Q1 2014 Earnings Conference Call
Calin Dragan, Chief Executive Officer
Michael Coombs, Chief Financial Officer
May 13, 2014

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 East Japan Co. Ltd. (CCEJ) 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“Yuka Shoken Houkokusho”.

•••••
•
•

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 bymanagement;• 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 aninvestment in our securities.
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.

2

May 8, 2014
128th Anniversary of Coca-Cola

Calin Dragan, Chief Executive Officer
Michael Coombs, Chief Financial Officer
May 13, 20143

Q1 2014 Earnings Conference CallSupporting Presentation
Introduction• Key Messages• Our
Roadmap for Sustainable Growth

On-Track in First Quarter 2014
• Rapidly and Actively Integrating• Q1 2014 Results

Upward Revision to 2014 Plan
• Revised 2014 Full-Year Plan
• Details on Change to Accounting Policy and Estimates• 2014 Update, CAPEX, Commercial, Marketing4Coca-Cola East JapanKey Messages

 Volume growth of 3%, sequential improvement in most channels
 Q1 revenue includes -1% impact of divesting non-core assets like Mikuni Wine.
Excluding this impact, Q1 revenue would be positive Operating income in line with full-year plan, but overshadowed in Q1 by changein accounting policies. Impact on full-year operating income is positive.
 Supply chain synergies & 2014 installation of new production lines ahead of plan New full-year comparable OI margin target increased to 3.5% from 2.8% afteralignment of accounting policies to global bottling practices
 On track with roll-out of pricing related to consumption tax
 Strong marketing and innovation calendar in 20145

One+ Roadmap for Growth
2014: A Year of TransitionOI Margin+1 pt
2013-20142012-2013

StormingForming

Define & deploy
new bus. model

Speed ofintegration: 250+
projects

Identifying
synergies &positioning forgrowth

OI Margin+1-2 pts
2014-2015

Norming
Refine &optimize newbusiness modelOI Margin+1-2 pts
2015-20172017- Tokyo Olympic
Games & Beyond

Accelerating

Performing
Approaching
global bottler
performancelevelsProcess re-engineering
Exploiting new& launch of ERP systemarchitecture as
while delivering firstcompetitive
results
advantage to drivesynergies & growth

Meet & exceed
world-classbottler levels

A world-class
Japanese bottler
on the world stage6ON TRACK
IN 2014

Rapidly and Actively Integrating
As Committed Last Quarter Two new production lines in Hakushu and Iwatsuki up and running.
 Call center consolidation from six to two centers (Nagoya, Okegawa) New performance management & incentive program in place Second Voluntary Separation Plan (VSP) complete CokeOne+ Enterprise Resource Planning (ERP) implementation
underway8

Q1: Continuing Signs of Progress
Positive volume and share trends
Sales
VolumeQ1 2014 Actual

vs. Prior Year

Q1 Market Share*(NARTD Beverages)

vs. Prior Year60,431 (BAPC)+3.4%

Volume+0.4

82,681 (UC)+3.3%Value+0.2

Volume Share vs. Prior Year

Value Share vs. Prior Year
Q1 2014+0.4

CCEJ

Q1 2014+0.2

CCEJ*Source: Intage, OTC channel

9Q1: Improving Trends Across Channels
Vending Volume Even, Challenges Remain in CVS
Channel Volume Growth

Q1 2014 Volume By Channel(% of total volume)

Q1 Vending andEating & Drinking hurtby snows in February

Other Supermarket
12%21%
Drug &Vending
31%

Eating &Drinking
15%

Discount
9%

CVS
12%

Total BAPC* Pro-Forma
Volume Growth• Q1 2014 +3.4%

vs. prioryear

D&D

Nat’l SM

Local SMVMEat & Drink

CVS

Q1 2014+14%+16%+9%0%0%-5%

FY 2013+5%-1%+3%-2%0%+1%* BAPC (Bottler Actual Physical Cases)10Q1: Improving Trends Across Categories
Balanced Volume Growth, CVS Impacting Coffee
Q1 2014 Volume by Category(% of total volume)
Sparkling
27%
Tea
22%

Category Volume Growth

Juice 6%

Other
12%

Q1 Coffee +3%in vending

Coffee18%

Sports
7%

Water
9%

Total BAPC* Pro-Forma
Volume Growth• Q1 2014 +3.4%

vs. prioryear

SSD

NSTSports

WaterCoffee

Juice

Q1 2014+4%+10%+10%+9%-2%-4%

FY 2013+1%+4%+2%-2%-4%+2%* BAPC (Bottler Actual Physical Cases)

11Q1 2014 Results
Foundation for full-year growth• Revenue mix reflects volume growth, tax increase, heavy snows, competitive pricing and mix pressure• Consolidated revenue includes -1% impact of divesting non-core businesses (Mikuni Wine)• Q1 operating Income includes -3.4 billion yen net impact due to changes in accounting policy.
Without this change, OI performance in line with full-year growth plan2014 Q1

2014 Q1

2013 Q1

ActualOne-time
items

ComparablePro-Forma
Estimate

Diff%

60,431

58,462

1,969+3.40

in million yen

Sales Volume(BAPC) (,000 cases)
Net Revenue

Vs. PY2014 Q1

60,431--111,915--

111,915

112,408

-493

-0.44

61,552*--

61,55260,502

1,050*+1.74

50,362--50,362

51,906-1,543-2.97

55,947*--55,94752,6653,282*+6.23

Operating Income-5,584---5,584-759-4,825--

Profit Before Tax-6,892

1,363-5,529-970-4,559--Net Income-5,075845-4,230-778-3,452--COGS

Gross Profit
SG&A* Includes net JPY 861 million accounting change impact in COGS and JPY 2,531 million impact in SG&A

12Drivers of Q1 Operating Income
Underlying performance on-track with full-year plan
In million JPY-1,433-759-2,192-1,057+465
GP impactof vol & mix• Positive
volume• c-tax
impact• snows• CVS
weakness2013 Q1 Pro-Forma
Operating Income-4,825

-433

SCM
OPEX
synergies • New CCEJ
Uniforms• Consulting-325
Marketing
(DME)

-83
Divestingnon-corebusinesses(MikuniWine, etc.)

