Coca-Cola West Japan Company, Limited

Corporate Book 2004
Year ended December 31, 2004

Profile

On July 1, 1999, Sanyo Coca-Cola Bottling Co., Ltd.
and Kita Kyushu Coca-Cola Bottling Co., Ltd. merged to form
Coca-Cola West Japan Company, Limited (CCWJ).
Backed by an equity investment from The Coca-Cola Company,
Japan’s first Coca-Cola Anchor Bottler was born.
As an Anchor Bottler and strategic partner of The Coca-Cola Company,
CCWJ now plays a central role in Coca-Cola’s business activities in Japan.

Contents
1 Consolidated Financial Highlights
2 To Our Shareholders
4 Reform From Within—the Medium-term Management Plan
6 Reform From Within in CCWJ Businesses
8 About CCNBC
10 Responding to Buy-side and Sell-side Trends
14 CCWJ’s Core Brands
16 Corporate Social Responsibility—Contributing to Society
20 Corporate Governance/Management
21 Six-year Summary
22 Management’s Discussion and Analysis
27 Risk Information
28 Financial Data

Forward-looking Statement

32 Consolidated Balance Sheets

This corporate book contains statements regarding the Company’s
future plans, strategies, projected performance and outlook. These
forward-looking statements are not historical facts, but represent
management’s opinions and beliefs based on information available
at the time of writing. Readers are cautioned that any number ofrisks and factors beyond the Company’s control could cause actual
results to differ materially from those projected by management.
These include, but are not limited to, economic trends, intensifying
competition in the soft drink industry, market supply and demand,and changes in taxation and other applicable laws and regulations.

34 Consolidated Statements of Income
35 Consolidated Statements of Shareholders’ Equity
36 Consolidated Statements of Cash Flows
37 Stock Information/Credit Rating Information
38 Coca-Cola System in Japan
40 Corporate Data/Group Companies

Consolidated Financial Highlights(Millions of yen)
Fiscal year:

2003

2004

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥240,825¥253,248

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,63816,860Recurring profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,895

17,065

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,380

8,564

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

204,180

207,216

Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

165,454

167,036(Yen)

Per share data:
Net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 116.25¥ 108.80

Dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36.00

40.00

Net sales

Operating income

Net income(Millions of yen)

(Millions of yen)

(Millions of yen)

253,248247,737
240,825

250,000

19,63820,00010,0009,380

226,111

17,4498,564

16,860

16,634 16,704

207,8278,000

200,000

7,086

15,0006,000

150,000

5,700

10,0004,000

100,000

5,000
2,000

50,000

0

0

00

01

02

03

04

1,420

0

00

01

02

03

04

00

01

02

03

04

Coca-Cola West Japan Company, Limited01

To Our Shareholders

Operating Results

Reform From Within Initiatives

Undertones of an economic recovery emerged for the JapaneseOn the sales front, we took an aggressive marketing stance as

economy during fiscal 2004, ended December 31, 2004. A

we worked to bolster our four major brands and advance into

rebound in corporate earnings led to higher capital investments,

new fields such as food for specified health uses. CCWJ took

and the employment picture also improved. Nonetheless, a

the lead globally in launching sales of Coca-Cola 2, andfull-scale recovery remained elusive amid a slowdown in over-unveiled new packaging designs for beverages Sokenbicha andseas economies and steep oil prices.

Aquarius. We also launched a new Georgia coffee sales cam-

Despite Japan being buffeted by an unprecedented number

paign, among other actions. In parallel, we worked hard toof typhoons, the Japanese soft drink industry as a whole

improve the quality of our operations and product freshness,

witnessed positive market growth thanks to record-breaking

core aspects of our bottler business. And to build a powerfulsummer temperatures. Operating conditions neverthelesssales base attuned to our customers and business clients, we

remained as challenging as ever, the result of fierce pricetook steps to enhance the performance of CCWJ vending

competition and steadily increasing costs associated withmachines by incorporating more IT features.

increasingly diverse product packaging.

On the production side, we enacted far-reaching cost-

In this climate, the CCWJ Group continued its drive to

reduction initiatives that included converting conventional canmeet planned objectives during the second year of the Reform

production lines to bottle-can lines at our plants to prepare

From Within medium-term management plan. Using earlier

for growth in the sale of bottle-can packaged products. A

steps to cement business foundations in fiscal 2003 as a start-

review of our production framework also enabled us toing point, we designated fiscal 2004 as a year for realizing

improve capacity utilization. At the same time, we worked totangible results. To this end, the Group channeled its collec-

strengthen quality management by further raising employee

tive efforts into a variety of activities aimed at bringing theawareness of quality and promoting activities designed tobenefits of Reform From Within to fruition.

prevent related mishaps. The goal here is to ensure that

These efforts resulted in consolidated net sales of¥253,248 million, up 5.2% over the previous year. Never-

CCWJ remains able to provide high-quality, reliable products.
Where management administration is concerned, we initi-

theless, operating income declined 14.1% year on year toated the full-scale launch of “V-Comix,” a new system for¥16,860 million, and recurring profit was down 14.2% tomanaging business results introduced to facilitate efforts to¥17,065 million. Net income likewise decreased 8.7% tomeet Group business targets. Indirect business operations¥8,564 million. Excluding the impact of changes to ourcurrently undertaken by individual Group companies are also

retirement benefits system enacted in 2003, operating income

being consolidated in an additional push to boost manage-

would have been ¥14,589 million, a year-on-year improve-

ment efficiency.

ment of 12.2% on a comparative basis.

CCWJ is also confronting environmental problems
through an environmental action program called “What We
Can Do for the Environment.” Activities are mainly aimed at
curbing greenhouse gases, which has emerged as one of themost pressing global environmental concerns.

02

Coca-Cola West Japan Company, LimitedIn our contribution to regional communities, we continued

Dividends

to sponsor a number of activities in line with “Our Total

In appreciation to our shareholders for their loyal support, we

Happiness,” the CCWJ management philosophy. These

declared a year-end dividend of ¥20 per share. The full-yearinclude support for the Ichimura nature school in Kyushu to

dividend, including the interim dividend, is thus ¥40 per

promote the healthy development of youth, as well as support

share, up ¥4 per share from the previous year.

for community welfare activities, cultural events and educational programs.
Meanwhile, Coca-Cola National Beverage Co., Ltd.,To our shareholders and investors, I respectfully ask foryour continued support and understanding of CCWJ and its
operations.

established through the cooperation of Coca-Cola (Japan)
Co., Ltd. and all Coca-Cola bottlers across Japan and respon-

April 2005

sible for nationwide supply chain management, made progressin preparations to add the production of franchise products as
a new business domain. Previously, the production of franchiseproducts was handled exclusively by individual Coca-Colabottlers. Under a unified supply framework integrating pro-

Norio Sueyoshi

curement through to manufacturing and distribution, thiscompany will seek out further cost-cutting opportunities in a

Representative Director

drive to strengthen the long-term competitiveness of the entire

President & CEO

Coca-Cola system in Japan.

Leaping Ahead Through Reform From Within
The outlook is for a sluggish economy as a slowdown in theeconomies of both the U.S. and China begins to hinder exports
and capital expenditures in Japan. Meanwhile, pension problems, a higher tax burden and other concerns about the futuremean that soft consumer spending is also likely to persist. Withno substantial growth predicted for the soft drink market,
business conditions are expected to remain severe.
Faced with this climate, we have designated 2005, the final
fiscal year of the Reform From Within medium-term management plan, as a year for making a leap ahead in growth. The
entire CCWJ Group stands united in ongoing activities aimed
at bringing Reform From Within to a successful close.

Coca-Cola West Japan Company, Limited

03

Reform From Within—the Medium-term Management Plan

Achieving Reform From Within
The CCWJ medium-term management plan runs from the beginning of fiscal 2003
to the end of fiscal 2005. The fundamental policy of the plan is Reform From Within,which is made up of five key areas of reform to be targeted by the entire Group.
Fiscal 2005—the plan’s final year—has been designated as a year for a leap ahead in growth.
The entire CCWJ Group is thus promoting activities aimed at achieving
the successful completion of Reform From Within.

Medium-term Management

Concrete Measures

Fundamental Policy (2003-2005)

1

Reform From Within
Reform From Within that makes the
CCWJ Group a vital part of customers’
lives and clients’ businesses.
Reform From Within that puts the
CCWJ Group ahead in the soft drink
business.
Reform From Within that encourages
the CCWJ Group to pursue roles andfunctions.
Reform From Within that draws on thevitality of the employees and organizationof the CCWJ Group.

Reform From Within that establishes a
CCWJ Group coexisting with society.

Build a New Business System
1. Reform management
2. Strengthen management capabilities with new
business units
3. Foster and develop new products
4. Prioritize quality
5. Build a system that optimizes supply and demand
6. Prioritize customer satisfaction

2
3

Strengthen Group Management
1. Promote an appropriate positioning of businesses within
the Group
2. Build a Group-wide management control system
3. Enhance communication

Restructure Personnel Management
1. Strengthen functions through the appropriate positioningof businesses within the Group
2. Build a new personnel and welfare system that responds
to enhanced functions and roles
3. Create the necessary personnel structure to meet needs
for inventory checks and new roles
4. Establish appropriate working hours
5. Foster and recruit personnel
6. Create a platform for communication between company
and employee

4

Coexist With Society

Reform From Within means:■ Change must come from within all executives and personnel
in the Group■ Change in building companies and a group must come fromwithin all executives and personnel in the Group04

Coca-Cola West Japan Company, Limited

1. Augment the corporate ethics system
2. Take the lead as an environmentally friendly company
3. Make a greater contribution to regional communities

CCWJ Group companies are working as one to conductcustomer- and client-oriented marketing activities.
Coca-Cola WestJapan Company,
Limited

Nishinihon
BeverageCo., Ltd.

MarketingCoca-ColaWest Japan
VendingCo., Ltd.

Clients andCustomers

Coca-Cola WestJapan Logistics
Co., Ltd.

Coca-ColaWest Japan
Products
Co., Ltd.

Coca-Cola WestJapan Customer
Service Co., Ltd.

■ Nishinihon Beverage Co., Ltd.
(Vending Sales)■ Coca-Cola West Japan Company, Limited(Product Management)

Responsible for managing CCWJ’s network ofvending machines, with a focus on Coca-Colaproducts, Nishinihon Beverage pursues increased
sales and profits by providing high-quality vending
machine services to customers.

Responsible for product management, or moreaccurately, marketing, CCWJ puts together proposals for sales promotion plans and installs new
vending machines as it seeks to help business
partners boost their sales of Coca-Cola products.
In this way, CCWJ is working to increase earnings
and market share, and, ultimately, working hand inhand with other Group companies, to enhance thecorporate value of the Group as a whole.

■ Coca-Cola West Japan Vending Co., Ltd.
(Vending Machine Operations)■ Coca-Cola West Japan Products Co., Ltd.
(Manufacturing)Responsible for vending machine operations, CocaCola West Japan Vending works hard to ensure
our customers keep coming back for more. This isachieved by positioning machines in optimum
locations, changing the type of drinks loaded inmachines to match the season, and ensuringmachines are always full.

As the manufacturing arm of the Group, Coca-Cola
West Japan Products provides the high-quality,
dependable soft drinks that our clients want. Offering a broad range of manufacturing services, thecompany constantly endeavors to supply products
more quickly at lower cost to other parts of the
CCWJ Group.

■ Coca-Cola West Japan Logistics Co., Ltd.
(Logistics and Retail Operations)■ Coca-Cola West Japan Customer Service
Co., Ltd. (Equipment Service)

Coca-Cola West Japan Logistics is responsible for
the Group’s logistical and retail operations, providing quality distribution services based on safety,
precision, speed, care and courtesy. The objective
is to supply business partners with the products
they want, when they want them.

Responsible for the installation, repair and cleanliness of vending machines, Coca-Cola West Japan
Customer Service provides the best in equipment
support services so that customers can count on
CCWJ for consistently high product quality.

