Coca-cola Femsa Sab De Cv Units Cons Of 5 Shs -l- + 3 Shs Series -b- · BMV:KOF/UBL
Coca-cola Femsa Sab De Cv Units Cons Of 5 Shs -l- + 3 Shs Series -b- — Coca-Cola FEMSA — Investor Presentation (March 2007)
27 slides from Coca-cola Femsa Sab De Cv Units Cons Of 5 Shs -l- + 3 Shs Series -b-'s investor presentation, March 2007
Slide 1: Coca-Cola FEMSA
Coca-Cola FEMSA 1 March 2007 – Mexico City
Slide 2: Cautionary Statement
Cautionary Statement •FORWARD-LOOKING STATEMENTS •This presentation contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended. These forward-looking statements relate to Coca-Cola FEMSA, S.A. de C.V. and subsidiaries (“KOF”) and their b
Slide 3: KOF Overview
~ KOF OVERVIEW @® KOF-MEXICO
Slide 4: FEMSA's Structure & Contribution by Business
FEMSA’s Structure & Contribution by Business Public Float 14.7% 31.6% 53.7% 100% 100% Total Revenue: US$ 11,625 million EBITDA: US$ 2,316 million 10% 28% 28% 40% 50% 44% 4 Figures in Mexican pesos converted to US dollars at 10.7995 year-end exchange rate.
Slide 5: KOF – 2006 Operating and Financial Results
KOF – 2006 Operating and Financial Results Volume (1,998 MM UC) Revenues (US$ 5,346 MM) EBITDA (US$ 1,131 MM) 8% 6% 5% 11% 13% 14% 4% 8% 9% 11% 53% 54% 7% 65% 9% 10% 6% 7% Mexico Central America Colombia Venezuela Brazil Argentina 2006 - Average Unit Price (USD/UC) 3.27 3.11 2.62 2.70 2.44 1.90 EBIT
Slide 6: KOF's importance within KO System
KOF’s importance within KO System KOF is the second largest Coca-Cola Bottler in the world, representing: 9% of the world 34% of Latin America 42% of Mexico 6
Slide 7: KOF in the Beverage World
KOF in the Beverage World KOF continues to be one of the most profitable bottling operators in the world… 20.2% 12.6% 23.9% 2006 Revenues (MM US$) 32.2% 2006 EBITDA (MM US$) EBITDA Margin (%) 13.1% 19.8% 19 ,8 16 19 ,8 0 4 17 ,9 5 8 17 ,3 6 4 41.7% 12 ,7 3 0 16.6% 11,2 7 4 17.6% 8 ,18 9 21.2% 7 ,0 9
Slide 8: Strong EBITDA Generation
Strong EBITDA Generation …a clear track record of consistent EBITDA growth during the last 10 years… EBITDA (US$ MM) 1,131 1,029 899 742 537 518 438 330 243 244 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 CAGR 97- 06 18.6% Financial information in nominal terms translated into US Dollars using
Slide 9: Significant Debt Reduction
Significant Debt Reduction …allowing us to reduce US$ 1.1 billion of net debt since the acquisition of Panamco… Cash Net Debt $2,828 330 $2,545 240 $2,221 307 $1,862 $1,854 $1,835 $1,772 162 301 356 384 2,498 2,305 1,914 1,700 1,534 1,498 1,388 May 03 Dec-03 Dec 04 Dec-05 Jun 06 Sep 06 Dec-06 Debt /
Slide 10: Attractive Growth Opportunities…
Attractive Growth Opportunities… New collaborative framework with The Coca-Cola Company The Coca-Cola Company will provide additional marketing focus A new business model in the still beverages segment Expansion of our geographic footprint 10
Slide 11: … in the Sparkling Beverage Segment...
… in the Sparkling Beverage Segment... Growth mainly driven by the Coca–Cola brand. 1,694 Total Colas Flavors 1,604 84% 1,549 78% 1,493 58% 2003(1) 2004 2005 2006 Sparkling Beverages Sales Volume (MM UC) CAGR 03- 06 4.3% 11 (1) Includes full-year sales volume of our original territories and our new
Slide 12: … and in the Still Beverage Segment.
