John F. Brock CHAIRMAN & CEO. Nik Jhangiani SVP & CFO

Transcription

1 John F. Brock CHAIRMAN & CEO Nik Jhangiani SVP & CFO

2 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 presentation should be read in conjunction with the risks and uncertainties discussed in our filings with the Securities and Exchange Commission ( SEC ), including our most recent Form 10-K and other SEC filings. 2

3 AGENDA SOLID FOUNDATION OPPORTUNITY FOR GROWTH SHAREOWNER VALUE CRS AND KEY TAKEAWAYS 3

4 CCE Snapshot $8.2 billion net sales 30 billion servings annually to 170 million consumers 17 production facilities ~11,750 employees Preeminent Western European Bottler 4 10-K 2013

5 Vision and Global Operating Framework Vision Be the best beverage sales and customer service company Strategic Priorities #1 or strong #2 in every category we compete Our customers most valued supplier A winning and inclusive culture Drive consistent long-term profitable growth 5

6 Solid Foundation for Growth Large and Growing Category ~$180B of annual retail value - Beverage Market ~$65B of annual retail value - NARTD Successful Position #1 in value & volume share in NARTD and Sparkling Managing the levers of our business to drive consistent longterm profitable growth and deliver shareowner value 6 Non-alcoholic ready-to-drink (NARTD); Canadean FY12 (most recent available), excludes tap/bulk water & dairy; AC Nielsen FY13; rounded

7 AGENDA SOLID FOUNDATION OPPORTUNITY FOR GROWTH SHAREOWNER VALUE CRS AND KEY TAKEAWAYS 7

8 v % 3 Yr CAGR +4.5% Large and Growing Category ~$180B Beverage Market (Retail Value) ~$27B NARTD - Measured (Retail Value) 2013 Growth 2 ~$27B NARTD Measured 2 ~$115B ~$38B NARTD Hot Tea/Coffee, All Alcohol, Dilutables 1 Non-measured Canadean FY12 (most recent available), excludes tap/bulk water & dairy, rounded 2. AC Nielsen FY13, rounded

9 Key Category for Our Customers - NARTD FMCG Sector Ranking #1 #2 NARTD Charcuterie Charcuterie NARTD NARTD Charcuterie NARTD Beer NARTD Beer NARTD Charcuterie NARTD Beer 2013 NARTD Value $B Value % Growth AC Nielsen FY13 (Strategic Planner); Rankings based on most recent available data (excludes tobacco)

10 Territory Growth Opportunity Population 1 (in M) & Per Caps CCE 2013 Performance 3 CCE #1 in NARTD & Sparkling in value & volume in every territory Grew value & volume share in NARTD category Grew value & volume share in Sparkling segment 10 1: CCE internal reports 2: The Coca-Cola Company (TCCC ) beverages based on eight fluid ounce servings 3: AC Nielsen FY13

11 CCE Focused on High Value Segments Category & CCE Mix Segment Strategy 35% 46% 22% 87% 36% 43% 18% 3% 10% N A R T D V O L U M E 1 N A R T D V A L U E 1 C C E V O L U M E 2 Sparkling: grow segment Still: selectively grow value share Sparkling Still Water CCE participates in high value segments AC Nielsen FY K 2013

12 Capturing the Growth Opportunities Successful Brands Solid Marketing & Execution Plans Great People 12

13 Successful Brand Portfolio Coca-Cola Trademark 69% Volume Sparkling Flavors & Energy 18% Volume Stills 13% Volume K 2013

14 Sparkling Coca-Cola Trademark 2014 Highlights Accelerate Coke Zero Just Add Zero campaign Enhance Share A Coke campaign Package innovation Win in digital 2013 Growth +15% #1 in volume and value cola share in every territory 14 CCE internal reports

15 15 Commercial Coke Zero

16 Sparkling Flavors 2014 Innovation/Activation FINLEY - France Sweetener innovation Stevia Package innovation Schweppes re-launch in Great Britain New adult sparkling non-alcoholic beverage Low calorie Preservative free With lemon juice Fully integrated marketing 16

17 Energy Brand Expansion & Innovation New flavors (Relentless Cherry & Burn lemon ICE) Sweetener options (Relentless sugar free reformulation) 17

