Coca Cola Bottlers Japan : Consolidated Financial Summary for Fiscal Year Ended December 31, 2019 (IFRS)

This document is a summary translation of the Japanese language original version. In the event of any discrepancy, errors and/or omissions, the Japanese language version shall prevail.

Consolidated Financial Summary for

Fiscal Year Ended December 31, 2019 (IFRS)

			February 13, 2020
Listed company name: Coca-Cola Bottlers Japan Holdings Inc.	Listed stock exchanges: Tokyo and Fukuoka
Code number: 2579	URL: https://en.ccbj-holdings.com/
Delegate:	Title: Representative Director & President	Name: Calin Dragan
Contact:	Title: Head of Controllers Senior Group Division, Finance	Name: Cordula Thomas	Phone: [phone]

Expected date of general shareholders meeting: March 26, 2020

Expected date of the dividend payment: March 27, 2020

Expected date of submission of annual securities report: March 27, 2020

FY 2019 supplementary information: Yes

FY 2019 financial presentation: Yes

(Fractions of one million yen are rounded)

1. Consolidated financial results for the fiscal year ended December 31, 2019 (from January 1, 2019 to December 31, 2019)

(Percentages indicate changes over the same period in the prior fiscal year)

(1) Consolidated financial results

Net income for the

Total comprehensive

Net sales

Business Income

Operating income

Net income

year attributable to

owners of the parent

income

million

％

million

％

million

％

million

％

million

％

million

％

yen

yen

yen

yen

yen

yen

Dec. 31, 2019

914,783

(1.4)

15,042

(35.4)

(55,389)

－

(57,895)

－

(57,952)

－

(52,108)

－

Dec. 31, 2018

927,307

10.8

23,276

(42.1)

14,682

(60.9)

10,162

(53.6)

10,117

(53.9)

3,197

(89.4)

		Earnings per share	Diluted earnings per share	Ratio of income to equity	Ratio of income before tax Ratio of Operating income
		attributable to owners of	to total assets	to net sales
					the parent
		yen		yen	％	％	％
	Dec. 31, 2019	(322.22)		－	(10.7)	(6.1)	(6.1)
	Dec. 31, 2018	52.68		－	1.6	1.6	1.6
	Reference: Share of income (loss) of entities accounted for using equity method
	Fiscal Year 2019: 43 million yen	Fiscal Year 2018: (5) million yen

• "Business Income" is a measure of our underlying or recurring business performance after the adoption of IFRS, and deducts cost of goods and SG&A from revenue, and includes other income and expenses which we believe are recurring in nature.

(2) Consolidated financial position

				Equity attributable to parent	Ratio of equity attributable	Equity attributable to
		Total assets	Total equity	owners of the parent per
				owners	to parent owners	share
		million yen	million yen	million yen	％	yen
	Dec. 31, 2019	952,444	506,491	505,999	53.1	2,821.27
	Dec. 31, 2018	877,472	580,906	580,448	66.2	3,163.63

(3) Consolidated cash flows

		Net cash from (used in)		Cash and cash equivalents
	Operating activities	Investing activities	Financing activities	at end of year
Year ended	million yen	million yen	million yen	million yen
Dec. 31, 2019	42,629	(68,308)	73,994	113,825
Dec. 31, 2018	51,244	(48,628)	(55,835)	65,510

2. Dividends

		Dividends per share			Total dividend	Dividend		Ratio of dividends
(Record date)	1Q	2Q	3Q	Year-	Annual		payments	payout ratio		to net assets
end		（annual）	(consolidated)		(consolidated)
Year ended	yen	yen	yen	yen	yen		million yen	%	%
Dec. 31, 2018	－	25.00	－	25.00	50.00	9,266	94.9	1.6
Dec. 31, 2019	－	25.00	－	25.00	50.00	8,968	－	1.7
Dec. 31, 2020	－	25.00	－	25.00	50.00			99.6
(forecast)

3. Forecast of consolidated financial results 2020 (from January 1, 2020 to December 31, 2020)

(Percentages indicate changes over the same period in the prior fiscal year)

Net sales

Business Income

Operating income

Net income

Net income for the year

Earnings

attributable to owners of

per share

the parent

million yen

％

million

％

million

％

million

％

million yen

％

yen

yen

yen

yen

Full year

927,200

1.4

18,000

19.7

14,000

－

9,000

－

9,000

－

50.18

2020

Notes

(1) Changes in significant subsidiaries during the current period

: None

1. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error corrections

1)	Changes in accounting policies due to revisions to accounting standards under IFRS	: Yes
2)	Changes other than those in 1) above	: None
3)	Changes in accounting estimates	: None

1. Number of outstanding shares (common shares)

1. Number of outstanding shares at the end of period (including treasury shares):

FY 2019:	206,268,593 shares	FY 2018: 206,268,593 shares
2) Number of treasury shares at the end of period:
FY 2019:	26,917,320 shares	FY 2018: 22,793,049 shares
3) Average number of outstanding shares during the period:
FY 2019:	179,852,114 shares	FY 2018: 192,050,508 shares

(Reference) Summary of the Non-consolidated Financial Results

1. Non-consolidated financial results for the fiscal year ended December 31, 2019 (from January 1, 2019 to December 31, 2019)

1. Non-consolidatedfinancial results

(Percentages indicate changes over the same period in the prior fiscal year)

