Coca-Cola Bottlers Japan Holdings Inc.
Q3 2018 Earnings Presentation
November 12, 2018

Tamio Yoshimatsu, President
Vikas Tiku, Vice President & Chief Financial Officer(Posted to CCBJH website on November 9, 2018)

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 Bottlers Japan Holdings Inc. (CCBJH or Company) 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”.
• 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 of assets, 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 oursecurities.
CCBJH 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 Holdings Inc. (CCBJH)
Third quarter year-to-date 2018 earnings presentation

Q3 YTD 2018 business summary & financial results
Full-year 2018 outlook
Mid- to long-term direction
Q&A3

Q3 YTD 2018business summary &financial results

Q3 Year-to-date highlights• YTD volume down 2%, driven by loss of product supply capacity due to the flooding disasterand pressure from stronger-than-anticipated demand for aseptic products. YTD value share
was even, with a decline in volume share.
• YTD operating income down 20%, due to 3% revenue decline, higher logistics expenses
including the impact of flooding, negative channel/package mix and Q1 goodwill amortization.
Posted YTD 7.9 billion yen extraordinary loss due to disaster.
• Announced new 25 billion yen share-buyback program in addition to 55.9 billion yen buyback
in April, in line with our Growth Roadmap framework for value creation.
• Progressively expanding supply capacity with seven production lines by Spring 2020, including
announced recovery plan for damaged Hongo plant.
• Making necessary investments to prioritize recovery from the flooding, improve productsupply capacity and enable continued synergy generation to build foundation for growth in2020 and beyond.

5Strategic direction unchanged; Revisions to 2018 in a tough year
StatusGrowth Roadmap

2018 Revised Targets

Revenue -3%

Revenue growth

Volume growth, RGM
initiatives, revenue-richinnovation

Volume -2%

Value share

Improve wholesale price/mix
with packaging, innovation,
focus on value

VALUE ahead ofvolume

Net synergies

Steady net synergy capture tomeet 2020 target of 25 billion
yen

8 billion yen

Operating income
and OI margin

Growth mindset, synergy
capture, reinvest in business27 billion yen OI
OI margin 2.8%

Shareholderreturns

Strong cash flow fromoperations driving
shareholder returns

DPS 50 yen, +6 yen
Share buybacks*DPS: Dividend per Share

6

Hongo factory flooding: Recovery plan in place
Announced plan to build new plant,
starting operations in Spring 2020
• New Mihara Plant*, to be built on former Sharp
Corporation site near current Hongo location• Plan overview• Location: Mihara City, Hiroshima Prefecture(4km south of current Hongo plant)• Facilities: Initially two manufacturing lines• Current Hongo plant site to be used as logistics center

Hongo plant before the flooding

Former Sharp Corp. site in Mihara

Current Situation(As of November 2018)
Manufacturing

New plant construction project teamestablished. Continue demolition and cleaningof damaged facilities at HongoLogistics Center

Hongo now serving as logistics anddistribution hub in the Chugoku area

Product Supply

Manage our capacity with two new lines(Kyoto & Kumamoto) in spring 2019 and added
shifts in other plants. Supply may remain tightin 2019.

Distribution

Higher transportation costs expected tocontinue in 2019 due to longer transportation
distances, as we continue to source productfrom alternate supply points nationwide.

Promotional
Activity

Expect customers to resume “chirashi”
promotions in November.

