Coca-Cola Enterprises and The Coca-Cola Company Strategically Advance and Strengthen their Partnership. February 25, 2010

Transcription

1 Coca-Cola Enterprises and The Coca-Cola Company Strategically Advance and Strengthen their Partnership February 25, 2010

2 Information & Forward-Looking Statements FORWARD-LOOKING STATEMENTS Included in this presentation are forward-looking management comments and other statements that reflect management s current outlook for future periods. As always, these expectations are based on currently available competitive, financial, and economic data along with our current operating plans and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. The forward-looking statements in this news release should be read in conjunction with the risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and other SEC filings. IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT This communication may be deemed to be solicitation material in respect of the proposed transaction. In connection with the proposed transaction and required shareowner approval, the Company will file relevant materials with the Securities and Exchange Commission (the "SEC"), including a proxy statement/prospectus contained in a Form S-4 registration statement, which will be mailed to the shareowners of the Company. SHAREOWNERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Shareowners may obtain a free copy of the proxy statement/prospectus, when it becomes available, and other documents filed by the Company at the SEC's web site at Copies of the documents filed with the SEC by the Company will be available free of charge on the Company's internet website at under the tab "Investor Relations" or by contacting the Investor Relations Department of Coca-Cola Enterprises at PARTICIPANTS IN THE SOLICITATION The Company and its directors, executive officers and certain other members of its management and employees may be deemed to be participants in the solicitation of proxies from its shareowners in connection with the proposed transaction. Information regarding the interests of such directors and executive officers was included in the Company's Proxy Statement for its 2009 Annual Meeting of Shareowners filed with the SEC March 3, 2009 and a Form 8-K filed on December 18, 2009 and information concerning the participants in the solicitation will be included in the proxy statement/prospectus relating to the proposed transaction when it becomes available. Each of these documents is, or will be, available free of charge at the SEC's web site at and from the Company on its web site or by contacting the Shareowner Relations Department at the telephone numbers above. 1

3 Agenda Transaction Overview new CCE Overview 2

4 Transaction Overview The Coca-Cola Company ( TCCC ) and Coca-Cola Enterprises ( CCE ) are taking the next steps in the strategic realignment of their North American and Western European operations TCCC will acquire CCE s North American operations for an aggregate consideration of ~$13.6 billion, consisting of TCCC s shares in CCE and the assumption of CCE s debt and other items CCE public shareowners will receive $10 per share cash consideration and a share of CCE s European businesses ( new CCE ) in exchange for each share of CCE new CCE will be TCCC s Strategic Bottling Partner in Western Europe new CCE has agreed in principle to acquire TCCC s Norwegian and Swedish bottling operations for ~$822 million in cash, subject to the signing of definitive agreements new CCE will have the right to acquire TCCC s German bottling operations within months at fair value new CCE will initially borrow up to 3.0x pro forma Debt / EBITDA to fund the cash consideration, the Norway and Sweden acquisition and a planned ~$1 billion share repurchase program 3

5 Proposed Transaction Structure CCE s European operations will be separated from its North American operations by transferring CCE Europe to new CCE in a tax-efficient transaction, resulting in: TCCC as sole shareowner of CCE and CCE North American operations CCE public shareowners as 100% owners of new CCE CCE Today new CCE TCCC CCE Public Shareowners TCCC CCE Public Shareowners 34% 66% 100% 100% CCE old CCE new CCE 100% 100% 100% 100% 100% 100% Norway / Sweden Bottlers CCE North American Operations CCE European Operations CCE North American Operations Norway / Sweden Bottlers* CCE European Operations Value Proposition: One CCE Share One new CCE share + $10 Cash One new CCE Share = CCE Europe + Norway + Sweden Bottlers* * Acquisition of Norway and Sweden bottlers subject to the signing of definitive agreements and regulatory approval. 4

6 Compelling Value for CCE s North American Operations ($ in billions) TCCC s Shares in CCE ( million) CCE Debt Assumed by TCCC Unfunded Pension Liabilities Assumed by TCCC Other Items (3) Total Consideration (1) (2) $ ~ 0.7 ~ $13.6 (1) Based upon a thirty day trailing average as of 2/24/2010. (2) Valuation (ABO) as of 12/31/09. (3) Estimate includes assumption of employee compensation liabilities, and certain other contractual terms. 5

