Kikkoman Corporation

Corporate and Strategic Overview

June 2001
Yuzaburo Mogi
President and Chief Executive Officer
 Topics

Ⅰ. Results and Strategy by Product Segment

Ⅱ. Midterm Action Plan and Measures to
Strengthen Kikkoman
Ⅲ. Key Issues and Actions
(Appendix)
Results for the Fiscal Year Ended
December 31, 2000
The information in the handouts was based on the company’s judgment at
the time of preparation and does not constitute a promise or guarantee
that the company will achieve its targets or implement the strategies
outlined.

1
 I. Results and Strategy by Product Segment

I-1. Financial Performance 2000

2. Soy Sauce
3. Soy Sauce Derivative
Products
4. Del Monte
5. Sake & Wine
6. Coca-Cola Business

2
 I-1. Financial Performance 2000

(¥ Million, %)

YoY
Excluding Exchange Growth
Increase/ YoY Growth
Consolidated Amount Coca-Cola ％ Rate Rate
Decrease Net
Business Adjustment (%)

Net Sales 326,708 218,645 -3,078 -1 -4,214 1,135 1

Operating Income 14,686 11,676 629 6 -386 1,016 9

Recurring Income 12,911 10,019 889 10 -349 1,239 14

Net Income 6,150 5,713 1,620 40 -241 1,861 46

Exchange Rate (\/$US) 107.95 -5.71 -5

3
 I-2. Soy Sauce
2000 Soy Sauce Market Size and Share Breakdown in JAPAN
2000Estimated production: 1,046 thousand kl

About 1,800 small

manufacturers
Kikkoman
45% 28%

Yamasa
11%
Shoda Higeta Higashimaru
Marukin 4%
4% 5%
3% 4
Source: Kikkoman data
 I-2. Soy Sauce
Kikkoman Premium Soy Sauce Share in the Home Use Market in JAPAN

Kikkoman 2nd-ranked brand 3rd-ranked brand

60 ％ 60 ％ 61％ 60%
60

40

20 13% 15% 15% 14% 15% 15% 13%

12%

0
1997 1998 1999 2000

Source: Kikkoman data 5

 I-2. Soy Sauce
Overseas Soy Sauce Sales (Unit: 1,000 kl)

2000:
over 120,000kl

120

100

80

60

40

20

0
1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000
Average
Growth Rate 10.2%
6
 I-2. Soy Sauce
Kikkoman Group Annual Production Capacity
3 plants in USA
Chitose
Japan Wisconsin: 85,000kl
The Netherlands 279,000kl California: 20,000kl
7,000kl Noda
China
14,000kl
(Spring 2002 )
Takasago

Taiwan
26,000kl Estimate for end of 2001
Singapore
10,000kl Note: The figure for Japan
represents actual production in 2000

7
 I-2. Soy Sauce
Soy Sauce Sales in the U.S.
(Indexed to 1994) 144
150

100
100

50

0
1994 1995 1996 1997 1998 1999 2000

8
 I-2. Soy Sauce
Soy Sauce Sales in EUROPE
(Indexed to 1994)
250
202
200

150

100
100

50

0
1994 1995 1996 1997 1998 1999 2000

9
 I-2. Soy Sauce
Soy Sauce Sales in ASIA and OCEANIA
(Indexed to 1994) 176
180
160
140
120 100
100
80
60
40
20
0
1994 1995 1996 1997 1998 1999 2000

10
 I-2. Soy Sauce
Production and Sales Bases in the U.S.

▲
★ ★ ●▲
▲ ▲
●
●▲ ▲ ▲

●▲ ▲
Production
▲ bases
●
▲
●▲
★ KFI
Sales bases
▲ ▲ ▲ ● KII
▲ JFC

As of the end of 2000

11
 I-2. Soy Sauce
Kikkoman Soy Sauce Share in the U.S. Home Use Market

60%
55%
53%
50%
46%

40%

20%
1990 1994 1999 2000
Source: Kikkoman data 12
 I-2. Soy Sauce
Market Breakdown of Sales for Soy Sauce in the U.S.
Industrial Use
(Indexed to 1994)
Foodservice
144
Home Use
140 12%
12%
120 11%
100 11% 11%
100 11%
11%
80 43% 44%
40% 42% 43%
35% 38%
60

