Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Coca-Cola East Japan — Q4 2015 Earnings Presentation
36 slides from Coca-cola Bottlers Japan's earnings presentation, Feb 15, 2016
Slide 1: Q4 & Full-Year 2015 Earnings Presentation
Coca-Cola East Japan Q4 & Full-Year 2015 Earnings Presentation Calin Dragan, CEO Michael Coombs, CFO February 15, 2016 www.ccej.co.jp (Posted to CCEJ Website February 12, 2016)
Slide 2: Forward-Looking Statements
Forward-Looking Statements Q4 & Full-Year 2015 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 for
Slide 3: Taste The Feeling: New Global Campaign
Taste The Feeling: New Global Campaign Q4 & Full-Year 2015 Calin Dragan, Chief Executive Officer Michael Coombs, Chief Financial Officer May 13, 2014 3
Slide 4: Q4 & Full-Year 2015 Earnings Presentation
Q4 & Full-Year 2015 Earnings Presentation Q4 & Full-Year 2015 Introduction • Overview and Key Messages Full-Year 2015 Results • Share, Volume and Financial Results One+ Roadmap for Growth • Key Takeaways Outlook for Full-Year 2016 • Full-Year Plan Wrap-up 4
Slide 5: Q4 & Full-Year Overview and Key Messages
Q4 & Full-Year Overview and Key Messages Q4 & Full-Year 2015 Full-year reported operating income slightly ahead of revised forecast (October 2015) Delivered positive gross profit impact of volume, price and mix in Q4 Full-year gross profit margins improved, as we deliver manufacturing and procure
Slide 6: Transformation Continued in Line with Plan
Transformation Continued in Line with Plan Q4 & Full-Year 2015 2015: Major achievements in the second full year of operations Sendai Coca-Cola Bottling Company • Acquisition completed on April 1, 2015 • Completed legal entity consolidation and inclusion in ERP system as of January 1, 2016 Consol
Slide 7: Q4 & Full-Year 2015 Results
Q4 & Full-Year 2015 Results www.ccej.co.jp
Slide 8: Full-Year Volume Performance
Full-Year Volume Performance Q4 & Full-Year 2015 Reported Volume by Quarter 2015 - Highlight by Quarter Q1 Full-Year • Cycling 2014 ahead of consumption tax increase +8.7% (+1.1%*) Q2 • Sendai acquisition on April 1 • Strong volume in April cycling C-tax increase in 2014 • Less CCEJ volume promotion
Slide 9: Share Recovery in Strong Competitive Environment
Share Recovery in Strong Competitive Environment Q4 & Full-Year 2015 2015 vs. Prior Year • Share gains in Colas, Teas and Water Market Share* Q4 Full-Year • Value share gains in Supermarket, Convenience Volume +0.2 -0.3 Store, Drug & Discounter channels Value +0.4 -0.2 • Value share ahead of volume
Slide 10: Toward More Rational Pricing
Toward More Rational Pricing Q4 & Full-Year 2015 OTC Retail Pricing Trends • Average retail price declined vs. prior year, reflecting market trends • CCEJ average retail price above market average for both large and small packages, driven by less aggressive promotional activity and selective investm
Slide 11: Performance by Channel: Improving Mix
Performance by Channel: Improving Mix Q4 & Full-Year 2015 Q4 Volume by Channel Channel Volume Growth (% of total) Including Sendai Others Supermarket 11% (SM) 20% Drug & Discounter Vending (D&D) (VM) 11% 29% Eating & Convenience Drinking Store (CVS) (E&D) 15% 14% vs. Prior Year CVS D&D Nat’l SM Loca
Slide 12: Performance by Category: Driving Value
Performance by Category: Driving Value Q4 & Full-Year 2015 Q4 Volume by Category Category Volume Growth (% of total) Including Sendai Juice Others 5% Sparkling (SSD) 12% 25% Coffee 18% Teas 23% Water Sports 11% 6% vs. Prior Year NST Water Coffee Sparkling Sports Juice Q4 2015 +18% +29% +17% +9% +9%
Slide 13: Full-Year 2015 Financial Results
Full-Year 2015 Financial Results www.ccej.co.jp
Slide 14: Drivers of Full-Year Operating Income
Drivers of Full-Year Operating Income Q4 & Full-Year 2015 In MM JPY GP Impact Supply Chain of Mix & Vol. Savings +2,732 -2,584 +2,167 -1,153 DME** -1,214 +1,480 Depreciation • 1.1% organic • Approx. 5B yen • Improvement vs. vs. PY OPEX Other volume growth • Moderating (less manufacturing past run ra