7 Additional Transaction Highlights new CCE will continue a strong relationship with TCCC Key Strategic Partner for Western Europe year bottling agreement 5-year incidence pricing agreement Right to acquire TCCC's German bottling operations within months at fair value new CCE to retain all CCE cash, cash equivalents, marketable securities, and certain idle assets TCCC will assume all employee liabilities other than those related to new CCE TCCC to provide transition services to new CCE for a period of up to 18 months new CCE to retain Coca-Cola Enterprises name and CCE ticker (1) CCE independent directors and executive leadership to remain at new CCE Transaction is expected to close in the fourth quarter, 2010 (1) Subject to NYSE approval. 6

8 Compelling Rationale for CCE, TCCC System and Respective Shareowners For CCE Compelling value for North America Compelling shareowner return including $10 per share cash consideration new CCE provides attractive revenue / growth profile with improved revenue and EPS growth prospects Strategic and focused operations in an expanded, higher margin Western European market European business model is robust similar to TCCC System outside of North America For TCCC System Creates robust North American business system as it strengthens competitive position Benefit of shared synergies Opportunity to restructure and enhance North American system Transformational transaction to enhance system economics and shareowner returns 7

9 Agenda Transaction Overview new CCE Overview 8

10 Our Vision, Global Operating Framework and Financial Objectives remain the same VISION Be the Best Beverage Sales and Customer Service Company DRIVE CONSISTENT LONG-TERM PROFITABLE GROWTH #1 or strong #2 Most valued supplier Winning and inclusive culture 9

11 Leading Western European Bottler Strategic Bottling Partner of TCCC in Western Europe Geographic footprint in markets with growing Non-Alcoholic Ready to Drink ( NARTD ) category Leading brands Leading NARTD positions Third-largest Coca-Cola bottler by volume Will handle 8% of TCCC global volume (1) Leading NARTD positions in each country served Solid operating and execution capabilities Robust business model (1) Source: TCCC 10

12 Leading Positions in Key European Territories Pro Forma Revenue (1) $7.3 bn Market Overview Benelux 26% Norway / Sweden 10% Great Britain 35% Great Britain France Benelux NARTD Rank (2) #1 #1 #1 Population (m) (3) Per Cap Consumption (4) (5) Norway # Sweden # France 29% Source: Company information. (1) FY2009 figures converted to USD at 2009 average FX rates. (2) Canadean, Market Insights 2009 (3) Population in millions of persons, as of Source IMF, World Economic Outlook Database, October (4) Represents 8oz servings of TCCC products based on 2008 data. (5) Represents weighted average data for Belgium and The Netherlands. 11

13 Favorable Volume Growth Profile TCCC Consumption Per Capita (8oz servings) Great Britain 4.9% CAGR France 3.1% CAGR U.S. 0.1% CAGR Canada 0.2% CAGR Source: TCCC; based on U.S. fluid ounces of a finished TCCC beverage 12

14 Opportunities for Growth 800 TCCC Consumption Per Capita (8oz servings, 2008) Mexico United States Belgium Australia Spain Norway Ireland Canada Great Britain Germany Sweden Netherlands Italy France Source: TCCC; based on U.S. fluid ounces of a finished TCCC beverage

15 new CCE Compares Favorably Across A Range of Metrics North America old CCE new CCE Sparkling Volume Growth (1) (1.5%) (0.7%) (2) 1.8% Territories TCCC Per Capita Consumption (3) Sparkling Market Share (value) 36% 50% 64% Historical Volume Growth (4) (0.2%) 0.5% 3.0% Historical Operating Income Growth (5) (2.3%) 2.2% 7.5% Operational 2009 EBITDA Margin 9.9% 12.0% 16.1% ROIC (2009) (6) ~5% ~8% ~11% Total Debt / EBITDA (7) N/A 3.4x ~2.9x Annual dividend per share (planned) N/A $0.36 ~$0.50 (1) Based on internal estimates for total markets. (2) CCE sparkling growth calculated as weighted average growth. (3) Represents 8oz servings of TCCC products based upon 2008 data. (4) Represents quarterly average of volume growth for the past 40 quarters from 4Q 99 to 3Q 09 per company filings. Not pro forma for acquisition of Norway and Sweden bottling operations. (5) Represents fully allocated OI growth CAGR of last 5 years. Not pro forma for acquisition of Norway and Sweden bottling operations. (6) Represents fully allocated EBIT x (1 effective tax rate ) / (average net debt + average book equity). Pro forma for $6.7 billion, net of tax, of impairment adjustments. (7) Defined as the following items from the reported balance sheet: current maturities of long-term debt plus long-term debt. Pro forma for planned share repurchase. 14