Coca-Cola West Japan Company, Limited05

Reform From Within in CCWJ Businesses

The CCWJ Group is deploying measures to develop a variety of innovative business systems
under the Reform From Within medium-term management plan. The following isa brief introduction to two such measures—Bringing IT to Vending Machines
and Freshness Initiatives. The former encapsulates our efforts to link vending machines,
one of CCWJ’s core profit sources, with information technology (IT).
The latter, meanwhile, encompasses steps to bolster the management of product freshness,enabling our customers to enjoy more delicious products.

Bringing IT to Vending Machines
Goals for IT

Outlook

Vending machines are the very lifeblood of the soft drink business,whether in terms of sales volume, monetary sales or earnings. In
this area, the Coca-Cola system in Japan stands atop the industry,
operating nearly one million vending machine units. CCWJ
believes that linking vending machines to information technology(IT) is a crucial step to expanding profitability and establishingworld-leading operations.

At present, CCWJ has 6,600 Internet-enabled vending machines.
Over the next five years, the vending machine channel plans to bringover half of its vending machines, or nearly 45,000 units, online.
This development is being watched closely by other bottlers, CocaCola (Japan) and the global headquarters in Atlanta.
CCWJ is also aggressively promoting the embedding of IT in
vending machines. In fact, the majority of the IT vending machines
in operation across Japan already come from the CCWJ Group. This
year, CCWJ will continue its push to effectively introduce IT vending machines in locations where they are needed.

Combining vending machines with IT
CCWJ’s system merging vending machines with IT takes advantage
of a host of real-time data such as that pertaining to sales andmalfunctions by connecting vending machines online. This systemallows CCWJ to respond more rapidly to strong-selling products
and malfunctions, avoid declines in freshness and product sellouts,
use data to better plan restocking visits, and ensure an optimal
product lineup. By making vending machines more visible in themarketplace, CCWJ is poised to spur development of cutting-edge,
never-before-seen business opportunities.

06

Coca-Cola West Japan Company, Limited

Freshness Initiatives
Key freshness initiatives
Delivering high-quality, reliable products that anyone can enjoy
anytime, anywhere is fundamental to the Coca-Cola business. Threepoints are essential to achieving this: the delivery of fresh products,
ensuring that products are never out of stock, and pursuit of the“ideal” sale, that customers feel good about their purchase. The
CCWJ Group’s freshness initiatives constitute a program for bolstering the management of product freshness through a concerted drive
to emphasize these key points at every level.

Targeted actionsFirst, freshness targets were established at every stage from manufacturing through to sales. Standards are also set for halting productshipments, conducting voluntary recalls or other actions dependingon the time remaining prior to expiration dates. To achieve theseaims, CCWJ has promoted sales activities that incorporate the perspectives of customers and business clients. The Company has also
introduced new supply-demand systems with the goal of obtaining
highly precise demand forecasts, and has ushered in Reform FromWithin, a program of sweeping infrastructural and other changes toenhance quality.
Alongside these structural changes, CCWJ conducts regular freshness surveys and improvement activities in the soft drink sector. For
CCWJ Group vending machines, product freshness checks provide

the basis for strict inventory control. At high-volume food retailers,
liquor stores and other channels, this process is called shinsengumi
mimawari (literally “visits from the freshness squad”), and involves
sending branch managers out to perform checks on and improve
freshness in the vending machines, coolers and warehouse inventories
of CCWJ’s business clients. In a similar process for supermarkets
known as tenroundo (“making the store rounds”), CCWJ conducts
comparative freshness checks of products from other companies aspart of its drive to enhance freshness.
Where in-house inventory is concerned, CCWJ carries out
monthly freshness checks on all products at all business sites, anactivity that leads directly to improved freshness.

Benefits
One prominent benefit of these initiatives has been that customers
can now enjoy delicious products that are even fresher. But otherbenefits are steadily emerging with respect to in-house inventory.
In addition to an increase in products produced less than a monthearlier, substantial declines have been noted in both inventory
volume and days in inventory.
Going forward, CCWJ intends to use similar in-depth initiatives
that mesh closely with its operational regions to further strengthen
freshness management so as to continue providing customers with arefreshing break whenever they need it.

Coca-Cola West Japan Company, Limited07

About CCNBC

PurposeEstablished through joint investment from Coca-Cola (Japan)
Co., Ltd. and all Coca-Cola bottlers across Japan, Coca-Cola
National Beverage Co., Ltd. (CCNBC) commenced operations in October 2003 with the goal of building a nationwide
supply chain management (SCM) structure.
CCNBC oversees the centralized procurement, manufacturing and distribution operations of the Coca-Cola Group in
Japan. The company seeks to curb costs by optimizing its nationwide network to boost efficiency, as well as by standardizing business processes and integrating information systems.
Funds generated from cost reductions are reinvested
primarily to enhance competitiveness, mainly in respect tosales. CCNBC is making strategic investments to increase thenumber of vending machines installed and raise value for
consumers. Special emphasis is also being given to investment
in sales development capabilities, including support tools for
proposal-based sales initiatives targeting chain stores. The
strengthening of manufacturing capabilities is another areatargeted for investment.
Furthermore, maintaining a more appropriate inventory
level will not only enable CCNBC to deliver fresher products
to the market than ever before, but to offer improved services
to major business clients with nationwide sales networks. At
the same time, it will strengthen the company’s ability toquickly and flexibly respond to sudden market changes.
Ultimately, this adaptation will help the Coca-Cola Group in
Japan to achieve long-term growth in earnings.

The CCNBC Vision: Give the Coca-Cola System a Sustainable Competitive Edge

Outstanding product quality and freshness
Procurement

Accelerate cost reductions
Manufacturing

Centralized
Decision-making

Improve business client services
Respond swiftly to the market

Distribution

Infrastructural flexibility

Progress Report
In phase one of its operations, CCNBC assumed the production
and supply of toll products (see note 1), and the procurementof related raw ingredients and materials, in October 2003.
Phase two saw the transfer of manufacturing operations for
franchise products (see note 2) of individual bottlers to
CCNBC in January 2005. With this change, the formerly
separate manufacturing frameworks for toll and franchiseproducts have been integrated, giving birth to a new SCM
system that oversees on a national level the entire lineup of
products produced by the Coca-Cola system in Japan.
Under the new supply chain model, the role of bottlers
will be more vital than ever before. First, as shareholders in

08

Coca-Cola West Japan Company, Limited

CCNBC, bottlers continue to weigh in on key decisions
pertaining to the integration of the nationwide supply chain.
Second, all finished products are purchased from CCNBC.
Third, under contract from CCNBC, bottlers became
responsible for the manufacturing and quality assurance ofthe products produced at their respective plants, and for
distribution services.
Notes: 1) Toll products include teas, water, and new beverage categories
previously manufactured and shipped to bottlers by Coca-Cola
Tea Products Co., Ltd.
2) Franchise products include carbonated drinks, coffee and otherproducts manufactured and sold by bottlers using concentrates
purchased from Coca-Cola (Japan) Co., Ltd.

CCNBC Roadmap to SCM Integration
Phase One

Before October 1, 2003
Toll Products
CCTPC•National-level supply
management of toll products

Phase Two

October 2003 to December 2004

January 2005
CCNBC—All Products•Centralized supply-demandplanning•Centralized procurement•Centralized manufacturing•Innovation

Former Toll Products

CCNBC•Centralized planning•Centralized procurement•Centralized manufacturing•Innovation

Centralized Procurement
by CCNBC
Franchise Products
Franchise Products

Bottlers•Franchise products ofeach bottler

Bottlers•Franchise products ofeach bottler

Cost-reduction Benefits
In 2004, the benefits of cost reductions surpassed initial plans.
Compared to initial projections of ¥14.4 billion in cost
reduction program (CRP) (see note) benefits nationwide forfiscal 2004, first announced at a national SCM planning conference on November 18, 2004, actual benefits were ¥16.7
billion. Individually, CCWJ saw CRP benefits of ¥1.9 billion,
sharply higher than initial projections of ¥1.0 billion for the year.
For 2005, forecasts call for nationwide CRP benefits of¥19.0 billion. This takes into account the likely impact of
escalating crude oil prices and other factors on the procurement of certain resins used as raw material for PET bottles,
and metals for cans. CCWJ, for its part, expects to see
benefits totaling ¥2.2 billion.
Planned CRP benefits for 2005 are based on calculationsof minimum achievable targets and are the most conservative
estimates. Aiming to deliver even greater CRP benefits, theCompany is proactively constructing a new information system,and scrutinizing its entire system for ways to manufacture
products even a single yen cheaper. CCWJ hopes to ultimately
generate results that surpass initial plans.
By 2007, cost reductions are expected to yield annual
benefits of at least ¥25.0 billion/year nationwide, and at least¥3.0 billion for CCWJ on an individual basis.

CCNBC CRP Benefits in 2004 (YoY Comparison)
(Yen)

CCWJ

over
3.0 billion
1.9 billion

2.2 billion

1.0 billion

Initial Plans Results
20042005 Plan

2007 Targets

over
25.0 billion

Nationwide Total
19.0 billion
16.7 billion
14.4 billion

Projection
Results(as of November 18, 2004)
2004

2005 Plan

2007 Targets

Note: CRP (Cost Reduction Program)This term is used to refer to the amount of cost reductions, as well as
profits that result from cost-cutting activities.

Coca-Cola West Japan Company, Limited09

Responding to Buy-side and Sell-side Trends

Vending Machine
ChannelThe vending machine channel,
one of CCWJ’s core operations,is an extensive network for providing
products to customers.

Fiscal 2004 Overview

Policies for Fiscal 2005 and Beyond

This channel accounted for 51% of sales in fiscal 2004, andcontributes to top- and bottom-line performance as a key
source of earnings for the CCWJ Group. Sales volume was28,649,000 cases, an increase of 5.8% compared to fiscal
2003. This was 32.9% of CCWJ’s total sales volume, up 1.4
percentage points from a year earlier.
In fiscal 2004, the vending machine channel had a total of
136,185 vending machines, and a 28.5% share of Japan’s
indoor vending machine market, up 0.2 of a percentage point
year on year.

As a pillar of sales and earnings for the CCWJ Group, theCompany’s goal for this channel is to attain greater vending
machine business growth through expansion and efficiency.
Hence, the fundamental action policy is to create the world’s
leading vending machine business by wielding a competitiveedge with earnings strength built on in-depth consumer andclient account services.
To be number one, CCWJ must first ensure that its
proposal-based sales initiatives can offer greater added valueon the sales front. On the operations side, the Company must
more than ever provide fresh and appealing products. And in
equipment services, CCWJ has to provide even higher quality
services to satisfy its clients.
Under the fundamental action policy, one key strategy for2005 is to revitalize existing accounts. Efforts are particularly
focused on re-enhancing measures that target major sales
accounts for this channel. Management resources are also
being prioritized in a push to raise sales Company-wide.
Furthermore, CCWJ is beefing up efforts to develop prime
sales locations in the indoor vending machine market, where
its market share is relatively low but sales are expected togrow, as part of a move to target new business opportunities
with greater precision. As backing for this step, CCWJ in
January 2005 added a new organizational component specializing in market development that is effectively and proactively
scouting out new possibilities. CCWJ is also continuing to
implement measures that capitalize on vending machine-based
IT to secure a more dominant competitive edge.

Sales volume(Thousand cases)
40,00030,00027,06828,64920,00010,000003

04

Note: July 2004 survey within CCWJ’s sales region conducted by J.D.
Power Asia Pacific, Inc.

Measures Taken
In this channel in fiscal 2004, CCWJ made progress developing prime locations by using sales rankings as a metric for
installing new machines, taking advantage of a system forcalculating projected sales, and leveraging collaboration at theGroup level. The Company also moved ahead with the IT
transformation of its vending machines, boosted productfreshness, and lowered the percentage of product sellouts,
shortened response times for machine repairs and took otheractions to make improvements to the quality of its operations.
These actions contributed to per unit sales growth for vending
machines. Furthermore, Company-wide freshness initiatives
helped CCWJ rank first in quality assurance in a recent survey
report on customer satisfaction.

