Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Q2 2020 Earnings Presentation
44 slides from Coca-cola Bottlers Japan's earnings presentation, Aug 13, 2020
Slide 1: Second quarter year-to-date 2020 Earnings Presentation
Second quarter year-to-date 2020 Earnings Presentation August 13, 2020 Coca-Cola Bottlers Japan Holdings Inc. Calin Dragan, President Bjorn Ulgenes, Vice President & Chief Financial Officer (Posted to CCBJH website on August 12, 2020)
Slide 2: Forward-looking statements
Forward-looking statements The plans, performance forecasts, and strategies appearing in this material are based on the assumptions and judgment of the management of Coca-Cola Bottlers Japan Holdings Inc. (CCBJH or Company) in view of data obtained as of the date this material was released. These fo
Slide 3: Coca-Cola Bottlers Japan Holdings Inc. (CCBJH)
Coca-Cola Bottlers Japan Holdings Inc. (CCBJH) Second quarter (Q2) year-to-date 2020 earnings presentation Overview and situational analysis Q2 YTD results and year-to-go outlook Q&A 3
Slide 4: Overview and Situational Analysis
Overview and Situational Analysis
Slide 5: We are all in this together
We are all in this together Delivering happy moments to everyone, while creating value 5
Slide 6: Year-to-Date Overview
Year-to-Date Overview Q2 reflects impact of emergency declaration and decision to postpone Olympics. Q2 volume down 18%, YTD volume down 11%. Lemon-dou alcohol brand ahead of plan. Targeting appropriate balance of value & volume – slight OTC market share decline as we maintain wholesale price hike,
Slide 7: Macro and industry impact from COVID-19. When is "new normal"?
Macro and industry impact from COVID-19. When is “new normal”? Impact of COVID-19/Lifestyle changes Daily new coronavirus infections Traffic (Shinjuku station vs LY*) Emergency declaration -58.1 % Emergency declaration About Telework introduction rate (Tokyo Apr Diff. pre month) +2.6X 2 （Introductio
Slide 8: Market Environment Update; "with COVID-19"
Market Environment Update; “with COVID-19” Balancing topline pressure from volume declines and channel mix shifts Industry situation YTD Guiding principles for CCBJI quick actions Still navigating “with COVID-19” market execution What we can do now Supermarket, More stable traffic, with reduced Miti
Slide 9: CCBJH navigating critical year with aggressive cost focus
CCBJH navigating critical year with aggressive cost focus Solid start pre-coronavirus; Acting with urgency; COVID-19 uncertainty remains Situational analysis More focus on what we can control • Successfully addressing • Early recognition of tough 2020 “controllable” cost structure to and withdrawal
Slide 10: Q2 YTD 2020 results
Q2 YTD 2020 results ay
Slide 11: Q2 YTD 2020 results vs. 2019
Q2 YTD 2020 results vs. 2019 Business Income decline led by beverage volume performance, partially offset by cost savings. Operating income progressed versus prior year, cycling one-time expenses. 2020 2019 YoY Revenue 386,679 433,710 -10.8% Beverage Business Sales Volume (Million Cases) 212 237 -11
Slide 12: Q2 YTD 2020 Drivers of Business Income
Q2 YTD 2020 Drivers of Business Income COVID-19 vending volume decline driving topline pressure; Significant cost-saving efforts Q2 YTD 2019 Volume, DME Commodity Manufacturing Others Healthcare & Q2 YTD 2020 Business Price & Mix* (Direct Marketing Skincare Business Income Expense, fixed only) Busin
Slide 13: Cost-saving opportunities to balance near-term volume pressure
Cost-saving opportunities to balance near-term volume pressure Year one of strategic plan a unique moment to identify more savings Volume performance Cost savings initiatives Q2 reflects Japan emergency declaration Over 10 billion yen YTD, with more to come Volume declines vs. prior year, but signs
Slide 14: NARTD market share & retail pricing trends