OI in-linewith fullyear plan

Impact ofaccountingchange:
Q1 negative
FY positive-5,584-3,392

2014 Q1 Comparable
Operating Income13

UPWARDREVISION TO
2014 PLAN

Upward Revision to 2014 Plan
• Upward revision driven by accounting policy changes. No change to underlying plan.
• Supply chain synergies to increase sequentially with introduction of five new production lines• New full-year comparable operating margin target of 3.5%
Vs. PY2014 FY

2014 FY

2014 FY

2013 FY

Revised Estimate

One-time
items

Comparable
Estimate

Comparable

Diff%

in million yen

Sales Volume(BAPC) (,000 cases)

287,756

287,756

284,014

3,742+1%

Net Revenue

535,800

535,800

533,602

2,198

+0%

Gross Profit

255,800

255,800

246,604

9,196

+3%

Operating Income

19,00019,000

10,240

8,760

+86%

Profit Before Tax

15,5004,000*

19,5009,492 10,008+105%

Net Income

9,600

2,600

12,200

5,693

+114%

OI margin
3.5%

OI margin
1.9%*Reflects estimate of extraordinary items related to employee VSP
and restructuring initiatives related to the CCEJ integration

6,507

15

Upward Revision to 2014 Plan
Driven by Change in Accounting Policy+8,760In million JPY+1,122OtherOPEX-862
DME+4,000-1,297-218

Depreciation Non-Core

Net BenefitofAccounting
ChangeBusiness+5,915

2014 plan shared
2/12/2014

Volumeprice/mix

2013 Comparable
Operating Income

15,000(no change inunderlying plan)+100

10,24019,000SCM

2014 PlanComparable
Operating Income (Old)

Revised 2014 Plan
Comparable
Operating Income

16Changes to Accounting Policy & Estimates
Aligning with global bottler peers
As part of our investment and operational strategies to ensure assets are productive over their
entire lives and to maximize usage periods, we revised accounting policies to:• Align depreciation method for all asset classes to straight-line method• Revise estimated useful lives of cold drink equipment from 5-6 years to 9 years• Write-off existing asset salvage values and assume zero salvage value going forward
Asset Category

Depreciation Method Useful Life

Building and Structures
Machinery, Equipment and Vehicles
Tools, Furniture and Fixtures
Sales Equipment

No change

Straight-Line
9 years

17

2014 Capital Expenditure Plans
Investing for GrowthApprox. ¥60 Billion in total CAPEX for 2014; ¥26 Billion in total depreciation• Reflects impact of accounting policy change• Includes five new production lines and two in-line PET bottle blowers in 2014
• Reflects continuing investment in cold drink equipment to drive availability
2014 Capital Investment

Asset Category

CAPEX

Q1

MM yenDepreciation

2014FYNewInvestment

MM yenExisting
AssetsTotal

Q1

2014FY

Q1

2014FY

Q1

2014FYCOGS Capitalized

5,690

30,700

52

1,700

2,052

4,500

2,104

6,200

OPEX Capitalized

4,321

29,200

71

1,600

7,087

18,3007,158

19,900Capitalized Total

10,011

59,900123

3,300

9,139*

22,8009,262

26,100*includes net impact of accounting policy changes and salvage value write-off18

Expanding New RTM across our Territory
Improve customer service & operational efficiency

Route-to-Market (RTM)• Expansion from model
pilot program to allterritories now underway• Tochigi, Ibaraki, Chiba tobe complete by end of Q2• 120 sales centers will becovered by July 201519

Strong Marketing & Innovation Plans
Leveraging our portfolio of brands
Q1

WinterCoca-Cola Zero Limit

FIFA World Cup

Q2
4/10 – 4/13
Trophy Tourin Japan

Q1“Weekly Georgia” & New Georgia Campaign

Q2

Georgia European Restage
4/7 Launch

Luana Renewal
5/19 Renewal

Jointly developed withSarutahiko specialty
coffee shop

Q1

Sokenbicha 20th Anniversary

Ayataka Green Tea Campaign

525ml
PETQ2

Karada Sukoyakacha W

Matecha Renewal

ILohas Sparkling20

Q2 2014 Milestones
 Two new production lines in Ebina and Tokai commissioned in May
 Integration of Logistics and Equipment subsidiary companies in Coca-Cola East
Japan Products (CCEJP) New Route-to-Market deployed in Tochigi, Ibaraki and Chiba areas
 Continued roll-out of new pricing and packaging for consumption tax increase Appointment of Chief Strategic Transformation Officer, to accelerate theimplementation of CokeOne+21

Thank You
Q1 2014 Earnings
Conference Call
May 13, 2014