10

Coca-Cola West Japan Company, Limited

Chain Store Channel
Supermarket-oriented operations are home
to considerable consumer needs. This is
helping to make the chain store channel
one of CCWJ’s fastest growing sales channels.

Fiscal 2004 Overview

Policies for Fiscal 2005 and Beyond

The chain store channel saw sales volume edge 0.9% higher
compared to fiscal 2003, to 16,737,000 cases. The percentage
of CCWJ’s total sales volume was 19.2%, down 0.1 of apercentage point from 19.3% recorded in the previous year.
CCWJ has made steady progress in this business area, withsales volume for fiscal 2004 more than 20% higher than thatposted in 2000. On the earnings side, the contribution of thischannel to earnings remained unchanged from fiscal 2003 at
8.0%, with efforts going forward to focus on achieving greater
earnings growth.

CCWJ is calling on this channel to grow profits by expanding
sales volume and share, and to build a business structure thatwill become a model for bottlers nationwide. Essentially, thisentails leading other bottlers in offering better service quality
to customers and business clients through a framework where
higher sales are matched by earnings growth. By forging athree-way “Win-Win-Win” relationship, customers will
receive value while business clients and CCWJ raise both sales
and profits. Guided by this stance, the fundamental policy ofthe chain store channel will be to pair robust sales and market
share expansion with profitability.
In 2005, one key strategy based on this policy will be topromote Revenue Gross Management (RGM). This approach
involves joining forces with business clients to create wellcrafted retail spaces that enhance customer satisfaction andencourage customers to purchase products. Tenroundo 10 is thename of a specific initiative for promoting RGM that aims to
expand retail space—the source of volume and monetary sales
for both CCWJ and its clients—by 10% compared to current
levels. Tenroundo 10 also seeks to enact three different “Reform
From Within” processes. One will be to create areas that are
more stimulating to customers, while another will help
CCWJ’s account-driven sales activities to evolve even further.
The final process will focus on achieving a better mix ofproducts to sell.
CCWJ has also recently begun work on a project launchedin collaboration with Coca-Cola (Japan) to rebuild thebusiness structure for supermarket channels.

Sales volume(Thousand cases)
20,00016,586

16,73703

04

15,00010,0005,000
0Measures Taken
In the chain store channel, CCWJ pressed ahead with its strategy of conducting a case-by-case analysis of client accounts.
Clients are categorized according to sales volume and profitability, with individual client characteristics incorporated into
sales measures tailored to their specific needs to enhance sales
volume and profits. In particular, relationships with majorclient accounts are being bolstered by blanket implementationof this “account-centric” sales system throughout the CCWJ
organization, from headquarters to individual business branches.

Coca-Cola West Japan Company, Limited

11

Convenience Store andGeneral Retail Channel
This channel encompasses sales toconvenience stores, drug stores,
high-volume food retailers
and liquor stores.

Fiscal 2004 Overview
Sales volume in the convenience store and general retailchannel was 24,184,000 cases, down 3.1% from fiscal 2003.
Sales volume for this channel dipped 1.2 percentage points to27.8% of total volume, compared with 29.0% a year earlier.
Presently, this channel is seeing real growth in sales at convenience stores, but contraction at general retail stores.

Sales volume

Policies for Fiscal 2005 and Beyond(Thousand cases)

CCWJ is challenging the convenience store and general retailchannel to find a suitable balance between expansion andefficiency, while retaining its role as a highly profitablebusiness channel. The object, in other words, is to achieve
qualitative expansion, with resources concentrated in the mostprofitable business formats. Here, efficiency will mean raisingproductivity by effectively utilizing assets without incurring
unnecessary costs. Put a different way, the most important
strategies will be those attuned to specific business formats
and sales rankings.
Taking a cue from this stance, the fundamental action
policy for the convenience store and general retail channel will
be to grow market share and improve earnings throughmerchandising-driven activities encompassing the customer’s
perspective. The goal is to become a world leader in terms ofmerchandising.
In 2005, bolstering segment sales will be one key strategy
stemming from this policy. As in the previous year, greater
selectivity and focus will be bywords as CCWJ develops
merchandising tailored to different business formats.
To identify potential sales opportunities, one challenge will
be to capitalize on the potential that the development of new
business formats has to offer. And CCWJ is making thesearch for new sales more efficient by upgrading vending
machines at stores with low sales with IT features, and bysteadily beefing up its freshness initiatives.

30,00024,96024,18403

04

20,00010,0000Measures Taken
Long-term business relationships are a prominent feature of
CCWJ’s general retail channels. Many clients have ties thatdate back to the early days of CCWJ, when company representatives paid personal visits to each one to request theirbusiness. Today, the emergence of convenience stores andsupermarkets has diversified sales routes, sparking the need todevise sales methods to cope with these market changes. For
this reason, CCWJ is turning its attention to proposal-based
sales initiatives that better anticipate market demand.
By implementing measures that emphasized greater selectivity and focus and catered to particular business formats andclients, CCWJ achieved increased sales at high-volume foodretailers and secured more display space inside stores and at
new stores. All of this came despite the negative impact of
successive typhoons in fiscal 2004. Freshness initiatives also
continue to be strengthened to help boost customer satisfaction by offering fresher products.

12

For large convenience store chains where direct businessnegotiations with individual stores is not possible, CCWJ
enlisted the cooperation of Coca-Cola National Sales Co.,
Ltd. in talking with the chain’s regional headquarters. For
chains where individual stores handle such discussions, CCWJ
implemented a full range of activities, including regularlyscheduled store visits.

Coca-Cola West Japan Company, Limited

Food Service Channel
The food service channel’s core operations
encompass the sale of soft drink syrup
to fast food chains, cinemas, sports facilities,
casual dining restaurants and theme parks.

Fiscal 2004 Overview
Sales volume in the food service channel rose 4.5% to7,753,000 cases, compared to the previous year. The percentage of total sales volume was 8.9%, up 0.3 of a percentage
point from the 8.6% recorded in fiscal 2003. On the earnings
side, sales activities with an emphasis on profitability led to asignificant jump in earnings. In contrast to an operating loss
posted in 2002, this channel recorded operating income infiscal 2004.

Sales volume(Thousand cases)
10,000
8,000

7,419

7,753

03

04

6,000
4,000
2,000
0

Measures Taken
In fiscal 2004, one key strategy involved measures to expand
markets by enhancing customer-facing marketing, and to
reduce costs and raise efficiency to improve earnings.
To expand markets, CCWJ is moving first to thoroughly
bolster the power of its brand. This has entailed revitalizing
carbonated beverages and expanding coffee beverages throughactivities that reflect client needs. To reinforce market development at every level, the Company expanded sales by taking
bold actions that emphasize profitability and the use of hot
beverage machinery, and assumed a more assertive stance inmeeting the competition.

In an effort to improve earnings, CCWJ focused on withdrawing from clients with lower sales, steps to lift sales elsewhere, and other activities designed to yield improvements.
Extensive use was also made of equipment in inventory.

Policies for Fiscal 2005 and Beyond
The mission of the food service channel is total dedication to
consulting sales, creating a climate in which every employee
can consistently deliver ideal services to customers andbusiness clients with sincerity and enthusiasm. The resulting
environment is then enlisted in the pursuit of ideal sales.
Driven by this mission, the fundamental action policy of
the food service channel is to develop a new fountain business.
Actions taken thus far in the two years since the start of the“Reform From Within” medium-term management plan havebeen aimed at building the foundation for this business. This
progress will provide the basis for all actions in 2005 taken in
the determined pursuit of qualitative and quantitative targets.
Under this fundamental policy, the key strategy in 2005
will be to take the consumer’s perspective in enhancing market
activities. Specifically, this will entail capturing new markets
by developing new, large-scale outlets where annual sales ofmore than 600 cases can be expected; developing the hot
beverage market by rolling out machines for regular andpowdered coffee; and taking a more assertive stance intackling competition and in winning business. Among otheractivities, CCWJ is also ushering in programs that primarily
target key national food service chains in an effort to findunrealized sales opportunities at existing outlets.
CCWJ believes actions of this type are the driving force
behind the food service business unit’s sales activities, enabling
it to accurately grasp customer needs and to create newmarkets better attuned to lifestyle trends.

Coca-Cola West Japan Company, Limited

13

CCWJ’s Core Brands

CCWJ is striving at every level to strengthen its four core brands—Coca-Cola, Sokenbicha, Aquarius and Georgia.

Coca-Cola

Georgia

Sokenbicha

Aquarius

14

Coca-Cola West Japan Company, Limited

Contributing about 10% to CCWJ’s sales volume, Coca-Cola has a market share in
Japan of 79%. In CCWJ’s operating area, Coca-Cola has a dominant market share of
79%. In fiscal 2004, CCWJ took a more dynamic approach in promoting Coca-Cola,leading the world in launching sales of Coca-Cola 2, and developing “Special Magic
Coca-Cola” as a new sales campaign. To further grow sales volume and market share,
CCWJ is initiating a new advertising campaign titled, “From Moment to Moment,
Coca-Cola,” in fiscal 2005.

Home Market Share (2004)*Non-vending Retail Sales Market

79 %
Cola

Launched by CCWJ in 1975 and now a byword for canned coffee, Georgia was thefirst product in this category to be sold nationwide. Georgia represents more than
30% of CCWJ’s sales volume and commands a market share in Japan of 47%. In
CCWJ’s operating area, Georgia’s commanding market share is even higher, at 70%.
In fiscal 2004, CCWJ ran the “Look on the Bright Side! Georgia” sales campaign.
In fiscal 2005, CCWJ is looking to cement this product’s position further through its“Georgia 30th Anniversary Promotion,” a campaign commemorating three decades ofGeorgia coffee.

Home Market Share (2004)*Non-vending Retail Sales Market

70 %Canned coffee

Underpinned by the motto, “For refreshment, health and beauty,” Sokenbicha is a tea
for health- and beauty-conscious people. CCWJ was first in pioneering Sokenbicha
for its own target region, prior to the product’s nationwide launch. Sokenbicha has amarket share of 79% nationwide, and an impressive 82% share in CCWJ’s operatingarea. Even today, Sokenbicha is still synonymous with blended tea. In fiscal 2004,
together with revamped packaging, CCWJ promoted a new sales campaign, “So
Beautiful, Sokenbicha.” CCWJ also launched a new green tea blend, which contributed heavily to improved sales volume and market share. With a new advertising
campaign, “The SokenBeauty Within,” and redesigned packaging for the green tea
blend, CCWJ is working to further solidify this product’s base in fiscal 2005.

Home Market Share (2004)

Developed in Japan and growing in stature as a global brand, Aquarius is Japan’s
most-loved sports drink. Aquarius’ market share in Japan is 48%, with an overwhelming 54% market share in CCWJ’s operating area. In fiscal 2004, CCWJ ushered in
the “BODY! Go! Go!” sales campaign to vividly underscore the link between sports
and Aquarius. In fiscal 2005, CCWJ is adopting a redesigned package and promoting
a new sales campaign, “Sports Science Has Evolved, Aquarius,” to even further hone
the competitive edge of this product.

Home Market Share (2004)*Non-vending Retail Sales Market

82 %Blended tea*Non-vending Retail Sales Market

54 %Sports drinks

Coca-Cola West Japan Company, Limited

15

Corporate Social Responsibility—Contributing to Society

Committed to being a good corporate citizen, the CCWJ Group always thinks and actsfrom a social standpoint. Consequently, CCWJ is developing a range of activities
that contribute to regional society and the environment.
CCWJ allocates a fixed portion of earnings every year to fund these ongoing activities
with the understanding and support of shareholders.

Contributions to Regional Society
Fundamental
StanceTogether With Society
CCWJ’s support for the healthy development of youth and its efforts to promote closer
communication with target regions consists of four elements: support for community
welfare, sponsorship of sports activities, patronage of cultural events and educational
programs, and support of regional events.

Cultural and
Educational
Activities● Operation of the Ichimura
nature school in Kyushu
Founded on the principle thatlearning from the land is a key
survival skill, this facility uses
farming and cooperative living tohelp children develop into wellbalanced, mature young people.