			Operating revenue		Operating income		Recurring income	Net income
	Year ended		million yen	%			million yen	%		million yen	%		million yen	%
	Dec. 31, 2019	26,517		155.6		21,730	278.9	20,273		288.1		20,702	371.0
	Dec. 31, 2018		10,375		(10.3)			5,734		99.3		5,224		(14.2)		4,395		(11.9)
			Earnings per		Diluted earnings per
			share				share
					yen				yen
	Dec. 31, 2019				115.11					－
	Dec. 31, 2018				22.89					－
	(2) Non-consolidated financial position
												Net assets (excl. minority	Net assets
			Total assets		Net assets		(excl. minority
					interests) to total assets
												interests) per share
	As of		million yen				million yen				%				yen
	Dec. 31, 2019				549,683				331,139				60.2		1,846.32
	Dec. 31, 2018				478,594				332,507				69.5		1,812.27
	Reference: Net assets (excl. minority interests)
	Fiscal Year 2019: 331,139 million yen		Fiscal Year 2018: 332,507 million yen

• Consolidated Financial Results are not subject to quarterly review procedures conducted by certified public accountant or audit firm.
• Explanation regarding appropriate use of the forecast, other special instructions

Figures in the above forecast are based on information available to management at the time of announcement. Due to number of inherent uncertainties in the forecast, actual results may differ materially from the forecast. Furthermore, please refer to "1. Overview of Operating Results, etc. (1) Analysis of Operating Results (Outlook for 2020)" on page 4 for matters relating to performance forecasts.

Table of contents

	Page
Attachment
1. Overview of Operating Results, etc. …………………………………………………………………………………………	2
(1) Analysis of Operating Results ……………………………………………………………………………………………	2
(2) Analysis of Financial Position ……………………………………………………………………………………………	5
(3) Basic Policies for Income Distribution and Dividends for FY2019 and FY2020……………………………………….	6
2. Basic Concept Concerning the Selection of Accounting Standards………………………………………………………….	6
3. Consolidated Financial Statements and Notes ……………………………………………………………………………….	7
(1) Consolidated Statement of Financial Position…………………………………………………………………………….	7
(2) Consolidated Statements of Income and Comprehensive Income ……………………………………………………….	9
(Consolidated Statements of Income) ……………………………………………………………………………………	9
(Consolidated Statements of Comprehensive Income) …………………………………………………………………. 10
(3) Consolidated Statements of Changes in Equity …………………………………………………………………………	11
(4) Consolidated Statements of Cash Flows …………………………………………………………………………………	13
(5) Notes to Consolidated Financial Statements ……………………………………………………………………………	15
(Notes Relating to Going Concern Assumption) ………………………………………………………………………	15
(Changes in Accounting Policies) ………………………………………………………………………………………	15
(Segment Information, etc.) ……………………………………………………………………………………………	16
(Per Share Information) ……………………………………………………………………………………………….…	18
(Significant Subsequent Events) …………………………………………………………………………………………	18
4. Others …………………………………………………………………………………………………………………………	19
(1) Changes in Key Consolidated Management Indicators …………………………………………………………………	19
(2) Officer Change……………………………………………………………………………………………………………	20

1

1. Overview of Operating Results, etc.

(1) Analysis of Operating Results

(Qualitative information on the Consolidated Operating Results) (Overview of Full-year 2019 Results)

Coca-Cola Bottlers Japan Holdings Inc. ("CCBJH" or the "Company") announced the results of the fiscal year ending on December 31, 2019 (January 1, 2019 to December 31, 2019). In this fiscal year, total non-alcoholicready-to-drink (NARTD) beverage industry volume performance is estimated to be slightly negative versus prior year mainly due to cycling of strong demand driven by hot summer weather last year as well as longer rainy and cool weather in July. The health food and cosmetics industries continue to grow, driven by demand from health-conscious consumers and inbound tourism, while the competitive environment has been marked by successive product launches by various industry players.

For CCBJH, 2019 has been a transition year focused on recovery from the flooding damage and disruption to product supply in 2018 and building a solid foundation for future growth. We have been making major investments to recover our supply network and progressively expand production capacity, and will continue to do so through second quarter 2020. We were the first in the beverage industry to announce and implement a wholesale price increase for large PET products in April, the first time in 27 years, as an important initiative toward achieving more balanced volume and revenue growth.

We developed and announced a new five-year strategic business plan in August 2019 with targets for both Business Income margin and ROE in 2024 of 5 to 6%. The new five-year strategic business plan includes focused investments to reignite sales growth in close collaboration with Coca-Cola (Japan) Company, Limited as well as fundamental transformation to drive cost savings. Over the course of the five-year plan, we expect net cost savings of approximately 35 billion yen, representing ongoing savings initiatives and incremental programs focused on transforming our vending channel operations, evolving our frontline salesforce capabilities and identifying opportunities across procurement and our supply chain.

Our full-year results were impacted by a decline of topline revenue due to lower beverage business sales volume, reflecting supply constraints of higher-growth aseptic PET products and continued lower manufacturing efficiencies and elevated logistics and distribution expenses as we recover our supply and distribution infrastructure after the flooding in 2018. Business income for our core beverage business was ahead of the plan we announced in May 2019, offset by weaker performance in the health and skincare segment. Consolidated year-to-date results also reflect impairment of goodwill recorded in the second quarter.

In addition to the qualitative information contained in this report, please also see our earnings presentation material posted on the Company IR website (https://en.ccbj-holdings.com/ir/library/presentation.php) to be used at our earnings presentation on Friday, February 14, 2020 at 1:30pm (JST). The earnings presentation and audio will be available live and on demand as an audio webcast in the IR section of the CCBJH website.

Full-year 2019 Highlights

• Full-yearNARTD beverage volume declined 2%, reflecting unseasonably cool and rainy weather in July and the wholesale price increase in April, recovering to 1% growth in the fourth quarter (October to December). Full-year beverage business revenue declined 1% and grew 1% in the fourth quarter.
• Beverage business market share improved, with value share growth ahead of volume share in the fourth quarter led by coffee, non-sugar tea and sports category performance. Premium-priced new products contributed to value share growth
• Business Income (BI) was substantially in-line with the full-year plan announced in May 2019 led by ahead-of-plan core beverage performance despite underachievement of the health care & skin care business. Full-year Business Income decreased 35% versus prior year as we continue to recover from the supply disruption of 2018.
• Full-yearoperating loss of 55 billion yen reflects the goodwill impairment recorded in the second-quarter.
• Continued investment for recovery of supply network, expanding production capacity and improving infrastructure. Capital investments of close to 90 billion yen in 2019, with three new manufacturing lines and two new automated warehouses, as well as completion of company-wide deployment of a new ERP system, "CokeOne".
• Major transformational initiatives ongoing. Announced new organizational structure aligned with the strategic business plan and grounded in new corporate mission, vision and value statement. Executing transformation in vending business and investing in people capability development to achieve sustainable growth.

