Representative Director & Vice President, Chief Financial OfficerBjorn Ivar Ulgenesinvestment, restrained in the previous year, also had an impact.In this challenging business environment, we have taken measures to minimize the impact to our topline. Such measure include rolling out new products and responding to changing trends in each channel. In addition, we have pushed forward with our transformation to evolve the vending operation model, reallocate product inventories and consolidate distribution bases around the Saitama Mega DC to optimize distribution in the Kanto region. We have streamlined our supply chain structure to achieve low-cost operations, improved operational efficiency through company-wide digital transformation (DX), and promoted new work styles to build a foundation for profitable growth when the market normalizes. These efforts have produced steady results, mitigating COVID-19ʼs impact and reducing short-term costs to protect our business and build a foundation for future growth.We aim to achieve the same level of business income as the previous year by further promoting transformation and implementing initiatives to improve the earnings base, such as price revisions and control of marketing expenses.In commercial, we are rolling out new products and responding to diversifying consumer needs. We are focused on both growth and profitability. As part of such profitability-focused pricing strategy initiatives, we revised the shipping price of large PET bottle products in May. In manufacturing and logistics, we are working to reorganize our supply chain network, which will be the foundation for sustainable growth. We are realizing stable function in our Saitama Mega DC, which began operations in 2021. We expect a smooth launch of the Akashi Mega DC, scheduled to start operations in July 2022. In conjunction with our Mega DCs we are consolidating sales and logistics centers as well as reducing and optimizing product inventories.Leadersʼ Perspective: Our Value Creation StoryTop Message ／ Message from the CFO0606Summary of 2021In 2021, domestic non-alcoholic ready-to-drink (NARTD) beverage industry growth was estimated to show only a slight increase on the previous year. Although there was improvement in people traffic when the COVID-19 state of emergency declaration was lifted, we did not see a full recovery. Prolonged state of emergency declarations and record heavy rainfall in our peak season all impacted demand. In these conditions we have begun a fundamental transformation of our business, based on the principles of focusing on what we can control while responding to the volatility in demand and channel trends triggered by COVID-19.As for business performance in 2021, sales volumes increased from the previous year with traffic recovery following the lifting of the state of emergency declaration. However, business income decreased from the previous year with the lower revenue per case caused by changes in consumer behavior and severe competition. The implementation of appropriate marketing and human capital 2022 Business Plan and OutlookIn 2022, we expect a level of growth in the domestic beverage market with the traffic recovery of 2021. However, the challenging business environment is expected to continue due to the continued impact of changing consumer behavior. Such changes include the shift in drinking occasions from immediate consumption to at-home. Other factors include a shift in purchasing channels as well as continued intense competition and rising global commodity and crude oil prices, and Yen depreciation.For our 2022 plan, we forecast 4.3% year-on-year growth in revenues to 819.7 billion yen and a business income loss of 14.6 billion yen. This is a similar level to the previous year. Although we expect a cost increase of more than 10 billion yen due to rising commodity prices, the continued challenging business environment, and the cycling of approximately 18 billion in temporary cost savings implemented in 2021. We aim to achieve 2% volume growth over the previous year by implementing sales activities to capture growth opportunities arising from returning traffic. Message from the CFO
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