40

20 54% 51% 49% 47% 46% 45% 44%

0
1994 1995 1996 1997 1998 1999 2000
13
 I-2. Soy Sauce
Main Uses of Soy Sauce in the U.S.

lHome Use
To prepare meat dishes
To season fish dishes
To season stir-fry dishes
lFoodservice
To marinate steak, chicken and other meat
To season hamburgers
To flavor salads and dressings
lIndustrial Use
To season frozen foods
An ingredient in noodles and soups
To season bacon and ham

14
 I-2. Soy Sauce

Main Promotions in the U.S.

lAdvertising
Ads featuring the “KIKKO-MAN”
character have been run on a nationwide
cable TV network and in magazines.
lSales Promotion
Coupon sales and food-tasting
promotions at supermarkets
lPR
Promotion of recipes through TV,
newspapers and magazines; food-tasting
events

15
 I-3. Soy Sauce Derivative Products
Soy Sauce Derivative Products Growth in JAPAN

Ref: Per household expenditure on soy sauce and soy sauce derivative
products (¥)
Soy Sauce Soy Sauce Derivative Products
7,000
6,000
5,000
4,000 2,579 3,605
3,000
2,000
2,947 2,548
1,000
0

1989 2000

Source: Household Expenses Survey, Ministry of Public Management, Home 16

Affairs, Posts and Telecommunications
 I-3. Soy Sauce Derivative Products
Sales of Tsuyu and Tare in JAPAN

(Indexed to 1991) Kikkoman sales Market

350
1997 Launch of 306
Yakiniku no Tare
300

1995 Launch of
250 Hon Tsuyu 2000 Launch of
1992 Launch of Yakiniku Shoyu
200 Straight Tsuyu

138
150
100
100
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Average Growth Rate 1991-2000: 13.2% 17
 I-4. Del Monte
Results and Strategy
lJapan
Intense competition in a declining market

lOverseas
Strengthening sales with the establishment of Del
Monte Asia

18
 I-5. Sake & Wine
Results and Strategy

l Bolstering operations in Japan

l Developing distinctive products

19
 I-6. Coca-Cola Business
Operation and Alliance

l Marginal decline in net sales, decrease in profits

l Participation in joint production company

20
 II. Midterm Action Plan and Measures to
Strengthen Kikkoman

II-1. Midterm Action Plan

2. Measures to Strengthen
Kikkoman

Notes:
Effective from fiscal 2001, Kikkoman has changed its
fiscal year from January-December to April-March.

21
 II-1. Midterm Action Plan
Fiscal 2003 Targets (¥ Million, %)

Coca-Cola
Consolidated Japan Overseas Segment Total Total Grand Total
Business

Net Sales 174,000 78,000 252,000 242,000 115,000 357,000

Operating
6,800 7,400 14,200 14,200 3,300 17,500
Income
Operating
Income Ratio (%) 3.9 9.5 5.6 5.9 2.9 4.9

ROE（％ ） 7

Exchange Rate：¥110.00/US$1

22
 II-1. Midterm Action Plan
Net Sales and Operating Income (Excluding Coca-Cola Business) (¥ Million)

Net Sales (left scale) Operating Income (right scale)

245,000 14,500
240,000 14,000
235,000 13,500
230,000 13,000
225,000 12,500
220,000 12,000
215,000 11,500
210,000 11,000
205,000 10,500
200,000 10,000
FY2000 FY2002 FY2003
Exchange Rate ¥107.95/US$1 ¥115.00/US$1 ¥110.00/US$1

Note: Figures of Fiscal 2002 and Fiscal 2003 are targets. 23

 II-1. Midterm Action Plan
Overseas Production Framework

l Exploring the possibility of a third U.S. plant to

bolster production capacity

24
 II-2. Measures to Strengthen Kikkoman
Promoting a Stronger Kikkoman

l Streamlining Non-core Businesses and Assets

l Restructuring Domestic Production
l Improving the Domestic Logistics System

25
 II-2. Measures to Strengthen Kikkoman
Restructuring Domestic Production Facilities (By Fiscal 2004)
Total planned investment: ¥10.5 billion
(Fiscal 1999- Fiscal 2004)
Cumulative investment to
2000 year-end: ¥3.3 billion

