森の水だより、からだ巡茶、からだすこやか茶、COCOTEEN、ココティーン、BISTRONE、ビストローネ、OLO OLO、オロオロ、. POWERADE、パワー
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The plans, performance forecasts, and strategies appearing in this material are based on the assumptions and judgment of the management of Coca – Cola East Japan Co. Ltd. (CCEJ) in view of data obtained as of the date this material was released. These forecasts may differ materially from actual performance due to risks and uncertain factors such as those listed below. Risks and uncertain factors are not limited to the items listed below. They are also included in our annual securities report, or Shoken Houkokusho Intensification of price competition in the marketplace Change in economic trends surrounding our business Major fluctuations in capital markets Fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen and the U.S. dollar Increases in prices of raw materials Change in the tax environment CCEJ’s ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management; CCEJ’s ability to market and distribute effectively Uncertain factors other than those above The information in this presentation is provided for informational purposes and should not be construed as a solicitation of an investment in our securities . CCEJ undertakes no duty to update any statement in light of new information or future events. You should rely on your own independent examination of us before investing in any securities issued by our company . Forward – Looking Statements 2
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Introduction Key Messages Our Roadmap for Sustainable Growth Delivering Results in 2014 Rapidly and Actively Integrating Q2 & 1H 2014 Results Additional Details Details on Change to Accounting Policy and Estimates Funding Options, Shareholder Returns, Q3 Milestones Q2 & 1H 2014 Earnings Presentation 4
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Coca – Cola East Japan Starting Peak S eason from a Position of Strength One full year of operations since integration on July 1, 2013 Solid and sequentially improving top – line performance in a quarter marked by the consumption tax increase Volume growth of +3% year – to – date and +2% in the second quarter Third consecutive quarter of share gains . Q2 value share ahead of volume share growth Regaining momentum in coffee and convenience stores with successful campaigns and product launches Q2 & YTD revenue growth include – 1% impact of divesting non – core assets (Mikuni Wine) Continuing to capture supply chain synergies Q2 operating income growth of 28% includes the benefit of previously announced change in accounting policy for depreciation. OI quarterly phasing in line with historic seasonality No change to full – year estimates 5
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2013 – 2014 2014 – 2015 2015 – 2017 2017 – Tokyo Olympic Games & Beyond 2012 – 2013 2014: A Year of Transition Q2: Consumption Tax Rise OI Margin + 1 pt OI Margin +1 – 2 pts OI Margin +1 – 2 pts Forming Speed of integration: 250+ projects Storming Define & deploy new bus. model Identifying synergies & positioning for growth Accelerating Meet & exceed world – class bottler levels A world – class Japanese bottler on the world stage Performing Approaching global bottler performance levels Exploiting new architecture as competitive advantage to drive synergies & growth Norming Refine & optimize new business model Process re – engineering & launch of ERP system while delivering first results One+ Roadmap for Growth 6
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Rapidly and Actively Integrating in 1H Delivering on our Commitments Roll – out of new pricing and packaging for consumption tax increase completed on – plan Legal integration of 3 Logistics and 4 Equipment subsidiary companies into Coca – Cola East Japan Products (CCEJP) completed on – plan Four new production lines and two new in – line PET blowers installed New Route – to – Market deployment on track Call center consolidation from six to two Second employee voluntary separation plan complete Kick – off of T eam GOLD with concrete targets related to gender diversity 8
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1H: Steady Quarterly Volume Growth Sequential Improvement during Q2 after Tax R ise – 2.6% +1.1% April May June +6.7% +3.4% +2.0% Q1 Q2 Many product launches Good execution, strong share gains 1H +2.6% Q2 Highlights Volume decline in April after tax rise Consumer behavior recovery during quarter Vending price rollout complete end of June Outlook Tough prior year volume cycling in July; 2014 rainy season into July Gaining share in July Q3 peak season for bottling business 1H Volume Growth By Quarter Q2 Volume Growth By Month 9
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Q2 Market Share* (NARTD Beverages) vs. Prior Year Q2 YTD Volume + 0.7 +0.6 Value + 0.9 +0.6 *Source: Intage, OTC channel Q2: Continuing Signs of Progress Value Share Growing Faster than Volume Share Volume Share vs. Prior Year 10 Value Share vs. Prior Year Balanced growth of immediate consumption (IC) & future consumption (FC) packaging Volume composition: IC 74% vs. FC 26% Strong share gains in colas, coffee, teas & water
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Drug & Discount 11% CVS 13% Eating & Drinking 13% Vending 30% Other 11% Q2 2014 Volume By Channel (% of total volume) Supermarket 22% vs. prior year CVS D&D Local SM VM Eat & Drink Q2 2014 +12% +10% +2% +2% – 2% – 3% YTD 2014 +4% +12% +8% +5% – 1% – 1% Total BAPC* Pro – Forma Volume Growth Q2 2014 +2.0% YTD 2014 +2.6% Channel Volume Growth Q2: Normalizing Trends after Tax Rise Innovation Drives CVS Growth, VM Pricing Complete * BAPC (Bottler Actual Physical Cases) Q2 VM volume impacted as pace of c – tax price rollout was ahead of industry 11 FOSHU tea, sparkling water launches
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