franchise owner, is responsible for supplying concentrate and beverage bases (coffee beans, tea leaves, juices, etc.) for all of Coca-Cola’s
brands, as well as R&D, innovation, and marketing and brand development.
The bottlers, including CCEJ, as franchisees, are responsible for manufacturing, distribution and selling the finished products. We all are working
together with our system partners to grow the Coca-Cola business by optimizing our overall operations through more efficient production anddistribution, marketplace execution that is firmly focused on the consumer, faster response to market preferences, enhanced customer service, andrigorous quality control.
Other Coca-Cola System Related Companies in Japan
Coca-Cola Tokyo Research &Development Co., Ltd. (CCTR&D)
Coca-Cola IBS Co., Ltd. (CCIBS)
Coca-Cola Business Sourcing Co.,
Ltd. (CCBSC)
Coca-Cola Customer Marketing
Company (CCCMC)FV Corporation Co., Ltd. (FVC)

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Product development and technical support to respond to the needs of the customerin Japan. A wholly owned subsidiary of The Coca-Cola Company.
Providing business consulting services, as well as developing and maintaining theinformation systems to support Coca-Cola System companies in Japan. Jointly owned
by The Coca-Cola Company and all the bottlers in Japan.
Providing joint procurement of raw materials, packaging, equipment, indirectmaterial, etc., for Coca-Cola System companies in Japan. Jointly owned by The CocaCola Company and all the bottlers in Japan.
Business negotiations window for nationwide retail, convenience stores, supermarket
and food-service chains as well as developing proposals for sales promotions andstorefront activities. Jointly owned by CCJC and all the bottlers in Japan.
Sales negotiations window for national chain vending operators, and deals non-CocaCola products as well as Coca-Cola branded products. Jointly owned by CCJC and allthe bottlers in Japan.

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CCEJ Q1 2016

Glossary of Frequently Used Terms
CDE

Abbreviation of Cold Drink Equipment. Vending machines, coolers and beverage dispensers, etc.

DME

Abbreviation of Direct Marketing Expenses. Sales promotion-related expenses reported in advertisement & sales promotion expenses andpartly in sales commissions of SG&A.

FC

Abbreviation of Future Consumption. Purchase or sell beverage for future consumption in home, etc. It also means the products / SKUs forFC (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 fountains) and channels that consumers purchase the beverages for IC(for example,vending machine, convenience stores channels, etc.).

OBPPC

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

OperationalExcellence(OE)

The Coca-Cola System’s way to develop people and culture around productivity which allows higher financial value achievement by driving
sustainable improvement using common language and tools as well as focusing on business priorities.

PicOS

Abbreviation of Picture of Success, which outlines standards and example for making ideal market place execution and market place
activities including product deployment, CDE and advertisement placement, vending machine faces and column management, etc.

PTC

Abbreviation of Price, Terms and Conditions, an internal guideline for setting appropriate transaction conditions with customers,
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.

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THANK YOU
Coca-Cola East Japan
Q1 2016 Earnings Presentation
May 16, 2016
<Inquiries>
Investor Relations
Coca-Cola East Japan

ir@ccej.co.jp+81-3-5575-3797
http://investor.ccej.co.jp/

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