2

Review of Results

Full-year (January to December)

In Million JPY, IFRS

Net Revenue

Gross Profit

Selling, General & Administrative Expenses

Other income (Recurring)

Other expenses (Recurring)

Investment gain (loss) on equity method

Business Income

Impairment losses of goodwill

Other income (Non-recurring)

Other expenses (Non-recurring)

Operating Income (Loss)

Net Income (Loss) Attributable to Owners of Parent

Sales volume of beverage business (Million cases)

Q4 (October to December)

In Million JPY, IFRS

Net Revenue

Gross Profit

Selling, General & Administrative Expenses

Other income (Recurring)

Other expenses (Recurring)

Investment gain on equity method

Business Income (Loss)

Other income (Non-recurring)

Other expenses (Non-recurring)

Operating Income (Loss)

Net Income (Loss) Attributable to Owners of Parent Sales volume of beverage business (Million cases)

2018	2019	YoY
927,307	914,783	(1.4)%
452,151	441,060	(2.5)%
426,195	423,685	(0.6)%
1,635	1,083	(33.8)%
4,310	3,459	(19.7)%
(5)	43	－
23,276	15,042	(35.4)%
－	61,859	－
481	3,045	533.2%
9,075	11,617	28.0%
14,682	(55,389)	－
10,117	(57,952)	－
515	503	(2)%
2018	2019	YoY
216,991	220,020	1.4%
102,766	103,796	1.0%
106,252	104,874	(1.3)%
522	194	(62.9)%
2,458	1,309	(46.7)%
149	133	(11.2)%
(5,272)	(2,061)	－
－	908	－
137	2,357	1,625.6%
(5,409)	(3,510)	－
(2,737)	(2,258)	－
119	119	1%

• Sales volume of beverage business excludes alcoholic beverage volume, which was 1.9 million cases in 2019.
• We have introduced "Business Income" as a measure of our underlying or recurring business performance after the adoption of IFRS in 2019. Business income deducts cost of goods and SG&A from revenue and includes other income and expenses which we believe recurring in nature.

Full-year 2019 net revenue was 914.8 billion yen, a decrease of 12.5 billion yen, or 1.4% compared to the prior-year period. Net revenue of the beverage business decreased 9.9 billion yen (1.1%) versus the prior-year period, to 890 billion yen, reflecting a 2% volume decline offset by improved price/mix from the wholesale price increase of large PET packages in April and the national launch of Lemon dou "chu-hi" alcohol beverage in the fourth quarter. Net revenue of the healthcare & skincare business declined 2.7 billion yen (9.7%) year-on-year to 24.8 billion yen, reflecting continued weakness of mail/web order sales with some recovery in the fourth quarter due to new product launches and marketing activities.

3

Full-year business income, an indicator of our recurring business performance, was 15.0 billion yen, a decrease of 8.2 billion, or 35.4% year-on-year, and roughly in line with full-year expectations. Business income of the core beverage business was 11.4 billion yen (down 6.5 billion yen or 36.2% year-on-year), which was slightly above the revised plan target announced in May driven by tight control of expenses. The beverage business performance reflects weaker topline revenue due to the sales volume decline of 2% and continued lower manufacturing efficiencies and elevated logistics and distribution expenses this year as we recover and expand supply capacity after the disruption in the second half of 2018. Partly offsetting this pressure, we achieved labor savings as a result of integrating retirement benefit programs in the first quarter and completing a voluntary employee retirement program in the second quarter. Promotional expenses in the period were also lower, in line with volume performance. Business income in the healthcare & skincare business was 3.6 billion yen, a decrease of 1.7 billion yen or 32.7% year-on-year, reflecting lower revenues while we continue to focus on promotional expense control and other cost savings opportunities.

We reported a consolidated operating loss for the fiscal year of 55.4 billion yen (14.7 billion yen operating income in prior year period), mainly driven by the impairment of goodwill recorded in the second quarter. As a reference, other expenses (non- recurring) in the prior-year period include loss on disaster of 8.9 billion yen from the flooding damage in our Hongo Plant in Mihara-city, Hiroshima Prefecture in July 2018. Other expenses (non-recurring) in 2019 include 9.2 billion yen of special retirement allowance and 655 million yen of transformation-related expenses to drive fundamental transformation of our business for sustainable growth, further value creation and efficiency improvement following our newly developed strategic business plan announced in August 2019.

Net income attributable to owners of parent was a loss of 58.0 billion yen (10.1 billion yen in the prior-year period).

Beverage volume performance by channel and category (excluding alcohol)

Full-year volume performance was impacted by weaker performance of new launches and product renewals this year as we focus on rebuilding supply capacity, large PET volume declines due to the wholesale price increase in April, and unseasonably rainy and cool weather in July. Volume performance has recovered and 1% growth in the fourth quarter.

