3Q Performance Announcement
for the Year Ending December 2006
October 25, 2006
Coca-Cola West Holdings (2579）
URL

Contact
TEL 092-283-5718
http://www.ccwh.co.jp/

PR・IR GroupFAX 092-283-5729
E-mail masahiro-takase@ccwh.co.jp

Contents
Ⅱ．Marketing

Ⅰ．Performance Results

1．3Q Review

1．3Q Earnings… 3 pg2．3Q Consolidated Profit Change Factors… 5 pg①Key Brand Activities…21 pg3．Group Companies’ Performance… 7 pg②Key Channel Activities…23 pg4．4Q Performance Forecast… 8 pg③Overview of 3Q…25 pg5．4Q Consolidated Profit Change Factors… 9 pg

6．Performance Forecast for the fiscal year

…10 pgⅡ．Group Restructuring
1．Group Growth Strategy…12 pg2．Group Restructuring…13 pg3．Group Restructuring Plan

…14 pg4．Consolidation of Logistics Companies…15 pg5．Synergies from Integration of Logistics
Companies…16 pg6．Reduction of Capital: Kinki, Mikasa,
and Kansai Beverage…17 pg7．Renaming Daisen Beverages…18 pg2．4Q Marketing Activities Plan
①Brand Strategy…27 pg②Package Strategy…29 pg③Channel Strategy…30 pg➃Scenario for Achieving Sales Volume…31 pg[Reference]・OTC Market Share (Excl. VM)…33 pg・By Brand/By Channel: Sales Volume/Revenue/Gross Profit on Sales
Composition Ratio…34 pg・Performance Trend (Consolidated)…35 pg・Financial Data

…36 pg・Coca-Cola System in Japan…37 pg・Overview of Group Companies…39 pg・Terminology…40 pg1

Ⅰ. Performance Results

2

3Q Earnings（Jul-Sep）: Sales Volume¾Sales Volume ； vs. plan -2.3％、 vs. last year -4.0％
2005
Actual※1

Plan※2

Actual（000 case、% ）2006 3Q
vs. PlanDifference

vs. Last Year%

Difference

%

July

19,087

17,505

17,201-304-1.7-1,886-9.9

Aug19,934

20,36121,058

697

3.4

1,124

5.6

Sep

17,414

17,596

15,919-1,677-9.5-1,495-8.6

3Q Total

56,43655,462

54,178-1,284-2.3-2,257-4.0※1 2005 actual figure is the total of CCWJ、Kinki CCBC、Mikasa CCBC 2005 actual.
※2 The above plan is based on the performance forecast announced as of Aug. 8, 2006.

＜Sales Volume by month （vs. Plan／vs. Last Year)＞
10
5.6

（ ％）

vs. Plan
vs. LY

5
0

3.4
-1.7

-5
-10

-8.6
-9.5

-9.9
Jul

Aug

Sep

3

3Q Earnings（Jul-Sep）: Consolidated Profits¾Revenue: vs. Plan 2,009 MM JPY decline（‐1.7%）、vs. LY 46,539 MM JPY increase（＋66.5%）¾Operating Income: vs. Plan 34 MM JPY increase（＋0.6%）、vs. LY 983 MM JPY increase（＋20.8%)

2005 3Q
Actual ※ 1
Revenue
Operating Income
Recurring Income

Net Income

69,957
4,720
4,746
2,594

Plan
※2

Actual

118,507
5,670
5,936
3,470

116,497
5,704
5,909
3,455

2006 3Q
vs. PlanDifference%-2,00934-26-14（MM JPY、%）vs. Last Year
Difference
%
-1.7
0.6
-0.5
-0.4

-46,539
983
1,162
861

66.5
20.8
24.5
33.2

※1. 2005 3Q actual figure is the consolidated actual figure of existing company group (former CCWJ).
※2. The above plan is based on performance forecast announced as of Aug. 8, 2006.

■Reference ：In the case of adding ex-Kinki group’s actuals

2005 3Q
ActualRevenue
Operating Income
Recurring Income
Net Income

120,900
7,500
7,600
4,100

Actual116,497
5,704
5,909
3,455

（MM JPY、%）2006 3Q
vs. Last Year
Difference%-4,403-1,796-1,691
-645

-3.6
-23.9
-22.3
-15.7

※The above 2005 actual is adjusted based on a total of ex-CCWJ and ex- Kinki CCBC, eliminating inter-company transaction.

