Coca-Cola West Group(CCWG) 2007-2009 Business Plan

December 21st, 2006

Coca-Cola West Holdings2579
Contact TEL 81-92-283-5718 URL http://www.ccwh.co.jp/ PRIR Group FAX 81-92-283-5729 E-mail masahiro-takase@ccwh.co.jp

Contents
Whole Image of Three Year Business Plan Description of Three Year Business Plan Environmental Analysis Corporate Vision The View Of Management Vision Target Strategy
1

Whole Image Of
Environmental Analysis Outside Inside Changes at the speed exceeding prediction Go to the nest stage for growth Vision

To the leading bottler in the world

Growth exceeding competition overwhelmingly Establishment of a steadfast profit base

Corporate Vision

Creating our Future Beverage Business

Change to the Consumer View The strong confidential relation of employee and company
Target (2009) Sale Volume 200 Net Revenue() 440 Operation Income()25 Ratio (/) 5 more
Million Cases, Billion Yen

The View Of Management Group Management Corporate Governance Corporate Social Responsibility Aspirations Effect major expansion of volume and net sales Maximizing the value to the consumers High quality of work Work satisfaction and growth of each associate

8 more 5 more 4 more 12 more

Strategy Return it to employees, shareholders, and local communities I. Evolution to the new bottler by strategic partnership strengthening with TCCC/CCJC II. Expansion of the sales and the profit by the "Consumer View" activity exceeding competitors III. Functional strengthening, increase in efficiency which harnessed management integration IV. Strengthen a capability base of talented associates and organizations 2

What is

Wing

We will flap forcibly with ten years, 20 years, and 30 years

West + ing CCWG always develops and continues evolving We + ing Win Each of us always develops and continues evolving Win for fighting with competitors on consumer view

Environmental Analysis

Environment which surrounds CCWG

Outside Changes at the speed exceeding prediction
Macro environment (society, economy, labor, and working) Arrival of the low-birthrate-and-longevity age Arrival of the low-birthrate-and-longevity age Expansion of a cost rise risk Expansion of a cost rise risk Soft drink market Change of consumer structure Change of consumer structure Diversification of consumer needs Diversification of consumer needs Structural change of market Structural change of market Competition intensification and Competition intensification and reorganization in retail reorganization in retail Competition intensification in the soft drink industry Competition intensification in the soft drink industry

Inside Go to the nest stage for growth

CCWG The largest bottler in Japan The largest bottler in Japan Strengthening Relations with TCCC/CCJC Strengthening Relations with TCCC/CCJC Increasing the number of a Vending Machine(VM) Increasing the number of a Vending Machine(VM) Development of advanced VM based on IT Development of advanced VM based on IT Coca-Cola system Increase in retired employees Increase in retired employees Improvement of response capabilities to Improvement of response capabilities to consumer and cost reduction by the functional consumer and cost reduction by the functional integrated company integrated company Establishment of CCCMC Establishment of CCCMC Examination of a next-generation model in Examination of a next-generation model in Slow down in sales volume and operating profit Slow down in sales volume and operating profit Main listed bottlers Main listed bottlers
4

. Corporate Vision

CCWG Corporate Vision

Coca-Cola West Group Corporate Vision

Creating our Future Beverage Business

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
5

The view of management

Aspiration

Effect major expansion of volume and net sales

Maximizing the value to the consumers Return it to employees, shareholders, and local communities High quality of work

Work satisfaction and growth of each associate

 The view of management

The view of management of CCWG

For growth of CCWG, it is undertaken just like one company Each company realizes "management which carried out independence" What is "management which carried out independence? Each company manages actively with the basis of required sufficient authority and responsibility, and a commitment is attained Each company manages by self-conclusion, and corporate value of CCWG is raised Increase in efficiency of management and speeding up of decision-making. Avoid of double decision-making. The simple organization design which attains increase in efficiency and speeding up of decision-making Realize clarification of responsibility and high transparency Clarification of responsibilityThe organization design with clear role and result which should be attained, and maintenance of a clear authority standard High transparencyIntelligence sharing of the same quantity and quality Strengthening of a supervisor function Strengthening of the monitoring function about decision-making and execution based on independence of each company Win the trust of all its stakeholders-consumers,customers and society through daily activity Carry out the corporate citizenship All employees work being conscious of society Activity that both Improvement of corporate value and development of society are realized simultaneously Activity for being called "a good company" from all stakeholders
7