By channel, full-year supermarket, drug & discounter and convenience store volume declined 3%, 2% and 4%, respectively. The vending and retail & food channels both declined 1% versus the prior year. Supermarket and drug & discounter channels were initially impacted by the wholesale price increase in April, as the large PET volume contribution is relatively higher in these channels, with double-digit volume declines in the second quarter. Fourth-quarter volume for both channels grew 3% and 4%, respectively, as the wholesale price increase settled in and we started to cycle the worst of the prior-year supply constraints in the second half of the year. Also, revenue per case continued to improve in both channels after the wholesale price increase. Vending volume in the fourth quarter was even versus prior year, reflecting continued moderating volume trends from third quarter. We have expanded initiatives to drive vending purchase transaction growth, such as new package sizes and price points, as well as increasing availability of the Georgia Japan Craftsman brand in aseptic PET packaging.

By category, full-year coffee volume was even versus prior year supported by expanding coverage of Georgia Japan Craftsman across all channels and introducing smaller package sizes in coffee in vending. Non-sugar tea and sports category volumes grew in the fourth quarter, but full-year volume decreased 1% and 3%, respectively, impacted by large PET package volume declines after the wholesale price increase. Sparkling beverage volume declined 5% for the full year due to weaker product renewal performance and the wholesale price increase, which was partially offset by new product launches such as Coca-Cola Energy in the third quarter. Full-year water volume declined 8% as we cycled prior year product launches of immediate consumption iLohas-brand water, and as a result of the wholesale price increase, which impacted sales of Mori no Mizu brand water sold in two-liter packaging. Fourth-quarter water volume grew 1%, led by growth of plain iLohas-brand water.

(Outlook for next fiscal year)

In 2020, we expect the overall Japan non alcoholic ready-to-drink (NARTD) beverage market volume to be flat versus 2019, cycling lower demand due to the cool and rainy summer weather in 2019 and the large PET wholesale price increase.

Under these circumstances, and reflecting the mid-term business plan's guiding principle that "business as usual is not an option", CCBJH is executing a transformation of our cost structure, including in the important vending channel and back-office routines, and increasing front-facing investments for growth in such areas as production capacity, space-to-sell and people development, and we will continue to drive fundamental business change to return to a sustainable growth trajectory.

In the beverage business segment, in order to grow together as one "Coca-Cola System" in Japan, we will work closely with the Coca-Cola (Japan) Company, Ltd. with aligned investment plans and more focused innovation on "fewer, bigger bets" to

4

drive revenue growth. And we will continue to transform the Commercial organization to realize best-in-class customer management, starting with a new organizational structure in January 2020 in order to strengthen customer relationships and sales execution. Regarding the vending channel, we aim to deliver sustainable growth by expanding the operational process reengineering we started in the Kinki region in 2019. In addition, together with The Coca-Cola Company as a world-wide partner, we will leverage the excitement of the Tokyo Olympic and Paralympic games held in Japan for the first time in 56 years, and we will implement comprehensive marketing campaigns to activate the market. Finally, the national launch of the Lemon-dou alcohol brand is performing well, and we will continue to expand our presence in this new beverage category.

Regarding our manufacturing capacity and efforts to optimize our logistics and distribution network, which are key elements of our growth plan, we will commission four new production lines in 2020, including the new Hiroshima plant, and we continue to build out the Project Shinsei logistics and distribution infrastructure, including optimization of sales centers and construction of automated warehouses and a new mega distribution center in Saitama Prefecture. We will also expand the transformation of our back office operations into what we call centers of excellence and centers of scale, including outsourcing of transactional processing where feasible. Our intiatives include people strategies aligned with our new Mission, Vision and Values as well as initiatives for ESG goals for creating shared value including World Without Waste, our 2030 Package Vision for the Coca-Cola system in Japan.

In the health food and cosmetic business, we expect continued market growth, but with intensified competition as more players seek to participate in this growing market segment. Under these circumstances, we will activate the existing main products and recent new launches with effective marketing and advertising, including expanding to internet sales and focusing on action to expand our customer base. Also, we will continue to make efforts in product development and marketing capabilities to ensure a pipeline of relevant products that meet consumers' changing needs.

We expect consolidated revenue for this year will be 927.2 billion yen, an increase of 1% versus 2019, reflecting total beverage volume growth of 3%. Business income is expected to increase 20.0% versus the prior year, to 18.0 billion yen. Reported operating income is expected to increase 14.0 billion yen (In 2019, Operating loss is 55.4 billion yen). Net income attributable to the owners of the parent is expected to 9.0 billion yen (In 2019, Net loss attributable to the owners of the parent is 58.0 billion yen).

(2) Analysis of Financial Position

Assets at the end of the fiscal year were JPY 952.4 billion yen, an increase of 75.0 billion yen from the end of the previous fiscal year. This is mainly attributable to an increase of Cash and cash equivalents by bond issuance in the third quarter, increase of fixed assets as a result of commissioning three new production lines in Kumamoto and Kyoto plant, and two new automated warehouses in Hakushu and Kumamoto plant as well as non-current assets by newly including Right-of- use assets as a result of the implementation of IFRS 16 starting from this fiscal year, which are partially offset by decrease of goodwill by goodwill impairment in the second quarter.

Liabilities at the end of the quarter were 446.0 billion yen, an increase of 149.4 billion yen from the end of previous fiscal year. This is mainly due to an increase of Bonds and debt in non-current liabilities due to issuance of the bond, and an increase of Lease liabilities in conjunction with including Right-of-use assets.

Net assets at the end of the quarter were 506.5 billion yen, a decrease of 74.4 billion yen. This is mainly due to a decrease of Retained Earnings as a result of the goodwill impairment and an increase of Treasury Shares due to the completion of the share buyback program in February 2019.

The cash flow conditions for the full-year are as follows.

Net cash used for operations was 42.6 billion yen (51.2 billion net cash generated from operations in the previous year period). This results mainly from the 55.4 billion yen net loss before tax, loss due to impairment of goodwill, depreciation expenses, increase of notes and account payable-trade, etc. offset by an increase of trade and other receivable, inventories, payment of taxes, etc.

Net cash used for investment activities was 68.3 billion yen (48.6 billion yen in the previous year period), due to purchases of fixed assets as we recover our supply network and progressively expand production capacity, etc.

