Coca-cola Europacific Partners Plc · NASDAQ:CCEP
Coca-cola Europacific Partners — Coca-Cola European Partners — Deutsche Bank db Access Global Consumer Conference 2016
45 slides from Coca-cola Europacific Partners's conference presentation, Jun 14, 2016
Slide 1: Deutsche Bank db Access Global Consumer Conference 2016
Deutsche Bank db Access Global Consumer Conference 2016 John F.Brock CEO Damian Gammell COO Nik Jhangiani CFO
Slide 2: Forward Looking Statements
Forward Looking Statements This communication may contain statements, estimates or projections that constitute “forward-looking statements”. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “plan,” “seek,” “may,” “could,” “would,” “should,” “might,” “will,” “f
Slide 3: Creating The Coca-Cola System's Largest Bottler
Creating The Coca-Cola System’s Largest Bottler CCEP CCEP CCEP KEY OVERVIEW PERATING FINANCIAL TAKEAWAYS OVERVIEW OVERVIEW
Slide 4: A Major European Consumer Packaged Goods Company
A Major European Consumer Packaged Goods Company Iceland1 Sweden Combines operations of CCE, Iberian, and German bottlers into Norway a new Western European bottler, CCEP Netherlands ~€11 billion in pro forma 2015 net sales Great Britain ~€1.8 billion in pro forma 2015 EBITDA Germany Belgium Serving
Slide 5: The Right Merger, At The Right Time
The Right Merger, At The Right Time Solid platform for value creation New level of partnership with The Coca-Cola Company (TCCC) and a shared vision to drive growth Shared best practices to drive efficiency and enhance commercial effectiveness Leverage scale and realize synergy benefits to improve o
Slide 6: New Level of Partnership with TCCC
New Level of Partnership with TCCC ALIGNED ALIGNED OPPORTUNITY TO INTERESTS FOCUS ON PROFIT IMPROVE BUSINESS GROWTH MODEL TCCC has an 18% Europe is a significant Opportunity to improve ownership in CCEP contributor of TCCC’s franchise operating model Operating Income ~25% while leveraging leading br
Slide 7: Opportunity to Create New Ways of Operating
Opportunity to Create New Ways of Operating DEVELOP FOCUS new ways of on improving working together market execution LEVERAGE INCREASE low cost, large scale, return on investments and flexible supply chain e.g. capex, marketing, …) Leverage, Challenge, and Go Beyond Existing Best Practices
Slide 8: Consumer Preferred Brands
Consumer Preferred Brands COCA-COLA SPARKLING STILLS WATER TRADEMARK FLAVORS & ENERGY 65% Mix 20% Mix 8% Mix 7% Mix Internal reports, unit case volume mix, rounded 8
Slide 9: NARTD Opportunity For Growth
NARTD Opportunity For Growth CATEGORY MIX & CCEP VALUE SHARE1 COMMENTS Sparkling Still Water NARTD category is ~€95B2 in retail sales 31% 46% CCEP Opportunity Measured channels are 17% ~71% ~ €40B1 in retail sales 30% 4% 52% 24% 24% 1% Opportunity to grow share and grow the category Growing the Cate
Slide 10: Creating The Coca-Cola System's Largest Bottler
Creating The Coca-Cola System’s Largest Bottler CCEP CCEP OVERVIEW CCEP OPERATING FINANCIAL TAKEAWAYS KEY OVERVIEW OVERVIEW
Slide 11: Significant Opportunities for Profitable Growth
Significant Opportunities for Profitable Growth SPARKLING Drive value growth in ~€45B sparkling segments1 STILLS Grow share in ~€50B still segments1 EFFICIENCY & Increase efficiency and effectiveness of ~€6.6B EFFECTIVNESS COGS and ~€2.9B SD&A annual spend2 SYNERGIES Realize synergies of creating CC
Slide 12: Sparkling
Sparkling Focus on immediate consumption, smaller pack size Leverage brand investment Drive recruitment & sampling Innovate brand, sweetener, packages Appeal to More Consumers
Slide 13: Stills & Water
Stills & Water Opportunities to Grow Share New brands New packages New flavors New low/no calorie options Satisfy More Occasions
Slide 14: Marketing Highlights
Marketing Highlights Leveraging Assets Across Markets TASTE THE UEFA EURO HOLIDAY FEELING 2016 OLYMPICS PROGRAMMING June 10 – July 10 September 5 – 21
Slide 15: Connect With More Customers, More Often
Connect With More Customers, More Often AVAILABILITY MARKETING OPERATIONS EXECUTION Compelling customer Investing in cold-drink programs and POS Executing in-store Driving consumer awareness/action with Improving sales marketing assets and delivery Leveraging Capabilities to Drive Customer Growth
Slide 16: Increase Efficiency & Effectiveness
Increase Efficiency & Effectiveness Supply Chai Excellence Pan European scale supported with global procurement capability Flexible & efficient logistics / Route market flexibility Cost-efficient production & expandable infrastructure Responsible sustainable Drive Efficiency and Effectiveness in a C