Group Management

Corporate Governance

Corporate Social Responsibility

 The view of management

Group Management
Management organization07 Turned PDCA cycle effectively toward CCWG target PDCA cycle of each companyStrengthen of activity in a market and improve the expertise The function near a market point of contact promotes PDCA per area The high function of expertness promotes PDCA per function We will reorganize functional companies further in the future PDCA cycle of a group strategypromote the total optimal group management by the resource allocation (authority transfer) and monitoring (result report) to each company

Effect major expansion of volume and net sales

WJ area Nishinihon Beverage CCWJ Cunstomer Service CCWJ Vending Kinki area Kansai Beverage Service Mikasa area Mikasa Beverage Mikasa Beverage Service Service Mikasa Service Production Kinki Coca-Cola Products CCW Daisen Products Distribution

PDCA cycle of each company

Non-Coca-Cola Business Non-Coca-Cola Business

CCWJ Products

Cadiac

Nesco

Logistics CCW Logistics

P A C
P A C D
8

CCWJ

Kinki CCBC

Mikasa CCBC

CCWH

PDCA cycle of a group strategy

Vision

CCWG Vision

To the leading bottler in the world

Growth exceeding competition overwhelmingly Establishment of a steadfast profit base

Change to the Consumer View The strong confidential relation of employee and company
9

Vision

Positioning of Bottlers in the world Listed Bottlers

Sale Volume
No 1 2 3 4 5 6 7 8 9 CCE FEMSA CCHBC Amatil CCBPI Swire Arca Continental CCI Bottler

Revenue
No 1 2 3 4 5 6 7 8 9 CCE CCHBC FEMSA CCWH Amatil CCCJCoca-Cola Central Japan Consolidated Arca Continental Bottler

Operation Income
No 1 2 3 4 5 6 7 8 9 CCE FEMSA CCHBC Amatil Arca Continental CCWH CCI ANDINA Bottler

10 Andina 11 CCWH 12 CCS 13 CCCJCoca-Cola Central Japan

CCE FEMSA CCHBC Amatil CCBPI Swire Arca Continental CCI Andina CCS Consolidated

10 CCI 11 CCBPI 12 Swire 13 Andina

10 CCCJCoca-Cola Central Japan 11 Swire 12 Consolidated 13 CCBPI

Company name Coca-Cola Enterprises Fomento Economico Mehicano Coca-Cola Hellenic Bottling Company Coca-Cola Amatil Coca-Cola Bottlers Philippines Swire Beverages Embotelladora Arca Grupo Continental Coca-Cola Icecek Embotelladora Andina Coca-Cola Sabco Coca-Cola Bottling Company Consolidated

Main territory North America(78%), Canada(98%), Part of Europe Latin America(Mexico, Argentina, Part of Brazil etc) Europe(26 countries) Australia, Indonesia, Korea, Fiji, NZ etc Philippines Taiwan, Part of China, 10 states of America Part of Mexico Part of Mexico Turkey, 6 countries of Eurasia Part of Chili, Brazil and Argentina East-South Africa(7 countries), Asia(5 countries) Part of North America

SourceCCWH

10

Target

Market scale prediction

2006 2009 Growth rate +4.1% 1.3%/year Take-Out Market
Super Market, CVS, Drug Store, Retail Positive factor Inflow from a vending machine Increase of homemeal replacement increase in a valuable soft-drink ratio Extension of business hours

Outdoor Vending machine market

Positive factor The empty space of alcohol or tobacco vending machines Cognition as a social infrastructure of vending machines Negative factor Outflow for takeout (CVS, SM) Outflow for coffee shop

-10.3 +8.5

2006 Market Scale

+4.1
Positive factor Increase in the rate of unmarried Fixing of coffee shop Negative factor Saving dining out expense Increase of home-meal replacement

2009 Market Scale

Positive factor Recovery of business (increase in overtime) Enlargement of businessplace business Increase in leisure time Negative factor Outflow for takeout (CVS, SM) Reduction in labor force