18 Stills Package innovation (Nestea proprietary bottles, multipacks) Sweetener options (Nestea Stevia) New flavors (Minute Maid, Nestea, Powerade Worldcup, Mer) 18

19 Package Innovation Compete More Effectively Drive Recruitment 250ml Can 1L Contour PET 1.75L Contour PET Boost Frequency 1.25L Contour PET Create Value 4 x 1.5L Multipacks 19

20 2014 Marketing Calendar Jan. World Cup Enhanced Dec. Trophy Tour Always on COKE WITH MEALS Recruitment Pack / Music 20

21 Share A Coke and World Cup Share A Coke Campaign 2013: 350M social media impressions 2014: enhanced on-line programming and more names World Cup Pre-tourney excitement: Trophy tour Ticket giveaways In-store activation Special edition packages TV commercials Digital Active living promotions 21

22 22 Commercial A Reason to Believe

23 Customer Centric Supply Chain Procurement, Production, and Logistics Excellence Pan European scale supported with global procurement capability Flexible & efficient logistics & distribution Cost efficient production & expandable infrastructure Responsible & sustainable 23

24 Enhanced Capability and Capacity Norway: new package and route to market Flexibility to execute widescale customized programs Improving production efficiency & effectiveness Expanding package, pack, and pallet flexibility External recognition for manufacturing sustainability 24

25 Being Our Customers Most Valued Supplier Most Valued FMCG Supplier GREAT BRITAIN FRANCE BELGIUM NETHERLANDS #1 #2 #1 #1 10 years in a row Up from #5 in years in a row 4 years in a row Advantage Group survey

26 Optimizing Our Business Business Transformation Program (BTP) Standardizing (e.g. channel-focused sales and marketing organization) Centralizing (e.g. shared services center) Improving (e.g. cold-drink equipment service activities) Improving our operating model for driving sustainable future growth 26

27 BTP Examples Sales Force Realignment Standardized sales and marketing structures Step-changed sales force effectiveness Enhanced core capabilities Centralization Of Transaction Processing Created shared services center Improved processes More effective customer service Reduced cost 27 Continued focus on organizational effectiveness and efficiency

28 New Packaging and Delivery Model in Norway New Route-to-Market, New Packaging UNLOCKING CATEGORY VALUE 2013 % Growth Category CCE NARTD Sparkling Customer Recognition CCE awarded NorgesGruppen Environmental Award for 2012 as a result of bold move of changing delivery and pack-type Results have exceeded expectations 28 AC Nielsen FY13

29 Our People Experienced Management Team Solid Bench Strength Investing In Capabilities 29 Attract, develop, and retain a highly talented and diverse workforce

30 Agenda SOLID FOUNDATION OPPORTUNITY FOR GROWTH SHAREOWNER VALUE CRS AND KEY TAKEAWAYS 30

31 Financial Priorities CONSISTENT earnings in line with our long-term objectives MAXIMIZE free cash flow (FCF) and maintain financial flexibility INCREASE return on invested capital and drive shareowner value Drive Consistent Long-Term Profitable Growth 31

32 Financial Approach Drive Cash From Operations Grow profitably while investing CapEx prudently Optimize Capital Structure Maintain target leverage range Opportunistically Invest and/or Return Cash To Shareowners Invest in high return M&A opportunities and/or return cash to shareowners Focus on total shareowner return 32

33 Cash from Operations Growth Net Sales Operating Income EPS Long-Term Targets 4-6% 6-8% High Single-Digit 2014 Outlook Low Single-Digit Mid-Single-Digit +10% Generate Solid Free Cash Flow 33 Comparable & currency neutral

34 Invest for Long-Term Growth 2013 Capital Mix Capital Highlights 61% Operations 23% Cold Drink Equipment 16% IT, Other Long-term target 4.0% 4.5% of net sales 2014 expected to be ~$350M ~2/3 supports growth, ~1/3 maintains existing assets K 2013

35 Balance Sheet Flexibility Net Debt 1 to EBITDA x 2 1.7x 2.0x 2.6x LONG-TERM TARGET RANGE 2.5x 3.0x K; Net Debt is total 3rd party debt less cash & cash equivalents; comparable EBITDA 2. Pro forma FY10 assumes D&A of low to mid $300M