● Coca-Cola West Japan Family
MusicalThis musical hosted during summer
vacation caters to parents andchildren, with members of thelocal community chosen by randomdraw to attend.

● Sawayaka Concert
Hosted during summer vacation
for parents and their children,
this entertaining concert brings
together local orchestras andnotable guest singers.

● Sawayaka Classical Concert
Members of the local community
are drawn from entries and invited
to attend this high-quality classicalmusic event.

Other● Japan Inter-High School
Sports Meet● Japan Youth Soccer
Tournament● H.I.H. Prince Takamado
Trophy All Japan InterMiddle School English
Oratorical Contest

16

Coca-Cola West Japan Company, Limited● Kinshuki Gyokuryuki High School
Judo and Kendo Tournament

● Donation of educational
materials to special schools
CCWJ donates PCs and othereducational materials to special
state schools with the hope ofhelping children at these schools
lead independent lives.

Social
WelfareServices

Contributions toRegional SocietySportsActivities● Donation of unicycles toelementary schools
CCWJ donates unicycles topublic elementary schools
to help children hone theirsense of balance.

Regional
Events● Coca-Cola West Japan Youth
Soccer Tournament
Representative teams drawn fromprefectures in CCWJ’s operatingarea take part in this tournament
held at the Sawayaka Sports Plaza.

● RoboCup 2002 Fukuoka/Busan● Sawayaka Youth Rugby Tournament● Sawayaka Rugby Clinic● World Wheelchair Basketball Championships 2002

Members of the CCWJ
Rugby Team teach thefundamentals of the game toelementary, junior high andsenior high school students.

Coca-Cola West Japan Company, Limited

17

Environmental Activities
An Industry Leader on Environmental Issues
CCWJ recognizes the debt of gratitude it owes to its customers and regional communities,
Basicwhich it repays through efforts to beautify and preserve the environment and recycle resources.
Philosophy All employees throughout the CCWJ Group take responsibility for the environment in theirworkplaces and contribute to building a comfortable and abundant society.

ActionPlan● Offer clean, safe products and services● Promote more efficient energy use to help prevent global warming● Use water effectively to conserve this precious resource● Work to reduce and recycle waste to help realize a recycling-oriented society● Take steps to procure highly recyclable and environmentally friendly materials● Vigorously develop regional environmental activities● Educate employees through training and promotional programs to raise environmental awarenessOperation of the Kitakyushu
Sawayaka Recycling Center
In 2003, construction of the Kitakyushu
Sawayaka Recycling Center was completed in
the Ecotown precinct of Kitakyushu City. Thiscenter collects and recycles empty cans, glass
bottles and PET bottles from sites in Fukuoka
and Saga prefectures. Upgrades to the facility
are ongoing to enhance the level of safety,
sanitation and performance.

Introduction of Eco-vehicles
CCWJ is promoting the “Eco-Drive”
concept by proactively adding hybrid andnatural gas-powered vehicles to itsdelivery and sales fleet.

Purchase of Green Products
In accordance with Group purchasing
guidelines, CCWJ actively buys goods witha low environmental impact in pursuit of
its environmental conservation andrecycling objectives.

18

Coca-Cola West Japan Company, Limited

RecyclingGreen
Product
Procurement

Accredited With ISO 14001
Certification
Seven of the nine companies in the
CCWJ Group have been accreditedwith ISO 14001 certification, aninternational standard for environmental management. Efforts willcontinue to obtain this certification
for all Group companies. Together
with Coca-Cola’s own “eKO System”
for environmental management, thiswill ensure that environmental systems are operating effectively andthereby promote the CCWJ Group’s
actions to help fight global warming.

School Biotope Operations
CCWJ assists children in joining with teachers, parents,
guardians and members of the local community to build
wildlife refuges by hand. These refuges are designed by thechildren themselves. CCWJ provides environmental education
tools so that children can learn about the splendor andimportance of the natural environment.

CombatingGlobalWarming

School Tree Planting
This program, with the theme, “Let’s create an
oak forest,” aims to foster an appreciation andlove of nature in children by inviting them tobecome the “foster parents” of seedlings grownfrom acorns. Students then get the experience of
replanting the tree on the local mountainsidewhen it has grown into a larger sapling.

Coca-Cola Ecology School

Environmental
Activities

Regional
Environmental
Education
SupportUnder the guidance of environmental education
instructors, and with the trees, insects and otherwildlife in the countryside as the textbook, CCWJ
holds environmental education classes that provide
important experiences for coexisting with nature.

Regional
Environmental
Preservation
Activities

Coca-Cola Clean Day
With the aim of self-enlightenmenton environmental issues for eachand every employee of the Group,
CCWJ runs its Clean Day activities
on the 8th of every month inregional communities.

Coca-Cola West Japan Company, Limited

19

Corporate Governance

CCWJ’s fundamental stance on corporate governance is toimprove management efficiency and transparency, while striving
to maximize shareholder value.
In March 1999, CCWJ restructured the Board of Directors
and adopted the executive officer system, separating decisionmaking and management oversight from business execution. In
2001, the Company established a committee responsible for
executive nomination and remuneration. Acting in an advisory
capacity to the Board of Directors, this committee, chaired by
one of CCWJ’s external directors, brings greater transparency
and fairness to the selection of directors and corporate auditors,
and ensures that remuneration for directors is appropriate. The
committee convened in January 2004 and 2005, respectively.
Currently, seven of CCWJ’s ten directors, and three of its fivecorporate auditors, are from outside the Group. Directors andauditors fully monitor how executives conduct business operations.

This includes taking part in meetings of the executive committee,
which is made up of executive officers, as well as other importantcompany meetings. When questions arise during the course ofbusiness execution, CCWJ consults attorneys, CPAs and otherspecialists for advice on determining the best way to proceed.
The CCWJ Group believes that compliance with all applicablelaws and regulations, and the spirit in which such are written, isfundamental to engaging in business activities, as is the proper
observance of social norms and customary business practices.
This belief is enshrined in a code of conduct compiled to encourage a compliance mind-set among all CCWJ Group directors andemployees. Further, to ensure that the Group meets its responsibilities as a good corporate citizen on every level, a division wasestablished to oversee CSR activities in January 2005.
Going forward, CCWJ will continue to pursue the initiatives
necessary to enhance corporate governance.

Management(As of April 1, 2005)

Directors
Representative Director

Masamitsu Sakurai

Representative Director
Director
Director
Director

Norio Sueyoshi
Tadatsugu Harada
Kouichi Morii
Masahiko Uotani

Director

Shingo Matsuo

Director

Kazuhiko Enomoto

Director
Director

Susumu Ishihara
Yuji Inoue

Director

Toshiaki Akahoshi

Chairman,President, Ricoh Company, Ltd.
***
President, Coca-Cola (Japan)
Company, Limited
President, Kyushu ElectricPower Co., Inc.
Chairman, Fukuokajisho Co., Ltd.
Chairman, Royal Co., Ltd.
President, Kyushu Railway Company
Senior Manager, Ricoh Company, Ltd.
Group Corporate Officer,
Ricoh Company, Ltd.
President, Ricoh Leasing Co., Ltd.
General Manager, Ricoh Co., Ltd.,
Fukuoka BranchPresident, Ricoh Kyushu Co., Ltd.

Senior Corporate Officer
Senior Corporate Officer
Senior Corporate Officer
Senior Corporate Officer
Senior Corporate Officer
Corporate Officer
Corporate Officer

Junji Katsura
Yukio Sako
Mitsuo Isobe
Masami Nomiyama
Tatsuhiko Ike
Masayuki Yamasaki
Toshinori Seto

Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer

Hayao Ogawa
Katsuzou Tsugawa
Shigejiro Sato
Naotake Tokieda
Tadanori Taguchi
Takashi Himeno
Yoshiki AsaharaGroup Executive Officers
Group Senior Corporate Officer Takeaki Sueyasu
Group Senior Corporate Officer Katsuyoshi Kawabe

Note: *Executive Officer

Auditors
Executive Corporate Auditor
Executive Corporate Auditor
Auditor
AuditorYasumasa Niimi
Ryuji Nakagawa
Tatsuo Hirakawa
Isanari Ohuchida

AuditorTakashi MatsuzakiGroup Senior Corporate Officer Toshiki Miyake
Group Senior Corporate Officer Masazumi Gotoh
Deputy President, Ricoh Company, Ltd.
Representative Senior Managing
Director, The Nishi-Nippon
City Bank, Ltd.
Attorney, Tokunaga, Matsuzaki &Saito Law Office
Deputy Chairman, Japan Federationof Bar Associations

Group Senior Corporate Officer Nobuji KiharaGroup Senior Corporate Officer Yuji Yamasaki
Group Senior Corporate Officer Nobuo Shibata
Group Senior Corporate Officer Shinji Oda

Executive Officers
President & CEO
Executive Vice President

Norio Sueyoshi
Tadatsugu Harada

Executive Vice President

Kouichi Morii

Executive Corporate Officer

20

Hijiri Morita

Coca-Cola West Japan Company, Limited

Group Senior Corporate Officer Takuo Shibata
Presidential Adviser(Sales, Business Systems and SCM)
Presidential Adviser(Administrative divisions);
CSR Division Manager;
General Manager,
Reform From Within Promotion
Office (concurrent posts)
Administration Division Manager

Food Service Sales Division Manager
Marketing Planning Division Manager
SCM Division Manager
Retail-Vending Sales Division Manager
Market Development Division Manager
Manager, SCM Planning Department
Manager, Partner Relationship
Department
Manager, Agents Sales Department
Chainstore Sales Division Manager
Business Systems Division Manager
Manager, General Affairs Department
Manager, Financial Affairs Department
Manager, Fukuoka BranchManager, Hiroshima BranchGroup Corporate Officer

Mikitoshi HagiharaGroup Corporate Officer

Tsuneo Fukuda

Group Corporate Officer

Yoshiaki Hamasaki

President, Nishinihon Bevarage Co., Ltd.
President, Coca-Cola West Japan
Logistics Co., Ltd.
President, TakaMasamune Co., Ltd.
President, Coca-Cola West Japan
Customer Service Co., Ltd.
Director and Executive Corporate
Officer, Mikasa Coca-Cola BottlingCo., Ltd.
President, Coca-Cola West Japan
Vending Co., Ltd.
President, Coca-Cola West Japan
Products Co., Ltd.
President, Coca-Cola West Japan
Service Co., Ltd.
Director and Senior Corporate Officer,
Coca-Cola West Japan Products
Co., Ltd.
Standard System Promotion Manager,
Coca-Cola Beverage Services Co., Ltd.
Director and Corporate Officer,
Coca-Cola West Japan Products
Co., Ltd.
Director and Senior Corporate
Officer, Coca-Cola West Japan
Vending Co., Ltd.

Six-year Summary(Millions of yen)
1999

Net sales . . . . . . . . . . . . . . . . . . . . . . ¥ 164,731

2000

2001

2002

2003

2004

¥ 207,827¥ 226,111¥ 247,737¥ 240,825¥ 253,248

Operating income . . . . . . . . . . . . . . . .

15,16017,44916,634

16,704

19,63816,860Recurring profit . . . . . . . . . . . . . . . . .

15,88918,516

16,021

17,00519,895

17,065Recurring profit margin (%) . . . . . . .

9.6

8.9

7.1

6.9

8.3

6.7

Net income . . . . . . . . . . . . . . . . . . . .

6,823

5,700

1,420

7,086

9,380

8,564

Net income per share (Yen) . . . . . . . .

113.67

77.83

17.62

85.49

116.25108.80Return on sales (%) . . . . . . . . . . . . . .

4.1

2.7

0.6

2.9

3.9

3.4

Total assets . . . . . . . . . . . . . . . . . . . .

182,316

181,637

202,713204,070

204,180

207,216

Total shareholders’ equity . . . . . . . . .

154,395

157,604

157,129

164,658

165,454

167,036

Shareholders’ equity ratio (%) . . . . . .

84.7

86.8

77.5

80.7

81.0

80.6

Shareholders’ equity per share (Yen) . .

