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

the Third Quarter Ended September 30, 2019 (IFRS)

November 7, 2019

Listed company name: Coca-Cola Bottlers Japan Holdings Inc.

Listed stock exchanges: Tokyo and Fukuoka

Code number: 2579

URL: https://en.ccbj-holdings.com/

Representative: Representative Director & President

Name: Calin Dragan

Contact: Head of Controllers Senior Group, Finance

Name: Cordula Thomas Phone: +81-3-6896-1707

Expected date of quarterly report submission: November 11, 2019

Expected date of the dividend payments: －

FY 2019

3Q supplementary information: Yes

FY 2019

3Q earnings presentation: Yes

(Fractions of one million yen are rounded)

1. Consolidated financial results for the 3rd quarter 2019 (from January 1, 2019 to September 30, 2019)

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

(1) Consolidated financial results

Net sales

Business Income

Operating profit

Net profit

Net profit for the year

Total comprehensive

attributable to owners

income

of the parent

million

％

million

％

million

％

million

％

million

％

million

％

yen

yen

yen

yen

yen

yen

3rd quarter

694,763

(2.2)

17,103

(40.1)

(51,880)

－

(55,650)

－

(55,693)

－ (54,877)

－

2019

3rd quarter

710,317

－

28,548

－

20,090

－

12,882

－

12,854

－

12,266

－

2018

Earnings per share

Diluted earnings per share

yen

yen

3rd quarter 2019

(309.40）

－

3rd quarter 2018

66.26

－

  • "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

Total assets

Total equity

Equity attributable to parent

Ratio of equity attributable

owners

to parent owners

million yen

million yen

million yen

％

968,031

503,473

502,994

52.0

Sep. 30, 2019

877,472

580,906

580,448

66.2

Dec. 31, 2018

2. Dividends

Dividends per share

(Record date)

End of 1Q

End of 2Q

End of 3Q

Year-end

Annual

Year ended

yen

yen

yen

yen

yen

Full year 2018

－

25.00

－

25.00

50.00

Full year 2019

－

25.00

－

Full year 2019 (forecast)

－

25.00

50.00

Note: Revisions to the cash dividends forecasts most recently announced: None

3. Forecast of consolidated financial results 2019 (from January 1, 2019 to December 31, 2019)

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

Net sales

Business Income

Operating profit

Net profit

Net profit for the year

Earnings per

attributable to owners

share

of the parent

million

％

million

％

million

％

million

％

million

％

yen

yen

yen

yen

yen

yen

Full year

923,300

(0.4)

15,400

(33.8)

(53,100)

－

(56,700)

－

(56,700)

－

(315.26)

2019

Note: Revisions to the forecasts of consolidated financial results most recently announced: None

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):

3Q

2019: 206,268,593shares

FY 2018: 206,268,593 shares

2) Number of treasury shares at the end of period:

3Q

2019: 26,915,847 shares

FY 2018: 22,793,049 shares

3) Average number of outstanding shares during the period:

3Q

2019: 180,002,117 shares

3Q 2018: 194,004,590 shares

  • These 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. Qualitative Information on the Financial Summary for this Quarter

  1. Information on the Future Outlook, Such as Forecast of Consolidated Financial Results" on page 5 for matters relating to performance forecasts.

Table of contents

Page

Attachment

1. Qualitative Information on the Financial Summary for this Quarter.........................................................................

2

(1)

Details of Consolidated Financial Results........................................................................................................

2

(2)

Details of Consolidated Financial Position.......................................................................................................

4

(3)

Information on the Future Outlook, Such as Forecast of Consolidated Financial Results ..........................

5

2. Condensed Quarterly Consolidated Financial Statements and Main Notes .............................................................

6

(1)

Condensed Quarterly Consolidated Balance Sheets .........................................................................................

6

(2)

Condensed Quarterly Consolidated Statements of Income and Comprehensive Income .................................

8

(3)

Condensed Quarterly Consolidated Statements of Changes in Equity ..........................................................

10

(4)

Notes to Condensed Quarterly Consolidated Financial Statements................................................................

12

(Notes Relating to Going Concern Assumption) ..........................................................................................

12

(Changes in Accounting Policies).................................................................................................................

12

(Segment Information)..................................................................................................................................