36 Balanced Debt Portfolio Long-Term Debt Maturity ($M) Weighted average cost of debt ~3% K 2013; rounded

37 Improving Net Income to Free Cash Flow Conversion FCF as a % of Net Income Comments 100% 75% ~25% 2013 impacted by non-recurring items (e.g. restructuring) 50% 25% ~75% ~100% Over time, we expect the two to more closely align 0% 2013 FCF One-Time / Other Net Income Continued focus on annual ROIC improvement K 2013; CCE internal reports; comparable; one-time / other = cash restructuring, cash tax, other

38 Invest in High Return M&A Opportunities Opportunities Evaluation Criteria Core business growth Adjacent territories and adjacent categories Other territories New business Cash flow of existing business Incremental value creation by CCE Incremental value to CCE s core business Risk, cost, and timeframe Opportunities evaluated against alternatives, including return of cash to shareowners 38

39 Dividends $1.00 Increased the Annualized Rate By At Least 25% in Each of the Last 5 Years $0.80 $0.60 $0.40 $0.20 $ E 7 consecutive years of increases K, internal reports; rounded

40 Cash Returned to Shareowners $3.6B Share Repurchase Dividends Other $1.0B $1.0B $1.2B $1B E 44% 12% 11% 11% 9% % of Mkt Cap 10-K, YE market cap (2014 as of 02/18/2014); internal reports; rounded 40 Almost $8B of cash returned after the formation of new CCE through 2014E

41 $4.5B Cash Opportunity Progress Report During 2011, we outlined a $4.5B opportunity through 2014 How are we doing? 2H E ($B) Opportunity 1 Outlook 2 Free Cash Flow Balance Sheet Total While the environment has been challenging, our focus on managing our business levers has allowed us to remain broadly on-track Investor Event presentation 2. 2H from historical earnings releases and 10-Ks; 2014 outlook as of Feb 5, 2014; FCF adjusted for cash restructuring, cash tax, pension contributions in excess of pension expense; rounded

42 Future Cash Availability Annual Cash Available as % of Market Capitalization ~2-3% ~6-7% ~8-10% 42 CCE internal reports Net Income Organic growth while maintaining debt leverage + = Opportunity to generate significant cash annually for M&A and/or shareowners Annual cash available

43 Key Financial Takeaways Realistic about challenging environment History of and commitment to managing the levers of our business to deliver growth Favorable and flexible capital structure Long-term financial objectives are challenging, yet achievable Focus on consistent long-term profitable growth and total shareowner return 43

44 Agenda SOLID FOUNDATION OPPORTUNITY FOR GROWTH SHAREOWNER VALUE CRS AND KEY TAKEAWAYS 44

45 CRS Vision and Framework DELIVER FOR TODAY INSPIRE FOR TOMORROW Sustainability Vision We will deliver for today, growing a low carbon, zero waste business, and inspire and lead change for a more sustainable tomorrow Strategic Priorities Deliver For Today Lead The Industry Innovate For The Future 45 Corporate Responsibility and Sustainability (CRS)

46 Key CRS Achievements Decreasing Environmental Impact While Reducing Costs Making Significant Progress on Sustainability Goals Water reduced water use ratio to 1.4 liters/liter Carbon lowest footprint in CCE history Packaging new recycling joint ventures; began consumer recycling behavior study Achieved operational carbon footprint goal 7 years ahead of schedule Partnered with key customers to deliver consumer-facing recycling programs Expanded portfolio of low and no-calorie offerings All new cooler placements are HFC-free 46

47 CRS Leadership 2013/2014 Recognition By Industry and Sustainability Stakeholders Improve operational effectiveness Rated #1 Food & Beverage Company by Corporate Knights; Ranked #43 overall Increase engagement and advocacy Enhance image and reputation 47

48 Business Environment Risks Challenging macroeconomic environment Volatile commodity costs Increasing focus on health and wellbeing Risk of increased taxes Though optimistic about our long-term outlook, we are realistic about key business environment risks 48

49 Key Takeaways Operating environment remains challenging Financial priorities focused on long-term profitable growth Track record of and focus on delivering shareowner value CCE is executing our strategic priorities 49

50 John F. Brock CHAIRMAN & CEO Nik Jhangiani SVP & CFO