4

3Q Consolidated Profit Change Factors (vs. Plan)＜Gross Profit＞（BB JPY）

51.1

Gross Profit – 3Q plan

＊Major factors for profit decrease－1.1

Impact by Sales Company(※） Decrease in Sales Volume

・Impact from Sales Company(※）－0.6

Impact by Sales Company(※) Decrease from Sales Mix

Decrease by other group companies－0.3

Other increase＋0.1

Sales Volume decrease
Sales Mix
・Decrease from othergroup companies

1.1BB JPY
－0.6BB JPY－0.3BB JPY

49.2

Gross Profit – 3Q Actual
450

500

※Sales companies are ＣＣＷＪ、Kinki CCBC, and Mikasa CCBC＜Operating Income＞（BB JPY）

5.7

Operating Income - 2006 3Q Plan
Decrease in Gross Profit－1.9

Decrease in Advertising Cost

＋0.6

Decrease in Sales Commission＊Major factors for profit decrease・Decrease in Gross Profit＋0.3

Decrease from Service Fee＊Major factors for profit increase・Decrease in advertising cost 0.6BB JPY＋0.3

Decrease from Rental Expense

・Decrease in sales commission 0.3BB JPY＋0.2

Decrease in Depreciation Cost

＋0.2

Decrease in other cost

－1.9BB JPY＋0.3

・Decrease in service fee

0.3BB JPY

・Decrease in rental expense

0.2BB JPY

・Decrease in depreciation cost 0.2BB JPY

5.7

Operating Income - 2006 3Q Actual
0

50

5

3Q Consolidated Profit Change Factors（vs. LY）＜Gross Profit＞（Billion Yen）

30.2

Gross Profit - 2005 3Q
Net increase from Kinki Group＋20.3

Sales Mix impact＋0.9

Other increase＊Major factors for profit increase

＋0.3
－1.8

Decrease of sales volume
Decrease from change in accountingclassification

20.3BB JPY

・Sales Mix

0.9BB JPY

＊ Major factors for profit decrease

－0.7
49.2

Gross Profit- 2006 3Q

・Net increase from Kinki Group・Decrease of sales volume‐1.8BB JPY

・Decrease from appropriations‐0.7BB JPY

250＜Operating Income＞（Billion Yen）

4.7

Operating Income - 2005 3Q＊Major factors for profit increase

Increase in Gross Profit
Increase from change in accountingclassification
Decrease of advertising cost

＋19.0
＋0.7
＋0.4

Decrease of Kinki Group SG&A

－18.5
－0.2

Increase of depreciation cost
Increase of other expenses－0.4

・Increase in Gross Profit

19.0BB JPY

・Change in account classification

0.7BB JPY

・Decrease in advertising cost

0.4BB JPY

＊Major factors for profit decrease
・Kinki Group SG&A cost

‐18.5BB JPY

・Increase in depreciation cost

‐0.2BB JPY

5.7

Operating Income - 2006 3Q

06

Group Companies’ Performance（MM JPY、%）＜ Coca-Cola West Japan＞

Revenue
Operationg Income

2005
3Q
Actual ※ 1
50,957
2,407＜ Kinki CCBC＞
Revenue
Operating Income

2006 3Q
vs. plan

ActualPlan※249,7682,549

48,3432,293

Difference-1,425-255

46,001
1,687

45,865809

45,472
1,549＜ Mikasa CCBC＞
Revenue
Operating Income

8,304
303

8,056
276

＜ Nishi Nihon Beverage＞
Revenue
Operating Income

5,147
56

＜ Kansai Beverage Service＞
Revenue
Operating Income＜ Mikasa Beverage Service＞
Revenue
Operating Income

vs. LY
%
-2.9
-10.0

Difference-2,613
-114

%

-393
739

-0.9
91.3

-528
-137

-1.1
-8.1

8,051
226

-5
-50

-0.1
-18.1

-253
-77

-3.0
-25.4

4,987
135

4,954
142

-32
7

-0.6
5.2

-193
86

-3.7
153.6

8,897
575

9,044
361

8,785
373

-259
11

-2.9
3.0

-112
-202

-1.3
-35.1

723
16

756
28

743
30

-13
1

-1.7
3.6

19
13

2.6
81.3

-5.1
-4.7

※1 2005 3Q actual figure of CCWJ, Kinki, Mikasa is assumed as it was the same company form & business adjusted for this term
※2 The above plan is the figure based on performance forecast announced as of Aug.8, 2006.

7

4Q Performance Forecast (Oct-Dec） - Consolidated Profits（MM JPY、%）

2005
4Q
Actual ※Actual2006 4Q
vs. LY
Difference%

Revenue

58,557103,200

44,643

76.2

Operating Income

1,796

3,600

1,804

100.4

Recurring Income

1,999

3,900

1,901

95.1

Net Profit

2,168

2,200

32

1.5

※2005 4Q Actual is the actual consolidated figure of existing group (former CCWJ).

■Reference ：In the case of adding ex-Kinki group’s 2005 actuals
2005
4Q
Actual ※Plan（MM JPY、%）2006 4Q
vs. LY
Difference%

Revenue

100,900

103,200

2,300

2.3

Operating Income

2,700

3,600

900

33.3

Recurring Income

2,800

3,900

1,100

39.3

Net Profit

2,800

2,200

-600

-21.4

※The above 2005 actual is adjusted based on a total of ex-CCWJ and ex- Kinki CCBC, eliminating inter-company transaction.

