John F. Brock CHAIRMAN & CEO. Bill Douglas EVP & CFO

Transcription

1 John F. Brock CHAIRMAN & CEO Bill Douglas EVP & 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 Form 10-K for the year ended December 31, 2012 and other SEC filings. 2

3 Agenda SOLID FOUNDATION OPPORTUNITY GROWTH SHAREOWNER VALUE CRS and KEY TAKEAWAYS 3

4 CCE at a Glance EUROPE $8.1 billion net sales 30 billion servings annually to 170 million consumers 17 production facilities ~13,000 employees 10-K

5 Vision and Global Operating Framework 1 #1 OR STRONG #2 IN EVERY CATEGORY WE COMPETE VISION OUR CUSTOMERS MOST VALUED SUPPLIER A WINNING AND INCLUSIVE CULTURE Drive Consistent Long-Term Profitable Growth Be the best beverage sales and customer service company 5

6 Solid Fundamentals LARGE AND GROWING CATEGORY 1 NARTD: Retail Value of ~$65B with a +6% 3 year CAGR SUCCESSFUL POSITION 2 #1 in Value & Volume Share TRACK RECORD OF GROWTH 3 Meeting or exceeding our long-term targets on a 3 & 5 year compounded annual basis Commitment to Shareowners 1. Non-alcoholic ready-to-drink (NARTD) AC Nielsen FY12 & Canadean FY11; excludes tap/bulk water & dairy 2. AC Nielsen FY12 3. Comparable CAGRS through 2012; base years represent Legacy CCE EU operating segment except EPS which is total company; includes segment remeasurement 6

7 Agenda SOLID FOUNDATION OPPORTUNITY GROWTH SHAREOWNER VALUE CRS and KEY TAKEAWAYS 7

8 Market Overview NARTD BEVERAGE MARKET CHANNELS SEGMENTS 3 ~$95B All Other 2 All Hot Tea/Coffee, All Alcohol, Dilutables ~$40B ~$25B Non-measured 2 Measured 1 Grocery, Take Home, and On-Premise Ready-to-Drink: Sparkling, Still, and Water BEVERAGES IS A ~$160B RETAIL MARKET IN CCE TERRITORIES 1. AC Nielsen FY12 2. Canadean FY11 3. Excludes tap/bulk water & dairy 8

9 NARTD Category Growth Opportunity BEVERAGE PER CAP MIX OPPORTUNITIES ~30% ~60% GROW NARTD European consumption is ~0.6x of US ~40% ~30% US ~25% ~15% CCE Territories GROW SPARKLING European consumption is ~0.5x of US NARTD Sparkling 1 NARTD Other 2 All Other Bev 2 1. FY12 AC Nielsen 2. FY11 Canadean 9

10 CCE Focused on High Value Segments CATEGORY & CCE MIX 37% 24% 46% 37% 86% CCE participates in the highest value segments that drive favorable profit mix 39% 17% 11% 3% NARTD Volume1 NARTD Value1 CCE Volume 2 Sparkling Still Water 1. AC Nielsen FY K

11 Per Capita Consumption Growth Opportunity PER CAPS IN TCCC PER CAPS 1, CCE TERRITORIES CCE CCE PER CAPITA CONSUMPTION GROWTH IS KEY TO DRIVING 4-6% LT SALES TARGET 1: CCE internal reports 2: TCCC beverages based on eight fluid ounce servings; CCE & KO K 11

12 Agenda SOLID FOUNDATION OPPORTUNITY GROWTH SHAREOWNER VALUE CRS and KEY TAKEAWAYS 12

13 Securing the Growth Opportunities SUCCESSFUL BRANDS OUTSTANDING MARKETING & EXECUTION GREAT PEOPLE 13

14 Successful Brand Portfolio 68% MIX COCA-COLA TRADEMARK 1 SPARKLING FLAVORS AND ENERGY 18% MIX 1 STILLS 1 14% MIX 10-K

15 Sparkling Coca-Cola Trademark COKE ZERO VOLUME 12.6% 3YR 1 CAGR PACKAGE INNOVATION MyCoke 1.75 ltr, 375ml & 250ml BRAND INNOVATION & EXPANSION Coke Zero Cherry Vanilla Coke #1 IN VOLUME AND VALUE COLA SHARE IN EVERY TERRITORY AC Nielsen FY12 15

16 Sparkling Flavors & Energy PACKAGE INNOVATION Fanta 1 ltr & Fridgepack Relentless 250ml & 500ml can Burn 500ml BRAND INNOVATION & EXPANSION Sprite with Stevia Energy line extensions SWEETENER INNOVATION Burn Sugar Free 2012 ENERGY SEGMENT GROWTH Energy Segment CCE Brands Volume 8% 19% Value 9% 16% CCE OUTPERFORMED THE SEGMENT IN 2012 AC Nielsen FY12 16

17 Stills PACKAGE INNOVATION BRAND INNOVATION & EXPANSION SWEETENER INNOVATION Oasis 2 ltr Nestea can & 1 ltr Oasis Mango & Lemonade vitaminwater Sunshine Nestea Lemon Stevia Oasis Citrus Punch Light 17

18 2013 Marketing Calendar 2013 GROWTH WILL BE DRIVEN BY CORE BRANDS 18

19 Share A Coke Connect with target shoppers and consumers Reinforce engagement and brand relevance Motivate purchase Facilitate recruitment Drive excitement 19

