Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Q3 2020 Earnings Presentation
38 slides from Coca-cola Bottlers Japan's earnings presentation, Nov 13, 2020
Slide 1: Third quarter year-to-date 2020 Earnings Presentation
Third quarter year-to-date 2020 Earnings Presentation November 13, 2020 Coca-Cola Bottlers Japan Holdings Inc. Calin Dragan, President Bjorn Ulgenes, Vice President & Chief Financial Officer (Posted to CCBJH website on November 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: Third quarter year-to-date 2020 earnings presentation agenda
Coca-Cola Bottlers Japan Holdings Inc. (CCBJH) Third quarter (Q3) year-to-date 2020 earnings presentation Overview and situational analysis Q3 YTD results and outlook Q&A 3
Slide 4: Overview and Situational Analysis
Overview and Situational Analysis
Slide 5: Q3 Year-to-Date Overview
Q3 Year-to-Date Overview YTD beverage market continues negative, moderating trend versus Q2 as restrictions lifted CCBJH Q3 volume, revenue and Business Income show gradual recovery versus prior quarters this year. Q3 Business Income almost even versus prior year. Continued growth in vending market
Slide 6: Market Environment Update; "with COVID-19"
Market Environment Update; “with COVID-19” Initial traffic recovery with Japan “GO-TO” campaign; Selective investment to recover share Industry situation YTD Guiding principles for Our quick actions Uncertainty during “with COVID-19” market execution Setting a foundation for 2021 • Extra focus on Cu
Slide 7: Strict focus on managing what we can control; Building a foundation for recovery
Strict focus on managing what we can control; Building a foundation for recovery ✓ Beverage market contraction, stabilizing for now at lower levels. ✓ Mitigating short-term revenue contraction with significant cost and capital reduction. Making good progress to reduce heavy fixed cost base. ✓ Transf
Slide 8: Vending transformation is yielding results
Vending transformation is yielding results Share momentum, better volume-per-machine, transforming to lower cost base Vending value share growing Vending volume-per-machine 33 32 +1.3% +1.2% recovering vs. PY 20% 10% (2020YTD) Vending service Vending fixed (FY2019) 31 route reduction cost savings* I
Slide 9: Market share pressure in OTC channels on pullback in investment
Market share pressure in OTC channels on pullback in investment Value share growth in coffee, cola, black tea; Strong progress in Online channel Continuous wholesale pricing and promotional discipline Market share impacted by postponed Olympics programs, OTC NARTD Market Share especially in CVS chan
Slide 10: Successfully expanding to new consumption occasions
Successfully expanding to new consumption occasions Alcohol business contributing revenue and profit Million Lemon-dou cumulative sales volume Cases Lemon-dou pilot started in May 2018 as 8 first Coca-Cola Company alcohol brand 7 Nationwide launch in October 2019, 6 Launch to date consistently outpe
Slide 11: Resilient and flexible infrastructure in place
Resilient and flexible infrastructure in place Building a foundation for recovery Completion of world-leading Hiroshima plant – Fully up and running. Total seven new manufacturing lines nationwide, 20% growth in aseptic production capacity versus 2018. Continuing to add manufacturing capacity of gro
Slide 12: Sustainability as one driver of growth
Sustainability as one driver of growth Making progress in sustainable packaging toward WWW goals Helps support achievement of Expand “label-free” products offerings World Without Waste “iLOHAS eco ACTION” campaign with Uniqlo Launching pilot project for PET bottle recycling with Welcia Holdings in T
Slide 13: "Business as usual is not an option"
“Business as usual is not an option” • Actively Reducing fixed cost and increasing flexibility across the business • Crisis is a driver to accelerate transformation • COVID-19 outlook uncertain, but clear focus on returning to growth 13
Slide 14: Emerging stronger: In the past 60 years, Coca-Cola business in Japan has withstood many crises
1957 1958 in Japan 1957: Coke established 1959 * 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 Emerging stronger: Nixon 1970 standard ends gold 1971 1972 1973 1974 1st Oil Shock 1975 1976 1977 1978 1979 1980 Shock 2nd Oil 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 Burst 1993 Bub
Slide 15: Q3 YTD 2020 results
Q3 YTD 2020 results ay
Slide 16: Q3 YTD 2020 results vs. 2019
Q3 YTD 2020 results vs. 2019 Moderating Business Income decline, partially offset by significant cost savings. Operating income improved versus prior year, cycling one-time expenses. 2020 2019 YoY (%) Revenue 616,774 694,763 -11.2 Beverage Business Sales Volume (Million Cases) 344 384 -11 NARTD (Non
Slide 17: Q3 YTD 2020 Drivers of Business Income
Q3 YTD 2020 Drivers of Business Income Moderating trend vs Q2. Strong progress in cost-savings to partially offset topline pressure Volume, Price DME Commodity Manufacturing Others Healthcare & & Mix* (Direct Marketing Skincare -34.9 Expense, fixed only) Business Income 17.1 (YTD) Q3 -14.5 +0.1 7.0
Slide 18: 2020 Q3 YTD NARTD channel & category volume performance
2020 Q3 YTD NARTD channel & category volume performance Growth in Drug & Discounter, Online channels; Package mix impacting revenue per case By channel Wholesale By category Vs. PY Volume revenue Vs. PY Volume 1% per case 7% Sparkling -12% Supermarket (SM) -1% -38 Yen 6% 18% 26% Non-sugar tea (NST)
Slide 19: NARTD channel/category/package volume performance
NARTD channel/category/package volume performance Q3 2020 volume: -11% By package By channel Wholesale Q3 YTD 2020 vs PY Volume Vs. PY Volume revenue 1% per case 2% S-PET -11% 7% Supermarket (SM) -1% -78 Yen 18% 9% L-PET +4% 27% Drug & Discounter (D&D) +7% -67 Yen 5% 39% Can -17% Convenience Store (
Slide 20: Outlook
CiCila BOTTLERS JAPAN HOLDINGS INC.
