Coca Cola Bottlers Japan : Consolidated Financial Summary for the Second Quarter Ended June 30, 2023 (IFRS)

This flash report is unaudited and a translation of the Japanese language version.

Consolidated Financial Summary for

the Second Quarter Ended June 30, 2023 (IFRS)

		August 9, 2023
Listed company name: Coca-Cola Bottlers Japan Holdings Inc.	Listed stock exchanges: Tokyo
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: Tatsuhiro Ishikawa Phone: [phone]

Expected date of quarterly report submission: August 10, 2023

Schedule for dividends payment: September 1, 2023

Preparation of supplementary materials on quarterly financial results: Yes

Holding of quarterly financial results conference: Yes

(Fractions of one million yen are rounded to the nearest million)

1. Consolidated financial results for the first half of 2023(from January 1, 2023 to June 30, 2023)

1. Consolidated financial results

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

Revenue

Business income

Operating income

Net income

Net income attributable Total comprehensive

to owners of the parent

income

million yen

%

million yen

%

million yen

%

million yen

%

million yen

%

million yen

%

2nd Quarter, 2023

404,109

7.5

(6,763)

－

(6,529)

－

(3,932)

－

(3,947)

－

(2,853)

－

2nd Quarter, 2022

375,948

1.8

(18,221)

－

(14,431)

－

(9,896)

－

(9,899)

－

(8,177)

－

Earnings per share

Diluted earnings per share

yen

yen

2nd Quarter, 2023

(22.01)

－

2nd Quarter, 2022

(55.20)

－

*Business income is an indicator of our recurring business performance that is calculated with costs of goods and selling, general and administrative expenses deducted from revenue, and other income and expenses which we believe are recurring in nature added and subtracted accordingly.

(2) Consolidated financial position

	Total assets	Total equity	Equity attributable to parent owners	Ratio of equity attributable to parent
				owners
	million yen	million yen	million yen	％
Jun. 30, 2023	829,829	469,076	468,920	56.5
Dec. 31, 2022	826,737	476,358	476,216	57.6

2. Dividends

			Dividends per share
	First quarter	Second quarter	Third quarter	Fiscal year	Total
	yen	yen	yen	yen	yen
FY ended December, 2022	－	25.00	－	25.00	50.00
FY ending December, 2023	－	25.00
FY ending December 2023			－	25.00	50.00
(forecast)

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

3. Forecast for consolidated financial results 2023 (From January 1, 2023 to December 31, 2023)

						(Percentages indicate changes over the same period in the prior fiscal year)
									Net income (loss)		Earnings (Loss)
	Revenue		Business income (loss)	Operating income (loss)	Net income (loss)	attributable to owners of the
									parent		per share
	million yen	%	million yen	%	million yen	%	million yen	%	million yen	%	yen
Full year of 2023	847,100	4.9	(5,000)	－	(5,300)	－	(4,300)	－	(4,300)	－	(23.98)
Note: Revisions to the forecasts of consolidated operating results most recently announced: None

Notes
(1)	Changes in significant subsidiaries during the current period
	(Changes in specified subsidiaries resulting in changes in scope of consolidation):	None
(2)	Changes in accounting policies and changes in accounting estimates:
	1)	Changes in accounting policies as required by IFRS:	None
	2)	Changes other than those in 1) above:	None
	3)	Changes in accounting estimates:	None

1. Number of outstanding shares (common shares)
2. 1. The number of outstanding shares (including treasury shares):

2nd Quarter, June 2023:	206,268,593 shares
FY Ended December 2022:	206,268,593 shares
2) The number of treasury shares:
2nd Quarter, June 2023:	26,930,179 shares
FY Ended December 2022:	26,928,478 shares
3) The number of average shares outstanding:
2nd Quarter, June 2023:	179,339,355 shares
2nd Quarter, June 2022:	179,343,239 shares

Note: The Company has introduced Executive reward BIP Trust and Stock-granting ESOP Trust during the first half of current fiscal year, and the Company shares held by these trusts are included in the number of treasury shares at the end of period, as well as the number of treasury shares to be deducted from the average number of shares during the period.