5

Net cash generated from financing activities was 74.0 billion yen (55.8 billion yen net cash used for financing activities in the previous year period), driven by an issuance of 150 billion yen of straight bond, etc., partially offset by cash spent for share buy- back, payment of year-end dividends, etc.

As a result of these activities, cash and cash equivalents at the end of the fiscal year was 113.8 billion yen, an increase of 48.3 billion yen versus the prior year period.

(3) Basic Policies for Income Distribution and Dividends for FY2019 and FY2020

The Company periodically reviews its capital structure and dividend payout ratio to maximize shareholder returns while maintaining flexibility to pursue growth opportunities. The Company seeks to use retained earnings to fund investment for sustainable growth for our business and further enhancement of corporate value.

CCBJH sets its basic policy regarding dividends, which includes active redistribution of profits while placing the highest priority on paying dividends in a stable manner, by comprehensively reviewing the Company's business performance and level of retained earnings. In addition, the Company has set a payout ratio target of 30% or more for net profit attributable to owners of the parent. The company pays interim and year-end dividends.

The Company plans to pay 25 yen per share for year-end dividend for the year ending December 2019, and the annual dividend will be 50 yen per share including the 25 yen-per-share interim dividend. This represents the same per-share dividend versus prior year. Regarding the dividend forecast for the year ending December 2020, the Company plans to pay the same amount of dividend per share, which is 25 yen per share for the interim and year-end dividends, respectively, and therefore the expected annual dividend will be 50 yen per share. This reflects the business outlook for the year as well as our policy of prioritizing stable dividends payment during this period of transformation.

The Company continues to consider the implementation of share buybacks by comprehensively reviewing the Company's business performance and level of retained earnings. The Company completed 13 billion yen of share buybacks in the fiscal year ending December 2019.

2. Basic Concept Concerning the Selection of Accounting Standards

Coca-Cola Bottlers Japan Holdings Group (The Group) discloses consolidated financial statements based on International Financial Reporting Standards (IFRS) starting from the fiscal year ending December 2018, with a view to enhancing the international comparability of financial statements and contributing to the improved convenience for shareholders and investors of the Company.

6

3. Consolidated Financial Statements and Notes

(1) Consolidated Statement of Financial Position

Assets

Current assets:

Cash and cash equivalents Trade and other receivables Inventories

Other financial assets Other current assets Total current assets

Non-current assets:

Property, plant and equipment Right-of-use assets Goodwill

Intangible assets

Investments accounted for using the equity method

Other financial assets Net defined benefit assets Deferred tax assets Other non-current assets Total non-current assets

Total assets

	(Millions of yen)
As of	As of
December 31, 2018	December 31, 2019
65,510	113,825
92,402	98,528
68,781	74,120
645	752
10,740	17,587
238,078	304,812
435,305	467,136
－	39,629
88,880	27,021
66,539	67,123
298	310
34,796	33,499
38	－
6,264	6,093
7,274	6,820
639,394	647,632
877,472	952,444

7

		(Millions of yen)
	As of	As of
	December 31, 2018	December 31, 2019
Liabilities and equity
Liabilities
Current liabilities:
Trade and other payables	105,701	122,364
Bonds and debts	45,512	17,261
Lease liabilities	－	6,634
Other financial liabilities	993	916
Income taxes payable	3,069	1,104
Provisions	18	20
Other current liabilities	22,230	19,886
Total current liabilities	177,524	168,186
Non-current liabilities:
Bonds and debts	56,401	188,487
Lease liabilities	－	34,138
Other financial liabilities	749	-
Net defined benefit liabilities	33,712	24,908
Provisions	2,191	2,104
Deferred tax liabilities	23,082	24,876
Other non-current liabilities	2,907	3,254
Total non-current liabilities	119,042	277,767
Total liabilities	296,566	445,953
Equity:
Capital stock	15,232	15,232
Capital surplus	450,533	450,526
Retained earnings	182,418	121,372
Treasury shares	(72,651)	(85,649)
Accumulated other comprehensive income	4,915	4,517
Equity attributable to owners of parent	580,448	505,999
Non-controlling interests	458	492
Total equity	580,906	506,491
Total liabilities and equity	877,472	952,444

8

1. Consolidated Statements of Income and Comprehensive Income (Consolidated Statements of Income)

		(Millions of yen)
	For the year ended	For the year ended
	December 31, 2018	December 31, 2019
Net sales	927,307	914,783
Cost of sales	475,156	473,723
Gross profit	452,151	441,060
Selling and general administrative expenses	426,195	423,685
Impairment losses of goodwill	－	61,859
Other income	2,116	4,127
Other expenses	13,385	15,076
Share of income (loss) of entities accounted for using	(5)	43
equity method
Operating income (loss)	14,682	(55,389)
Financial revenue	830	1,145
Finance costs	745	1,175
Income (loss) for the year before income taxes	14,767	(55,419)
Income tax expense	4,605	2,476
Net income (loss) for the year	10,162	(57,895)
Net income (loss) for the year attributable to
Owners of parent	10,117	(57,952)
Non-controlling interests	45	56
Earnings per share (yen)	52.68	(322.22)

9

(Consolidated Statements of Comprehensive Income)

Net income (loss) for the year Other comprehensive income.