Takasago Noda Plant

Plant Consolidate cooking
and culturing
Renew cooking and
equipment in the 1st
culturing equipment
Noda Factory by end
by end of Fiscal 2002
of Fiscal 2004

26
 II-2. Measures to Strengthen Kikkoman
Rebuilding the Domestic Production Facilities (By Fiscal 2011)

Consolidation of the Noda Plant

1st Noda Factory

Railroad
2nd Noda Factory
Edogawa
River

27
 II-2. Measures to Strengthen Kikkoman
No. of Employees in Kikkoman’s Domestic Production Division

1,200
1,150
1,100
1,050
1,000
950
900
850
800
FY1999 FY2000 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

Note: Figures from Fiscal 2002 onward are targets.

28
 II-2. Measures to Strengthen Kikkoman
Improving the Domestic Logistics System (¥ Million)
(Cost savings: comparison with Fiscal 1998)
1,000
900 ¥800 million in cost
savings
800
700
¥518 million in cost
600 savings
500
400
300 ¥210 million in cost
savings
200
100
0
FY1999 FY2000 FY2002

Note: Fiscal 2002 figure is a target. 29

 III. Key Issues and Actions

III-1. Measures to Raise Corporate Value

2. Introduction of KPI
3. Environmental Protection

30
 III-1. Measures to Raise Corporate Value

l Introduction of executive officer system

l Retirement of treasury stock
l Introduction of a stock-option plan

31
 III-2. Introduction of KPI

l Kikkoman Performance Index

KPI is a performance benchmark that evaluates results
against goals and it was introduced this April.

32
 III-3. Environmental Protection

lRelease of Environmental
Reports
July 2000: Non-
consolidated report
July 2001: Consolidated
report due out

Scope of consolidation: 8 manufacturers based in Japan and overseas 33

 Corporate Image Survey

l Popularity Ranking of Leading Companies <Among

General Public>
1. Kikkoman Corporation
   2. Q.P. Corporation
   3. Sony Corporation
4. The Calpis Food Industry Co., Ltd.
5. House Foods Corporation
Sample: 9,697 men and women between the ages of 18
and 69, living within a 40km radius of metropolitan
Tokyo.
Polling Agency: Nikkei Research
34
4th Corporate Brand Score Ranking

l The Nikkei Industrial Daily (Feb. 14, 2001)

1. Sony Corporation
2. Toyota Motor Corporation
3. Honda Motor Co., Ltd.

 28. Kikkoman Corporation

28. Kirin Brewery Company, Limited
28. Asahi Breweries, Ltd.
28. NSK Ltd.
28. Kyocera Corporation
28. Olympus Optical Co., Ltd.

35
(Appendix)
Results for the Fiscal Year Ended December 31, 2000

Ⅰ Excluding Coca-Cola Business

1 Share of Sales & Operating
Income by Product Segment
2 Operating Income Ratio by
Product Segment
Ⅱ Including Coca-Cola Business
1 Share of Sales & Operating
Income by Product Segment
2 Operating Income Ratio by
Product Segment

37
 (Appendix)
I-1. Share of Sales & Operating Income by Product Segment

Excluding Coca-Cola Business (¥ Million, %)

Operating
% of Operating % of
Consolidated Net Sales Income Ratio
Total Income Total （％ ）

Soy Sauce 85,478 39.1 24,391 64.5 28.5

Soy Sauce Derivative
19,980 9.2 2,793 7.4 14.0
Products

Del Monte 25,417 11.6 2,836 7.5 11.2

Sake & Wine 28,269 12.9 3,874 10.3 13.7

Other Foods 52,676 24.1 2,693 7.1 5.1

Others 6,823 3.1 1,218 3.2 17.9

Total 218,645 100.0 37,808 100.0 17.3

Note: Operating Income=Income before deducting advertising and headquarter operating expenses
38
 (Appendix)
I-2. Operating Income Ratio by Product Segment

