MidMid--TermTerm PerformancePerformance AnnouncementAnnouncement forfor thethe YearYear EndingEnding DecemberDecember 20062006 August 9th, 2006 Coca-Cola West Holdings（2579） Contact PR・IR Group TEL 092-283-5718 FAX 092-283-5729 URL http://www.ccwh.co.jp/ E-mail [email protected] ContentsContents Ⅰ．Mid-term Performance Results for the year ending Ⅲ．Marketing Activities in 2006 December 2006 １．Review of 1H Marketing Activities １．2006 Mid-Term Overview …3pg ・Market Share … 21pg ２．1H Profit Change Factors ・Sales Results by Brand / Channel … 23pg （vs. plan/vs. last year） …5pg ・Review of Vending Activities … 34pg ３．Group Companies’ Performance …9pg ・Review of Chain Store Activities … 37pg ・1H Summary … 40pg Ⅱ．Coca-Cola West Group （CCWG） 2006 2H Plan ２．2H Marketing Activities １．Corporate Vision …11pg ・Mid-term Sales Strategies … 43pg ２．Aspirations of CCWG …12pg ・Core Brand Key Activities … 45pg ３．Basic Concept of Creating CCWG …13pg ・Key Channel Activities … 48pg ４．Sales Synergies …14pg ・Scenario to achieve volume target … 50pg ５．Cost Synergies/CC System Synergies …15pg ６．CCWG 2006 2H Forecast …16pg [Reference] ７．2H Profit Change Factors （vs. ly） …17pg ・Coca-Cola System in Japan … 54pg ８． CCWG 2006 Annual Forecast …18pg ・Group Company Overview … 56pg ・Explanation of Terminology … 59pg 1 Ⅰ. Mid-Term Performance Results for the year ending December 2006 2 2006 Mid-Term Overview － CCWJ 2006 1H Performance ¾Sales Volume ； vs. plan ‐ 5.9％、vs. ly ‐ 2.1％ ¾Consolidated Revenue ； vs. plan 6.9BB JPY decline（‐5.8％）、vs. ly 5.6BB JPY decline（‐4.8％） ¾Operating Income ； vs. plan 2.1BB JPY decline（‐40.9％）、vs. ly 2.1BB JPY decline（‐41.1％） （MM JPY、%） 2006 1H 2005 1H Plan Actual vs. Plan vs. ly Actuals ※ Difference % Difference % Revenues 117,359 118,600 111,693 -6,906 -5.8 -5,666 -4.8 Operating Income 5,313 5,300 3,129 -2,170 -40.9 -2,183 -41.1 Recurring Income 5,509 5,400 3,464 -1,935 -35.8 -2,044 -37.1 Net Income 2,543 3,400 1,729 -1,670 -49.1 -813 -32.0 ※The above plan is in line with the full year forecasts announced on 2/8/06 2006 1H Activity Summary ¾Brand: ・Actual volumes for key brands excluding Aquarius were negative vs. last year ・Georgia sales had been stagnant following its renewal last year, but began to turn around since May ¾Channel: ・All channel were negative vs. plan. CS and Food services grew vs. last year ・Vending: ・Market developments are positive vs. last year. # of VM have increased since last year ・VPM has decreased due to Georgia’s stagnant sales ※ＶＰＭ…(Ｖｏｌｕｍｅ Ｐｅｒ Ｍａｃｈｉｎｅ） ・Chain Store: ・Profits recovering due to increased productivity and CBPPP strategy implementation ¾In order to further strengthen the business base, CCWJ has agreed to an integration with Kinki ※ＣＢＰＰＰ：Ｃｈａｎｎｅｌ、Ｂｒａｎｄ、Ｐａｃｋａｇｅ、Ｐｒｉｃｅ、Ｐｒｏｍｏｔｉｏｎ 3 2006 Mid-Term Overview － Kinki CCBC 2006 Mid-Term Performance ¾Sales Volume ； vs. plan ‐ 5.7％、vs. ly ‐ 3.6％ ¾Consolidated Revenue ； vs. plan 5.3BB JPY decline（‐6.1％）、vs. ly 4.5BB JPY decline（‐5.2％） ¾Operating Income ； vs. plan 1.8BB JPY decline（‐73.5％）、vs. ly 1.8BB JPY decline（‐73.6％） （MM JPY、%） 2006 Mid-Term 2005 1H Plan Actual v.s. Plan v.s. ly Actuals ※ Decline Rate Decline Rate Revenues 86,169 87,000 81,651 -5,349 -6.1 -4,518 -5.2 Operating Income 2,506 2,500 662 -1,838 -73.5 -1,844 -73.6 Recurring Income 2,431 2,500 502 -1,998 -79.9 -1,928 -79.3 Net Income 1,365 1,400 -865 -2,265 － -2,231 － ※The above plan is in line with the