Coca-Cola Bottlers Japan Holdings Inc.

Good evening. This is Gomi, Head of Industrial Relations at Coca-Cola Bottlers Japan Holdings. Thank you for joining our third quarter 2026 earnings presentation for analysts and investors. Today, we are joined by President Kaleen Dragan and Vice President and CFO, Bjorn Ulgernes. 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 the prepared remarks, we will be happy to take your questions. Simultaneous interpretation in Japanese and English is available for both today's presentation and the Q&A. Before we begin, please note that today's presentation contains forward-looking statements and should be considered together with missionary statements in our presentation materials. With that, I'd like to turn the call over to Kaleem Dragan. Kaleem, please.

Good evening, everyone. This is Kaleem Dragan. Thank you for joining us today for our earnings call. Let me begin by sharing the highlights of today's presentation. Please turn to slide three. For the third quarter year to date, business income achieved an increase of 7.9 billion yen year over year. This summer, during the peak demand season, the entire beverage industry was hit by record-breaking adverse weather. The situation in the Middle East increased cost pressures across the industry. Together, these factors created an extremely challenging business environment for our company. Even under these conditions, we maintain an upward trend in business income through our relentless focus on profitability. We are very pleased with our results. Sales volume continued to outperform the market and our value share grew. This showed that our competitiveness is steadily improving. Key initiatives to strengthen our future earnings base are also on track. We implemented our September price revision ahead of the industry as planned with strong will despite the challenging conditions. Our transformation efforts to build the growth foundations are also progressing smoothly. We are also making solid progress on shareholders' returns. In addition to the previously announced enhancement to the shareholder returns measures, we have decided to cancel 7 million shares of treasury stocks equivalent to 4.1% of total shared issues. In the fourth quarter, we intend to build on this momentum and aim to increase business income. While we continue to forecast cost increases due to the situation in the Middle East, we expect those to remain within the projected range. We are working together company-wide to achieve our full-year business target, business income target of 35 billion yen. Furthermore, we will focus on strengthening our profit foundation and investing in growth, both of which are critical to achieve our goals of our vision 2030. Now, our CFO, Bjorn Ulganes, will provide a detailed explanation of our financial results.

Thank you, Colleen. Good evening, everyone. This is Bjorn. Slide 5 shows the year-to-date third quarter profit and loss. By rigorously focusing our business activities on profitability, we were able to achieve an increase in business income. Revenue declined by 1.4% year-over-year. Record-breaking adverse weather during the summer led to lower sales volumes and an unfavorable channel mix. Positive impact of price revisions continued to improve wholesale revenue per case. Although sales volume declined year over year, we outperformed the market by leveraging the solid-growth foundation we have built to date and implemented effective marketing activities. Gross profits was impacted by rising costs due to commodities, including the situation in the Middle East. However, improvements in wholesale revenue per case, resulting from price revisions, helped support gross profits, limiting the year-over-year decline to 0.8%. Business income increased by 7.9 billion yen year over year. This was driven by a series of price revisions, transformation benefits, and agile company-wide cost savings. These gains more than offset the impact of lower sales volumes and higher costs related to the situation in the Middle East. We are on track to meet our full-year business income targets. I will explain the factors behind the change in business income later. Operating income improved significantly, rising by 103.8 billion yen year-over-year, driven by an increase in business income and the absence of 88.4 billion yen impairment loss recorded in the vending business in the second quarter of the previous year. In addition, net income rose by 68.4 billion yen year-over-year to 19.6 billion yen, driven by the increase in operating income. Slide 6 shows our financial results by segment. First, the vending business. Sales volume declined due to factors including price revisions and adverse weather. Hotel revenue per case continued to improve, but revenue decreased. On the other hand, segment profit increased by 6.5 billion yen year-over-year to 14.8 billion yen. This includes the positive impact of reduced depreciation expenses following the impairment loss in the vending business in the previous year. Transformation initiatives also played a significant role by improving profitability and drought productivity, enabling us to achieve organic profit growth. In the OTC business, volume declined, but revenue remained flat year over year, supported by the price revision. Segment profit increased by 9.4% year-over-year, primarily due to the flexible reduction of marketing expenses in response to worse weather conditions. In food service, both volume and revenue grew year-over-year, driven by the expansion of our product lineup to meet customer needs, and the success of our efforts to secure new business. Revenue grew by a robust 9.3% year over year. We also steadily implementing investments aimed at growth over the medium to long term and are achieving business growth in line with our plans. Please turn to slide seven. for the factors behind the change in business income. In addition to price revisions and transformation benefits, agile cost savings efforts across the entire company contributed to a year-over-year increase in business income of 7.9 billion yen. 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 activities and resulted in a negative 0.5 billion yen impact. Major contributing factors include the unit price impact, which posted a positive 12.1 billion yen, largely due to improvements in wholesale revenue per case, resulting from the series of price revisions. On the other hand, the volume impact was negative, 6.6 billion yen, reflecting a decline in volume due to the increment weather and worsening channel mix. While the other category, including alcohol, had a negative impact of 6 billion yen. Transformation benefits totaled 4.1 billion yen in line with our plan. Especially in commercial area in particular, we are seeing improved profitability from the transformation of our vending system. We are also achieving cost savings in the supply chain and back office areas. Marketing expenses decreased by 1.7 billion yen compared to the previous year. This reflected our agile decision to scale back marketing investments when their expected return on investment declined because of the adverse weather in the third quarter. We continue to make investments that will lead to profit growth from a medium to long-term perspective. Manufacturing costs decreased by 0.1 billion yen from the previous year. Although equipment utilization rates declined due to lower production volumes, cost-saving initiatives on the production floor continued to contribute positively. Other costs decreased by 4.4 billion yen This was driven by company-wide cost-saving measures implemented in response to the business environment, including adverse weather conditions and cost increases resulting from the situation in the Middle East. Note that these figures include the positive impact of this year's depreciation expense from the previous year impairment loss of the vending business. This effect has already run its course in the first half of this year. For commodity and utility costs, including the impact from the situation in the Middle East, became apparent in the third quarter, resulting in a total cost increase of 1.9 billion yen. Although our hedging strategy kept the impact from the Middle East within the anticipated range, Market conditions and foreign exchange rate fluctuations contributed to a cost increase of 2.4 billion yen, while energy costs decreased by 0.5 billion yen. In the third quarter, we adjusted our capital allocation in response to market conditions, and as a result, capital expenditure decreased compared to the previous year. Next year, we plan to appropriately strengthen our capital allocation while carefully assessing market conditions and growth opportunities. Starting with the next slide, Alex will give an overview of our commercial activities. Alex?