Slide 21: Updated Full-year 2020 guidance
Updated Full-year 2020 guidance (Announced on Oct. 5, 2020) Unit: Million JPY Consolidated 2020 Forecast 2019 Actual YoY (%) Revenue 819,700 914,783 -10.4 Beverage Business Sales Volume (Million Cases) 459 505 -9 NARTD (Non-alcoholic ready to drink) Beverage Volume 451 503 -10 Business Income 0 15,0
Slide 22: Updated full-year 2020 guidance: Drivers of Business Income
Updated full-year 2020 guidance: Drivers of Business Income Establishing “New Normal” cost structure to be more resilient and agile Selective reinvestment in marketing programs in Q4 as solid foundation for 2021 Volume, price DME Healthcare & Commodity Manufacturing Others & mix* (Fixed DME only) Sk
Slide 23: Continued priority on good stewardship of capital
Continued priority on good stewardship of capital Dividend Year-end Dividend • No change to reinstated year-end dividend plan of 25 yen per share • Focus on return to stable dividend payout during transformation 25 yen/share Balance Sheet and Cash Flow • Identified ~12 billion yen cash-in opportunit
Slide 24: Update from Coca-Cola (Japan) Company
Update from Coca-Cola (Japan) Company 2020 Highlights Q4 Highlights 24
Slide 25: 2020 Business Plan: Planning with Agility & Flexibility
2020 Business Plan: Planning with Agility & Flexibility Plan to maximize TOKYO 2020 Revised plan with gradual and selective activity increase in 2H At Home Platform Innovation Lemon-dou Innovative Marketing Vending Recovery Winter Campaign 25
Slide 26: 2020 Year-to-date Highlight
2020 Year-to-date Highlight Coca-Cola Zero Sugar ILOHAS × UNIQLO Georgia Test Your Luck campaign Full renewal Eco ACTION campaign Attracting new users and With 1.5 million participants Working with partners to with high repeat purchase Georgia TM promote recycling and Contributing to market environm
Slide 27: 2020 Year-to-date Highlight
2020 Year-to-date Highlight Kochakaden Craftea Fanta Premier New flavors and package renewals Peach introduction Lemonade added to the lineup, contributing Establishing a position as to the expansion of the Black Tea Category Adult sparkling beverage 27
Slide 28: Q4 Highlights: Lemon-Dou
Q4 Highlights：Lemon-Dou Established as a teiban brand one year after nationwide launch. Steadily rolling out initiatives to spark consumer interest and drive further growth. No. 5 in hit products in Nikkei Trendy rankings 2020 Source: December 2020 issue of Nikkei Trendy 28
Slide 29: Q4 Highlights: Vending Welcome Back Program to drive traffic
Q4 Highlights: Vending Welcome Back Program to drive traffic Buy One Get One Free Promotion Coke ON Pay Promotion Oct. Dec. Shopper recruitment ~1 MM 50% cash back when purchasing with CokeON pay Transaction@ Coke ON VM 3.1MM (up to 200 JPY) Coke ON Downloads: ~800K 29
Slide 30: Q4 Highlight: Winter campaign
Q4 Highlight : Winter campaign TVCM Youtube OOH Digital Online live The time together is the best gift you can give. Store merchandise Cake promotion Pay promotions McDonald's December November promotion 1 16 30
Slide 31: Q4 Highlight: Shibuya Coke Vision
Q4 Highlight: Shibuya Coke Vision At about 40 meters above the Shibuya Scramble intersection "Shibuya Coke Vision" Started at 17:00, October 26 on the rooftop of QFRONT building 31
Slide 32: Wrap up
BOTTLERS JAPAN HOLDINGS INC.
Slide 33: Managing what we can control; Building a foundation for growth
Managing what we can control; Building a foundation for GROWTH ✓ Agile and resilient cost structure in place to match new reality • 30 billion yen cost savings expected in 2020; recurring savings up 1.5X-2.0X vs. initial plan (pre-coronavirus) • 20% reduction in number of vending service routes, 14
Slide 34: Bottlers Japan Holdings Inc.
BOTTLERS JAPAN HOLDINGS INC.
Slide 35: Appendix
Appendix BOTTLERS JAPAN HOLDINGS INC.
Slide 36: 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 37: 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 38: 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/
Coca Cola Bottlers Japan — Q3 2020 Earnings Presentation on 6ix