8

4Q Consolidated Profit Change Factors (vs. LY)＜Gross Profit＞（BB JPY）

25.5

Gross Profit – 2005 4Q
Net increase from Kinki Group＋19.8

Increase from Sales Volume

＋0.5
＋0.1

＊Major factors for Profit Increase
・Net Increase for Kinki Group

19.8BB JPY

・Increase in Sales Volume

0.5BB JPY

・Sales Mix Impact

0.1BB JPY

Sales Mix Impact
Decrease from change in Accounting
Classification－1.1

Decrease from Service Fee－0.2

・ Decrease from Change in

Other Decreases－0.2

Accounting Classification
・Decrease of Service Fee

44.4

Gross Profit - 2006 4Q plan
200

300

＜Operating Income＞＊ Major factors for Profit Increase

＋18.9
＋1.1

Decrease from Personnel cost
Decrease from other Costs

＋0.4
＋0.6

Decrease from Kinki Group SG&A

－18.9
－0.3

Operating Income - 2006 4Q plan

‐0.2BB JPY（BB JPY）

Increase of Gross Profit
Increase from change in Accounting
Classification

Increase in Depreciation Cost

‐1.1BB JPY

400

1.8

Operating Income - 2005 4Q＊Major factors for Profit Decrease・Increase in gross profit

18.9BB JPY

・Increase from change in
Accounting Classification
・Decrease in Overhead Cost

1.1BB JPY
0.4BB JPY

＊Major factors for Profit Decrease
・Kinki Group SG&A

‐18.9BB JPY

・Increase in Depreciation Cost

‐0.3BB JPY

3.6

0

100

9

Performance Forecast for the Fiscal Year■West Group 2H Plan＋ex-CCWJ 1H Consolidated Actual Figure

2005
ActualRevenue
Operating Income
Recurring Income
Net Profit※
245,874
11,83012,256
7,305

Plan
333,400
12,40013,3007,400（MM JPY, %)2006
vs. Last Year
Difference%
87,526
35.6
570
4.8
1,044
8.5
95
1.3

※2005 actual figure is the actual consolidated figure of existing company group (former CCWJ).

■Reference ：In the case of adding 2005 actual figure of ex-Kinki Group（West Group full year＋ex-Kinki Group 1H Consolidated Actual）（MM JPY、%）2005
ActualRevenue
Operating Income
Recurring Income
Net Profit※
417,444
17,812
18,065
10,554

2006
Plan
413,800
13,10013,800
6,400

vs. LY
Difference-3,644-4,712-4,265-4,154※The above figurel is adjusted based on a total of ex-CCWJ and ex- Kinki CCBC, eliminating inter-company transaction.

%
-0.9
-26.5
-23.6
-39.4
10

Ⅱ. Group Restructuring

11Group’s Growth Strategy

Return to
Stakeholders

Maximize
Value

Leadership in
the KO system
in JapanMarket Execution

Expansion Efficiency

Group Restructuring

Strategic Partnership with TCCC/CCJC
12Group Restructuring

Restructure group companies in order to achieve
further growth of CCW group.

Consolidation of Logistics Companies
Capital Reduction of
Kinki, Mikasa, and Kansai Beverage Services
Corporate Name Change for Daisen Beverages

13Group Restructuring Plan
Group Restructuring Plan
CCWJ
CCWJ
Nishi
Nishi Nihon
Nihon Beverage
Beverage
ＣＣＷＪ
ＣＣＷＪ Products
Products
ＣＣＷＪ
ＣＣＷＪ Vending
Vending
ＣＣＷＪ
ＣＣＷＪ Customer
Customer Service
Service
ＣＣＷＪ
ＣＣＷＪ Logistics
Logistics

Change capital structure and reorganize
by function
Sales
Sales
(Commercial(Commercial Distribution)
Distribution)

Vending
Vending Operation
Operation

Nichibei
NichibeiTakamasamune
Takamasamune
West
West Japan
Japan Service
ServiceKansaiKansai Beverage
Beverage Service
Service
Nesco
Nesco

CCWH
Kinki
Kinki

Kinki
-Cola Products
Kinki Coca
Coca-Cola
Products
KansaiKansai Logistics
Logistics
CadiacCadiacLex
Lex Estate
EstateSeiko
Seiko Corporation
Corporation JapanJapan
CC andand CCAkiyoshiAkiyoshi systems
systems

MikasaMikasaMikasaMikasa Beverage
Beverage Service
Service
MikasaMikasa Logistics
Logistics
MikasaMikasa Service
Service

DiasenDiasen Beverage
Beverage

Logistics
Logistics Operation
Operation
CCWH

Vending
Vending Service
Service
Manufacturing
Manufacturing

Consolidation of
3 Logistics
Companies

Beverage
Beverage Operator
Operator
Operation
Operation

Non-Coca-Cola
Non-Coca-ColaBusiness
Business
14

Consolidation of Logistics Companies¾3 logistics companies will be consolidated to achieve further growth of the group.