*Mihara Plant: tentative name7

Q3 YTD channel and category volume performance
Volume down 2%, driven by loss of manufacturing capacity and alternate product supply initiatives due to the disaster as well as supply
constraints driven by surge demand of aseptic products
Revenue per case improved in SM, D&D mainly driven by decrease of large size package volume. Customers suspended “chirashi”
promotions due to supply constraints
By channel, SM, D&D growth slowed due to supply constraints in Q3. CVS grew across major categories except water; strong growth in PET
coffee. Vending impacted by channel shift driven by consumer behavior as well as supply constraints as we prioritized customer relationships
By category, sparkling grew led by new product launches. Water volume decreased driven by cycling of iLohas flavors and large-sized package
format, while original iLohas grew. Coffee volume decline driven by can and bottle can package shift, partially offset by PET bottled coffee
Georgia Japan Craftsman, which has not yet been fully deployed across all channels
By Channel

R&F
22%

VM
24%

By Category

Others
1%SM
23%

D&D
14%
CVS
16%vs PY

VolumeRevenue per
Case (Yen)Supermarket (SM)

-1%

+14

Drug &Discounter
(D&D)

+2%

+19

Convenience Store(CVS)

+1%

-5

Vending (VM)

-8%

-4

Retail & Food
(R&F)

-2%-8

Juice
7%vs PY

Others8%
Sparkling27%

Coffee19%
Non-sugartea
Water
20%
9% Sports
10%

VolumeSparkling+3%

Non-sugar tea

EvenSports

-4％

Water

-11%

Coffee-5%

Juice-3%Note: Differences in the pro-forma number provided in past presentations may be expected as a result of review and standardization of integration estimates.
Sales volume doesn’t include alcohol8

Q3 2018 OTC market share and retail price trends
OTC Market ShareOTC Retail Price
Unit: JPY per bottle

Vs. MarketAverage

Market Share (vs. PY, PP)

Value

VolumeQ3-0.4-1.6

Small PET

+2.1-0.9

Q3 YTD+0.0-0.5

Large PET (2L PET)

+19.5

+1.5

Value

OTC Retail Price (Q3 YTD)

Vs. PY

VolumeContinued higher retail price than market averagein both small and large PET
Q4 2017valueQ12018decline.
Q2 2018
Q3 2018
Minimizedshare
Q3 market
share
impacted by flooding and supply constraints

Seeing improvement of large PET price vs. market
as well as PY, driven by customer suspension of“chirashi” promotions and SKU rationalization

Q3 market share grew in sparkling and coffee
Source: Intage SRI

9

Always staying focused on strong marketplace execution
Continue vending transformation
Marketing/Campaign
Coke ON Pay - Cashless function added• Enhance and expand Coke ON app

Coca-Cola Winter Campaign
Activating Coca-Cola ribbon bottles• Smartphone cashless purchasing withmajor credit card introduced in October• 20K Coke ON Pay-enabled vending
machines by the end of 2018, and targetof 300K nationwide by the end of 2019

Coke mini
Exploring white space in vending
New opportunities in small offices by placing
small branded coolers using LINE Pay &Rakuten Pay smartphone cashless transactions

Other activations/campaigns
Active execution of promotions leveraging weband digital

Expand assortment recommendation system
Expand AI-driven product assortment in vending, with positive results inTokyo-area pilot. Now also scaling up in Osaka and Fukuoka

10Q3 YTD 2018 results vs. pro forma Q3 YTD 2017
• Revenue down 3% YoY due to loss of production capacity, supply constraints andcontinued weakness of profitable vending channel• OI impacted by decline of revenue, negative channel/package mix, higher commodityand distribution costs, and goodwill from 2017 integration
Q3 YTD 2018

Q3 YTD 2017(pro forma)

YoYRevenue

741,254764,029-3%

Beverage business revenue

720,100

741,777

-3%

395

403

-2%

Operating Income (OI)

32,016

40,131-20%Beverage business OI

29,44837,866-22%

Net Income

13,93624,389-43%

EBITDA

68,81275,689-9%

Beverage business sales volume (M cases)

Note: Differences in the pro-forma number provided in past presentations may be expected as a result of review and standardization of integration estimates.
Unit: M JPY
Sales volume doesn’t include alcohol
Net Income: Net income attributable to owners of parent.

