Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Coca-Cola East Japan — FY2014 Earnings Presentation
33 slides from Coca-cola Bottlers Japan's earnings presentation, Feb 16, 2015
Slide 1: FY 2014 Earnings Presentation
FY 2014 Earnings Presentation Calin Dragan, Chief Executive Officer Michael Coombs, Chief Financial Officer February 16, 2015 (Posted to CCEJ website on February 13, 2015)
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 East Japan Co. Ltd. (CCEJ) in view of data obtained as of the date this material was released. These forecasts may differ ma
Slide 3: Coca-Cola Contour Bottle 100th Anniversary
Coca-Cola Contour Bottle 100th Anniversary Calin Dragan, Chief Executive Officer Michael Coombs, Chief Financial Officer May 13, 2014 3
Slide 4: Full-Year 2014 Earnings Presentation
Full-Year 2014 Earnings Presentation Introduction • Overview and Key Messages • Transforming our Business 2014: A Year of Investment & Positioning for Growth • Q4 and Full-Year 2014 Results One+ Roadmap for Growth Outlook for Full-Year 2015 • Full-Year Plan • Key Takeaways 4
Slide 5: 2014: Encouraging results in a tough year
Coca-Cola East Japan 2014: Encouraging results in a tough year Progress in Q4 after a tough summer. FY results slightly ahead of revised plan. Five consecutive quarters of volume and value share growth, despite challenging environment. Starting 2015 from a stronger position. Launches and innov
Slide 6: Real Transformation of the Business
Real Transformation of the Business Making progress on our integration commitments Structure Functional management and operation of business from Day One. New functional role sorts and routines have stabilized. After only 18 months, legacy bottler integration complete. No legacy bottler entities
Slide 7: Real Transformation of the Business
Real Transformation of the Business Making progress on our integration commitments Capacity Five new production lines and two new in-line PET blowers installed Shutdown of operations at two manufacturing plants complete Insourcing of production capacity continues as planned– targeting ~95% in
Slide 8: 2014: A Year of Investment & Positioning for Growth
2014 A YEAR OF INVESTMENT & POSITIONING FOR GROWTH
Slide 9: Full-Year Results Clearly Impacted by Q3
Full-Year Results Clearly Impacted by Q3 Quarterly Highlights 2014 Volume & NSR* by Quarter • Consumer loading before tax rise Q1 • Historic snowfalls in Feb impacted Full-Year 2014 immediate consumption channels Volume +0.4% • Volume decline in April after tax rise NSR -1.0% Q2 • Vending price chan
Slide 10: A Return to Share Growth in 2014
A Return to Share Growth in 2014 Entering 2015 from a stronger position Q4 Market Share* vs. Prior Year Strong Q4 share gains in colas, coffee, tea and water (NARTD Beverages) Q4 2014 Full-year volume composition: IC 74% vs. FC 26% Volume +0.8 +0.7 Expect to hold 2014 share position in 2015 Value +0
Slide 11: An Evolving Channel Mix
An Evolving Channel Mix • Growth in CVS; Differences in indoor vs. outdoor vending • VM channel impacted by price rise after tax hike Q4 2014 Volume by Channel Channel Volume Growth (% of total) Q4 & FY Others Indoor vending Supermarket 11% Drug & volume even (SM) 20% Discounter Vending (VM) (D&D) C
Slide 12: Channel Mix Drives Category Performance
Channel Mix Drives Category Performance • Growth in coffee, tea & water led by innovation • Sparkling and sports volumes impacted by vending channel Q4 2014 Volume by Category Category Volume Growth (% of total) Juice YTD ilohas sparkling Others water +1.9 million cases Sparkling 6% 11% (SSD) 27% Co
Slide 13: Investing in Marketplace Execution
Investing in Marketplace Execution Building customer relationships for the future Net Full-Service Vending Machine Placements Net Cooler Placements New Customer Outlets • Indoor focus • Branded assets (Indoor 2X Outdoor) • Immediate • Cashless consumption (IC) • Low energy use 2.4X 2.8X +17% 2.3X vs
Slide 14: Drivers of Q4 Operating Income
Drivers of Q4 Operating Income A strong quarter following a call to action in Q3 Q4 2014 • GP impact better than plan due to renewed focus on pricing terms & +4,893 vs PY conditions and better volume performance -1,805 • Supply chain recovery after production line delays +3,617 +263 • Reduced incent
Slide 15: Fourth Quarter 2014 Results
Fourth Quarter 2014 Results 2014 Q4 2014 Q4 2014 Q4 2013 Q4 Vs. PY Actual One-time Comparable Comparable in million yen items Diff % Sales Volume 66,576 - 66,576 66,699 -123 -0.2 (BAPC) (,000 cases) Net Revenue 122,698 - 122,698 126,006 -3,308 -2.6 COGS 64,809* - 64,809 68,898 -4,089 -5.9 Gross Prof
Slide 16: Drivers of Full-Year Operating Income