＜Objective of the Consolidation＞① Achieve economies of scale through expansion and enhancequality through efficient operations② Share best practice and know-how of low-cost operations③ Expedite decision-making related to logistics and strengthen
execution capabilities④ Consolidate back-office operation⑤ Capture opportunities outside CCW group such as CCNBC＜Corporate Profile after Consolidation＞
CCWJ
CCWJ Logistics
Logistics
KansaiKansai Logistics
Logistics
MikasaMikasa Logistics
Logistics
Date of Consolidation:
January 1, 2007 (plan)

Name

Coca-Cola West Logistics, Co., Ltd.

Business

Carrier business

Address

Hiroshima City

Representative (Plan)

Katsuyoshi Kawabe

Capital

JPY70 MM

Total Assets

JPY3,362MM

Fiscal year end

DecemberNote: Total assets are the sum of each company’s total assets as of December 31, 2005.

15

Synergy from Consolidation of Logistics Companies＜Synergy of Consolidation＞
 Expand operations utilizing our own vehicle¾ Place our own vehicle in Kansai area：
Secure 35% of our own vehicle operating rate
¾ Assess opportunities of acquisition of other logistics companies
 Secure backload taking advantage of regional network across west Japan
 Promote collection and recycling business Consolidate back-office function《Reference》 Projected Income Statement Highlight
2006(JPY in Million）

2008

2007

2009

Revenue

16,63016,77017,65018,360Operating
Income

490

590

710

920

Operating
Income Ratio

3.0％

3.5％

4.0％

5.0％

16

Reduction of Capital: Kinki, Mikasa, and Kansai Beverage¾Reduce capital of Kinki, Mikasa, and Kansai Beverages to JPY100 MM withoutcompensation＜Objective of Capital Reduction＞
・Shift to small corporation category under the corporation act andenhance flexibility of business management as a functional company within
the CCW group such as in designing a decision-making body

9Kinki Coca-Cola Bottling: JPY10.9 billion ⇒ JPY100 MM
9Mikasa Coca-Cola Bottling JPY4.1 billion ⇒JPY100 MM
9Kansai Beverage: JPY1.4 billion⇒ JPY100 MM

Effective Date: Mid December 2006 (plan)《Reference》 Capital of Coca-Cola West Japan : JPY100MM

17

Renaming Daisen Beverages＜Reason for the Change of Corporate Name＞
・Daisen beverages became a wholly-owned subsidiary of CCWH in August 2006.
By adding “Coca-Cola West” in the company name, it is clarified that Daisen
Beverages is the group company of CCWH and the sense of unity within thegroup will be further nurtured.

DaisenDaisen Beverages
Beverages

New；
New Name
Name；
Coca-Cola West Daisen
Coca-Cola
Daisen Products
Products
Effective Date of Rename: December 31, 2006 (plan)18

Ⅲ. Marketing19

Review of 3Q

20

Review of 3Q － Key Brand Activities (1)2H KeyKey Brand
Brand Activities
Activities
2H

Actual Sales Volume By Brand＜Maximizing the Summer Demand＞■Coca-Cola⇒Expansion of Diet Coke
⇒Deploying the value-added can■Aquarius⇒Price, Heat-stroke countermeasures⇒Deploying the promotion of the value-added can,etc.
⇒Expansion of Active Diet and Freestyle

Change

Coke

4,661

-721

-13.4

-664

-12.5

Georgia
Sokenbicha

9,982

-596

-5.6

-338

-3.3

4,951

74

+1.5

40

+0.8

Aquarius

8,327

218

+2.7

320

+4.0

Hajime

2,543

-891

-26.0

-737

-22.5

Morino Mizu/Minaqua

1,891

-229

-10.8

-151

-7.4

Others21,824

862

+4.1

-728

-3.2

54,178-1,284-2.3-2,257

-4.0

Total

⇒Brand re-vitalization through introduction ofseasonal and sub-flavors

Rate

ChangeRate

Georgia Sales Growth by Month (v.s. LY)＜Re-vitalizing Georgia＞＜Re-vitalizing Hajime＞

v.s. Ly

ActualSales（Unit：000’ uc、％）■Non-Sugar Tea⇒Karada Meguricha ： Maintain coverage, start of anew promotion⇒Maximum implementation of New / renewal
products and increasing retail exposure.
⇒Maximum implementation of the new campaign
with displays at the counterQ3 2006
v.s. Plan

8%
6%
4%
2%
0%
△2%
△4%
△6%
△8%
△10%
△12%
Jul

2005

Ａｕｇ Ｓｅｐｔ Ｏｃｔ

Ｎｏｖ

Ｄｅｃ

Ｊａｎ

2006

Ｆｅｂ

Ｍａｒ

Ａｐｒ

Ｍａｙ

Ｊｕｎ

Ｊｕｌ

Ａｕｇ Ｓｅｐｔ Ｏｃｔ※10/19 Current

21

Review of 3Q ｰ Key Brand Activities（2）2H KeyKeyBrand
BrandActivities
Activities
2H＜Maximizing the platform through new products＞⇒Further nurturing new products in 1H