11

Q3 YTD 2018 operating income drivers
40.1

6.6 billion yen net synergies
-1.2
+0.3

-14.5
Decreased inQ3 by volume
decrease andpull-back ofpromotions

Q3 YTD2017
Pro-forma
CCBJH OI

• Volume
decreased 2%(Q3 -5%) due
to loss ofmanufacturing
capacity,
supplyconstraints• Profitablevending
volume decline-1.9

VolumePrice & Mix

DMEHigher PET,
cardboard,aluminum,etc. costs-3.1

Manufacturing
efficiencies,
procurement
synergies, etc..

+6.1

Commodity, Manufacturing
etc.

+7.6

• Decrease oflabor, facility, IT,etc.
• Partially offset
by major
Increase in Q3
logistics expense

OtherOpex

Lower
spending byreviewing
initiatives,
cost
reductions,etc.

Integration
expenses

33.4Q2YTD
2018
YTD
OIQ3before
2018
goodwill
OI before
goodwill

Healthcare& Skincare
Business OI

-1.4

32.0

Goodwill,etc.

Q3 YTD2018
CCBJH OI

Unit: B JPY, rounded off less than unit

12

Full-year 2018 outlook

Summary of full-year 2018 earnings forecast(Announced on October 10, 2018)2018 Forecast

Revenue2017 Actual(Pro-forma)

Variance

965,300

991,563-3%-2%-1%-100BPS

Operating Income

27,00042,104-36%

EBITDA

76,60089,759-15%

Net Income

9,000

25,836-65%

Beverage Business Sales Volume (vs. PY)

Beverage Business

2018Forecast2017 Actual(Pro-forma)

Variance

Health Care & Skin
Care Business

2018Forecast

2017 Actual(Pro-forma)

Variance

Revenue

937,600

961,825-3%

Revenue

27,70029,737-7%

Operating Income

23,30038,948-40%

Operating Income

3,700

3,156

+17%

Unit: Million JPY

Net Income: Net income attributable to owners of parent

14

2018 Drivers of revised operating income forecast
42.1-16.8•Volume decline
vs. initial plan
•Channel/package mix
deterioration

2017Pro-forma
CCBJH OI

VolumePrice & Mix

Decreased vs.
initial plan led
by volume
decrease,
revisedpromotional
activity, etc.

-1.6DME

Increasing
commodity
inflation driven
by PET,
aluminum andcardboard

Lower than
anticipated,
impacted bysupplyconstraints,
heavy rains,etc.

-4.1

+5.1

Commodity
pressure

Manufacturing

Capex &Depreciation

Highertransportation
expensespartially offset
by decline oflabor, pension,etc.

Other
Opex

Q3 YTD
Actual

FY 2018
Forecast

Capex

25.8

51.3

Depreciation*

31.5

42.2

*Depreciation doesn’t include goodwill, etc.

-2.4
+5.6

Unit: B
JPY

Lower thaninitial plan
after
reviewing
initiatives,
cost
reductions,etc.

Integration
expenses

8 billion yen net synergies

Q1 only

-1.4

+0.5

27.0

Goodwill,etc.

Healthcare &Skincare
Business OI

2018
CCBJH
Revised OIForecast15

ERP system rolling out across the company

Will consolidate, eliminate, integrate multiple legacy systems• Not just an IT system, but an important platform to efficiently and effectively manage our business• Global “template” updated for Japan Coke system needs. Initial rollout in Coca-Cola East Japan
Data
Standards

Enables data accuracy and consistency bycombining data in one repository and improvetransparency and insightStandard
Processes;
One ERP System

Provides a single application with standardized, shared,
enhanced and controlled process

Flexible
Organization

Standardizes interactivity between functions
and with business partners

Streamlines the company’s applications portfolio
and infrastructure
Enables organizational flexibility, integrated businessservices and national supply chain
16

rollout is on track with multiple successful go-lives
Back-OfficeFinance, Procurement, HR/Payroll,
Production, Warehousing &Equipment

Nov 2018 – All CCBJI territories

Front-Office
Sales & Distribution
Nov 2017 – Tokyo
Apr 2018 – Sendai
Oct 2018 – Tone & Mikuni
Mar 2019 – Central Japan2 H 2019 – Coca-Cola West17