Excluding Coca-Cola Business (¥ Million, %)

Consolidated Segment Total Japan Overseas

Net Sales 85,478 88,204 64,140 24,063
Soy Sauce Operating Income 24,391 24,395 15,029 9,365
Operating Income Ratio (28.5) (27.7) (23.4) (38.9)
19,980 19,980 19,980
Soy Sauce Derivative Net Sales
Operating Income 2,793 2,793 2,793
Products Operating Income Ratio (14.0) (14.0) (14.0)
Net Sales 25,417 25,420 20,575 4,845
Del Monte Operating Income 2,836 2,836 2,590 246
Operating Income Ratio (11.2) (11.2) (12.6) (5.1)
Net Sales 28,269 28,273 28,269 4
Sake & Wine Operating Income 3,874 3,874 3,874
Operating Income Ratio (13.7) (13.7) (13.7) (9.9)
Net Sales 52,676 58,900 26,261 32,639
Other Foods Operating Income 2,693 2,680 797 1,883
Operating Income Ratio (5.1) (4.6) (3.0) (5.8)
Net Sales 6,823 6,975 4,945 2,030
Others Operating Income 1,218 1,218 1,023 195
Operating Income Ratio (17.9) (17.5) (20.7) (9.6)
Net Sales 218,645 227,755 164,172 63,583
Total Operating Income 37,808 37,799 26,107 11,691
Operating Income Ratio (17.3) (16.6) (15.9) (18.4)

39
Note: Operating Income=Income before deducting advertising and headquarter operating expenses
 (Appendix)
II-1. Share of Sales & Operating Income by Product Segment

Including Coca-Cola Business (¥ Million, %)

Operating
Consolidated Net Sales % of Total % of Total
Income
Soy Sauce 85,478 26.2 24,391 51.1
Soy Sauce Derivative
19,980 6.1 2,793 5.9
Products
Del Monte 25,417 7.8 2,836 6.0
Sake & Wine 28,269 8.6 3,874 8.1
Other Foods 52,676 16.1 2,693 5.6
Others 6,823 2.1 1,218 2.6
Coca-Cola Business 108,063 33.1 9,884 20.7
Total 326,708 100.0 47,693 100.0

Note: Operating Income=Income before deducting advertising and headquarter operating expenses 40
 (Appendix)
II-2. Operating Income Ratio by Product Segment

Including Coca-Cola Business (¥ Million, %)

Consolidated Segment Total Japan Overseas
Sales 85,478 88,204 64,140 24,063
Soy Sauce Operating Income 24,391 24,395 15,029 9,365
Operating Income Ratio (28.5) (27.7) (23.4) (38.9)
Sales 19,980 19,980 19,980
Soy Sauce Derivative
Operating Income 2,793 2,793 2,793
Products Operating Income Ratio (14.0) (14.0) (14.0)
Sales 25,417 25,420 20,575 4,845
Del Monte Operating Income 2,836 2,836 2,590 246
Operating Income Ratio (11.2) (11.2) (12.6) (5.1)
Sales 28,269 28,273 28,269 4
Sake & Wine Operating Income 3,874 3,874 3,874
Operating Income Ratio (13.7) (13.7) (13.7) (9.9)
Sales 52,676 58,900 26,261 32,639
Other Foods Operating Income 2,693 2,680 797 1,883
Operating Income Ratio (5.1) (4.6) (3.0) (5.8)
Sales 6,823 6,975 4,945 2,030
Others Operating Income 1,218 1,218 1,023 195
Operating Income Ratio (17.9) (17.5) (20.7) (9.6)
Sales 108,063 108,063 108,063
Coca-Cola Business Operating Income 9,884 9,884 9,884
Operating Income Ratio (9.1) (9.1) (9.1)
Sales 326,708 335,819 272,236 63,583
Total Operating Income 47,693 47,683 35,992 11,691
Operating Income Ratio (14.6) (14.2) (13.2) (18.4)

41
Note: Operating Income=Income before deducting advertising and headquarter operating expenses