… and in the Still Beverage Segment. Important growth opportunities to capture. As % of 32.8 Regional Volume 3.6 2.2% 2.8 1.0% 22.5 8.8 4.8% Argentina 19.0 1.6 18.2 0.8 2.2 0.3 Brazil 1.6 1.7 2.3 1.2% Venezuela 8.1 8.5 9.4 0.3 5.9 4.2% Colombia 2.3 0.3 0.5 Central America 1.9 1.8 8.0 9.4 0.9% Mexico
Slide 13: KOF – Mexico
@® KOF OVERVIEW » KOF — MEXICO 13
Slide 14: KOF – México is the largest and most dynamic bottler in México…
KOF – México is the largest and most dynamic bottler in México… Achieving volume growth of 4.5% in México Valley of Mexico Puebla Veracruz Chiapas Michoacán Guanajuato More than 1Billion Unit Cases sold in 2006… Sparkling Beverages Water Other 1071 MM UC Vs ‘05 5.2% 1.4% 4.7% 57.9% 14
Slide 15: Key success factors for KOF – Mexico
Key success factors for KOF – Mexico: Powerful brands Industry Leading Capabilities Outstanding People Effective and efficient Superior Execution distribution Network 15
Slide 16: Powerful brands…
Powerful brands… A strong Sparkling and Still beverages portfolio based on the strength of the Coca– Cola brands… KOF Sparkling Beverages Portfolio KOF Still Beverages Portfolio Premium Energy Core Water In & Out Extensions Sport drinks Core Juices & Value Fruit Multiflavor Tea Regional Aguas VPBs F
Slide 17: Leading Capabilities - Multi-segmentation
Leading Capabilities - Multi-segmentation Multi-segmented approach to serve clients based on socio – demographic variables, competitive intensity, consumption occasion and consumer behavior at the POS… We are able to differentiate our execution in terms of: Portfolio Pricing Communication Cooler lay
Slide 18: Leading Capabilities - RGM
Leading Capabilities - RGM We managed to grow our Share of Sales during 2006 due to our Revenue Management Strategies… Value based portfolio by Cluster and Segment RGM Strategies Cluster C Cluster B Cluster A Strategic Map $ / LT + 24 22 Premium 20 17 16 Convenience 14 Entry 12 10 Frequency 8 6 4 Fi
Slide 19: … and superior POS execution by Segment…
… and superior POS execution by Segment… Segmented execution and Cooling platform as competitive advantages … Cooler Service Layout Portfolio Rules of Commercial Conditions engagement Promotions Image Segmented Picture of Success: Over 450,000 Coolers Portfolio Weighted by volume cooler coverage Coo
Slide 20: … Supported by specialized measuring tools…
… Supported by specialized measuring tools… POS execution and Strategies are measured by different Systems: RED as an external measuring tool and Score Card as an internal tool (Salesforce)… Evaluation criteria Cooler 1st Position Exclusiveness Layout Additional Exhibition Rules of Engagement POP Hi
Slide 21: … Maintaining leadership while facing an aggressive competitive landscape…
… Maintaining leadership while facing an aggressive competitive landscape… During the last year we managed to grow our Price Gap and gain Share of Sales in Colas in all our territories… Price Evolution and Price Gap Colas – KOF Territories (Dec 05 – Dec 06) 4.3% 45.5 43.6 -11.4% 33.4% 38.5 75.0% 34.
Slide 22: Based on Effective and efficient manufacturing and distribution network
Based on Effective and efficient manufacturing and distribution network: 2006 2004 Clients 624,191 574,572 Presale Routes 2,748 2,505 Daily Presale Visits 200,604 180,360 Delivery Routes 3,557 3,399 2006 2003* Distr. Centers 92 133 Plants 12 18 Headcount 22,989 24,498 12 Plants 92 Distribution Cente
Slide 23: …Layered on Efficient Routes to Market…
…Layered on Efficient Routes to Market… Ability to better serve our clients through mix-and-match service models: CLIENT’S VARIABLES Account Size Drop Size Urban / Rural Channel Service Requirements SALES MODELS Tailored Presale GTM Sales & Delivery Telesale Models Hybrid Route Conventional HH DELIV
Slide 24: …with increasing Collaboration amongst key clients…
…with increasing Collaboration amongst key clients… Collaborative Customer Relationship Model (CCRM) routines implemented with Key Modern Trade partners… Vision Be the best option in the modern market beverages category, having an optimal value, service and collaboration model with our customers Por
Slide 25: KOF Mexico's Plans for the future…
KOF Mexico’s Plans for the future… Increase Pricing via Segmented Execution Continued Reinvestment in Core Brands Win in Water Expand our Portfolio toward new categories through Jugos del Valle Improve our Point of Sales Execution (UNO) Continuous internal Capability Development (RGM / Multi Segment
Slide 26: KOF Overview and Mexico Focus
KOF OVERVIEW AND MEXICO FOCUS 26 March 2007
Slide 27: Reconciliation table
Reconciliation table Coca-Cola FEMSA In Mexican constant pesos as of the end of each period 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Operating Income 1,210 1,591 2,051 2,940 3,796 4,440 6,707 7,702 8,683 9,456 Depreciation 266 336 551 823 763 558 966 1,237 1,308 1,504 Amortization & others