Items that will not be reclassified subsequently to income or loss:

Remeasurements of defined benefit plans Share of other comprehensive income of equity method investees

Net change in financial assets measured at fair value through other comprehensive income

Subtotal

Items that may be reclassified subsequently to income or loss:

Foreign currency translation adjustments of foreign operations

Cash flow hedges

Subtotal

Total other comprehensive income (loss) for the year Total comprehensive income (loss) for the year

Comprehensive income (loss) attributable to: Owners of parent

Non-controlling interests

	(Millions of yen)
For the year ended	For the year ended
December 31, 2018	December 31, 2019
10,162	(57,895)
(2,889)	5,596
(4)	4
(3,344)	621
(6,236)	6,221
(12)	－
(716)	(434)
(728)	(434)
(6,965)	5,788
3,197	(52,108)
3,152	(52,164)
45	56

10

1. Consolidated Statements of Changes in Equity For the year ended December 31, 2018

(Millions of yen)

Equity attributable to owners of the parent company

Balance as of January 1, 2018

Comprehensive income for the year

Net income (loss) for the year

Other comprehensive income (loss)

Total comprehensive income (loss) for the year Transactions with owners, etc.

				Other
				Comprehensive		Non-
Capital stock	Share	Retained	Treasury	income	Total	controlling	Total
premium	earnings	Shares	Accumulated	interests
15,232	450,498	184,317	(4,693)	9,258	654,611	427	655,038
－	－	10,117	－	－	10,117	45	10,162
－	－	－	－	(6,965)	(6,965)	－	(6,965)
－	－	10,117	－	(6,965)	3,152	45	3,197

Dividends of surplus

Purchase of treasury stock

Disposal of treasury stock

Transactions of share- based payment

Reclassification from accumulated other comprehensive income to retained earnings

Reclassification from accumulated other comprehensive income to non-financial assets

Other changes

Total transactions with owners etc.

Balance as of December 31, 2018

－	－	(9,173)	－	－	(9,173)	(21)	(9,194)
－	(25)	－	(67,961)	－	(67,987)	－	(67,987)
－	1	－	4	－	4	－	4
－	67	－	－	－	67	－	67
－	－	(2,843)	－	2,843	－	－	－
－	－	－	－	(221)	(221)	－	(221)
－	(7)	－	－	－	(7)	7	－
－	36	(12,016)	(67,958)	2,622	(77,316)	(14)	(77,329)
15,232	450,533	182,418	(72,651)	4,915	580,448	458	580,906

11

For the year ended December 31, 2019

(Millions of yen)

Equity attributable to owners of the parent company

Balance as of January 1, 2019 (Before restatement) Adjustments resulting from the adoption of IFRS 16 Balance as of January 1, 2019 (After restatement) Comprehensive income for the year

Net income (loss) for the year

Other comprehensive income (loss)

Total comprehensive income (loss) for the year Transactions with owners, etc.

				Other
				comprehensive		Non-
Capital stock	Share	Retained	Treasury	income	Total	controlling	Total
premium	earnings	shares	accumulated	interests
15,232	450,533	182,418	(72,651)	4,915	580,448	458	580,906
－	－	(338)	－	－	(338)	－	(338)
15,232	450,533	182,080	(72,651)	4,915	580,110	458	580,568
－	－	(57,952)	－	－	(57,952)	56	(57,895)
－	－	－	－	5,788	5,788	－	5,788
－	－	(57,952)	－	5,788	(52,164)	56	(52,108)

Dividends of surplus

Purchase of treasury stock

Disposal of treasury stock

Transactions of share- based payment

Reclassification from accumulated other comprehensive income to retained earnings

Reclassification from accumulated other comprehensive income to non-financial assets

Total transactions with owners, etc.

Balance as of December 31, 2019

－	－	(9,071)	－	－	(9,071)	(22)	(9,093)
－	(64)	－	(13,002)	－	(13,066)	－	(13,066)
－	(1)	－	3	－	3	－	3
－	57	－	－	－	57	－	57
－	－	6,315	－	(6,315)	－	－	－
－	－	－	－	129	129	－	129
－	(7)	(2,756)	(12,999)	(6,186)	(21,947)	(22)	(21,970)
15,232	450,526	121,372	(85,649)	4,517	505,999	492	506,491

12

(4) Consolidated Statements of Cash Flows
		(Millions of yen)
	For the year ended	For the year ended
	December 31, 2018	December 31, 2019
Cash flows from operating activities
Income (loss) for the year before income taxes	14,767	(55,419)
Adjustments for:
Depreciation and amortization	47,531	56,951
Impairment loss	202	62,870
Change in allowance for doubtful accounts	255	(515)
Interest and dividends income	(516)	(509)
Interest expenses	612	1,175
Share of loss (income) of entities accounted for using	5	(43)
equity method
Gain on sale of property, plant and equipment	(215)	(2,183)
Loss on disposal and sale of property, plant and equipment	9,399	2,513
Decrease (increase) in trade and other receivables	(4,355)	(6,149)
Decrease (increase) in inventories	(6,869)	(5,339)
Decrease (increase) in other assets	393	(266)
Increase (decrease) in trade and other payables	2,234	6,259
Increase (decrease) in net defined benefit liabilities	491	(213)
Increase (decrease) in other liabilities	1,148	(3,543)
Others	501	(451)
Subtotal	65,579	55,138
Interest received	3	1
Dividends received	487	508
Interest paid	(548)	(1,018)
Income taxes paid	(14,553)	(13,675)
Income taxes refund	275	1,675
Net cash provided by operating activities	51,244	42,629
Cash flows from investing activities
Acquisitions of property, plant and equipment and intangible	(49,752)	(78,213)
assets
Proceeds from sales of property, plant and equipment and	658	7,621
intangible assets
Purchases of other financial assets	(137)	(58)
Proceeds from sale of other financial assets	273	2,255
Proceeds from sales of shares of subsidiaries resulting in	406	－
change in scope of consolidation
Others	(75)	88
Net cash used in investing activities	(48,628)	(68,308)

13

Cash flows from financing activities

Increase (decrease) in short-term loans payable Repayments of long-term loans payable Proceeds from issuance of bonds

Bond redemption Dividends paid

Dividends paid to non-controlling interests Proceeds from disposal of treasury stock Purchases of treasury stock Repayments of lease liabilities

