Coca-Cola Bottlers Japan Holdings Inc.

Good evening, this is Gomi, Head of Investor Relations at Coca-Cola Bottlers Japan Holdings. Thank you for joining our first quarter 2026 earnings presentation for analysts and investors. Today, we are joined by President Kevin Dragan and Vice President CFO Leon Uginas. Also with us are Vice President, President of the Food Service Company and Chief Business Strategy Officer, Maki Kado, Executive Officer and President of the Retail Company, Alex Gonzalez, and Executive Officer, Chief Supply Chain Officer and Chief Sustainability Officer, Andrew Ferrett. Following prepared remarks, we will be happy to take your questions. Simultaneous interpretation in Japanese and English is available for both today's presentation and Q&A. Before we begin, please note that today's presentation contains forward-looking statements and should be considered together with cautionary statements contained in our presentation materials. With that, I'd like to turn the call over to Karin Dragan. Karin-san.

Good evening, everyone. This is Karin Dragan, and thank you for joining our earnings call. Today, I am honored to be able to open my prepared remarks by reminding everyone that next month on May 8th, Coca-Cola brand celebrates the 140th anniversary. With that occasion, we want to wish Coca-Cola brand a warm, happy birthday. We are really proud that we are able to bring such a iconic global brand to consumers in Japan, and we remain committed to further enhancing its value in the market. For the highlights of today's presentation, please turn to slide three. We are off to a very strong start in 2026. Business income for the first quarter exceeded our target, growing by 3.8 billion yen versus the previous year. Already, we have achieved more than one-third of the full-year business income target. This was primarily driven by a strong volume growth of 4% versus the previous year, gains in value share, and improved profitability from price divisions, resulting in a solid profit growth. In Vending, Top line trends are improving and showing positive momentum. Announced today, we will offer Japan's leading energy drink brand, Monster Energy, to our vending machines starting this peak summer season, positioning us to further accelerate growth in our vending business. In the first quarter, we successfully executed key initiatives to improve profitability. Price revisions one of our core profitability drivers, were implemented as planned for green tea products in March and are steadily delivering results. Our transformation initiatives are also progressing smoothly, generating cost savings through strengthened operational foundation. Despite continued uncertainty in the current outlook, we have assessed the potential impact of the situation in the Middle East And we are confident in our ability to manage any resulting cost increases this year. By leveraging the strengths of the global Coca-Cola system, which is one of our core strengths, we expect to mitigate these pressures through our procurement efforts. In addition, by accelerating our profit growth momentum, pursuing farther cost savings, and seriously considering farther price revisions, we will take all necessary actions which are We are determined to achieve the four-year business income target of 35 billion yen. Now, our CFO, Bjorn Urgens, will provide a detailed explanation of our financial results.

Thank you, Colleen, and good evening, everyone. This is Bjorn. Please turn to slide five for the first quarter profit and loss. In the first quarter, we achieved both revenue and profit growth that exceeded our targets. Despite the impact of changes to the channel mix, revenue exceeded the targets and achieved strong year-on-year growth of 3.6%, driven by higher-than-planned volume growth and improved wholesale revenue per case. Gross profit outpaced revenue growth and grew by 5.2%. In addition to top-line growth, this was supported by commodity cost management, including joint procurement across the Coca-Cola system and solid hedging strategies, despite a challenging external environment marked by rising costs. In addition, as the first year of our strategic business plan, Edition 2030, we reviewed the useful life of our manufacturing machinery and equipment in line with our policy of making selective capital investments to improve capital efficiency and deploy capital effectively over the long term. As a result, lower depreciation expenses totaling approximately half a billion yen contributed to profit growth. Business income increased by 3.8 billion year over year, primarily driven by top line growth and cost savings achieved through transformation initiatives. Factors contributing to this profit change will be explained later. Operating income increased by 9.8 billion yen year-over-year. In addition to business income growing year-over-year, gains on the sale of tangible fixed assets recorded as part of our efforts to optimize the balance sheets contributed. Net income increased by 5.5 billion yen from the previous year, primarily reflecting higher operating income. EBITDA, a measure of cash generating profitability, increased by 0.6 billion yen year-over-year to 5.4 billion. Slide 6 shows our financial results by segment. In the first quarter, a significant increase in the vending business profits drove overall profit growth. For the vending business, volume trend for existing machines improved and volume remained flat overall versus the previous year. While revenue for the business declined year over year, specifically Coca-Cola vending machines increased revenues due to improved wholesale revenue per case. In addition, driven by transformation benefits, improving routes, Segment profit increased significantly by ¥4.6 billion year-over-year, returning the segment to profitability. While this includes the benefit of lower depreciation expenses following the prior year's impairment loss in the vending business, we also achieved solid organic profit growth. In OTC, revenue outpaced volume and increased by 6.5% year-over-year, driven by robust top-line growth and price revision benefits. Volume and revenue growth were driven primarily by online drugstores and discounted. Through a rigorous focus on profitability-driven initiatives, segment profit increased by 25.6% year-over-year. In the food service business, we achieved high growth with double-digit increases in both volume and revenue compared to the previous year, driven by an expanded product portfolio tailored to customer needs and successful efforts to secure new customers. To sustain this momentum, we are steadily executing investments to support mid- to long-term growth and are driving business expansion in line with our plans. Please turn to slide 7 for the factors behind the change in business income. Business income grew strongly, increased by 3.8 billion yen compared to the previous year. Starting from the left, we can see the impact of volume, price, and mix. Together, these factors reflect changes in marginal profits from our commercial activity and contributed a positive 2.6 billion yen year-over-year. The main factors were a positive impact of 2.3 billion yen from volume, including channel mix, and a positive 3.8 billion yen impact from pricing, partially offset by a negative 3.5 billion yen impact from other factors. Although adverse channel mix due to changing consumer trends remained a headwind, volume growth and improved wholesale revenue per case resulting from price revisions are steadily contributing to profit growth. Transformation benefits total 1.9 billion yen in line with time. Savings were particularly significant in the commercial function, where benefits from the transformation of the vending business continued to materialize deadly. In the supply chain and back office, we are building a foundation that contributes to mid- to long-term growth while also generating cost savings. Marketing expenses decreased by 2.2 billion yen year over year. We continue to invest appropriately in marketing while carefully managing spending based on the return on investment philosophy and market conditions. Manufacturing costs increased by 0.1 billion yen year over year. Although production volume rose in line with sales and manufacturing efficiency improved, changes in product mix, including a higher proportion of outsourced production, increased costs. We continue to pursue cost savings in the production floor and strengthening our production structure ahead of the peak demand season. Other costs increased by 1.6 billion yen, primarily due to higher IT-related investments and expenses to support future profit growth, as well as increased labor and outsourcing costs. This increase includes the benefits of lower depreciation expenses resulting from the impairment loss recorded in the vending business in the previous year. Commodity and utility costs decreased by 0.8 billion yen thanks to successful hedging strategies and our procurement function leveraging the Coca-Cola system's global network, one of our company's key strengths. Net cost improvements from commodities and foreign exchange amounted to 0.4 billion yen. Utility costs also achieved a decrease of 0.4 billion. From the next slide, Alex will give an overview of our commercial activities. Over to you, Alex.