Drivers of Full-Year Operating Income Solid results in our first full year of operations Depreciation Net +1,442 SCM Synergies in COGS FY 2014 Net +5,435 +234 vs PY +174 vs plan -4,131 In million JPY -1,975 +5,573 -2,611 +2,807 +1,118 DME -1,906 -207 +7% Dep Non-recurring CCEJP GP OPEX Impact of exp
Slide 17: Full-Year 2014 Results
Full-Year 2014 Results 2014 FY 2014 FY 2013 FY Vs. PY Vs. Revised 2014 FY Plan Actual One-time Comparable Comparable in million yen items Diff % % Sales Volume 284,989 - 284,989 283,777 +1,212 +0.4 +0.3 (BAPC) (,000 cases) Net Revenue 523,299 - 523,299 533,602 -10,303 -1.9 +0.1 COGS 283,963* - 283,9
Slide 18: One+ Roadmap for Growth
One+ Roadmap for Growth
Slide 19: One+ Roadmap for Growth
One+ Roadmap for Growth Remaining focused on the journey to World-Class 2015: Roadmap for Growth still Appropriate • Financial results have shifted out by one year 2018- Tokyo Olympic • Pace of improvement will not change Games & Beyond • Focus on delivering in 2015, 2016 2016-2017 Accelerating 2015
Slide 20: Critical Learnings for the Future
Critical Learnings for the Future What’s working and what can we do better? What’s Working? What Can We Do Better? Action Plan Strong focus on Market Volume and value share gains Continued pricing pressure. balance between continue. Good execution of Need a more “rational” volume and value. Emphasis
Slide 21: Full-Year 2015 Outlook
FULL-YEAR 2015 OUTLOOK
Slide 22: Our 2015 Targets
Our 2015 Targets Reasons to Believe • Majority of cost synergy initiatives already in-flight • Commercial targets realistic; Assume continued pricing pressure and partial recovery of impact of 2014 weather and tax rise • People, processes & systems in place and better prepared vs. 2014 22
Slide 23: Full-Year 2015 Plan Overview
Full-Year 2015 Plan Overview Macro • Recovering economy a positive for market growth Environment but with added pressure from labor cost inflation • Input costs impacted by Forex, partly offset by lower energy prices NARTD Market • Low single-digit market growth Environment • Ongoing channel mix shi
Slide 24: 2015 Major Initiatives by Function
2015 Major Initiatives by Function Commercial • Targeted expansion of vending; Growth in Convenience Stores • Revenue Growth Management (RGM) through strengthened OBPPC and pricing, terms & conditions • Complete Route-to-Market deployment Supply Chain • ¥5.3 billion net SCM synergies (insourcing pro
Slide 25: Strong Marketing & Innovation Plans
Strong Marketing & Innovation Plans “Big Bet” launches of Coke Life and Tsumugi Tea Q1 Coca-Cola Bottle 100th Anniversary Coca-Cola Life Q1 Georgia Campaign New Flavor Launch Aluminum Can Rollout New Cup Vending Georgia Campaign Georgia New Flavor New The world is made Mitsuboshi Presso cup vending
Slide 26: Full-Year 2015 Plan
Full-Year 2015 Plan 1% OI margin improvement, in line with One+ Roadmap 2015 FY 2015 FY 2015 FY 2014 FY Vs. PY Estimate One-time Comparable Comparable Diff % in million yen items Estimate Sales Volume* - 287,763 287,763 281,586 +6,177 +2.2 (BAPC) (,000 cases) Net Revenue 535,700 - 535,700 523,299 +1
Slide 27: Drivers of FY 2015 Operating Income
Drivers of FY 2015 Operating Income FY 2015 -1,908 +5,126 vs PY DME +6,010 • “Big Bet” brand launches -2,411 +1,188 • VM locations • Key accounts +502 Depreciation vs. PY OPEX Other subsidiaries • COGS -705 • Cost inflation offset by procurement • OPEX +1,893 15,600 SCM efficiencies In million JPY +
Slide 28: 2015 Modeling Reminders
2015 Modeling Reminders Quarterly profit phasing • Majority of full-year Operating Income generated in third quarter Prior year impact of accounting policy change (depreciation and useful life) • Q1 2014 write-off of remaining salvage values approx. ¥4.6 billion Capital Expenditure • Productio
Slide 29: Milestones in 2015
Milestones in 2015 Structure Planned acquisition of Sendai Coca-Cola Bottling as of April 1, 2015 Entity integration of “mixed” vending operation businesses Complete RTM (Route-to-Market) deployment Indirect procurement initiative together with Coca-Cola West Capacity Installation of four
Slide 30: Appendix
APPENDIX
Slide 31: The Coca-Cola System
The Coca-Cola System A powerful partnership driving growth of the Coca-Cola business The Coca-Cola system in Japan consists of the Coca-Cola (Japan) Company (CCJC), bottlers and other related companies. CCJC, as the franchise owner, is responsible for supplying concentrate and beverage bases (coffee
Slide 32: Glossary
Glossary CDE Abbreviation of Cold Drink Equipment. Vending machines, coolers and beverage dispensers, etc. Coolers The equipment with Coca-Cola’s logos which keep beverages at an appropriate temperature (chilled and/or hot) for immediate consumption, and ready for selling them at the storefront of r
Slide 33: Thank You
THANK YOU FY 2014 Earnings Presentation February 16, 2015