Slide 17: Realize Synergies
Realize Synergies TOPLINE GROWTH SUPPLY CHAIN OPERATING EXPENSE Shared vision between Increased efficiency and Shared core support TCCC and CCEP to drive effectiveness of functions across the growth in Western Europe manufacturing and new company warehouse operations Enhanced commercial Reduced mana
Slide 18: Drive A New Culture
Drive A New Culture Customer centric Empower and place accountability in operating units Centralize activities that achieve scale or enable a common approach Minimize the integration disruption to our core business Establish a culture of success Provide growth opportunities to our people
Slide 19: Reasons to Believe
Reasons to Believe Significant headroom Leading portfolio with Alignment with TCCC for profitable growth pervasive availability Proven employees and Disciplined financial management team approach & strong FCF CCEP is a Leading CPG Company, Well Positioned to Lead NARTD Growth in Western Europe
Slide 20: Creating The Coca-Cola System's Largest Bottler
Creating The Coca-Cola System’s Largest Bottler CCEP CCEP OVERVIEW CCEP OPERATING FINANCIAL TAKEAWAYS KEY OVERVIEW OVERVIEW
Slide 21: Financial Framework
Financial Framework GROW Free cash flow with earnings line with lo term targets MAINTAIN Optimal capital structure and financial flexibility PURSUE Disciplined investment DRIVE Shareowner value with increasing return on invested capital A Continued Focus on Sustainable Growth and Financial Returns
Slide 22: Grow Free Cash Flow
Grow Free Cash Flow STRATEGY LONG-TERM TARGETS Deliver consistent Net Sales growth in a low single-digit range long-term profitable growth Operating Income growth in a mid-single-digit range Prudent capital investments CapEx ~ 4%—5% of Net Sales Drive cash from operations FCF to Net Income conversio
Slide 23: Maintain Optimal Capital Structure
Maintain Optimal Capital Structure PRO FORMA NET DEBT TO EBITDA CAPITAL STRUCTURE GOALS Operate within a 2.5x to 3.0x net debt to 3.5x EBITDA leverage ratio 2.5x Maintain investment grade debt rating Expect to de-lever to ~2.5x net debt to EBITDA by year-end 2017 Periodically re-evaluate optimal str
Slide 24: Balanced Debt Portfolio
Balanced Debt Portfolio DEBT MATURITIES BY YEAR(€m) Fixed Floating 500 300 300 471 493 500 500 500 350 350 350 350 224 200 250 16 17 18 19 20 21 22 23 24 25 26 28 30 Full-Year 2016 Weighted Average Cost of Debt is Expected to be Just Over 2%
Slide 25: Pursue Disciplined Investment
Pursue Disciplined Investment INVEST IN ATTRACTIVE RETURN OPPORTUNITIES CORE BUSINESS GROWTH Invest in innovation to drive growth RESTRUCTURING Invest incrementally in efficiency and effectiveness M&A Opportunistically invest in M&A to drive incremental shareowner value
Slide 26: Drive Shareowner Value
Drive Shareowner Value LONG-TERM RETURN CASH TO TARGETS SHAREOWNERS Diluted earnings per Initial dividend payout share (EPS) growth in a expected to be 30% to mid to high 40% of net income single-digit range Return of excess cash Return on invested to shareowners via capital (ROIC) ? 20 bps special
Slide 27: Realize €315m-€340m In Savings
Realize 315m 340m In Savings Within 3 Years of Closing KEY AREAS COMMENTS Underway ~40%; from Supply Chain combination ~60% Optimization Benefits of ~1/3 per year, based on year-end run rate savings Operating Efficiencies Cash costs estimated to be ~1.5x total savings Internal reports, rounded
Slide 28: Outlook
Outlook Operating environment to remain challenging For 2016, CCEP expects 2016 Net sales growth in a modest low singl digi range Operating income growth in a modes mi singl digi range Diluted earnings per shar growth i mi teen range Year end net debt to EBITDA is expected to be just over 3 times MI
Slide 29: Reporting Expectations
Reporting Expectations 1H16 earnings expected in September Quarterly comparable income statements for 2015 and 1H16 expected on or before 1H16 earnings Financials to be IFRS and € denominated CCEP is Focused on Clear and Timely Communications
Slide 30: Key Financial Takeaways
Key Financial Takeaways Realistic about the continued challenging environment History of, and commitment to, managing the levers of our business to deliver value Excited about the opportunities to create value with the formation of CCEP Focus on Generating Cash from Operations, Creating Long-Term Pr
Slide 31: Creating The Coca-Cola System's Largest Bottler