Sales Performance of Key New Products

7.2MM BAPC
Composition Rate16.9％ （-5.9% vs. LY)

Launched⇒Introduction of new added-value products⇒Introduction of seasonal flavors for key brands

Aquarius Freestyle

0.99 MM uc (in Apr)

Georgia Deepresso

0.73 MM uc (in Jul)

Karada Meguricha

0.61 MM uc (in May)

Georgia Five Blend

0.28 MM uc (in Aug)

Coca-Cola Citra

0.22 MM uc (in May)

Hajime Jikkuri Umami

0.12 MM uc (in Sep)

Hajime Sumi Gyokuro

0.09 MM uc (in Jul)DASANI Sparkling

0.06 MM uc (in Aug)& others
22

Review of 3Q ｰ Key Channel Activities（1）Actual Sales Volume By Channel

2H KeyKey Channel
Channel Activities
Activities
2H

Q3 2006■Vending⇒Expand # of VM in the market⇒Deployment of VPM※ improvements⇒Engage in implementing tests for chilled products※VPM…

（Volume per machine)■Chain Store⇒Implement pricing strategies in large PET with afocus on Hajime, Mineral Water, and Aquarius⇒Strengthening category management.

（000’ uc, %）VendingChangev.s. Ly

Rate

ChangeRate

16,459

-142

-0.9

-307

-1.8

Chain Store

12,983

-347

-2.6

97

+0.8

CVS

5,365

-164

-3.0

-248

-4.4

Retail

7,788

-75

-0.9

-1,067-12.1

Food Service

5,332

-172

-3.1

-316

-5.6

Distributor

493

-31

-6.0

-45

-8.4

Others

5,758

-353

-5.8

-371

-6.1

54,178-1,284-2.3-2,257

-4.0

Total

Number of Vending Machines in the Market(excl. cup vending machines)■On-Premise※⇒Market cultivation with a focus in the new quality
channel⇒Strengthening sales of existing key accounts

245,000
240,000（# of Machines）※On-premise…Refers to the syrup and package sales business inthe “eating out” market

v.s. Plan

ActualSales

3,599 Less
vs. Plan

235,000
230,000
234,341

237,774

225,000
220,0002005
End of Dec

2006
End of Sept Actual

23Review of 3Q ｰ Key Channel Activities（2）2LPET “Volume Share” Trend By Maker in SM
40

CCWH
B
D

CCWH

35

A
C

30

Jan Sept
30.6％

25
20

Ｄ

C

Ｂ

Ａ

15
10
5
0
1/2
40
35
30
25
20
15
10
5
0

1/16 1/30 2/13 2/27 3/13
3/27“Value
4/10 Share”
4/24 5/8Trend
5/22By6/5
6/19in SM
7/3 7/17 7/31 8/14 8/28 9/11 9/25
2LPET
Maker
CCWH
B
D

CCWH

Ａ
Ｂ

1/2

1/16

1/30 2/13 2/27 3/13

C

3/27 4/10 4/24

A
C

Jan Sept
31.8％

Ｄ

5/8

5/22

6/5

6/19

7/3

7/17 7/31 8/14 8/28

9/11 9/25

24

General Overview of 3Q
Sales⇒Due to west Japan’s favorable weather conditions in August, the sales were positive. However,Kyushu’s weather in September was not favorable thus affecting sales. As a result, 3Q results v.s. planand v.s. Ly were -2.3% and -4.0% respectively.

Brand⇒Positive momentum was attributed to the success of Georgia’s core product renewal⇒Favorable recovery is attributed to Sokenbicha’s restage effects and implementation of the fit-bottle.
⇒Aquarius is establishing a concrete position by satisfying the summer demand.
⇒Coca-Cola and Hajime were down v.s. plan and v.s. Ly.

Channel⇒In the Vending area, the number of vending machines has increased, but it hasn’t achieved the target.
⇒Chain store volume was down v.s. plan but up v.s. Ly., mainly due to the large PET pricing strategy inthe chain store during the peak season.

Activity Points for Q4（１）Brand Strategy⇒Recapturing and strengthening
Key Brands（２）Package Strategy⇒Increasing the selection of warm
products and implementing
aggressive market development（３）Channel Strategy⇒Investment focus on vending andchain store.