NARTD market share & retail pricing trends Balancing value & volume share in OTC, maintain share momentum in vending OTC Market Share Q2 OTC market share impacted by sales mix Market Share (vs. PY, PP) Value Volume • Higher market growth in future-consumption channels & packaging YTD Q2 (Jan. to Jun
Slide 15: 2020 Q2 YTD NARTD channel & category volume performance
2020 Q2 YTD NARTD channel & category volume performance 12% volume decline led by retail & food and vending due to COVID-19 By channel Wholesale By category Vs. PY Volume revenue Vs. PY Volume 1% per case 8% Sparkling -9% Supermarket (SM) -1% -11 Yen 6% 18% 27% Non-sugar tea (NST) -10% 25% Drug & Di
Slide 16: NARTD channel/category/package volume performance
NARTD channel/category/package volume performance Q2 2020 volume: -20% By package By channel Wholesale Q2 YTD 2020 vs PY Volume Vs. PY Volume revenue 1% per case 3% S-PET -10% 7% 14% Supermarket (SM) -1% -62 Yen 9% L-PET +3% 28% Drug & Discounter (D&D) +10% -54 Yen 5% 39% Can -17% 23% Convenience St
Slide 17: Priority on good stewardship of capital
Priority on good stewardship of capital Maintaining solid financial position & liquidity Balance sheet & cash flow CAPEX & Depreciation Maintain solid financial position: 50.4% Focus on strategic investments with equity ratio as of end of Q2 additional capex reduction plan in place. YTD cash and cas
Slide 18: Year-to-Go Outlook
Year-to-Go ay Outlook :
Slide 19: Year-to-go outlook
Year-to-go outlook Plan to update full-year 2020 forecast once we have clear visibility on Q3 results Carefully watching peak summer performance particularly on evolving changes in the market trends amid ongoing COVID-19 uncertainties Leading the way in cost savings in a tough COVID-19 situation to
Slide 20: Update from the Coca-Cola (Japan) Company
Update from the Coca-Cola (Japan) Company Campaign to cheer the athletes Marketing activities amid COVID-19 20
Slide 21: Campaign to cheer the athletes by drinking Coca-Cola products
Campaign to cheer the athletes by drinking Coca-Cola products “Your cheer will become hope for athletes” - Donation program for Japan National Team - (Starting on June 15, data as of August 9, 8 weeks after start) # of participants: About 630K Amount of donations: About 14M JPY 21
Slide 22: Marketing activities amid COVID-19
Marketing activities amid COVID-19 FEWER, BIGGER PIVOT TO CORE STAY@HOME INNOVATION 22
Slide 23: Marketing activities amid COVID-19
Marketing activities amid COVID-19 FEWER, BIGGER PIVOT TO CORE STAY@HOME INNOVATION 23
Slide 24: Big bet new products and activities
Big bet new products and activities Georgia Georgia Fanta Premier Grape Latte Nista Japan Craftsman Best selling Fanta flavor in Successfully acquiring new Growing PET coffee past 10 years consumers in young age market share and women Gaining buzz on SNS 24
Slide 25: Marketing activities amid COVID-19
Marketing activities amid COVID-19 FEWER, BIGGER PIVOT TO CORE STAY@HOME INNOVATION 25
Slide 26: Trade mark Coca-Cola: Launch new packages to meet consumer needs
Trade mark Coca-Cola: Launch new packages to meet consumer needs 350ml PET 700ml PET 1500ml PET 26
Slide 27: Fully renewed Coca-Cola Zero
Fully renewed Coca-Cola Zero Background Aug. 31 Desire to refresh while spending a lot of time at home Demand for zero sugar with rise in health consciousness 27
Slide 28: Marketing activities amid COVID-19
Marketing activities amid COVID-19 FEWER, BIGGER PIVOT TO CORE STAY@HOME INNOVATION 28
Slide 29: Launch "labelless" focusing on e-commerce channels
Launch “labelless” focusing on e-commerce channels 29
Slide 30: Ayataka green tea "Rich dining experience" campaign
Ayataka green tea “Rich dining experience” campaign Background Aug. 17 “Drink with meals” moments account for 21% of RTD green tea market Spend more time at home Data: Survey conducted by Coca-Cola (Japan) Company 30
Slide 31: Marketing activities amid COVID-19
Marketing activities amid COVID-19 FEWER, BIGGER PIVOT TO CORE STAY@HOME INNOVATION 31
Slide 32: Wrap up
BOTTLERS JAPAN HOLDINGS INC.