2,107.74

2,151.52

1,950.07

2,009.39

2,089.94

2,149.99

Return on equity (%) . . . . . . . . . . . . .

5.6

3.7

0.9

4.4

5.7

5.2

Cash flows . . . . . . . . . . . . . . . . . . . . .

17,31920,175

15,06722,481

25,26823,491

Capital expenditures . . . . . . . . . . . . .

14,937

14,634

11,35521,027

13,846

15,611

Depreciation and amortization . . . . . .

10,496

14,475

13,647

15,395

15,88814,927

Coca-Cola West Japan Company, Limited21

Management’s Discussion and Analysis

Market Information

years, intense summer heat and other factors drove consumption substantially higher in fiscal 2004.

Trends in the Japanese Soft Drink Market
Production volumes have risen steadily, albeit marginally, in
the Japanese soft drink market as a whole in recent years,
contributing to overall market expansion. In fiscal 2004,
despite the impact of successive typhoons, record-high summer temperatures drove production volumes sharply higher.
By soft drink category, while production volumes werevirtually unchanged for coffee beverages, the intense summer
heat led to increased production volumes for carbonated andtea beverages. Tea beverages in particular have continued torecord annual growth in production volumes, as well as agreater share of the overall soft drink market, since theseproducts were first marketed in the late 1980s.

Market Information in CCWJ’s Sales Territory
Population Trends
CCWJ’s sales territory encompasses five prefectures in the
Chugoku region (Hiroshima, Okayama, Yamaguchi, Tottoriand Shimane) and three prefectures in the Kitakyushu region(Fukuoka, Saga and Nagasaki). According to 2004 population statistics and the Basic Resident Register, Japan’s population was 126,824,000, of which 15,105,000 people lived in
CCWJ’s sales territory, representing 11.9% of the country’s
total population. The population in CCWJ’s sales territory
has remained at the 15-million level for the past few years.
Annual per capita consumption in CCWJ’s sales territory,
calculated based on 1 bottle equaling 237ml, was 189 bottles
in fiscal 2004. While the growth rate had slowed in recent

Overall production volume ofsoft drinks(1,000kl)
20,00015,493 15,859 16,167 16,162

17,174Market Share in Sales Territory*Non-vending Retail Sales Market
CCWJ’s share of the soft drink market in its sales territory
hovers between 25% and 30%. CCWJ commands a particularly high market share in the Kyushu region.
Vending Machine Statistics
CCWJ has a high share of vending machines in its sales territory, controlling over 50% of all vending machines installed.
At December 31, 2004, CCWJ had 136,185 machines, up
1,033 units year on year, giving it a market share of 51.5%.
CCWJ’s share of the indoor vending machine market rose 0.2
percentage point to 28.5%. While the Company’s share ofvending machines in the outdoor market is expected to fallslightly in fiscal 2005, this is because CCWJ is continuing
efforts from 2004 to review the placement of machines with
an emphasis on profitability.
Nationwide Comparison by Brand
The market shares of all CCWJ brands are higher in the
Company’s sales territory than nationwide. In particular,
CCWJ’s four core brands—Coca-Cola, Georgia, Aquarius
and Sokenbicha—have commanding market shares. Georgia
most notably has a market share in CCWJ’s sales territorythat far exceeds its market share in Japan, underscoring its
overwhelming strength on home ground.

Market share in sales territory*Non-vending retail sales market(%)(Machines/%)
250,000

40
33.0

33.9

32.6

50.6
30.5

30

15,000

Number of vending machines/
Share

28.5

52.9

60
52.6

51.5
50

200,000
150,000

10,00052.3

139,653 137,984 137,427 135,152 136,185

20

40
30

100,000
20
5,000

10
50,000
0

0

00

01

Carbonated beverages
Tea beverages

02

03

04

Coffee beverages
Others

Source: Japan Soft Drinks Association (Annual
Statistic Report on Soft Drinks FY2004)

22

Coca-Cola West Japan Company, Limited

10

0

00

01

02

03

04

Source: Neilsen Co. of Japan Store Audit(2000–2001)
Intage Inc. of Japan Store Audit (2004)

0

00

01

02

03

Number of vending machines

04
Share

Source: Nielsen Co. of Japan Store Audit (2004)Market share by category (2004)*Non-vending retail sales market
(%)

Cola

Canned coffee

Blended tea

Sports drinks

No.1 Coca-Cola

No.1 Georgia

No.1 Sokenbicha No.1 Aquarius

Japanese market

Japanese market

Japanese market

Japanese market

CCWJ

CCWJ

CCWJ

CCWJ

79%

70%

82%

54%

Japanese tea

Fruit juice

Mineral water

No.4 Marocha

No.1 Qoo

No.1 Morino Mizu Dayori

Japanese market

Japanese market

Japanese market

CCWJ

CCWJ

CCWJ

12%

9%

26%
Source: Intage Inc. of Japan Store Audit (2004)

Sales by category(Thousand cases)

100,000

85,63988,17888,450

2000

2001

8,278
3,932
3,368
15,57826,584
6,325
7,207
2,890
3,016
2,750
1,523
3,510
53,805
16,256
85,639

9,403
4,077
2,798
16,27826,998
6,656
6,759
4,065
2,523
2,490
1,777
4,229
55,497
16,40388,17886,02587,096

2002

2003

2004

8,967
4,251
2,346
15,56427,543
7,181
6,925
3,669
2,064
2,328
1,948
5,001
56,65916,22788,450

8,484
3,991
2,799
15,274
27,041
6,275
6,638
4,360
1,977
2,260
2,010
4,456
55,017
15,73486,025

8,581
4,440
2,645
15,66626,483
7,299
7,567
4,546
2,144
1,951
2,057
3,635
55,682
15,74887,09680,00060,00040,000Carbonated beverages
Non-carbonated beverages
Other

20,0000

Carbonated Coca-Colabeverages Fanta
Other
Total
NonGeorgia
carbonated Aquarius
beverages
Sokenbicha
Marocha (Japanese teas)
Kochakaden
Qoo and HI-C
Morino Mizu Dayori (Mineral water)
Other
Total
Other
Total

Coca-Cola West Japan Company, Limited

23

Sales Volume in CCWJ’s Sales Territory

Sales by packaging(Thousand cases)

Sales Volume by Product Category
The Company’s beverages are broadly divided into three
categories: carbonated beverages, mainly the Coca-Cola andFanta brands; non-carbonated beverages, including Georgia
brand coffee, Aquarius and Sokenbicha; and other.
Total sales volume in fiscal 2004 increased by 1,071,000
cases, or 1.2%, to 87,096,000 cases. Sales volume was up forboth carbonated beverages and non-carbonated beverages.
Sales volumes of carbonated beverages rose by 392,000 cases,or 2.6%, to 15,666,000 cases, while the sales volume of noncarbonated beverages increased by 665,000 cases, or 1.2%, to55,682,000 cases.
By brand, Coca-Cola and Fanta accounted for 83.1%(54.8% and 28.3%, respectively) of the 15,666,000 cases ofcarbonated beverages sold in fiscal 2004. In non-carbonatedbeverages, Georgia accounted for 47.6%, or nearly half, of the55,682,000 cases sold, followed by Sokenbicha, Aquarius,and Marocha and other Japanese teas, with 13.6%, 13.1%
and 8.2%, respectively.
During fiscal 2004, the Company launched 208 new
product varieties, including a number of existing products
sold with redesigned packaging, representing a total sales
volume of 34,664,000 cases, a year-on-year increase of
11,642,000 cases, or 50.6%.

100,000
85,63988,178 88,450

86,025 87,096

80,00060,00040,00020,000000
Returnable bottles
Large PET bottles
Other

01

02

03

One-way bottles
Cans
Post mix

04
Small PET bottles
Bottle-cans

Note: Post mix refers mainly to diluted drinks sold in paper
cup-dispensing vending machines.

Sales Volume by Packaging
CCWJ continued to shift from cans to PET bottles, withcanned products accounting for 39.0% of sales volume, adecline of 4.6 percentage points; PET bottle products rose
2.1 percentage points to 33.7%. Sales of small PET bottle
products of 350ml or less grew strongly, with sales volumes
rising 36.1% year on year from 3,515,000 cases in fiscal
2003 to 4,786,000 cases in fiscal 2004. CCWJ plans tocontinue expanding sales volumes of products packaged insmall PET bottles by broadening its product lineup targetedat female consumers.
Bottle-can products, which accounted for 4,066,000 cases
in fiscal 2003, rose 55.7% in fiscal 2004 to 6,330,000 cases.
More growth is expected in the coming years.

24

Coca-Cola West Japan Company, Limited

Sales Volume by Sales Channel
CCWJ is promoting marketing based on demand in each sales
channel in response to structural changes in the marketplace.
For example, the Company works to improve sales volumes
and profitability in vending machines in various ways. The
Company replaces vending machines with high sales volumes
and high operating rates with value-added machines that have
IT features, and relocates or withdraws machines in locations
where sales volumes are low. At supermarkets, CCWJ proposes products and sales methods on an individual store basis
and offers other detailed sales support. As a result of thisapproach, total sales volume increased 1.2% in fiscal 2004.
Although sale volume from retail channels declined slightly,
vending machines, chain stores, convenience stores, and foodservice channels all reported higher sales volume year on year.

Sales by channel(Thousand cases)

100,000
85,63988,178 88,450 86,025 87,096

80,00060,00040,00020,000

000
Retail stores
Convenience stores
Food service

01

02

03

04

Supermarkets
Vending machines
Other

Overview of Fiscal 2004 Operating Results
Record-high summer temperatures in fiscal 2004 helped overcome the negative impact of a series of typhoons that struck
Japan, lifting consolidated net sales to ¥253,248 million, up
5.2%, or ¥12,422 million, from the previous year.
In tandem with aggressive marketing, the Company took
steps to boost the quality of its operations and emphasize
product freshness.
While gross profit increased on higher sales volumes, thiswas overshadowed by a jump in selling, general and administrative expenses due to higher sales commissions and the effectof changes to the Company’s retirement benefits system.
Operating income fell by ¥2,777 million, or 14.1%, to¥16,860 million as a result. In fiscal 2003, the Company
recorded operating income of ¥19,638 million, of which¥6,631 million was accounted for by retirement benefits
system changes. Excluding this effect, operating income would

have been ¥13,007 million. In fiscal 2004, these changes
accounted for ¥2,271 million of the ¥16,860 million in
operating income. If these effects are excluded, operating
income would have been ¥14,589 million, or ¥1,582 million
higher than the previous year on a comparative basis.
Recurring profit and net income were also lower for theyear, with recurring profit down ¥2,830 million, or 14.2%,
to ¥17,065 million, and net income falling ¥816 million,
or 8.7%, to ¥8,564 million. Net income per share was¥108.80, compared to ¥116.25 in the previous year. The
dividend per share was ¥40 for fiscal 2004, and the payout
ratio was 37.7%.
< Operating Results by Segment >By segment, the Manufacturing and Marketing of Beverages &Foods segment posted a 5.2% increase in sales to ¥249,229
million prior to the elimination of intersegment transactions,although operating income decreased 2.2% to ¥21,723
million. The Other Businesses segment, which includes
distribution and vending machine-related operations, generated sales before the elimination of intersegment transactionsof ¥19,249 million, up 5.9% year on year. Operating income
was also higher, up 95.1% to ¥709 million.