25

Q4 Activity Plan

26

Key Activities in Q4 － Brand Strategy
Activity Points

Sales Plan By Brand¾Recapturing and strengthening key
brands（000' uc、％）

2005
Q4
Actuals

Q4 2006 Plan
Plan

v.s. Ly
ChangeRate■Georgia⇒Recapturing and strengthening during peak seasons

Coke

3,132

3,337

205

+6.6

Georgia
Sokenbicha

11,906

12,628

722

+6.1

2,931

3,211

280

+9.6

Aquarius

3,053

3,647

594

+19.4

■Coca-Cola

Hajime

2,221

2,362

141

+6.4

Morino Mizu
Others

1,291

1,392

101

+7.8

⇒Continued expansion of Diet Coke
⇒Expanding sales by creating a Christmas theme at the outlets.

18,966

18,774-192-1.0■Aquarius

Total

43,49945,351

1,852

+4.3

⇒Continued expansion of favorable sales by introducing a sub
flavor, “Vitamin Guard”⇒Implementation in testing hot drinks※The 2005 actuals above are a total of CCWJ, Kinki and
Mikasa’s actual results★Details on the next page■Non-Sugar Tea⇒Continued coverage of Karada Meguricha as well as
implementing new promotions⇒Implementation of hot drinks

27

Key Activities in Q4 － Georgia Strengthening Implementation■Georgia ： Recapturing and strengthening during peak seasons¾Expansion of retail exposure and maximum implementation of new / renewal
products⇒Strengthened implementation of the new Georgia Emblem Black（10/2～）¾Implementation of the Autumn Promotion⇒Georgia G１Challenge （8/28～）¾Introduce half case, multi-pack sales (Supermarket)¾Introduce hot products

Oct 2～

Rich Café
Au lait

EmblemBlack

Mild Café Au
Lait

28

Key Activities in Q4 － Package Strategy■Implement hot products with a focus on Georgia PET⇒Vending ： Increase in VPM through a smooth transition to hot
products as well as optimization of VM column.
※ＶＰＭ…（Ｖｏｌｕｍｅ Ｐｅｒ Ｍａｃｈｉｎｅ）⇒OTC： Creation of the “Winter Sales Area” through a focus on
maximizing Georgia and Non-sugar tea availabilities.

Hot PET Products

29Key Activities in Q4－ Channel Strategy
Activity Points

Sales Plan By Channel（000' uc, %）2005

Q4 2006 Plan

Q4

ActualsPlanv.s. Ly
ChangeRate

Vending

14,20515,039834+5.9

Chain Store

7,639

8,285

647

+8.5

CVS

4,531

4,898

368

+8.1

Retail

6,613

6,542

-72

-1.1

Food Service

4,619

4,835

216

+4.7

Distributor

418

398

-20

-4.8

Others

5,475

5,354

-121

-2.2

43,49945,351

1,852

+4.3

Total

※The 2005 actuals above are a total of CCWJ, Kinki and
Mikasa’s actual results■Vending⇒Optimizing the vending machine column…Smooth transition from autumn to winter products…Deploying hot products by location⇒Increasing the number of vending machines…Strengthen development of vending location
limit withdrawal⇒Continued implementation in testing chilled products■Supermarket⇒Maximizing CSD sales in the winter through winter CSD
Large PET promotions⇒Sales recovery of mineral water⇒Continued strengthening of category management■On-Premise⇒Investigating in capturing the market throughestablishing a new business model.

30

Q4 Sales Volume Achievement Scenario（000 BAPC）■Convenience■Convenience Store
Store■Vending■Vending
IncreaseIncrease thethe number
number ofof vending
vending machines
machinesinthemarketin the market-- Net
Net increase
increase inin salessales ：： 300,000
300,000 BAPC
BAPC

New
New Product：
Product： 368,000
368,000 BAPCBAPCExpandExpand VPM
VPM ：： 534,000
534,000 BAPCBAPC※ＶＰＭ…Ｖｏｌｕｍｅ Ｐｅｒ Ｍａｃｈｉｎｅ

Chain Store+647

Convenience
Store
+368

Others+483

Channel Trend etc.

－480

Sales
Volume43,499

Sales
Volume45,351

Vending+834■Chain■Chain StoreStore
Strengthen
Strengthen Large
Large PET/500
PET/500 PET：
PET：
480,000
480,000 BAPCBAPC
9Large9Large PET
PET Pricing
Pricing Strategy
Strategy
9Carbonated
9Carbonated Beverages
Beverages Promotion
Promotion
9Recover9Recover Water
Water Selling
Selling SpaceSpace Strengthen
Strengthen Georgia
Georgia 167,000
167,000 BAPC
BAPC2005 Q4 Actual2006 Q4 Plan
31

［Reference］

32

OTC Market Share（Excl. VM） － CCWH Area
Source：Intage※The numbers outside the graphare changes v.s. ly（%, Point）