16 Poised For Growth: Norway / Sweden a First Step* new CCE is positioned to expand in Western Europe Key Norway / Sweden Metrics 2009 (1) Norway and Sweden Volume 67 million (2) Right to acquire TCCC s German bottling operations at fair value Revenue EBITDA $741 million $99 million Other bottling territories Operating Income $62 million (1) Source: TCCC. (2) Volume in physical cases. * Acquisition of Norway and Sweden bottlers subject to the signing of definitive agreements and regulatory approval 15

17 Operational Snapshot of new CCE Territories Existing CCE European territories (Great Britain, France, The Netherlands, Belgium, Luxemburg) Norway and Sweden to be acquired from TCCC Right to acquire TCCC s German bottling operations within months at fair value Continuity of key management and independent directors HQ / Listing / Governance US-headquartered with primary listing on NYSE (2) Possibility for a secondary listing (e.g. London) in due course new CCE expected to continue membership in S&P 500 Index Key Financial Indicators (1) Pro forma 2009 Revenue: $7.3 billion Pro forma 2009 EBITDA: $1.2 billion Pro forma 2009 Operating Income: $0.8 billion Pro forma Net Debt / 2009 EBITDA: ~1.7x (3) (1) Includes Norway and Sweden. EBITDA and operating income include estimated corporate costs. (2) Subject to NYSE approval. (3) At closing, prior to planned share repurchase program. 16

18 Operational Snapshot of new CCE (cont d) Volume new CCE pro forma volume of ~600 million physical cases Western Europe forecast to be a growing market relative to North America ~13k employees Employees, Facilities, and Distribution HQ in Atlanta 18 manufacturing sites Indirect route to market in most countries ~550K pieces of cold drink equipment 17

19 Financial Snapshot of new CCE Key Pro Forma Metrics 2009 (1) Volume (Physical Cases) Revenue EBITDA Operating Income Net Debt / EBITDA Before ~$1B Share Repurchase Estimated Fully Diluted Shares Before Share Repurchase Expected Initial Annual Dividend per Share ~600 million $7.3 billion $1.2 billion $0.8 billion ~1.7x ~ mm ~$0.50 new CCE long-term targets are expected to exceed current long-term targets (1) Financials pro forma for acquisition of Norway and Sweden bottling operations. 18

20 Management Continuity at new CCE CEO John Brock CEO of CCE since years management experience with leading European beverage companies CEO of Interbrew and InBev COO of Cadbury Schweppes Europe Hubert Patricot CFO Bill Douglas Legal John Parker IT Esat Sezer HR Pam Kimmet President of CCE s European Group since years experience in the European Coke system CFO for CCE since years of experience in the Coke system 20+ years of management experience in European bottling in both M&A and finance roles General Counsel and senior management positions for CCE since years experience in the Coke system (15+ years with CCE) Significant experience as legal counsel for various European entities, including General Counsel of CCE Europe CIO for CCE since years of global IT experience with leading consumer products companies including CIO of Whirlpool for 3 years Significant experience as IT executive in various European markets 19 SVP of HR for CCE since years of global HR experience in major manufacturing, technology and financial services companies

21 new CCE: An Attractive Business Story Leading Western European bottler Long-term strategic alignment with TCCC Leading NARTD position in major Western European countries Competitive scale and diversity of brands new CCE s growth builds on existing European growth Strong balance sheet and free cash flow Attractive financial growth with long-term targets expected to exceed current long-term growth targets Continuity of talented leadership Strong shareowner cash return profile, including solid annual dividend and planned share repurchase program of ~$1 billion 20

22 Coca-Cola Enterprises and The Coca-Cola Company Strategically Advance and Strengthen their Partnership February 25, 2010

23 new Coca-Cola Enterprises Inc Reconciliation of GAAP to non-gaap (unaudited; in millions) 22