Others

Net cash provided by (used in) financing activities

Net foreign exchange differences on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

14

For the year ended	For the year ended
December 31, 2018	December 31, 2019
24,000	(24,000)
(1,817)	(1,686)
－	149,441
－	(20,000)
(9,173)	(9,071)
(21)	(22)
4	3
(67,998)	(13,095)
－	(7,576)
(830)	－
(55,835)	73,994
(12)	－
(53,231)	48,315
118,742	65,510
65,510	113,825

1. Notes to Consolidated Financial Statements (Notes Relating to Going Concern Assumption)
   Not applicable.

(Changes in Accounting Policies)

The Group adopted the new accounting standards and interpretations, which became mandatory in the year ended December31, 2019. Significant accounting standards and interpretations are as follows:

Establishment or revision of accounting

standards and interpretations

IFRS 16 Leases

(published January 2016)

Summary of requirements

New standard for leases, replacing IAS 17, requires all leases to be shown on the statements of financial position as if they were financed purchases. The new standard sets out the principles for the recognition, measurement, presentation and disclosures of leases.

The impact of the application of IFRS 16 is as follows. There is no significant impact of this change in accounting policy on earnings per share. The Group retrospectively applied IFRS 16 according to transitional measures, the cumulative effect of the commencement of application is recognized as an adjustment to the opening balance of retained earnings in the current consolidated fiscal year. In the transition to IFRS 16, the practical expedient of IFRS 16.C3 was selected as to whether an arrangement contains a lease or not, it takes over the judgment of IAS 17 "Leases" and IFRIC 4 "Determining whether an Arrangement contains a Lease".

IFRS 16 requires that lessee's lease not be classified as finance lease or operating lease, but rather as a single accounting model and, in principle, recognize the right-of-use asset representing the right to use the underlying asset and the lease liability representing the obligation to pay the lease payments for all leases. However, for short-term leases or leases for which the underlying asset is of low value, the Group may elect not to apply the requirements of this standard. After recognizing right- of-use asset and lease liability, right-of-use asset depreciation and interest expense related to lease liability are recognized.

In the Group, the lease term of the right-of-use assets is estimated by adding a reasonably reliable period in which the option to extend the lease is not exercised or the option to cancel the lease is not exercised. In addition, the discount rate applied to the lease liabilities for the right-of-use assets uses the lessee's incremental borrowing rate, and the weighted average is mainly 1.0%. Right-of-use assets are depreciated using the straight-line method mainly over 15 years from the start date.

As of the end of the previous consolidated fiscal year, finance lease liabilities that were recognized by applying IAS 17 were 901 million yen.

Of 7,644 million yen (before discount) of the operating lease contracts disclosed by applying this standard, 549 million yen (before discount) is accounted for as a small-value asset lease, in addition, there is a 37,409 million yen increase in lease liabilities over a period in which it is reasonably certain that the extension option will be exercised.

As a result, in the consolidated statement of financial position at the beginning of the current consolidated fiscal year under review, right-of-use assets increased by 44,034 million yen, deferred tax assets increased by 15,200 million yen, lease liabilities increased by 44,505 million yen, deferred tax liabilities increased by 15,028 million yen and long-term accounts payable increased by 40 million yen, retained earnings decreased by 338 million yen. Deferred tax assets and Deferred tax liabilities are offset on the consolidated balance sheets based on IAS 12 "Income taxes".

In addition, cash flow from operating activities increased by 7,000 million yen and cash flows from financing activities decreased by 7,000 million yen in condensed quarterly consolidated cash flows for the year.

15

(Segment Information, etc.)

(1) Reportable segments

Operating segments are defined as the components of the Group for which separate financial information is available that is evaluated regularly by the chief operating decision maker in making resource allocation decisions and in assessing performance. The Group has identified the following operating segments. No operating segments have been aggregated to form reportable segments.

The principal products and services belonging to the reportable segments are as follows, and the Healthcare and skincare segment is operated by a wholly owned subsidiary, Q'SAI CO., LTD. and its subsidiaries.

Reportable segments	Principal Products and Services
	Purchase, manufacture and sale of carbonated beverages such as Coca-Cola, coffee
Beverage Business	and black tea beverages, mineral water, etc., bottling, packaging, distribution and
	marketing, vending machine-related business in Japan
	Manufacture and sell of kale juice (aojiru) and other products made from Kale, as
Healthcare & Skincare Business	well as the manufacture and sale of health foods, cosmetics and other related
	products

The Board of Directors evaluates the performance of each segment compared to other companies in the same industry by using operating income as reported in accordance with generally accepted accounting principles (IFRS).

16

Information about reportable segments is as follows:

For the year ended December 31, 2018
	Reportable segments
	Beverage	Healthcare &
	Skincare
	Business
	Business
Sales revenue to external customers	899,863	27,444
Intersegment sales revenue	－	－
Total sales revenue	899,863	27,444
Segment income (loss)	8,864	5,818
Adjustments
Financial revenue
Finance costs
Income (loss) before tax
Other items
Depreciation and amortization	47,149	381
Impairment loss	202	－
Equity-method loss	(5)	－
For the year ended December 31, 2019
	Reportable segments
	Beverage	Healthcare &
	Skincare
	Business
	Business
Sales revenue to external customer	890,009	24,774
Intersegment sales revenue	－	－
Sales revenue	890,009	24,774
Segment income (loss)	(58,904)	3,515
Adjustments
Financial revenue
Finance costs
Income (loss) before tax
Other items
Depreciation and amortization	56,408	543
Impairment losses of goodwill	61,859	－
Impairment loss	1,011	－
Equity-method gains	43	－

		(Millions of yen)
Reportable
segments	Adjustment			Total
Total
927,307	－	927,307
－	－			－
927,307	－	927,307
14,682	－	14,682
		830
			745
		14,767
47,531	－	47,531
202	－	202
(5)	－	(5)
		(Millions of yen)
Reportable
segments	Adjustment			Total
Total
914,783	－	914,783
－	－			－
914,783	－	914,783
(55,389)	－	(55,389)
		1,145
			1,175
		(55,419)
56,951	－	56,951
61,859	－	61,859
1,011	－	1,011
43	－	43

(2) Information for each product and service

This information is omitted because the same information is disclosed in "(1) Reportable Segments."