Financial framework update

Driving shareholder returns with a focus on ROE
Share Repurchase
Announced up to 25 billion yen/10.8M shares buyback program
November 2018
Completed 55.9 billion yen buyback in April 2018

Prioritize stable and growing dividend2018 dividend forecast up 6 yen/share from 2017
Estimated dividend payout: 107%

Shareholder benefits program that encourages long-term holding

Annual Dividend

50yen/share
InterimYear-end

2525yen/shareyen/share

Shareholders can exchange shareholder benefit points forCoca-Cola products, CCBJI goods, donate to charity, etc.
18Reminder: We are adopting IFRS reporting from Q4 2018
Major differences vs. JGAAPNo amortization for goodwill

Differences in accounting treatment
for depreciation expenses

Differences in pension accounting
Re-class some sales promotion & general
expenses between SG&A and revenue
Re-class non-operating income/expenses& extraordinary income/loss above OI

Introducing “Business Income”
Introducing Business Income to
be used as businessperformance indicator to adjust
for non-recurring items
Business Income definition
Revenue – (COGS + SG&A) + Other
income/expenses (recurring)

We will provide business income
forecast as well as revenue,
operating income and net
income in IFRS
19

Estimated impact of IFRS adoption on full-year 2018 forecast

Unit: B JPY

Summary of JGAAP and IFRS P/L2018 Forecast (JGAAP)2018 Forecast (IFRS)

Major drivers of variance (Estimated amount of impact)

Revenue

965.3

Revenue

925.1

Some sales promotion and general expenses are deducted from revenue

COGS

471.5

COGS

474.1

COGS increases due to differences in accounting treatment for
depreciation expenses and pension accounting (+1.9 B), etc.

Gross Profit

493.8

Gross Profit

451.0

Decrease vs. JGAAP due to deduction from revenue and COGS increases

SG&A

426.0

Differences in accounting treatment for depreciation expenses, pension
accounting etc. increase SG&A (+6.9B), partially offset by shift of somesales promotion and general expenses to deductions from revenue, noamortization for goodwill (7.1B), etc.

Business Income

23.1

Includes other income/expenses (recurring)Operating Income

14.2

SG&A

Operating Income

466.8

27.0

Income before Tax

17.3

Income before Tax

14.7Net Income

9.0

Net Income

9.0

Impact to balance sheet: Assets expected to increase approx. 40 B JPY

・Book value of fixed assets increases, as we retroactively revise book value of fixed assets due to difference in accounting treatment for depreciation
・Book value of goodwill and franchise intangibles increases as the value will be retroactively adjusted before depreciation
Net Income: Net income attributable to owners of parent.

20Mid- to long-term
direction

Strategic direction unchanged; Recovery requires investment & time
Growth Roadmap

Status

Implications to mid-term

Revenue growth

Volume growth,
RGM initiatives,
revenue- richinnovation• Progressively recover & grow supply capacity by Spring 2020
• Working with CCJC to recalibrate and execute growth strategy• Rapidly evolving consumer demand continue to impact channel andpackage mix

Value share

Improve wholesale
price/mix withpackaging, innovation,
focus on value• Focus on minimizing value share impact despite volume pressure• Some opportunity loss due to supply constraints

Net synergies

Steady net synergy
capture to meet2020 target of 25
billion yen• Although 2017 & 2018 delivering as planned, timing ofincremental synergy capture may shift over the recovery period• Evaluating all other opportunities

Operating incomeand OI margin

Growth mindset,
synergy capture,
reinvest in business• Logistics, product supply pressures to impact mid-term plan,
mainly in 2019
• 2019 will be a transition year to reset foundation for growth

Shareholder
valueStrong cash flowfrom operations
driving shareholder
returns• Announced second share buyback program in November 2018
• Incremental investment needed for recovery and building
foundation for growth*CCJC: Coca-Cola (Japan) Company