Slide 33: Delivering results through accelerated transformation while mitigating immediate impact
Delivering results thorough accelerated transformation while mitigating immediate impact Situation we are facing Focusing on what’s in our control • Volume contraction Completed cost structure transformation • Consumer behavior shift faster than plan • Unfavorable channel & ✓ Rapid deployment of tra
Slide 34: First step of business transformation work completed amid COVID-19
First step of business transformation work completed amid COVID-19 Nationwide vending & OTC transformation rollout completed by end of June, faster than plan Completed expansion from Pilot to nationwide in record time Vending OTC Operation model transformation Sales Force Transformation • Reduction
Slide 35: Historic expansion of manufacturing & product supply capacity
Historic expansion of manufacturing & product supply capacity Efficient & high-spec production technology to help flexibly respond to market demand 2 2 lines lines Seven new manufacturing lines now up and running since last year, as planned 1 line Flexible aseptic manufacturing capacity Completed br
Slide 36: Continuing to invest in our people
Continuing to invest in our people Kicked off Coca-Cola University Japan Inclusion - Offer comprehensive programs to nurture next generation of leaders, including women in leadership, English language, professional skills - Providing future leaders work experience at other global bottlers Actively i
Slide 37: Making progress in sustainable packaging
Making progress in sustainable packaging Joint project to produce chemically-recycled PET bottles Resources Helps support achievement of World Without Waste bottle-to-bottle recycling CCBJI to carry out pilot sales of product using chemically recycled PET raw materials within this year Far Eastern N
Slide 38: Supporting prevention of COVID-19
Supporting prevention of COVID-19 Provide support to essential workers and people in need Community CCBJH activities Coca-Cola system activities Donated ~80K cases of Anti virus/bacteria ”Refresh Japan” program The Coca-Cola Foundation beverages wrapping on vending The Coca-Cola Foundation, The Coca
Slide 39: Wrap up
Wrap up Q2 reflects impact of government emergency declaration and restrictions, but uncertainties remain amid resurgence of COVID-19 Q3 is our peak season and most important quarter in the year; Carefully watching performance and implementing mitigating actions as necessary Through rapid cost savin
Slide 40: Bottlers Japan Holdings Inc.
BOTTLERS JAPAN HOLDINGS INC.
Slide 41: Appendix
Appendix BOTTLERS JAPAN HOLDINGS INC.
Slide 42: We are part of the global Coca-Cola system
We are part of the global Coca-Cola system An enduring and effective partnership Coca-Cola (Japan) Company • Brands • Customer focus • Innovation • Local expertise • Global perspective • Best-in-class execution • Consumer focus • Finished goods production • Superior insight • Logistics and distribut
Slide 43: Glossary of key terms
Glossary of key terms Business A measure of our underlying or recurring business performance after the adoption of IFRS. Business Income deducts cost of goods and SG&A from revenue, and Income includes other income and expenses which we believe are recurring in nature. DME Abbreviation of Direct Mar
Slide 44: Thank You
THANK YOU Investor Relations Coca-Cola Bottlers Japan Holdings Inc. ir@ccbji.co.jp https://en.ccbj-holdings.com/ir/ facebook: https://www.facebook.com/ccbji/
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