Creating The Coca-Cola System’s Largest Bottler CCEP CCEP CCEP KEY OVERVIEW OPERATING OVERVIEW FINANCIAL OVERVIEW TAKEAWAYS
Slide 32: A Responsible & Sustainable Business
A Responsible & Sustainable Business Commitment to the well-being of the communities we serve Shape and inform consumer choice 2015 Dow Jones Sustainability Index Strong alignment with TCCC Lead in Sustainability While Driving Value for Stakeholders
Slide 33: Our People
Our People Leveraging capabilities across our larger organization Building diversity Driving engagement Creating an Inclusive and Passionate Culture to be an Employer of Choice
Slide 34: Summary & Key Takeaways
Summary & Key Takeaways Realistic about A compelling the consumer business environment combination A unique A commitment opportunity for to driving profitable growth shareowner value Creating the Leading Independent Coca-Cola Bottler and a Major European Consumer Packaged Goods Company
Slide 35: Appendix
Appendix IFRS and U.S. GAAP Condensed Income Statements
Slide 36: CCEP FY15 (EUR) Pro Forma Income Statement – IFRS
CCEP FY15 EUR ) Unaudited pro forma condensed combined income statement – IFRS Pro forma adjustments4 Items impacting comparability Change in Additional Additional depreciation Cost of Combination- interest Total CCEP CCEP CCEP from sales from related expense Mark-to- Combination- Inventory Gain on
Slide 37: CCEP FY15 (EUR) Pro Forma Notes
CCEP FY15 EUR ) Unaudited pro forma condensed combined income statement – IFRS Source: Unaudited pro forma condensed combined financial information of CCEP for the year ended December 31, 2015 in the European Prospectus published on May 25, 2016 (“CCEP EUP Unaudited Pro Formas”) 1Derived by combinin
Slide 38: CCE Financial Highlights (EUR)
CCE Financial Highlights ) IFRS, EUR Pro forma adjustments4 Items impacting comparability5 Change in Additional Additional depreciation Cost of Combination- interest Total CCE CCE CCE from sales from related expense Mark-to- Combination- Inventory Gain on Total items FY15 Financials historical IFRS
Slide 39: CCIP Financial Highlights (EUR)
CCIP Financial Highlights ) IFRS, EUR Pro forma adjustments3 Items impacting comparability4 Change in Additional Additional depreciation Cost of Combination- interest Total CCIP CCIP CCIP from sales from related expense Mark-to- Combination- Inventory Gain on Total items FY15 Financials historical I
Slide 40: CCEG Financial Highlights (EUR)
CCEG Financial Highlights ) IFRS, EUR Pro forma adjustments4 Items impacting comparability5 Change in Additional Additional depreciation Cost of Combination- interest Total CCEG CCEG CCEG from sales from related expense Mark-to- Combination- Inventory Gain on Total items FY15 Financials historical I
Slide 41: CCEP FY15 (USD) Pro Forma Income Statement – U.S. GAAP
CCEP FY15 USD($) Unaudited pro forma condensed combined income statement – U.S. GAAP Pro forma adjustments2 Items impacting comparability Removal of historical Additional Total CCEP Depreciation Combination- interest Total Mark-to- Combination- Total items FY15 Financials historical from step-up rel
Slide 42: CCEP FY15 (USD) Pro Forma Notes
CCEP FY15 USD ($) Unaudited pro forma condensed combined income statement – U.S. GAAP Source: Unaudited pro forma condensed combined financial information of CCEP for the year ended December 31, 2015 in the CCEP registration statement on Form F-4 filed on April 11, 2016 (“CCEP F-4 Unaudited Pro Form
Slide 43: CCE Financial Highlights (USD)
CCE Financial Highlights($) U.S. GAAP, USD Pro forma adjustments2 Items impacting comparability3 Removal of historical Additional Total CCE Depreciation Combination- interest Total Mark-to- Combination- Total items FY15 Financials historical from step-up related expense from pro forma CCE market Res
Slide 44: CCIP Financial Highlights (USD)
CCIP Financial Highlights($) U.S. GAAP, USD Pro forma adjustments2 Items impacting comparability3 Removal of historical Additional Total CCIP Depreciation Combination- interest Total Mark-to- Combination- Total items FY15 Financials historical from step-up related expense from pro forma CCIP market
Slide 45: CCEG Financial Highlights (USD)
CCEG Financial Highlights($) U.S. GAAP, USD Pro forma adjustments2 Items impacting comparability3 Removal of historical Additional Total CCEG Depreciation Combination- interest Total Mark-to- Combination- Total items FY15 Financials historical from step-up related expense from pro forma CCEG market
Coca-Cola European Partners — Deutsche Bank db Access Global Consumer Conference 2016 on 6ix