+2.8 -4.9

Eat-In Market
Food service

Indoor Vending machine market

11

Target

The view of growth of CCWG In order to grow up more than the growth of a market and to raise a share, we need growth of about 3% per year

2006 Prospect

2009(Plan)

186

million cases

200

million cases

12

Target

Target of CCWG
Financial Data Sales volume Net revenues Operating income Operating income margin ROA
recurring income on total asset Unit Million cases Billion yen Billion yen % % % Billion yen Billion yen

2005
1

2006
2

2009 200 440 25 5.7 8.0 5.8 4.5 12.7

Change vs.06 +8% +6% +91% +2.5pt +3.8pt +3.2pt

188 417 17 4.3 5.7 4.2 1.0 8.9

186 413 13 3.2 4.2 2.6 1.9 4.0

ROE
net income on equity capital

EP
Economic Profit Free Cash Flow

1The above(2005) is based on the CCWJ group and Kinkis annual actual figures total, after inter-companys transaction among group companies. 2The above(2006 is based on the CCWG annual performance forecast announced as of Aug. 8, 2006 and Kinkis 1H actual figures total, after inter-companys transaction among group companies. EP : Real earnings (company earnings after deducting the cost of capital used to create profit) calculated after deducting capital costs from operating income after taxes capital cost is 4.2% 13

Strategy

CCWG growth strategy

Return to Stakeholders

Maximize Value
Market Execution

Leadership in the KO system in Japan

Expansion Efficiency

Group Restructuring

Strategic Partnership with TCCC/CCJC

14

Strategy

CCWG strategy

Evolution to the new bottler by strategic partnership strengthening with TCCC/CCJC Expansion of the sales and the profit by the "Consumer View" activity exceeding competitors Functional strengthening, increase in efficiency which harnessed management integration Strengthen a capability base of talented associates and organizations
15

Strategy Evolution to the new bottler by strategic partnership strengthening with TCCC/CCJC

1. Establishment of new strategic collaboration organization

Enforcement of a periodical management meeting Work in the same office with CCJC(Fukuoka/Osaka) : January, 2007 Communication strengthening with TCCC (implementation of a business meeting, Collaboration IR, etc.) Global talented-people exchange with CCJC and bottlers in world

Management meeting
Purpose : Inquire collaboration organization toward realization of the continued growth of Coca-Cola system Matters : Sharing of sales volume, share, profits, progress of strategies based on Annual Business Plan and modified action Exchange views on Coca-Cola system reform Frequency : Once in two months Participants : Top managements/Officers in charge of Sales, Marketing and Finance Top managements/Officers in charge of Sales and finance etc
16

Strategy Evolution to the new bottler by strategic partnership strengthening with TCCC/CCJC

2. Establishment of consistent organization by collaboration marketing

As a strategic partner of CCJC, CCWH will collaborate from marketing plan to operation with consistent process more than what we have done so far

Existing Brand Marketing

Powerful Supports

Functional Integrated Companies Just like one Company (Voice)

<Collaboration CCJC Brand Marketing Marketing>

CCWH Sales Marketing CCWJKINKIMIKASA

Full cooperation Marketing plan Product development Plan of market deployment Test marketing Commercial distribution Operation

Custmer Consumer

Process of marketing plan

Holding of a marketing forum Decision of a three-month rolling plan Sharing of important activities Project of new-product development

Plan of market deploymentExecution process

Decision of a three-month rolling plan of market development Reputation of important activitiesmonitoring New productsPromotion test plan New business

17

Strategy Evolution to the new bottler by strategic partnership strengthening with TCCC/CCJC

non-entered domain
New product/Reform sales methods) product/

Development of new products with CCJC, new category and sales method for aiming at the new growth opportunity in future Install "product development team" in CCWH Deployment of chilled products in vending machine Number of Vending machine for chilled products 1,200units in 2009 Product development for CVM Product development for On-Premise, reform of sales method Reform of sales method related to the high added value health drink

OnPremiseSyrup and package sales business in the eating out market

18

Strategy Evolution to the new bottler by strategic partnership strengthening with TCCC/CCJC