(Ref.) Operating income excluding effects ofretirement benefits system changes(Millions of yen)

19,63820,00016,860
6,631
15,0002,271

Portion of increase
due to retirement
benefits systemchanges+1,582
10,00013,007

14,589

5,000

0

03

04

Coca-Cola West Japan Company, Limited

25

Financial Position

Cash Flows

Total assets increased ¥3,036 million, or 1.5%, to ¥207,216
million. Current assets increased ¥2,406 million, or 4.2%,
from a year ago. This mainly reflects an increase in marketablesecurities accompanying the reclassification of bonds due tomature within one year and other investment securities formerly recorded as fixed assets. Total fixed assets edged up¥630 million, or 0.4%, year on year, primarily attributed to
an increase in investments and other assets, including investment securities, which outstripped a decline in property, plantand equipment.
Total current liabilities increased ¥597 million, or 2.5%,
compared with a year ago, principally due to an increase inaccrued expenses accompanying the extension and refurbishment of Company branch warehouses. Total long-term
liabilities increased ¥771 million, or 7.3%, from a year ago.
This mainly reflected an increase in deferred tax liabilities(see note) stemming from a reversal of retirement benefit
expenses accompanying changes to the Company’s retirement benefits system.
Shareholders’ equity increased ¥1,582 million, or 1.0%,
to ¥167,036 million, largely resulting from an increase inretained earnings due to the net income, despite a decrease
from the acquisition of treasury stock as part of theCompany’s capital strategy. The shareholders’ equity ratio
fell 0.4 of a percentage point from 81.0% to 80.6%, but
equity per share increased approximately 3% from
¥2,089.94 at the fiscal 2003 year-end, to ¥2,149.99.

Cash and cash equivalents at end of year decreased ¥81
million, or 0.4%, to ¥21,788 million.
Operating activities provided net cash of ¥21,502 million,
up 16.7% year on year. Net cash in fiscal 2004 was ¥3,079
million higher than the previous year when cash flows were
held down by the payment of a lump-sum transfer of ¥4,516
million and other factors.
Investing activities used net cash of ¥14,592 million, down
30.0% year on year. Cash used declined by ¥6,259 million
from a year earlier due to the acquisition of fewer bonds andother investment securities as part of the Company’s investment strategy.
Financing activities used net cash of ¥6,991 million,
37.1% less than in fiscal 2003. In fiscal 2004, the Company
repurchased less treasury stock as part of its capital strategy,
resulting in a ¥4,115 million year-on-year decrease in net cashused in financing activities.

Note: Deferred tax liabilities refer to the amount of taxes (corporate andotherwise) incurred on an accounting basis for a given period that arereasonably payable from an accounting standpoint at a later date.

Cash flows(Millions of yen)

40,00030,00024,763
20,88520,00016,22821,502
18,423

10,0000-10,000-20,000(9,310)(14,592)(15,007)(17,615)(20,852)(2,719)(3,126)(11,107)-40,000

00

01

From operating activities
From investing activities
From financing activities

26

Coca-Cola West Japan Company, Limited(6,991)(5,566)-30,000

02

03

04

Risk Information

Business results and other aspects of the Company’s operations mentioned in this corporate book are subject to a variety
of risks. Those risks deemed most likely to have a significant
impact on potential investment decisions are found below.
The CCWJ Group is fully aware of the possibility of theserisks and thus works to avoid them or deal effectively withthem should they arise.
Statements herein regarding future events or assumptions
reflect the judgment of the CCWJ Group as of March 25, 2005.
(1) Business agreements with The Coca-Cola
Company of the United States and Coca-Cola(Japan) Co., Ltd.
CCWJ and consolidated subsidiary Mikasa Coca-Cola BottlingCo., Ltd. conduct business activities based on a manufacturing
licensing agreement with The Coca-Cola Company, Coca-Cola(Japan) and CCNBC, and a distribution licensing agreementwith The Coca-Cola Company and Coca-Cola (Japan).
(2) Business ties with CCNBC
CCWJ has an equity interest in CCNBC, a company established to consolidate and oversee procurement, manufacturing
and distribution operations nationwide for the Coca-Cola
Group in Japan, and to build an optimal nationwide supply
chain structure, thereby reducing costs. CCNBC’s operations
are conducted in partnership with CCWJ and other CocaCola bottlers across Japan. The future progress and status of
cost-cutting plans of CCNBC could potentially impact theoperating results of the CCWJ Group.
(3) Quality assurance
Beverages are the core product of the CCWJ Group. The
Group makes every effort to raise employee awareness regarding quality and implements programs aimed at preventing
incidents concerning quality in order to offer its customers(consumers) high-quality and reliable beverages. Nevertheless,in the event of an incident related to product quality, theCompany’s brand image could be tarnished, irrespective ofwhether or not the CCWJ Group was actually at fault. An
incident of this nature could adversely affect the operating
results of the CCWJ Group.
(4) The soft drink industry
 Market competitiveness
Sales of beverages, the CCWJ Group’s core products, arereadily influenced by changes in customer (consumer) preference. In a beverage market of this kind, the CCWJ Group
strives to continuously offer appealing products and services.

Nevertheless, failure to amply forecast market changes could
potentially affect the operating results of the CCWJ Group.
 Impact of weather-related factors
Weather conditions tend to have an effect on the sales ofbeverages, the CCWJ Group’s core products. Cool summers
or warm winters, for example, often have a significant impact
on customer (consumer) demand. Although the CCWJ Groupmakes every effort to minimize the influence of weatherrelated factors on sales, the Group offers no guarantee that it
can completely eliminate the effect of such factors.
(5) Impact of economic conditions
 Trends in personal consumption
Sales of beverages, the CCWJ Group’s core products, areclosely linked to trends in personal consumption. Current
economic conditions in Japan suggest that a rapid recovery inpersonal consumption is unlikely. A sudden decline inpersonal consumption, however, could adversely affect theoperating results of the CCWJ Group.
 Fluctuations in asset value
Fluctuations in the value of land, marketable securities andother assets owned by the CCWJ Group could potentially
impact the Group’s operating results and financial position.
Marketable securities with a fair value, for example, are subject
to changes in fair market value in capital markets because thatis how they are valued.
(6) Public regulations
The CCWJ Group’s Manufacturing and Marketing of
Beverages & Foods segment is subject to a number of regulations in Japan, including the Act Against Unjustifiable
Premiums and Misleading Representations (Premiums andRepresentations Act) and the Food Sanitation Law. The
Group fully complies with these and all other regulations in
its commitment to providing safe and reliable products.
Accordingly, tougher regulations, for example, might incur
new compliance costs, which could potentially affect theoperating results of the CCWJ Group.
(7) Impact of disasters
The CCWJ Group has a system in place to minimize theeffects of power outages, as well as other scenarios for whichassumptions must be made, on its business operations.
Typhoons, earthquakes and other natural disasters, however,
could trigger conditions that exceed these assumptions.
Conditions of this magnitude could potentially impact theoperating results and financial position of the CCWJ Group.

Coca-Cola West Japan Company, Limited

27

Financial Data

Operating income (Millions of yen)
Operating income/Net sales (%)

Recurring profit (Millions of yen)
Recurring profit margin (%)
10

40,000
8.4

8.3
830,0006.7

16,63430,0006.7

6.9

16,021

17,00520,0008
6.7
619,895

18,516

16,86016,7047.1

6

19,63817,449

10

8.9

8.2
7.4

20,00040,00017,065

4
10,0000

4
10,0002

000Operating income

01

02

03

0

0

04

Operating income/Net sales

00

Recurring profit

Net income (Millions of yen)
Return on sales (%)

01

02

03

04

Recurring profit margin

Cost of sales (Millions of yen)
Cost of sales/Net sales (%)
4

20,0003.9
15,0002

250,000

53.3

3.4

54.9

54.2

55.2

60

55.2

200,000

2.9

3

2.7

9,380
10,000150,000
8,564

122,504

135,989 132,995 139,675

40

110,876

2

7,086

100,000

5,700

20
1

5,000

50,000

0.6
1,420
0

Net income

0

00

01

02

03

0

0

04

Return on sales

00

Cost of sales

01

02

03

04

Cost of sales/Net sales(Millions of yen)

28

2000

2001

2002

2003

2004

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income/Net sales (%) . . . . . . . . . . . . . . .

17,4498.4

16,634
7.4

16,704
6.7

19,638
8.2

16,860
6.7

Recurring profit . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recurring profit margin (%) . . . . . . . . . . . . . . . . .

18,516
8.9

16,021
7.1

17,005
6.9

19,895
8.3

17,065
6.7

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Return on sales (%) . . . . . . . . . . . . . . . . . . . . . . . .

5,700
2.7

1,420
0.6

7,086
2.9

9,380
3.9

8,564
3.4

Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales/Net sales (%) . . . . . . . . . . . . . . . . . .

110,876
53.3

122,504
54.2

135,98954.9

132,995
55.2

139,675
55.2

Coca-Cola West Japan Company, Limited

Total assets (Millions of yen)
Total assets turnover ratio (Times)

Total shareholders’ equity (Millions of yen)
Shareholders’ equity ratio (%)
1.5

400,000

100

400,000
86.8

1.2

1.2

1.2

1.2

80.7

77.5

1.1
300,000

81.0

80.6
80

300,000
1.0
202,713 204,070 204,180 207,216

200,00060

181,637

167,036
157,604 157,129 164,658 165,454

200,000

40
0.5
100,0000

100,000

000

01

Total assets

02

03

01

02

03

04

Shareholders’ equity ratio

Current assets (Millions of yen)
Current ratio (%)
25

30,00019.7

00

Total shareholders’ equity

Inventories (Millions of yen)
Inventory turnover ratio (Times)

20.1

0

0

04

Total assets turnover ratio

21.1

20

19.3

478.0

200,000

500

20.0
20

400
150,000

20,000282.5

1512,776

12,361

12,570256.3

94,534

12,762
10

Inventories

0

01

02

03

59,54050,0005

00

57,134

70,142

10,0000

243.5

100,000
72,348

9,681

300
239.5

100

0

0

04

Inventory turnover ratio

200

00

Current assets

01

02

03

04

Current ratio(Millions of yen)
2000

2001

2002

2003

2004

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets turnover ratio (Times) . . . . . . . . . . . . .

181,637
1.1

202,7131.2

204,070
1.2

204,180
1.2

207,216
1.2

Total shareholders’ equity . . . . . . . . . . . . . . . . . . .
Shareholders’ equity ratio (%) . . . . . . . . . . . . . . . .

157,604
86.8

157,12977.5

164,658
80.7

165,45481.0

167,036
80.6

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory turnover ratio (Times) . . . . . . . . . . . . . .

9,681
21.1

12,77620.1

12,361
19.7

12,57019.3

12,76220.0

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current ratio (%) . . . . . . . . . . . . . . . . . . . . . . . . .

94,534478.0

72,348282.5

70,142
256.3

57,134239.5

59,540243.5

Asset turnover ratio = Net sales / The average of assets at the beginning and end of the fiscal period
Shareholders’ equity ratio = Shareholders’ equity / Total assets
Inventory turnover ratio = Net sales / The average of inventory taken at the beginning and end of the fiscal period
Current ratio = Current assets / Current liabilities

Coca-Cola West Japan Company, Limited

29

Interest coverage ratio (Times)

Capital expenditures (Millions of yen)

2,500

25,00021,0272,402.0
2,000

20,00015,611

14,6341,500

13,84615,00011,3551,000

10,000

894.9
571.1

500

368.5

5,000
353.9

0

00

01

02

03

0

04

Depreciation and amortization (Millions of yen)

00

01

02

03

04

Return on equity (ROE) (%)
Return on assets (ROA) (%)

20,0005.7

6

5.2
15,395
14,47515,00015,88814,927

4.6

4.4

13,647

4.2

3.7

4

3.5
10,000
3.1
2
5,000
0.9
0.7
0

00

01

02

03

0

04

00

01

02

Return on equity (ROE)03

04

Return on assets (ROA)(Millions of yen)
2000

2001

2002

2003

2004

Interest coverage ratio (Times) . . . . . . . . . . . . . . .

368.5

571.1

353.9

894.9

2,402.0

Capital expenditures . . . . . . . . . . . . . . . . . . . . . . .

14,634

11,35521,027

13,846

15,611

Depreciation and amortization . . . . . . . . . . . . . . . .

14,475

13,647

15,395

15,88814,927Return on equity (ROE) (%) . . . . . . . . . . . . . . . . .
Return on assets (ROA) (%) . . . . . . . . . . . . . . . . .