• The consolidated financial summary is 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 at the time of issuance of this report, and the actual results may be changed materially due to a number of inherent uncertainties in the forecast. Furthermore, please refer to "1. Qualitative Information on the Financial Summary for this Quarter (3) Information on the Future Outlook, such as Forecast of Consolidated Financial Results" on page 5 for matters relating to performance forecasts.

Table of Contents
1. Qualitative Information on the Financial Summary for this Quarter	2
(1)	Qualitative Information on Consolidated Financial Results	2
(2)	Qualitative Information on Consolidated Financial Position	4
(3)	Qualitative Information on the Future Outlook, such as Forecast of Consolidated Financial Results	5
2. Condensed Quarterly Consolidated Financial Statements and Notes	6
(1)	Condensed Quarterly Consolidated Statement of Financial Position	6
(2)	Condensed Quarterly Consolidated Statements of Income and Comprehensive Income	8
(3)	Condensed Quarterly Consolidated Statements of Changes in Equity	10
(4)	Condensed Quarterly Consolidated Statements of Cash Flows	11
(5)	Notes to Condensed Consolidated Financial Statements	13
(Notes Relating to Going Concern Assumption)	13
(Segment Information)	13
(Subsequent events)	13

1

1. Qualitative Information on the Financial Summary for this Quarter

1. Qualitative Information on Consolidated Financial Results

Coca-Cola Bottlers Japan Holdings Inc. ("CCBJH," the "Company," or "we") announced the first half results for the fiscal year ending December 31, 2023 (January 1, 2023, to June 30, 2023).

In this year-to-date second quarter (January 1, to June 30, 2023, hereinafter referred as "first half"), the total domestic nonalcoholic ready-to-drink (NARTD) beverage industry volume is estimated to have contracted versus the same period of the previous fiscal year by about 1%. Although demand continued to increase supported by the recovery in traffic and resumption of economic activity, the negative impact on demand from the price revisions implemented by beverage companies and the cycling of the heat wave in the same period of the previous year had an impact. The business environment remained uncertain and challenging as the rising commodity and utility prices and yen's depreciation impacted business and consumer behavior.

Under these circumstances, we have positioned 2023 as the "Year of profit focus", and we have given top priority to improving profitability. In commercial activities, we implemented price revisions for canned products and large PET bottle products in May and focused on implementing and maintaining the prices of our products after the price revisions implemented from the previous year. In addition, we have worked to grow sales revenue and wholesale revenue per case by introducing new products and implementing efficient and effective marketing activities to capture increased demand from the traffic recovery. Moreover, to further improve profitability, we have announced that we will once again revise product prices for large PET bottles and other products, effective for shipments from October 1, 2023. In the manufacturing and supply chain fields, while faced with rising commodity and utility prices, and yen's depreciation, in April a new line at the Ebina Plant began operation and have been working to reduce manufacturing and distribution costs further by activities including the use of the Saitama Mega DC (Distribution Center) and Akashi Mega DC, automated distribution centers with the largest storage and shipping capacity in Japan. We have been working towards a stable operation for the summer, the highest period of demand.

We are working to realize ESG targets based on creating shared value with society. We have launched several collaborative initiatives with customers and government agencies to promote Sustainable Development Goals (SDGs) and enhance PET bottle recycling. We have been working to reduce our environmental impact through fostering a recycling-based society and expanding business opportunities through collaboration. In April, we launched a new initiative to reduce greenhouse gas emissions by participating in the "Green Innovation Fund Project / Building a Smart Mobility Society," a grant program aimed at realizing a carbon-neutral society. In addition, to further promote our sustainability strategy, we published our Integrated Report 2022 in June, which includes our material issues, value creation process, and strategies for sustainable growth.

We have announced our strategic business plan for 2028. In the strategic business plan, we target an annual revenue growth of

2 to 3%, business income margin of 5% or higher and ROIC (return on invested capital) of 5% or higher by 2028. For commercial activities, to achieve profitable growth, we will invest in high value-added products, implement appropriate growth strategies by sales channels, implement flexible pricing strategies that contribute to higher profit margins, and drive transformation in vending channel. We will work to further streamline the supply chain and improve all operational processes through promoting DX. In addition, we work to promote ESG management and human capital management to enhance our corporate value over the medium to long term through our business activities. To achieve the goals of the strategic business plan, the strategies will be executed with the strong collaboration with The Coca-Cola Company and Coca-Cola (Japan) Company, as a unified Coca-Cola System.