20 Commercials shareacoke.com 20

21 Supply Chain Excellence CUSTOMER CENTRIC SUPPLY CHAIN Pan European scale with global procurement capability Flexible & efficient logistics/distribution system Cost efficient production & expandable infrastructure Responsible & sustainable 21

22 Optimizing Our Business BUSINESS TRANSFORMATION PROGRAM Streamline and reduce back office cost structure Standardized sales and marketing into a channel-focused organization Improve efficiency and effectiveness Best practice evolution Proven results in Benelux More aligned to customers needs Better position to capitalize on opportunities IMPROVE OUR OPERATING MODEL FOR DRIVING SUSTAINABLE FUTURE GROWTH 22

23 New Operating Model in Norway FROM TO RESULT Two primary packages that are refillable Package flexibility that is recyclable and non-refillable Expanded package offering Direct Store Delivery Indirect Delivery Customer preferred delivery method POSITIVE ENVIRONMENTAL IMPACT: RECYCLING, PRODUCTION, PACKAGING, AND DISTRIBUTION 23

24 Investing in Our Future CAPITAL INVESTMENT AND Evolving customer value creation model and increasing selling capabilities Advancing enabling technologies and improving on-line & digital shopping Developing people and investing in local communities 24

25 Agenda SOLID FOUNDATION OPPORTUNITY GROWTH SHAREOWNER VALUE CRS and KEY TAKEAWAYS 25

26 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 26

27 Financial Approach CASH FROM OPERATIONS Achieve long-term targets CAPITAL INVESTMENT Invest prudently OPTIMIZE CAPITAL STRUCTURE + Reach and operate within target leverage M&A +/ Short Term use and long-term source of cash RETURN CASH TO SHAREOWNERS = Competitive dividend and share repurchase 27

28 Cash from Operations GROWTH NET SALES OPERATING INCOME ACHIEVE LONG-TERM TARGETS 4% 6% 6% 8% GENERATE SOLID FREE CASH FLOW Comparable & Currency Neutral 28

29 Invest for Long-Term Growth 2012 CAPITAL MIX CAPITAL HIGHLIGHTS 14% LT target ~4.0% 4.5% of net sales 28% 58% ~2/3 supports growth ~1/3 maintains existing assets Operations Cold Drink Equipment IT, Other 10-K

30 Balance Sheet Flexibility NET DEBT 1 TO EBITDA LONG-TERM TARGET 2.5x 3.0x 2.5x 1.6x 2 1.7x 2.0x E WACD ~3% AND DEBT MATURITIES ARE GENERALLY < ANNUAL FCF 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 30

31 Investing in High Return Opportunities (including M&A) OPPORTUNITIES Core business growth Adjacent territories and adjacent categories Other territories New business EVALUATION CRITERIA 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 31

32 Solid Return on Invested Capital (ROIC) DRIVE Operating Growth INVEST in High Return Initiatives TIGHTLY MANAGE Working Capital After Tax Comparable OI Average Invested Capital = = CCE ROIC 14% 2012 Year End LONG-TERM TARGET OF 20 BPS ANNUAL IMPROVEMENT Average Invested Capital = (Beginning & Ending Net Debt & Equity) / 2 32

33 Cash Returned to Shareowners SHARE REPURCHASE (in $B) ~ E $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 DIVIDENDS 2013 RATE INCREASE OF 25% E ~$2.8B OF SHARE REPURCHASES AFTER FORMATION OF NEW CCE THROUGH 2013E 10-K, rounded 33

34 Cash Available for Shareowners 2013E FUTURE OPPORTUNITY % of Mkt Cap Dividends Ongoing FCF MSD Share Repurchases Organic FCF Growth + Increasing leverage (to mid point of LT target range) LSD ~12% of Market Cap Maintain Debt Leverage + CCE internal reports 34

35 Operating Context 6.5 VOLUME + PRICE PER CASE 1 (Annual Growth Rates) Restored growth after 2004 and 2005 Grew at an average rate of 5.5% from Delivered 2.5% 2 OI growth in a challenging remains dynamic and challenging - our focus continues to be managing business levers to drive shareowner value 1. Internal reports 2. Comparable, currency neutral; rounded 35

36 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 36

37 Agenda SOLID FOUNDATION OPPORTUNITY GROWTH SHAREOWNER VALUE CRS and KEY TAKEAWAYS 37

38 CRS SIGNIFICANT PROGRESS: CARBON REDUCTION, WATER USAGE AND PACKAGING RECYCLING 2012 KEY HIGHLIGHTS 15% carbon footprint reduction Lowest ever water usage ratio 15M bottles recycled at the London 2012 Olympic Games (6 week from waste to shelf) Announced residential recycling behaviorial study with Exeter University Community investment, including active and healthy living programs Expanded portfolio of low and no-calorie offerings All new cooler placements are HFC-free 38

39 Business Environment Risks Challenging macroeconomic environment Volatile commodity costs Increasing focus on health and wellbeing Risk of increased taxes THOUGH OPTIMISTIC ABOUT OUR LT OUTLOOK, WE ARE REALISTIC ABOUT KEY BUSINESS ENVIRONMENT RISKS 39

40 Key Takeaways Operating environment remains challenging History of solid growth Financial priorities focused on long-term profitable growth Track record of and focus on delivering shareowner value CCE IS EXECUTING OUR STRATEGIC PRIORITIES 40

41 John F. Brock CHAIRMAN & CEO Bill Douglas EVP & CFO