3.7
3.1

0.9
0.7

4.4
3.5

5.7
4.6

5.2
4.2

Interest coverage ratio = Operating cash flows / Interest payments*
Return on equity = Net income / The average of shareholders’ equity at the beginning and end of the fiscal period
Return on assets = Net income / The average of assets at the beginning and end of the fiscal period* Interest payments represent interest paid as shown on the consolidated statements of cash flows.

30

Coca-Cola West Japan Company, Limited

Net income per share (Yen)Price earnings ratio (PER) (Times)
150

Shareholders’ equity per share (Yen)Price book-value ratio (PBR) (Times)
150

133.6

1.4

5,000

116.25

1.5
1.2

1.2

108.80

4,000
1.0

100

100

85.49

1.0

0.9

77.83

3,000
2,151.52

1,950.07 2,009.39

2,089.94 2,149.99

2,000
50

17.62

0

0.5

50

38.7
20.8

1,000

24.2

18.1

0

00

01

Net income per share

02

03

0

0

04

Price earnings ratio (PER)

00

01

02

03

Shareholders’ equity per share

Cash flows per share (Yen)Price cash flow ratio (PCFR) (Times)

Price book-value ratio (PBR)

Dividend per share (Yen)

15

500

50

12.6
400

40.0
40

10.9
313.7

300

275.4

04

299.3

272.3

32.0

34.0

01

02

10

30

8.8

187.0

34.0

36.0

6.7

200

20

6.5
5

100

0

10

0

00

Cash flows per share

01

02

03

0

04

00

03

04

Price cash flow ratio (PCFR)

(Yen)
2000

2001

2002

2003

2004

Net income per share . . . . . . . . . . . . . . . . . . . . . . .
Price earnings ratio (PER) (Times) . . . . . . . . . . . .

77.83
38.7

17.62
133.6

85.49
20.8

116.2518.1

108.8024.2

Shareholders’ equity per share . . . . . . . . . . . . . . . .
Price book-value ratio (PBR) (Times) . . . . . . . . . .

2,151.52
1.4

1,950.07
1.2

2,009.39
0.9

2,089.94
1.0

2,149.99
1.2

Cash flows per share . . . . . . . . . . . . . . . . . . . . . . .
Price cash flow ratio (PCFR) (Times) . . . . . . . . . .

275.4
10.9

187.0
12.6

272.3
6.5

313.7
6.7

299.3
8.8

Dividend per share . . . . . . . . . . . . . . . . . . . . . . . . .

32.0

34.0

34.0

36.0

40.0

Net income per share = Net income / The average number of shares during the period
Price earnings ratio = Market value at the end of the period / Net income per share
Shareholders’ equity per share = Shareholders’ equity / The number of shares outstanding at the end of the period
Price book-value ratio = Market value at the end of period / Shareholders’ equity per share
Cash flows per share = Cash flows / The average number of shares during the period
Price cash flow ratio = Market value at the end of the period / Cash flows per share

Coca-Cola West Japan Company, Limited31

Consolidated Balance Sheets(As of December 31, 2002, 2003 and 2004)(Millions of yen)

32

2002

2003

2004

ASSETS
Current assets:
Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade notes and accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 19,182
11,664
16,484
12,361
1,279
9,287
(117)

¥ 15,295
13,175
7,141
12,570
841
8,227
(118)

¥ 15,524
13,6698,923
12,762
812
7,930
(81)

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

70,142

57,13459,540

Fixed assets:
Property, plant and equipment:
Buildings and structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery, equipment and vehicles . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . .

20,187
15,774
17,487
34,637261
1,019

18,852
14,674
17,74034,722
44947

18,55914,252
17,19634,38993
1,344

Total property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . .

89,367

86,982

85,837

Intangible assets:
Goodwill on consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

250
3,566

118
2,599

34
2,808

Total intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,817

2,718

2,843

Investments and other assets:
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced payments for retirement expenses . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,940
1,735
–
7,178
(110)

40,636569
13,3063,097(264)

47,369
890
7,749
3,265
(279)

Total investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . .

40,74357,34458,995

Total fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

133,928

147,045

147,676

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥204,070¥204,180¥207,216

Coca-Cola West Japan Company, Limited

(Millions of yen)
2002

LIABILITIESCurrent liabilities:
Trade notes and accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .
Convertible bonds due to mature within one year . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable for equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

7,787
2,154
180
334
902
6,153
1,485
8,369

2003

¥

8,950
–
–
203
2,924
5,426
667
5,681

2004

¥

7,891
–
–
203
3,743
7,125
96
5,390

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27,36623,85324,451Long-term liabilities:
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for employees’ retirement benefits . . . . . . . . . . . . . . . . . .
Liabilities for directors’ and corporate auditors’ retirement benefits . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,906
3,683
372
1,092

5,880
3,394
323
996

6,911
3,146
345
963

Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,055

10,595

11,366

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34,421

34,44935,817MINORITY INTERESTS
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,990

4,276

4,362

SHAREHOLDERS’ EQUITY
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on other marketable securities . . . . . . . . . . . . . . .
Treasury stock (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,23135,399115,771341(2,086)

15,23135,399122,372411(7,960)15,23135,400127,849449(11,895)

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

164,658

165,454

167,036

Total liabilities, minority interests and shareholders’ equity . . . . . . . . .

¥204,070¥204,180¥207,216

Coca-Cola West Japan Company, Limited33

Consolidated Statements of Income(Years ended December 31, 2002, 2003 and 2004)(Millions of yen)
2002

2003

2004

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥247,737
135,989¥240,825
132,995¥253,248
139,675

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111,747

107,829

113,572

Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . .

95,04388,191

96,712

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,704

19,63816,860Non-operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,280
306
32
–
302
638

1,100
254
35
59
294
456

1,090
273
37
44
294
440

Non-operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of property, plant and equipment . . . . . . . . . . . . . . . . .
Property rental costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

979
47
2
471
268
188

843
22
–
441
188
191

884
8
–
463
135
276

Recurring profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,00519,895

17,065Extraordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on reversal of allowance for doubtful accounts . . . . . . . . . . . . . . .
Gain on sales of property, plant and equipment . . . . . . . . . . . . . . . . . . .
Proceeds from government assistance grants . . . . . . . . . . . . . . . . . . . .
Gain on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Return on the substituted portion of the combined
welfare pension insurance fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,419
38
–
–
211

231
–
231
–
–

158
–
71
86
–

4,169

–

–

Extraordinary losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of property, plant and equipment . . . . . . . . . . . . . . . . . . .
Impairment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Water damage losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from typhoon damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sale of subsidiaries’ stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses for early retirement program . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposals of property, plant and equipment . . . . . . . . . . . . . . . .
Write-down of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-down of golf club memberships . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement expense accompanying a large number of retirements . . . . .
Lump-sum transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense for restructuring of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . .
Expense for realignment of sales structure of subsidiaries . . . . . . . . . . .
Product disposal losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Product valuation losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Flavoring problem countermeasure losses . . . . . . . . . . . . . . . . . . . . . . .
Quality problem countermeasure losses . . . . . . . . . . . . . . . . . . . . . . . . .
Expense for compatibility with new currency . . . . . . . . . . . . . . . . . . . .
Lump-sum amortization of adjustments accompanying partial
reimbursement of trust for retirement benefits . . . . . . . . . . . . . . . . . .

9,006
1,472
–
–
–
–
764
148
–
39
39
171
4,516
1,855
–
–
–
–
–
–

2,141
45
–
43
–
31
–
–
17
97
189
–
–
753
–
269
112
113
466
–

2,564
161
505
–
168
–
–
–
88
40
55
–
–
–
383
–
–
–
–
583

–

–

576

Income before income taxes, minority interests and other adjustments . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,418
2,241
3,089
1

17,985
3,768
5,532
(695)

14,659
5,310
707
76

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34

Coca-Cola West Japan Company, Limited

¥

7,086

¥

9,380

¥

8,564

Consolidated Statements of Shareholders’ Equity(Years ended December 31, 2002, 2003 and 2004)(Millions of yen)
2002

2003

2004

Capital surplus:
Capital surplus at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Differences from cancellation of treasury stock . . . . . . . . . . . . . . . . . . .
Stock issued under exchange offerings . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale of shares in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 29,687
5,860
–
5,860
148
148

¥ 35,399–––––¥ 35,39900–––Capital surplus at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,39935,39935,400Retained earnings:
Retained earnings at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonus to directors and corporate auditors . . . . . . . . . . . . . . . . . . . . . . .
Sale of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111,586
7,086
7,086
2,901
2,859
37
4

115,771
9,380
9,380
2,779
2,738
41
–

122,372
8,564
8,564
3,087
3,057
30
–

Retained earnings at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥115,771¥122,372¥127,849

Coca-Cola West Japan Company, Limited

35

Consolidated Statements of Cash Flows(Years ended December 31, 2002, 2003 and 2004)(Millions of yen)
2002

2003

2004

¥ 12,418
15,395–138¥ 17,985
15,888–132¥ 14,659
14,927505
83(99)(3,094)(4,109)(49)(289)(9,196)

21
(247)
5,556

–
(339)
47
4,516
2
(162)
764
39
1,461
363
453
398
(907)
(282)
(1,211)(37)(210)
25,544404(59)–(5,005)20,885

–
(290)
22
–
(59)
62
–
97
(181)
353
(1,511)
(209)
(565)
1,163
939
(41)
194
24,445262(20)(4,516)(1,746)
18,423(8,722)
(310)
8
–
(44)
38
–
40
112
460
(493)
(191)
68
(1,058)241(30)
72
25,697304(8)–(4,491)
21,502

Cash flows from investing activities:
Acquisition of marketable and investment securities . . . . . . . . . . . . . . .
Proceeds from sales of marketable and investment securities . . . . . . . .
Acquisition of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisition of subsidiaries’ shares . . . . . . . . . . . . . . . . . .
Proceeds from the sale of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in loans to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from collection of loans to affiliates . . . . . . . . . . . . . . . . . . . .
Increase in time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from refund of time deposits . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,246)
4,477(21,062)
1,618
(191)
4,223
(436)
–
–
15
(12)
(17,615)(12,121)
3,118(14,575)
2,896
–
–
(192)
–
–
10
12
(20,852)(5,718)
5,682(15,049)
511
–
–
–
62
(100)
15
3
(14,592)

Cash flows from financing activities:
Decrease in short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redemption of convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisition of treasury stock . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . .

(481)
(71)
–
(2,081)–(2,859)(73)(5,566)

(180)
(130)
(2,154)(5,874)–(2,738)(30)(11,107)–––(3,937)3(3,057)–(6,991)

Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . .

(2,296)37,702¥ 35,406(13,536)
35,406¥ 21,869(81)
21,869¥ 21,788

Cash flows from operating activities:
Income before income taxes, minority interests and other adjustments . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-off of consolidation adjustment account . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in liabilities for directors’
and corporate auditors’ retirement benefits . . . . . . . . . . . . . . . . . . . . .
Decrease in liabilities for retirement benefits . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in advanced payments for retirement expenses . . .
Increase in investment securities from partial
reimbursement of trust for retirement benefits . . . . . . . . . . . . . . . . . .
Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lump-sum transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses (earnings) of affiliates . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on sales of marketable and investment securities . . . . . . . .
Gain on sale of shares in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-down of marketable and investment securities . . . . . . . . . . . . . .
Gain (loss) on sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposals of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in accounts receivable . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in accounts payable . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of directors’ bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses for lump-sum transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . .

36

Coca-Cola West Japan Company, Limited

Stock Information(As of December 31, 2004)

Authorized shares:
Outstanding shares:
Number of shareholders:Major shareholders:

270,000,000
82,898,654
13,077

Shareholders

Ricoh Company, Ltd.
The New Technology Development Foundation
Coca-Cola Holdings West Japan, Inc.
The Nishi-Nippon City Bank, Ltd.
Mellon Bank Treaty Clients Omnibus
Japan Trustee Services Bank, Ltd. (Trust account)
The Chase Manhattan Bank, NA London
State Street Trust & Banking Co., Ltd.
Showa Tansan Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust account)

Number of shares held(Thousands)

Percentage ofshares (%)

16,792
5,294
4,074
3,703
3,048
2,922
2,312
1,842
1,650
1,591

21.7
6.8
5.3
4.8
3.9
3.8
3.0
2.4
2.1
2.1

Note: The Company owns 5,225,000 shares of treasury stock. This shareholding is not shown in the table and has not been included in the calculationof voting rights (percentage of shares).