Details for the first half earnings are as follows. Please also refer to our earnings presentation material available on the Company IR website (https://en.ccbj-holdings.com/ir/library/presentation.php) to be used in our earnings conference call on Thursday, August 10, 2023 at 1:30 PM (JST). These will include details of the results, mid-term business plan and outlook. The earnings presentation audio webcast will be available live and on demand through our company website.

2

Summary of Business Performance

(Millions of yen except sales volume)

First half (January 1 to June 30)

	2022	2023	Change
	(%)
Revenue	375,948	404,109	7.5
Sales volume (million cases)	224	230	3
Gross profit	163,138	176,797	8.4
Selling, General & Administrative Expenses	181,275	183,212	1.1
Other income (Recurring)	521	364	(30.1)
Other expenses (Recurring)	666	711	6.7
Investment income(loss) on equity method	61	(0)	－
Business loss	(18,221)	(6,763)	－
Other income (Non-recurring)	6,658	1,658	(75.1)
Other expenses (Non-recurring)	2,868	1,424	(50.3)
Operating loss	(14,431)	(6,529)	－
Net loss attributable to owners of parent	(9,899)	(3,947)	－
	(Millions of yen except sales volume)
(For reference) Q2 (April 1 to June 30)
	2022	2023	Change
	(%)
Revenue	207,095	222,046	7.2
Sales volume (million cases)	123	126	2
Gross profit	91,127	98,056	7.6
Selling, General & Administrative Expenses	96,383	95,211	(1.2)
Other income (Recurring)	223	178	(20.0)
Other expenses (Recurring)	478	342	(28.3)
Investment income(loss) on equity method	39	(8)	－
Business income(loss)	(5,472)	2,674	－
Other income (Non-recurring)	968	535	(44.7)
Other expenses (Non-recurring)	257	579	124.8
Operating income(loss)	(4,761)	2,631	－
Net income (loss) attributable to owners of parent	(3,331)	2,513	－

• 1. "Business loss" and "Business income (loss)" is a measure of our recurring business performance. Business loss and Business income (loss) deducts cost of sales and selling, general and administrative expenses from revenue, and includes other income and expenses which we believe are recurring in nature.

2. Sales volume in 2022 is revised retroactively due to changes of counting segmentation and scope in some products.

Consolidated revenue was 404,109 million yen (7.5% increase of 28,161 million yen from the same period in the prior year). Despite the negative impact on volume following the price revisions and cycling of the heat wave in the same period in the prior year, sales volume increased by 3% compared to the same period in the previous year. This was achieved with the introduction of new products and effective marketing activities which led to capture the demand opportunity from traffic recovery. The price revisions implemented in the previous fiscal year and the one implemented in May this year are delivering benefits as planned with wholesale revenue per case increasing and contributing to revenue growth.

Consolidated business loss improved by 11,458 million yen (loss reduced) and was a loss of 6,763 million yen (18,221 million yen loss in prior year period). In addition to profit contributions from top-line growth, such as sales volume growth and wholesale revue per case price improvement, a decrease in expense with marketing activities focused on cost-effectiveness and lower distribution costs due to improvements in the supply chain network contributed. Profitability improvement was achieved while overcoming the impact of cost increases due to external factors such as higher commodity and utility prices and yen depreciation.

Consolidated operating loss improved by 7,902 million yen (loss reduced) and was a loss of 6,529 million yen (14,431 million yen loss in prior year period). In addition to business loss improving versus the previous year (loss reduced) being the primary reason, there was a cycling impact of gains from sales and disposals of property, plant, and equipment that was recorded in the same period of the previous year which decreased other income (non-recurring). Other income (non-recurring) in the first half includes 1,631 million yen in gain on sales and disposals of property, plant, and equipment, which was realized in the process

3