Marketing forum Purpose As a part of collaboration marketing, the sense of market of the whole thing is made to reflect in strategy planning of CCJC. Matters CCJC marketing strategyDebate of the marketability (viewpoint from the operating spot) of a program Follow-up of Annual Business Plan Decision of master planannual/quarter etc Frequency Once in two months It holds suitably if needed Participants CCJC : Division of marketing/channel/promoting CCWH : Sales planning division CCWJ/KINKI/MIKASA : Planning division etc
19

Strategy Evolution to the new bottler by strategic partnership strengthening with TCCC/CCJC

3. Cooperation strengthening with national functional integrated companies

exertion of an initiative as a sales volume NO.1 bottler

CCCMC
Coca-Cola Customer Marketing Company

Practice of customer marketing

Coca-Cola Vending Coca-Cola Vending Partnership Partnership

CCVP CCVP

Establishment of new vending business model

CCWG

CCNBC CCNBC High product quality Coca-Cola National Coca-Cola National Low cost operation
Beverages Beverages

Construction of operating basis and support system

Coca-Cola Integrated Coca-Cola Integrated Business Solutions Business Solutions

CCIBS CCIBS

20

Strategy Expansion of the sales and the profit by the "Consumer View" activity exceeding competitors

1. Reconstruction of the vending machine business which can offer the highest product and service quality to consumer
Reconstruction of the new business model in consumer viewpoint
We built the high business model of a barrier to entry, and promote the improvement in competitive power and cost increase in efficiency The measure for expansion by M&A In cooperation with Coca-Cola Vending Partnership(CCVP) Expansion of effective deployment of cashless payment vending machines Effective use of the on-line information by network vending machine expansion (selling information / operation increase in efficiency) Target of IT vending machine introduction : 20,000 units (3 years) Expansion of a universal machine / energy-saving machine / non-chlorofluocarbon machine Improvement in VPM by vending machine marketing strengthening Strengthening of account management Strengthening of the recovery restrictive measures of vending machines

Deployment of an added value vending machine

Maintenance, expansion, and defense of the existing accounts and locations

The newly developed activities accompanied by the profitability centering on an indoor market
Development strengthening by added value proposals (Cmode vending machines etc) Target of indoor vending machine introduction : 33,000 units (3 years)

Improvement of profitability
Improvement of unprofitable locations Increase in efficiency of operation which utilized IT Increase in efficiency of apparatus employment

21

Strategy Expansion of the sales and the profit by the "Consumer View" activity exceeding competitors

2. Improvement in quality of the customer management which can offer highest product and service with the customer to consumer
Expansion of offer worth to consumer by the improvement in quality of customer management
Promotion of customer relation management Inclination distribution of investmentFormulation of the business plan according to customer Promotion of category management (expansion of the sales and the profit by the scientific analysis based on data)

Strengthening of CBPPP strategy planning based on consumer purchase action, and market CBPPPChannelBandPackagePricePromotion power of execution
Enforcement of the business condition segment based on consumer use motivation Execution of the optimal strategy according to segment based on the consumer purchase action

Practical use of an internal management index

Visualization of the customer actual condition by the P/L creation classified by customer Strategic evaluation (achievements) and evaluation of a operating process (activity) Management of the cost price and a promotion

Improvement in organization capability

The advancement and increase in efficiency of activity by specialization of MD Strengthening of business talk power
22

Strategy Expansion of the sales and the profit by the "Consumer View" activity exceeding competitors

3. Production of structure which includes the consumer's voice in the management cycle of company Organization maintenance and Capability strengthening which harnesses the consumer's voice in a strategy
Structure which collects the consumers voice on a daily basis

Strengthening of the structure of policy reflection Information chain with CCJC, Structure which uses a complaint for management CCW area5000 affairs in 2005 Strengthening of the quality control organization in a market/Clarification of standard Shipment control, Quality control in market and Practical use of a branch inventory relish management system etc

Maintenance and fullness of production and physical distribution organization which sends "safety and relief" to consumer Deployment of improved quality movement in manufacturing department Enforcement of production and physical distribution equipment assessment, and maintenance of an investment standard Tradition of the technology by decision of a factory work standard Re-maintenance of operating process and operations manuals
23

Strategy Functional strengthening, increase in efficiency which harnessed management integration