13

1

1. Qualitative Information on the Financial Summary for this Quarter

(1) Details of Consolidated Financial Results

Coca-Cola Bottlers Japan Holdings Inc. ("CCBJH" or the "Company") announced year-to-date third quarter results for the fiscal year ending on December 31, 2019 (January 1, 2019 to September 30, 2019). In this period, total nonalcoholic ready-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 unseasonably rainy and cool weather in July. The health food and cosmetics market continues to grow, driven by consumer interest in products with healthy and anti-aging appeal, continued growth of inbound tourism and industry innovation in marketing and new product launches.

For CCBJH, 2019 is a transition year that has been 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 through second quarter 2020. In addition, we implemented a wholesale price increase for large PET products in April-the first increase in 27 years, and an important initiative to encourage more balanced growth between both volume and value.

We also developed and announced a new five-year strategic business plan, "THE ROUTE to 2024", 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 between CCBJH and the Coca-Cola (Japan) Company as well as transformational change to drive cost savings. Over the course of the five-year plan, we expect 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 network.

Our year-to-date third quarter Business Income results are roughly in line with our revised full-year outlook (announced in May 2019) for the beverage segment, with continued topline pressure in our health and skincare segment. Business results in 2019 reflect manufacturing capacity constraints in aseptic PET packaging combined with ongoing lower manufacturing efficiencies and elevated logistics and distribution expenses as we recover our supply and distribution infrastructure over the course of this year after the flooding and supply disruption in 2018. Year-to-date results also reflect impairment of goodwill 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, November 8, 2019 at 3:30pm (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.

Highlights

・Moderating beverage-volume performance year to date, with third-quarter volume down 1% and year-to- date volume down 3%. Flat beverage business revenue in the quarter and 2% decline year-to-date as the April wholesale price increase settles in.

・OTC market share growth in the third quarter in both value and volume. Strong volume performance in coffee and improving trend in vending channel.

・Year-to-date Business Income decreased 40% versus prior year, trending in line with the revised full-year plan announced in May for the beverage segment, reflecting expected quarterly phasing in 2019 as we cycle supply disruption primarily in the second half of 2018. Continued topline pressure in the health and skincare segment.

・Year-to-date operating loss of 51.9 billion yen reflecting the second-quarter goodwill impairment.

・150 billion yen straight bond issued in September to fund the recovery of our supply network and necessary investments for growth.

・Commissioned new high-speed aseptic manufacturing line at our Kyoto plant in October in addition to two new lines in the first quarter. On track to add four additional lines through second quarter 2020, including the newly built Hiroshima Plant to replace the flooded Hongo facility.

・Company-wide implementation of ERP system "CokeOne" completed in October. Now one integrated IT infrastructure across operations nationwide.

2

・Announced the national launch of alcohol brand Lemon-dou in October 2019, the first-ever alcoholic beverage brand in the global Coca-Cola system, with in-house production in CCBJI facilities.

・Strong commitment to capability development grounded in new company mission, vision and values aligned with the strategic business plan.

Review of Results

Year-to-date Q3 (January to September) 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 (Loss)

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)

Q3 (July to September)

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

Other income (Non-recurring)

Other expenses (Non-recurring)

Operating Income

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

2018

2019

YoY

710,317

694,763

(2.2%)

349,385

337,265

(3.5%)

319,943

318,810

(0.4%)

1,113

889

(20.1%)

1,853

2,150

16.1%

(154)

(90)

－

28,548

17,103

(40.1%)

－

61,859

－

481

2,137

344.4%

8,939

9,260

3.6%

20,090

(51,880)

－

12,854

(55,693)

－

396

384

(3%)

2018

2019

YoY

262,214

261,053

(0.4%)

128,860

127,019

(1.4%)

111,731

113,608

1.7%

424

329

(22.4%)

456

693

51.9%

(120)

(66)

－

16,977

12,980

(23.5%)

－

897

－

8,939

300

(96.6%)

8,038

13,578

68.9%

5,115

8,872

73.5%

148

147

(1%)

  • Sales volume of beverage business does not include alcoholic beverage volume.
  • 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 are recurring in nature.

Year-to-date third quarter net revenue was 694.8 billion yen, a decrease of 15.6 billion yen, or 2.2% compared to the prior-year period. Net revenue of the beverage business decreased 13.0 billion yen (down 1.9%) versus the prior-year period, to 676.0 billion yen. Third-quarter beverage volume declined 1%, reflecting unseasonably cool and rainy weather in July (July volume declined 13%), partly offset by positive cycling of prior year supply restrictions after the flooding of our Hongo plant. Third-quarter net revenue of the beverage

3

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Coca-Cola Bottlers Japan Inc. published this content on 07 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 November 2019 08:09:02 UTC