full year forecasts announced on 2/9/06 2006 1H Activity Summary ¾Brand: ・ Actual volumes for key brands excluding Aquarius are negative vs. last year ・ Georgia sales had been stagnant following its renewal last year, but began to turn around since May ¾Channel: ・All channels are negative vs. ly as well as vs. plan ・ Vending: ・# of VM vs. ly are positive ・VPM is negative vs. ly due to Georgia’s stagnant sales ・Profits decreased due to lowered selling price ・Chain Store: ・Discounts are almost the same as last year ¾In order to further strengthen the business base, Kinki has agreed to an integration with CCWJ. 4 1H Profit Change Factor （vs. plan）－CCWJ ＜Gross Profit＞ （Billion Yen） Gross Profit - 2006 1H plan 53.2 Decrease in sales volume -2.3 Sales Mix Impact -1.3 Decrease from Mikasa -0.4 Gross Profit - 2006 1H actual 49.2 450 460 470 480 490 500 510 520 530 540 550 ＜Operating Income＞ （Billion Yen） Operating Income - 2006 1H plan 5.3 Decrease in Gross Profit -4.0 Decrease in sales commission ＋0.5 Decrease in personnel expense ＋0.5 Decrease in depreciation expenses ＋0.1 Decrease in other expenses ＋0.7 Operating Income - 2006 1H actual 3.1 5 10 20 30 40 50 1H Profit Change Factor （vs. LY）－CCWJ ＜Gross Profit＞ （Billion Yen） Gross Profit – 2005 1H actual 51.8 Decrease from sales mix -1.0 Decrease in sales volume -0.8 Decrease from Mikasa -0.3 Decrease in profit from toll fee -0.2 Decrease in inventory transfer to CCNBC -0.2 Decrease in other profit -0.1 Gross Profit – 2006 1H actual 49.2 480 490 500 510 520 ＜Operating Income＞ （Billion Yen） Operating Income - 2005 1H actual 5.3 Decrease in Gross Profit -2.6 Increase in other expenses -0.4 Decrease in rent ＋0.3 Decrease in personnel cost ＋0.3 Decrease in transportation ＋0.1 Decrease in sales commission ＋0.1 Operating Income – 2006 1H actual 3.1 20 30 40 50 6 1H Profit Change Factor （vs. Plan）－Kinki ＜Gross Profit＞ （Billion Yen） Gross Profit - 2006 1H plan 39.3 Decrease in sales volume -2.1 Decrease from Sales Mix Impact -0.4 Decrease in other profit -0.2 Gross Profit – 2006 1H actual 36.6 300 310 320 330 340 350 360 370 380 390 400 ＜Operating Income＞ （Billion Yen） Operating Income – 2006 1H plan 2.5 Decrease in Gross Profit -2.7 Decrease in transportation ＋0.3 Decrease in sales commission ＋0.2 Decrease in personnel cost ＋0.2 Decrease in other expenses ＋0.2 Operating Income – 2006 1H actual 0.7 -5 0 5 10 15 20 25 30 7 1H Profit Change Factor （vs. LY）－Kinki ＜Gross Profit＞ （Billion Yen） Gross Profit - 2005 1H actual 38.8 Decrease in sales volume -1.2 Decrease from sales of Rex Lease -0.3 Decrease from sales mix -0.2 Decrease - others -0.5 36.6 Gross Profit - 2006 1H actual 300 310 320 330 340 350 360 370 380 390 400 ＜Operating Income＞ （Billion Yen） Operating Income - 2005 1H actual 2.5 Decrease in gross profit -2.2 Increase in Business System’s expenses -0.3 Decrease in promotion/advertising expenses ＋0.3 Decrease in personnel expense ＋0.2 Decrease in other expenses ＋0.2 Operating Income – 2006 1H actual 0.7 0 5 10 15 20 25 30 8 Group Companies’ Performance ＜Mikasa CCBC＞ JPY MM, % 2005 2006 1H 1H Plan Actual vs. plan vs. LY Actual ※ Difference % change Difference % change Revenues 13,361 13,457 12,615 -842 -6.3 -746 -5.6 Operating Income 8 -7 -268 -261 － -276 － ＜Nishi-Nihon Beverages＞ Revenues 9,687 8,965 8,871 -94 -1.0 -816 -8.4 Operating Income 46 37 176 139 375.7 130 282.6 ＜Mikasa Beverage Service＞ Revenues 1,285 1,289 1,282 -7 -0.5 -3 -0.2 Operating Income 14 -1 -14 -13 － -28 － ※Plan is based on the annual forecast announced on February 8, 2006. ＜Kansai Beverage Service＞ Revenues 16,406 16,417 16,056 -361 -2.2 -350 -2.1 Operating Income 861 777 586 -191 -24.6 -275 -31.9 ＜Nesco＞ Revenues 1,377 1,373 1,354 -19 -1.4 -23 -1.7 Operating Income 73 80 87 7 8.7 14 19.2 ＜Cadiac＞ Revenues 455 461 462 1 0.2 7 1.5 Operating Income 18 15 11 -4 -26.7 -7 -38.9 ※Plan is based on the annual forecast announced on February 7, 2006. 9 Ⅱ. Coca-Cola West Group 2006 2H Plan 10 Coca-Cola West Group: Corporate Vision － Coca-Cola West Group Corporate Vision－ CreatingCreating ourour FutureFuture BeverageBeverage BusinessBusiness CCWH will… • Provide the highest quality products to our consumers and business partnerships to our customers • Value the work satisfaction and lifestyle of each associate • Meet shareholder needs by achieving sustainable growth • Strengthen relationships with the community and our responsibility to the environment 11 Coca-Cola West Group Aspirations zzExpandExpand salessales andand shareshare inin thethe teterritoryrritory whichwhich accountsaccounts forfor approapproximatelyximately 1/31/3 ofof ththee populationpopulation ofof JapanJapan zzIncreaseIncrease profitabilityprofitability throughthrough efficientefficient organizationalorganizational structurstructureses andand operationaloperational processprocess MaximizeMaximize valuevalue toto thethe consumersconsumers andand satisfactionsatisfaction toto thethe customercustomerss basedbased onon increasingincreasing capabilitiescapabilities asas aa salessales marketingmarketing companycompany Leadership in Coca-Cola System Transformations Lead system transformations Collaboration with CCJC Collaboration with Functionally Integrated companies Sustainable Profit Growth （CCNBC, CCNSC, CCBSC etc） Achievements of the Coca-Cola West Group’s Ideal Structure Quick decision making Prominent Customer Marketing Community-based HR development Company with a high corporate image 12 Basic Concept of Creating the Coca-Cola West Group １．１．CreatingCreating a a sales sales focused focused company company ２．２．EfficientEfficient company company operations operations ・・HighHigh productivity, productivity, thorough thorough cost cost reductions reductions ３．３．AA company company that that values values the the work work satisfaction satisfaction andand lifestyle lifestyle of of each each associate associate 13 Sales Synergies ■Establish integrated process from product development to sales execution ①Collaboration in Product Development, Test Marketing Product Planning …Channel specific product, product in local needs /Development ②Sales Marketing Pilot Execution …Promotion mechanism, POS Feedback from Manufacturing ③Proactive Personnel Exchange market/sales information Sales ■Strengthen Sales Capabilities ①Increase responsiveness to key regional/local customers ・Increase responsiveness to key customers in regional chains and vending （transportation） ②Share both company’s knowledge ・Sharing/Implement the best practice methods of both companies from CCWJ’s strong vending channel and Kinki’s strong chain store channel ③Increase specialization of roles and functions ・Integrate the group companies on a functional basis, and increase specializations of roles and functions as well as quality of operations.