1. Maintenance and fullness of structure of decision-making, report and supervisor function

Introduction of a group corporate officer system Reexamination of an authority standard according to an organization and a role Reexamination of the organization design united with group reorganization Construction of a unification sanction system Logistics company integration (from January, 2007) Reorganization of a manufacture function Reorganization of functional companies (vending, vending service, etc.) Reorganization on Non-Coca-Cola business

2. Integration and maintenance of management organization

3. Strengthening and increase in efficiency of operating organization

Construction of the common platform of indirect department Construction of the SCM organization which corresponds to change of a market flexibly Reconstruction of a standard operating process Establishment of performance management structure Maintenance of a performance management index Maintenance of the performance management index centering on sales department The monthly settlement of accounts in MIKASA and consolidated statements are brought forward Concentration of group purchase
24

Strategy Strengthen a capability base of talented associates and organizations

1. Construction of value standard of personnel management

Decision and fixing promotion of a group talented-people management concept

2. Maintenance of the personal system in CCWG

Maintenance of position, rank, occupational description, grade and treatment level etc Maintenance of evaluation system

3. Career development of employee, Human-resources development which supports motivation and man-power development
Decision and enforcement of a personnel training plan which unified in CCWG Suitable treatment which harnessed each characteristic Promotion of positive action Consideration of work life balance Construction of a recruit center Construction of talented-people data bank function

Personnel plan (employee) 8,500 in 20068,000 in 2009

25

Strategy

IT system strategy
The framework of IT system which developed four strategies Evolution to the new bottler by Evolution to the new bottler by strategic partnership strengthening strategic partnership strengthening with TCCC/CCJC with TCCC/CCJC Expansion of the sales and the profit Expansion of the sales and the profit by the "Consumer View" activity by the "Consumer View" activity exceeding competitors exceeding competitors Functional strengthening, increase in Functional strengthening, increase in efficiency which harnessed efficiency which harnessed management integration management integration E x p a n sio n o f s ale s a n d p r o fit
The measure for the new growth field Strengthening of operating power, and the advancement of a process

Visualization of activity

M ain t e n a n c e a n d i n c r e a s e i n e ffi c i e n c y o f a m a n a g e m e n t b a s e

Standardization and integration of operating process / IT system

Strengthen a capability base of Strengthen a capability base of talented associates and organizations talented associates and organizations

Integration of IT infrastructure

26

Strategy

IT system strategy
IT system which supports four strategy measures
Standardization and integration of operating process / IT system
Measure for standardization of a basic process, and reconstruction of a system Collaboration project with CCIBS is started in the Fukuoka office this year from 2008

Visualization of activity
Structure which uses a complaint for management CCW area5000 affairs in 2005 from 2008 Structure which collects the voice on a daily basis from 2009

Strengthening of operating power, and the advancement of a process

Strengthening of the vending machine business by practical use of on-line information Strengthening of the products offered which suited the segment Formation of 1 round trip Directions of vending machine charge Visualization of Purchase informationStrengthening operating process etc SCM processSystem which manages the pull-date of branch stock on going from 2008 from 2007 from 2008

The measure for the new growth field

Construction of the back office system supporting IT VD machine business, such as a cashless payment from 2008

Integration of IT infrastructure
Reconstruction of a wide area network/LAN The measure for security from 2007 on going
27

Strategy

Target achievement scenario Operating Income

Attain the increase of 12 billion yen profits by realization of group strategy in2009.(vs2006)
2006 Prospect
Cost Reduction Existing Channel Increase sales volume New Channel Chilled and other Operators M&A Other

2009 Plan

+0.9 BY

+4 BY

+1 BY +6 BY
Personnel-expenses reduction-500
Vending machine/Trade fixture

2.6 BY

Centralized procurement 0.8 BY Manufacture and distribution cost reduction

25 BY

13.1 BY

SG&A
169BY Ratio of SG&A 41

Vending 6.4 BY SM/New Channel 1.0 BY CVS 0.2 BY Retail 1.7 BY Food Service 0.3 BY Other Channel 0.2 BY

Increase in efficiency Business System charge fee 0.9 BY

1.3 BY

Reduction of goods abandonment 0.2 BY

BY stands for Billion Japanese Yen

SG&A
168 BY Ratio of SG&A 38
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Reference

29

Reference

Performance Trend (Consolidated)