(3) Information for each region

Sales revenue by geographic region is omitted because the revenue of domestic sales to external customer accounts for the majority of sales revenue in the consolidated statements of income.

Since the carrying amount of non-current assets in Japan accounts for the majority of non-current assets in the consolidated statement of financial position, the description of non-current assets by region is omitted.

(4) Major customer

There is no customer to which sales exceeds 10% of the Group's total revenue.

17

(Per share information)

The calculation of basic earnings per share is based on the net income for the year attributable to owners of the Company and the weighted-average number of ordinary shares outstanding during the years.

The basis for calculating basic and diluted earnings per share is as follows.

	For the year ended	For the year ended
	December 31, 2018	December 31, 2019
Net income (loss) for the year attributable to owner	10,117	(57,952)
of parent (million yen)
Weighted-average shares of ordinary share	192,051	179,852
outstanding (in thousands)
Earnings (loss) per share (yen):	52.68	(322.22)

(Significant Subsequent Events) Not applicable

18

4. Others

1. Changes in Key Consolidated Management Indicators

		Japanese Standard			IFRS
		FY2015	FY2016	FY2017	FY2017	FY2018	FY2019
Net revenues / Net sales	(million	440,476	460,455	872,623	837,069	927,307	914,783
yen)

Net revenues growth rate / Net sales growth rate

Operating income

Operating margin

Recurring income

Recurring income margin

Income before income taxes and minority interests / Income for the year before income tax Ratio of income before income taxes to sales / Ratio of income for the year before income tax to net sales

Net income attributable to owners of the company Net income attributable to owners of the company/Net revenues attributable to owners of the company Comprehensive income / Total

comprehensive income

Earnings per share

Diluted earnings per share

ROE

ROA

Total assets

Net assets / Total equity

(%)	3.8	4.5	89.5	－	10.8	(1.4)
(million
14,262	21,143	40,579	37,594	14,682	(55,389)
yen)
(%)	3.2	4.6	4.7	4.5	1.6	(6.1)
(million	13,723	20,602	39,859
－	－	－
yen)
(%)	3.1	4.5	4.6	－	－	－
(million
15,228	12,707	39,240	37,914	14,767	(55,419)
yen)
(%)	3.5	2.8	4.5	4.5	1.6	(6.1)
(million
9,970	5,245	25,244	21,967	10,117	(57,952)
yen)
(%)	2.3	1.1	2.9	2.6	1.1	(6.3)
(million
11,217	5,022	31,976	30,065	3,197	(52,108)
yen)
(yen)	91.35	48.05	144.26	125.53	52.68	(322.22)
(yen)	－	－	－	－	－	－
(%)	3.9	2.0	5.7	4.6	1.6	(10.7)
(%)	3.8	5.5	6.3	5.6	1.6	(6.1)
(million
378,105	377,468	883,918	929,304	877,472	952,444
yen)
(million	260,878	261,173	627,485	655,038	580,906	506,491

yen)

Net assets (excl. minority
interests) to total assets / Ratio	(%)	68.9	69.1	70.9	70.4	66.2	53.1
of equity attributable to parent
owners
Net assets (excl. minority
interests) per share / Equity	(yen)	2,386.81	2,389.28	3,070.01	3,204.90	3,163.63	2,821.27
attributable to owners of the
parent per share
Price earnings ratio / Ratio of
equity attributable to parent	(times)	26.9	71.7	28.5	32.8	62.4	(8.7)
owners

*1. Items with "/" will be named "Japanese Standard / IFRS".

*2. As for the amount, Japanese Standards are rounded down, and IFRS is rounded off. In addition, the ratio is rounded off.

19

1. Officer Change
   Following transfer of an officer is decided internally in the Board Meeting held today.

1. New Director Candidates (as of March 26, 2020)

1. Directors (excluding Directors serving on the Audit & Supervisory Committee)

	Name		New	Current
	Hirokazu Yamura		Director (Outside Director)	Representative Director & President,
		Michinoku Coca-Cola Bottling Co., Ltd.
	(2) Directors serving on the Audit & Supervisory Committee (as of March 26, 2020)
	Name			New		Current
	Enrique Rapetti			Director (Outside Director)		Latin America Group CFO, The Coca-Cola
				Company - USA

2. Resigning Directors (March 26, 2020)

(1)	Director (excluding Directors serving on the Audit & Supervisory Committee)
Tamio Yoshimatsu	(Director)
(2)	Director serving on the Audit & Supervisory Committee
Jennifer Mann	(Outside Director)

3. Reference Information (Board structure as of March 26, 2020)

1. Directors (excluding Directors serving on the Audit & Supervisory Committee) Representative Director Calin Dragan

Representative Director	Bjorn Ivar Ulgenes
Director	Hiroshi Yoshioka	(Outside Director)
Director	Hiroko Wada	(Outside Director)
Director	Hirokazu Yamura	(Outside Director)
(2) Directors serving on the Audit & Supervisory Committee
Director	Irial Finan	(Outside Director)
Director	Celso Guiotoko	(Outside Director)
Director	Nami Hamada	(Outside Director)
Director	Enrique Rapetti	(Outside Director)

• The official decision will be made according to the resolutions required during the Ordinary General Meeting of Shareholder for the fiscal year ended December 31, 2019 to be held on March 26, 2020 and subsequent meetings of Board of Directors and Audit & Supervisory Committee to be held on the same day.

End of document

20