100％

OthersD
C
B
A
Coca-Cola

41.8

43.1

44.0

5.8
5.7
8.8

－0.1
＋0.7
－0.5

6.0
5.7
8.9

－0.3
＋0.8
－0.4

5.4
5.6
8.2

－0.1
＋0.3
－0.5

14.7

－1.1

14.5

－0.8

15.1

＋0.2

21.8

－1.1

21.7

－1.1

23.2

Q1

－0.9

Q2

Q3

33

By Brand/By Channel

Volume/Revenues/Gross Profits
2005 3Q

100％

2006 3Q

OthersHajime/ Marocha

Brand

Sokenbicha

44％
6％
9％

Aquarius

34％

34％

7％
10％

7％
9％
10％

12％

14％
Georgia

26％

28％

9％

12％

12％

VolumeRevenues

Gross Profit

18％

Coca-Cola2005 3Q

100％
OthersFood Service

12％
10％
16％

Channel

Retail10％

Convenience Store

23％

14％
4％
16％
10％

Vending

30％

Volume41％

Revenues

5％
9％

7％
5％
15％
7％
10％

31％

5％
10％

6％
10％

13％

15％

12％

26％

29％

9％

11％

12％

VolumeRevenues

Gross Profit

18％

15％

Chain Store

44％

35％

2006 3Q
12％
10％
14％
10％
24％

12％
4％
17％
10％

5％

3％

15％
8％
10％

17％
58％

56％

44％
30％

Gross Profit

VolumeRevenues

Gross Profit

34Performance Trend（Consolidated）（MM JPY）
1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Revenues

113,490

115,408

117,991

164,731207,827

226,111247,737

240,825

253,248245,874

333,400

Operating Profits

10,481

10,737

12,533

15,16017,44916,634

16,704

19,63816,86011,83012,400Recurring Profits

11,273

11,054

12,51015,88918,516

16,021

17,00519,895

17,065

12,256

13,300Net Profits

5,721

5,428

5,872

6,823

5,700

1,420

7,086

9,380

8,564

7,305

7,400

2006 Plan

25,000400,000

7/1/06: Integration
with Kinki CCBC

350,000

7/1/99: Mergedwith Sanyo CCBC

300,000

20,000250,000
200,000
150,000

15,000Operating Income
10,000

Revenue

100,000
5,000
50,000
0

0

96

97

98

99

00

01

02

03

04

05

06 Plan（MM JPY）（MM JPY）

35

Financial Data
＜Operating Profit／OP Ratio＞＜Net Assets / Equity Ratio＞
10.0

25,000OP%
20,000

7.4

OP

8.2

6.7

6.7

15,00010,0008.0

16,704

19,638

83.2

80.7

6.0
160,000

81.0

82.0

80.6

81.0

173,608

77.5
164,658

155,000

11,830

2.0

5,000

80.0

Net Asset

4.0

16,86084.0
83.0

Equity Ratio

170,000

165,000

4.8
16,634

175,000

165,45479.0
78.0

167,03677.0

157,12976.0

150,000

75.0

0.0

0
（MM円）

2001

2002

2003

2004

2005

（％）

（MM JPY）

2003

2004

2005

（％）

4.6

4.2

3.5

150.0
133.6
PER

5.2

5.0
4.4

2002

150.0

5.7

4.0

74.0
2001

＜EPS／PER＞＜ROA／ROE＞
6.0

145,000

4.3

100.0

116.25108.80
93.42

85.49

100.0

3.5

3.0
2.0
1.0

ROE

50.0

17.62

ROA

0.9
0.7
2001

20.8

18.1

24.2

0.0

0.0

（％）

EPS

2002

2003

2004

2005

（JPY）

29.5

50.0

0.0
2001

2002

2003

2004

2005 （倍）36Coca-Cola System in Japan
Investment（１００％）

The
Coca-Cola
Company（ TCCC ）②

Coca-ColaTokyo
R&D Center（ CCTR&D ）④

Coca-Cola
National
Beverage( CCNBC ）⑥
Coca-Cola
Beverage
Service（ CCBSC )⑦（１００％）

Coca-ColaJapan（ CCJC ）③

Coca-Cola
National
Sales（ CCNSC ）⑧
FV
Corporation（ FVC ）⑤
Coca-ColaWest
Holiding（ CCWH ） ①

Coca-Cola
Central Japan（ CCCJ )Coca-Cola
Bottling
10（ CCBC ）⑨
Joint Venture Company by TCCC, CCJC
& Coca-Cola Bottling Co※CCNBC、 CCNSC、FVC areequity method investees of CCWH.

37

Coca-Cola Related Companies and Their Roles① Coca-Cola West Holdings Co,, Ltd. (CCWH)⑥ Coca-Cola National Beverages Co., Ltd. (CCNBC)In July, 2006, Coca-Cola West Japan Company, Limited
and Kinki Coca-Cola Bottling Company, Limited merged the
management of both companies by establishing a joint
holding company CCWH.

Jointly established in April 2003 by TCCC and CCBCs for the
purpose of creating an optimal nationwide supply chain. It
started operation in October 2003. CCNBC procures raw
materials, coordinates manufacturing and supply/demandplans on a nationwide basis, and supply products to thebottlers.