MM JPY

1996 Net Revenues Operating Income Recuring Income Net Income 113,490 10,481 11,273 5,721

1997 115,408 10,737 11,054 5,428

1998 117,991 12,533 12,510 5,872

1999 164,731 15,160 15,889 6,823

2000 207,827 17,449 18,516 5,700

2001 226,111 16,634 16,021 1,420

2002 247,737 16,704 17,005 7,086

2003 240,825 19,638 19,895 9,380

2004 253,248 16,860 17,065 8,564

2005 245,874 11,830 12,256 7,305

2006 ( prospect) 333,400 12,400 13,300 7,400

400,000 350,000 300,000 250,000 200,000 150,000 100,000

Operating Income Net Revenues 1999/7/1: Merged with Sanyo CCBC 2001/4/5 Make Mikasa CCBC subsidiary 2006/7/1 Integration with Kinki CCBC

25,000

20,000

15,000

10,000

5,000 50,000 0
MM JPY

0 96 97 98 99 00 01 02 03 04 05 06

MM JPY

30

Reference

Financial Data (Consolidated)

Operating IncomeOperating Income RatioNet Assets / Equity Ratio
25,000 20,000 15,000 4.8 10,000 5,000 0
MM JPY

Operating income ratio

7.4 8.2 Operating income 6.7 6.7

10.0 8.0 6.0 19,638 16,860 11,830 2.0 4.0

175,000 170,000 165,000

83.2

84.0 83.0

Equity Ratio
80.7 81.0 80.6

82.0 81.0 80.0

173,608

Net Assets
160,000 155,000
157,129 77.5 164,658 165,454 167,036

79.0 78.0 77.0 76.0 75.0

16,634

16,704

150,000

0.0 2001 2002 2003 2004 2005

145,000 MM JPY
2001 2002 2003 2004 2005

74.0

ROAROE
10.0 8.0 6.0 4.0 2.0 0.0

EPSPER
150.0 150.0 133.6 PER 100.0 116.25 108.80 93.42 100.0

7.9
ROA ROE

8.3

9.4 8.2 5.7 5.2 5.9 4.3

50.0

85.49

4.4

EPS
17.62

0.9 2001 2002 2003 2004 2005

0.0
JPY

20.8

18.1

24.2

29.5

50.0

0.0 2001 2002 2003 2004 2005

times

31

Reference

Coca-Cola System in Japan

Capital Injection
Coca-Cola National Beverages Company, Limited (CCNBC
Coca-Cola Integrated Business Systems, Company, Limited CCIBS)
as of 2007//

Coca-Cola Tokyo Research & Development Company, Limited CCTR&D

Coca-Cola West Holdings Company, Limited CCWH Coca-Cola Central Japan Company, Limited CCCJ )

