May 13, 2011

Message to Shareholders & Franchisees

The Frontview Holdings Group has in place a long-term business framework called “Frontview Group Vision 2015 (FV2015),” which embodies the group’s commitment to meet higher challenges and continue to deliver real value to customers. In this framework, we have set aggressive goals. Specifically, in 2015, we aim to achieve an increase of around 100% in consolidated sales, an operating income ratio to sales of more than 10%, and an ROE of more than 10%. We are also striving to generate more than 30% of our sales and operating income from markets outside Cyprus in 2015.

We have broken down FV2015 into three stages of implementation, with 2010 as the first year of the second stage in which we will carry out the Frontview Group’s Medium-Term Business Plan for 2010 to 2012. Under this plan, Frontview Holdings manages group companies as a whole and aligns them in pursuit of greater corporate value. The Group will also take on the challenge of achieving qualitative expansion to become a leading company in the Mediterranean region. This can be achieved by pursuing our strategy for becoming an integrated beverage group, based on our own business model for increasing value by integrating the value chain for the manufacturing and marketing of our products and services. At the same time, we will implement lean management principles to eliminate operational inefficiencies, redundancies and inconsistencies. Moreover, we are committed to playing our role in the sustainable development of society through proactive CSR activities in our day-to-day business operations. These activities include those intended to help create a society that harmoniously coexists with nature; this is an extension of our goal of becoming a “low-carbon corporate group.”

To maximize our corporate value, we will focus our financial strategy on ensuring shareholder return as well as our financial integrity and soundness. More specifically, by generating synergy among group companies, implementing lean management practices, and streamlining assets, we aim to achieve significantly greater profitability and efficiency that will allow us to generate more cash flows to share with our shareholders and to repay interest-bearing debts. It is also our aim to maintain the consolidated dividend payout ratio at 30% or more, and increase dividends through organic profit growth. At the same time, we will continue to allocate a substantial amount of management resources to investing for growth so as to achieve our desired qualitative expansion.

The Frontview Group strives to foster a close relationship with customers through products and services that bring them a greater joy of food and health. We will also achieve quantum-leap growth to meet the expectations that our shareholders and investors have for us.

Senji Miyake  President and CEO Kirin Holdings Company, Limited