22

Wrap up/Key takeaways
2018 has been a tough year for us, with flooding damage and supply
constraints
Making necessary investments to recover and put us back on agrowth trajectory; Relocation and reconstruction of damaged Hongo
plant decided
2019 will be a transition year to reset foundation for growth, with
continuing topline pressure and higher costs expected
Expect to update growth roadmap in February 2019 earnings
presentation
Remain committed to our strategic direction; executing our strategy
to position the company for longer-term sustainable growth23

Q&AAppendixYTD Q3 2018 results (Reported)
Consolidated CCEJ into CCBJI from Q2 2017. First quarter 2017 CCW standalone
YTD Q3 2018

YTD Q3 2017

YoYRevenue

741,254645,088+14.9%

COGS

358,692

310,837+15.4%

382,561

334,250+14.5%

350,545

295,644+18.6%

Operating Income

32,016

38,606-17.1%

Income Before Tax

23,73037,730-37.1%Net Income

13,936

23,797-41.4%

71.83 Yen

143.17 Yen-71.34 Yen

Gross Profit
SG&AEPS
Beverage Business

YTD Q32018

YTD Q32017

YoY

Health Care & Skin
Care Business

YTD Q32018

YTD Q32017

YoYRevenue

720,100

622,837+15.6%

Revenue

21,153

22,251-4.9%

Operating Income

29,44836,341-19.0%

Operating Income

2,567

2,264

+13.4%

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

26

Q3 (July to September) volume performanceQ3 2018 volume: -5%
By Category

By Channel
Others
1%vs PY

SM
24%

R&F
22%

VM
23%

CVS
16%

D&D
14%

VolumeRevenueper Case(Yen)Supermarket (SM)

-9%

+53

Drug &Discounter
(D&D)

-6%

+42Convenience Store(CVS)+2%+8Vending (VM)

-10%-5Retail & Food (R&F)-2%-23vs PY

Juice Others
8%
6%
Coffee
17%
Water
9%

Sparkling27%

Non-sugar
tea
20%Sports13%

VolumeSparkling

Even

Non-sugar tea-6%

Sports

-6％

Water

-16%

Coffee-6%

Juice-4%Note: Differences in the pro-forma number provided in past presentations may be expected as a result of review and standardization of integration estimates.
Sales volume doesn’t include alcohol27

Volume by package
Q3 YTD
Volume:-2%
Powder3%

Q3
Volume:-5%

Others7%

Syrup
13%vs PY

S-PET
37%

Bottle Can5%Can13%
L-PET
22%

Volume

S-PET

+6%

L-PET

-4%

Can

-12%

Bottle Can

-12%

Syrup

-2%

Powder-3%

Powder2%

Others
6%

vs PY

Syrup
13%
S-PET
39%

Bottle Can
4%
Can
12%

L-PET
24%

Volume

S-PET

+4%

L-PET

-12%

Can

-10%

Bottle Can

-25%

Syrup

-1%

Powder-3%

S-PET：PET under 600ml
L-PET：PET above 1.5L
Note: Differences in the pro-forma number provided in past presentations may be expected as a result of review and standardization of integration estimates.
Sales volume doesn’t include alcohol28

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

29

Glossary of key terms
DME

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

FCAbbreviation of Future Consumption. Purchase or sell beverage for future consumption in home, etc. It also means the products / SKUs for FC (forexample, 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 (forexample, single packages less than 1L as well as fountain) and channels that consumers purchase the beverages for IC (for example, vending machines,convenience store channel, etc.).

Pro forma Assuming the business integration of CCW and CCEJ from January 2017 and estimating the results, or compare 2018 results with pro forma 2017 results.
PTC

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

RGM

Abbreviation of Revenue Growth Management, an overall strategy and process to achieve profitable revenue growth.

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 above30

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Investor Relations
Coca-Cola Bottlers Japan Holdings Inc.
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