② The Coca-Cola Company (TCCC)
Established 1919 in Atlanta, Georgia. Carries the rights togrant a license to manufacture and sell Coca-Colaproducts to the bottlers. TCCC (or its subsidiary) makes
franchise agreements with the bottlers.
③ Coca-Cola (Japan) Co., Ltd. (CCJC)
Established 1957 in Tokyo, as “Nihon Inryo Kogyo K.K.,” awholly-owned subsidiary of The Coca-Cola Company. The
company name was changed in 1958 to Coca-Cola (Japan)
Company, Limited. CCJC is responsible for marketing
planning as well as manufacturing and distribution ofconcentrate in Japan.
④ Coca-Cola Tokyo Research & Development Co., Ltd.
(CCTR&D)
Established in January 1993 as a wholly-owned subsidiaryof The Coca-Cola Company. Since January 1995, carries
out product development and technical support to respondto the needs of the Asian region.

⑦ Coca-Cola Beverage Services Co., Ltd (CCBSC)
Jointly established in June 1999 by TCCC and CCBCs andstarted operation in September 1999. Transferred
procurement operations to CCNBC as of October 2003,
CCBSC currently carries out activities to reform Japan’s
Coca-Cola information system.
⑧ Coca-Cola National Sales Co., Ltd. (CCNSC)
Jointly established in October 1995 by CCBCs and CCJC.
Carries out sales activities for national chain customers.
⑨ FV Corporation (FVC)
Jointly established in May 2001 by CCBCs and CCJC. FVC
carries out sales negotiations with national chain vending
operators, and deals with non-KO products as well as KO
products.

⑤ Coca-Cola bottlers (CCBCs)
There are 12 bottlers in Japan, which are responsible forselling Coca-Cola products in the respective territories.

38

Our Group Companies - Principal Business
Our Group Compa ni es（１）Coca-Cola West Japan (CCWJ)（２）Kinki Coca-Cola Bottling

Pri nci pa l B us i nes s
Beverage sales（３）Mikasa Coca-Cola Bottling（４）CCWJ Products

Beverage sales
Beverage sales
Beverage production（５）Kinki Coca-Cola Products

Beverage production（６）Daisen Beverages（７）CCWJ Logistics

Beverage production (mineral water)
Freight transport-operations（８）Kansai Logistics

Freight transport-operations（９）Mikasa Logistics

Freight transport-operations（10）CCWJ Vending（11）Nishinihon Beverage

Vending machine operations (Coca-Cola products)
Vending machine sales and servicing（12）Kansai Beverage Service

Vending machine sales and servicing（13）Mikasa Beverage Service（14）Nesco

Vending machine sales and servicing
Vending machine operations（15）KADIAC

Vending machine operations (in the Kansai Air Port)（16）CCWJ Customer Service（17）Mikasa Service

Vending machine-related businesses
Vending machine-related businesses（18）Nichibei

Manufacture of processed foods（19）Takamasamune

Production and sales of alcoholic beverages（20）West Japan Service（21）Rex Estate

Insurance, leasing, and business machine sales
Real estate business（22）Seiko Corporate Japan

Maintenance and repair of motor vehicle（23）C&C（24）Akiyoshi Systems

Sales and manufacturing of food, Chain restaurant business
Chain restaurant business

39

Glossary
Term
Chann el・Vending･Chain store･Convenience Store･Retail･Food Service
・On-Premise･Distributor
Ve nding
・Regular vending machine･Full service vending machine・Out-market vending machine
・In-market vending machine
・VPM
Chain Store･National chain･Regional chain･Local chain
Other･Sales mix

Description
Retail sale business to distribute products through vending machines to consumers
Wholesale business for supermarket chains
Wholesale business for convenience store chains
Wholesale business for grocery stores, liquor shops, and other over-the-counter outlets
Syrup sale business in the “eating out” market
Syrup and package sales business in the “eating out” market
Middleman who work for Coca-Cola to handle our products in remote areas and islands
A vending machine offered free of charge to a customer who supervises its operation anduses it to sell products purchased from us.
A vending machine installed and managed directly by us (product supply, collection ofproceeds etc.). Fees are paid to the location proprietors.
An outdoor machine whose users are relatively unspecific
An indoor machine whose users are relatively specific
Sales volume per vending machine
National chain supermarket that CCNSC are responsible for negotiating
Chain supermarket that owns its stores in the two or more bottlers’ territories
Chain supermarket that owns its stores in the single bottler’s territory
Composite of products by brand, channel, package, etc. The difference between budget andactual sales or cost of sales might be affected by a change in product sales mix as well as achange in unit price40

Forward-Looking Statement

The plans, performance forecasts, and strategies appearing
in this material are based on the judgment of the managementin view of data obtained as of the date this material was released.
Please note that these forecasts may differ materially from actual
performance due to risks and uncertain factors such as thoselisted below.
- Intensification of market price competition- Change in economic trends affecting business climate- Major fluctuations in capital markets- Uncertain factors other than those above

41