Number of shares held and percentage of shares held by shareholder category:
6.3%
10.5%

17.2%
2.1%

25.8%

Financial institutions
Securities companies
Other domestic corporations
Foreign corporations
Individuals and others
Treasury stock

Number ofshareholders

Number ofshares (Thousands)

66
30
319
198
12,463
1

14,238
1,742
31,57821,429
8,684
5,225

38.1%

<Composition of shareholders>PER (Times)
PBR (Times)
FY-end stock price (Yen)Dividend (Yen)
Payout ratio (%)

2000

2001

2002

2003

2004

38.7
1.4
2,735
32.0
42.7

133.6
1.2
2,355
34.0
108.9

20.8
0.9
1,775
34.0
52.1

18.1
1.0
2,100
36.0
28.3

24.2
1.2
2,630
40.0
37.7

Note: PER and PBR figures for fiscal 2000 are computed based on the year-end stock pricemultiplied by 1.1 times to adjust for stock splits.

Credit Rating Information
Japan Credit Rating Agency, Ltd.
Long-term credit rating
Rating and Investment Information, Inc.
Long-term credit rating

2000

2001

2002

2003

2004

AA–

AA–

AA–

AA–

AA–

A+

A+

A+

A+

A+

Coca-Cola West Japan Company, Limited37

Coca-Cola System in Japan

Japan’s Coca-Cola system consists of Coca-Cola (Japan) Co., Ltd.
and 14 bottling companies (bottlers) that manufactureand sell Coca-Cola products in the different regions of the country.
Coca-Cola (Japan) produces concentrates of Coca-Cola and other beverages.
Coca-Cola National Beverage Co., Ltd., which oversees procurement,
manufacturing and distribution on a national level, then supplies these concentrates
to the bottlers, which in turn use them to manufacture various products
under strict quality control in their respective plants. The bottlers distribute products
to their 466 sales centers throughout Japan, which ship the products directly
to nearly 1.2 million shops and other outlets by delivery trucks called “route trucks.”
In addition, approximately 980,000 automatic vending machines are installed extensively
and efficiently all over the country for the convenience of consumers.
Thus, the unique Coca-Cola system can grow with the changing needs of
local industries and communities.

14 Bottlers(As of January 2005)*Major investor shown in parentheses

Hokkaido Coca-Cola Bottling Co., Ltd.
Dai Nippon Printing Co., Ltd.
Hokkaido

Mikuni Coca-Cola Bottling Co., Ltd.

Michinoku Coca-Cola Bottling Co., Ltd.

Mitsui & Co., Ltd.
Saitama/Gunma/Niigata

Tanimura-Ya
Iwate/Akita/Aomori

Hokuriku Coca-Cola Bottling Co., Ltd.
Sendai Coca-Cola Bottling Co., Ltd.

Wakadori Corporation
Nagano/Toyama/Ishikawa/Fukui

Kamei Corporation
Miyagi/Fukushima/Yamagata

Mikasa Coca-Cola Bottling Co., Ltd.
Coca-Cola West Japan Company, Ltd.
Nara/Shiga/Wakayama

Tone Coca-Cola Bottling Co., Ltd.
Kikkoman Corporation
Chiba/Ibaraki/Tochigi

Kinki Coca-Cola Bottling Co., Ltd.
Kirin Brewery Company, Limited
Osaka/Hyogo/Kyoto

Tokyo Coca-Cola Bottling Co., Ltd.
Marujin CorporationTokyo

Coca-Cola Central Japan Co., Ltd.
Mitsubishi Corporation
Kanagawa/Shizuoka/Yamanashi/Aichi/Gifu/Mie

Shikoku Coca-Cola Bottling Co., Ltd.
Nippon Paper Group, Inc.
Kagawa/Ehime/Kochi/Tokushima

Coca-Cola West Japan Company, Ltd.
Ricoh Company, Ltd.
Hiroshima/Okayama/Yamaguchi/Shimane/Tottori/Fukuoka/Saga/Nagasaki

38

Minami Kyushu Coca-Cola Bottling Co., Ltd.

Okinawa Coca-Cola Bottling Co., Ltd.

Satsuma Shuzo Co., Ltd.
Kumamoto/Kagoshima/Oita/Miyazaki

Marujin Corporation
Okinawa

Coca-Cola West Japan Company, Limited

Group Overview

Investment(100%)

Coca-Cola
National Beverage Co., Ltd.
(CCNBC)

Coca-Cola
Asia Pacific
R&D Center(CCAP R&D)

6

Coca-Cola
Beverage Services Co., Ltd.
(CCBSC)

4The
Coca-Cola
Company(TCCC)

7

2(100%)

Coca-Cola
National Sales Co., Ltd.
(CCNSC)

Coca-Cola (Japan)
Co., Ltd.
(CCJC)

Coca-Cola West Japan
Co., Ltd.
(CCWJ)(5%)

1
Coca-Cola Central
Japan Co., Ltd.
(CCCJ)(5%)

8
Coca-Cola Bottling(12 companies)(CCBC)FV Corporation
(FVC)

3

5

9
Joint companies of TCCC/CCJC
and bottlers

 Coca-Cola West Japan Co., Ltd. (CCWJ)
Established as Japan’s first anchor bottler in July 1999 withthe merging of Sanyo and Kita-Kyushu Coca-Cola bottlingcompanies and stock participation by The Coca-Cola Company.
 The Coca-Cola Company (TCCC)
Established in 1919 in Atlanta, Georgia, in the United States.
TCCC holds the rights to license bottlers to manufacture anddistribute Cola-Cola products. Bottling contracts with bottlers
are entered into by TCCC or one of its subsidiaries.
 Coca-Cola (Japan) Co., Ltd. (CCJC)
Established in 1957 in Tokyo as “Nihon Inryo Kogyo K.K.,”
a wholly owned subsidiary of The Coca-Cola Company of the
U.S., and then renamed in 1958 to Coca-Cola (Japan) Company, Limited. CCJC is engaged in marketing, planning, andmanufacture and distribution of concentrates in Japan.
 Coca-Cola Asia Pacific R&D Center (CCAP R&D)
Established in January 1993 as a wholly owned subsidiary of
The Coca-Cola Company of the U.S. Since January 1995,
the center has been involved in product development andtechnical support responding to needs in the Asian region.
 Coca-Cola Bottlers (CCBC)
In Japan, there are 14 bottlers, which manufacture anddistribute products. Each bottler is responsible for different
regions of the country.

 Coca-Cola National Beverage Co., Ltd. (CCNBC)
Established in April 2003 as a joint company of The CocaCola Company and the bottlers to create an optimum
national supply chain management (SCM) system forJapan’s Coca-Cola Group. CCNBC started its operations in
October the same year. The company oversees the group’s
joint procurement of raw materials/ingredients, manufacturing on a national level, and supply-demand planning andcoordination, and supplies products to the bottlers.
 Coca-Cola Beverage Services Co., Ltd. (CCBSC)
Established in June 1999 as a joint company of The CocaCola Company and the bottlers and launched into business in
September the same year. In October 2003, procurement
operations were transferred to CCNBC. At this moment,
CCBSC is promoting reform of the information system for
the Japan Coca-Cola system.
 Coca-Cola National Sales Co., Ltd. (CCNSC)
Established in October 1995 as a joint venture of all theJapanese bottlers and Coca-Cola (Japan). CCNSC is responsible for sales activities to national chain customers.
 FV Corporation (FVC)
Established in May 2001 as a joint company of Coca-Cola(Japan) and all the Japanese bottlers. Its functions include:
sales to organizations spread over wide areas in the vending
machine business and handling of products other than corporate products (those authorized by Coca-Cola (Japan)).

Coca-Cola West Japan Company, Limited

39

Corporate Data
(As of Decenber 31, 2004)● Company name:Coca-Cola West Japan Company, Limited● Head office:7-9-66 Hakozaki, Higashi-ku, Fukuoka, Japan● Established:

December 20, 1960

● Outstanding shares:

82,898,654● Paid-in capital:¥15,231,000,000● Employees:

4,964 (Consolidated)● Principal businesses:

Manufacture and sales of beverages,
mainly Coca-Cola, Sprite, Fanta, and Georgia● Stock exchange listings: Tokyo Stock Exchange (First Section)
Osaka Securities Exchange (First Section)
Fukuoka Stock ExchangeGroup Companies(As of April 1, 2005)

Nishinihon Beverage Co., Ltd.

NICHIBEI CO., LTD.

COCA-COLA WEST JAPAN PRODUCTS CO., LTD.

TAKAMASAMUNE CO., LTD.

COCA-COLA WEST JAPAN VENDING CO., LTD.

WEST JAPAN SERVICE CO., LTD.

COCA-COLA WEST JAPAN CUSTOMER SERVICE CO., LTD.*MIKASA COCA-COLA BOTTLING CO., LTD.

COCA-COLA WEST JAPAN LOGISTICS CO., LTD.**MIKASA LOGISTICS CO., LTD.

●Principal businesses: Beverage sales●Head office: 5-1-6 Hakozakifuto, Higashi-ku, Fukuoka●Paid-in capital: ¥100 million●Representative: Takeaki Sueyasu●Principal businesses: Beverage production●Head office: 1670-2 Nihonmatsu, Todorokimachi, Tosu
●Paid-in capital: ¥100 million●Representative: Nobuo Shibata●Principal businesses: Vending machine operations●Head office: 2-2-32 Matsuda, Higashi-ku, Fukuoka●Paid-in capital: ¥80 million●Representative: Yuji Yamasaki●Principal businesses: Vending machine-related businesses●Head office: 871 Taniyama, Koga, Fukuoka●Paid-in capital: ¥22 million●Representative: Masazumi Gotoh●Principal businesses: Freight transport operations●Head office: 2-11-20 Higashisendamachi, Naka-ku, Hiroshima●Paid-in capital: ¥70 million●Representative: Katsuyoshi Kawabe* Name changed from Nishinihon Customer Service Co., Ltd. on
April 1, 2005.
** Name changed from Logicom Japan Co., Ltd. on April 1, 2005.

●Principal businesses: Manufacture of processed foods●Head office: 6-9, Wakazakura, Fujinokimachi, Tosu
●Paid-in capital: ¥80 million●Representative: Akira Gohhara●Principal businesses: Production and sale of alcoholic beverages●Head office: 297 Kuroda, Daizenjimachi, Kurume●Paid-in capital: ¥90 million●Representative: Toshiki Miyake●Principal businesses: Insurance, leasing, and realestate-related businesses●Head office: 7-9-66 Hakozaki, Higashi-ku, Fukuoka●Paid-in capital: ¥60 million●Representative: Shinji Oda●Principal businesses: Beverage production and sales●Head office: 643 Kabata-machi, Tenri, Nara
●Paid-in capital: ¥4,159 million●Representative: Tadao Fujino●Principal businesses: Freight transport operations●Head office: 643 Kabata-machi, Tenri, Nara
●Paid-in capital: ¥50 million●Representative: Minoru Yoshizawa

MIKASA SERVICE CO., LTD.

●Principal businesses: Vending machine-related businesses●Head office: 643 Kabata-machi, Tenri, Nara
●Paid-in capital: ¥90 million●Representative: Nobutsugu Nakajima

MIKASA BEVERAGE SERVICE CO., LTD.
●Principal business: Beverage sales●Head office: 643 Kabata-cho, Tenri, Nara
●Paid-in capital: ¥10 million●Representative: Hitoshi Tarutani

40

Coca-Cola West Japan Company, Limited

Coca-Cola West Japan Company, Limited
This corporate book is printed on recycled paper.

7-9-66 Hakozaki, Higashi-ku, Fukuoka 812-8650, JapanTEL (092) 641-8591

Printed in Japan

http://www.ccwj.co.jp/