The Coca-Cola Company TCCC

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

Coca-Cola Customer Marketing Company, Limited CCCMC

FV Corporation (FVC)
Investment by , , and Bottlers

10 Coca-Cola Bottlers CCBC

32

Reference

Coca-Cola Related Companies and Their Roles

Coca-Cola West Holdings Co,, Ltd. (CCWH) In July, 2006, Coca-Cola West Japan Company, Limited and Kinki Coca-Cola Bottling Company, Limited merged the management of both companies by establishing a joint holding company CCWH. The Coca-Cola Company (TCCC) Established 1919 in Atlanta, Georgia. Carries the rights to grant a license to manufacture and sell Coca-Cola products to the bottlers. TCCC (or its subsidiary) makes franchise agreements with the bottlers. Coca-Cola (Japan) Co., Ltd. (CCJC) Established 1957 in Tokyo, as Nihon Inryo Kogyo K.K., a wholly-owned subsidiary of The Coca-Cola Company. The company name was changed in 1958 to Coca-Cola (Japan) Company, Limited. CCJC is responsible for marketing planning as well as manufacturing and distribution of concentrate in Japan. Coca-Cola Tokyo Research & Development Co., Ltd. (CCTR&D) Established in January 1993 as a wholly-owned subsidiary of The Coca-Cola Company. Since January 1995, carries out product development and technical support to respond to the needs of the Asian region. Coca-Cola bottlers (CCBCs) There are 12 bottlers in Japan, which are responsible for selling Coca-Cola products in the respective territories. Coca-Cola National Beverages Co., Ltd. (CCNBC) Established in April 2003 by joint investment of The CocaCola Company and its Japanese bottling partners. Began initial operations in October 2003. Responsible for centralized procurement of ingredients and packaging materials, national demand/supply planning activities, and manufacturing and supply of certain finished beverage products to the bottling partners. Coca-Cola Beverage Services Co., Ltd (CCBSC) Established through joint investment by The Coca-Cola Company and its bottling partners in Japan, and the company will begin operations on January 1, 2007. It is charged with providing business consulting services to the Coca-Cola system in Japan, as well as developing and generally maintaining the information systems to support such work. Coca-Cola Customer Marketing Company (CCCMC) Established through joint investment by Coca-Cola (Japan) Co., Ltd. and all of its bottling partners in Japan, and the company will begin operations on January 1, 2007. It is charged with holding business negotiations with major retailer outlets, such as nationwide convenience stores and supermarket chains, as well as developing proposals for sales promotions and storefront activities. FV Corporation (FVC) Jointly established in May 2001 by CCBCs and CCJC. FVC carries out sales negotiations with national chain vending operators, and deals with non-KO products as well as KO products.

33

Reference

Our Group Companies Principal Business

as of 2007/1/1

Our Group Compa ni es Coca-Cola West Japan (CCWJ) Kinki Coca-Cola Bottling Mikasa Coca-Cola Bottling CCWJ Products Kinki Coca-Cola Products Daisen Beverages CCWJ Logistics Kansai Logistics Mikasa Logistics 10CCWJ Vending 11Nishinihon Beverage 12Kansai Beverage Service 13Mikasa Beverage Service 14Nesco 15KADIAC 16CCWJ Customer Service 17Mikasa Service 18Nichibei 19Takamasamune 20West Japan Service 21Rex Estate 22Seiko Corporate Japan 23C&C 24Akiyoshi Systems

Pri nci pa l B us i nes s Beverage sales Beverage sales Beverage sales Beverage production Beverage production Beverage production (mineral water) Freight transport-operations Freight transport-operations Freight transport-operations Vending machine operations (Coca-Cola products) Vending machine sales and servicing Vending machine sales and servicing Vending machine sales and servicing Vending machine operations Vending machine operations (in the Kansai Air Port) Vending machine-related businesses Vending machine-related businesses Manufacture of processed foods Production and sales of alcoholic beverages Insurance, leasing, and business machine sales Real estate business Maintenance and repair of motor vehicle Sales and manufacturing of food, Chain restaurant business Chain restaurant business

34

Reference

Glossary
Term Ch an n e l Vending Chain store Convenience Store Retail Food Service On-Premise Distributor Ve n din g Regular vending machine Full service vending machine Out-market vending machine In-market vending machine VPM Chain Store National chain Regional chain Local chain Oth e r Sales mix Description Retail sale business to distribute products through vending machines to consumers Wholesale business for supermarket chains Wholesale business for convenience store chains Wholesale business for grocery stores, liquor shops, and other over-the-counter outlets Syrup sale business in the eating out market Syrup and package sales business in the eating out market Middleman who work for Coca-Cola to handle our products in remote areas and islands A vending machine offered free of charge to a customer who supervises its operation and uses it to sell products purchased from us. A vending machine installed and managed directly by us (product supply, collection of proceeds etc.). Fees are paid to the location proprietors. An outdoor machine whose users are relatively unspecific An indoor machine whose users are relatively specific Sales volume per vending machine National chain supermarket that CCNSC are responsible for negotiating Chain supermarket that owns its stores in the two or more bottlers territories Chain supermarket that owns its stores in the single bottlers territory Composite of products by brand, channel, package, etc. The difference between budget and actual sales or cost of sales might be affected by a change in product sales mix as well as a change in unit price

35

Forward-Looking Statement

The plans, performance forecasts, and strategies appearing in this material are based on the judgment of the management in view of data obtained as of the date this material was released. Please note that these forecasts may differ materially from actual performance due to risks and uncertain factors such as those listed below. - Intensification of market price competition - Change in economic trends affecting business climate - Major fluctuations in capital markets - Uncertain factors other than those above

36