Slide 15: Full-Year 2015 Results
Full-Year 2015 Results Q4 & Full-Year 2015 • Volume and revenue growth gain traction in Q4 • Improved gross margin driven by manufacturing and procurement efficiency • SG&A increase led by marketing investment, logistics, Sendai integration, etc. • Net income increased due to lower effective tax rat
Slide 16: One+ Roadmap for Growth
One+ Roadmap for Growth www.ccej.co.jp
Slide 17: CCEJ One+ Roadmap for Growth
CCEJ One+ Roadmap for Growth Q4 & Full-Year 2015 2018- Tokyo Olympic Games & Beyond 2016-2017 Accelerating 2015-2016 Performing 2012-2014 Norming Meet & exceed Approaching world-class Forming & Storming 2012-2013 Refine & global bottler bottler levels optimize new performance Forming Define & deploy
Slide 18: 2012 to 2015 Operating Income Drivers
2012 to 2015 Operating Income Drivers Significant Integration Value Offset by Top Line Erosion Q4 & Full-Year 2015 Approx. ~20B Approx. ~20 B GP impact on mix/vol. Unit: Billion Yen OPEX SCM 2015 Synergies Other subsidiaries Headwinds & structural - Competitor pricing change 2014 - Consumption tax h
Slide 19: One+ Roadmap Progress & Update
One+ Roadmap Progress & Update Q4 & Full-Year 2015 Remain focused on the journey to World-Class • Maintain Roadmap transformational steps & timeframe 2018- Tokyo Olympic • Delayed pace of profit improvement Games & Beyond 2016-2017 Accelerating 2015-2016 Performing 2012-2014 Norming Meet & exceed Ap
Slide 20: 2015 to 2018 Operating Income
2015 to 2018 Operating Income: Continued Synergy Opportunities & Stabilized Top Line Q4 & Full-Year 2015 Others and Depreciation Subsidiaries OPEX DME* • Structural • Reflecting Supply Chain intensive • Continued • Leverage ERP change and Savings Non-Coke investment GP Impact marketing to improve Bu
Slide 21: Reflection on "Day One" Focus Areas
Reflection on “Day One” Focus Areas Q4 & Full-Year 2015 Good progress in four out of five focus areas. Revenue growth still a challenge. Growth Some progress in 2015 versus past trends Speed Unprecedented speed and scope of change Synergies Reduce costs and drive efficiency Infrastructure Create opt
Slide 22: Full-Year 2016 Outlook
Full-Year 2016 Outlook www.ccej.co.jp
Slide 23: Full-Year 2016 Plan Overview
Full-Year 2016 Plan Overview Q4 & Full-Year 2015 Operating Income 14 Billion Yen Revenue Growth +1.4% Operating Income Margin 2.5% Macro Environment • Individual consumption showing weakness • Tailwind for input costs; forex, lower energy and commodity prices, etc. NARTD Market • Flat to negative ma
Slide 24: Full-Year 2016 Outlook
Full-Year 2016 Outlook Q4 & Full-Year 2015 FY 2016 FY 2016 FY 2016 FY 2015 Vs. PY Reported Estimate One-time Comparable Comparable Diff % in million yen Items Estimate Result Sales Volume* 313,893 - 313,893 305,951 +7,942 +2.6 (BAPC) (,000 cases) Net Revenue 571,300 - 571,300 563,162 +8,138 +1.4 Gro
Slide 25: Drivers of Full-Year 2016 Operating Income Estimate
Drivers of Full-Year 2016 Operating Income Estimate Q4 & Full-Year 2015 In billion JPY -2.0 GP Impact +5.7 -1.5 of Mix & Vol. -0.9 +0.7 +0.1 OPEX DME** Depreciation • Personnel, IT Others and • Segmentation Subsidiaries Gross increase - +2.6% volume Supply Chain expenses, etc. and selective (1B) off
Slide 26: 2016 Major Initiatives by Function
2016 Major Initiatives by Function Q4 & Full-Year 2015 Commercial • Continued focus on Revenue Growth Management (RGM) through strengthened OBPPC and pricing, terms & conditions • Holistic review of cost-to-serve structure, including vending • Segmentation and selective marketing investment, product
Slide 27: Key Marketing Initiatives – First Quarter 2016
Key Marketing Initiatives – First Quarter 2016 Q4 & Full-Year 2015 Focus on Vending Sparkling Coca-Cola Global Campaign Canada Dry Schweppes • Segmented and selective “Taste The Feeling” Renewal Grape Sparkling investment and PicOS (column 280ml VM exclusive management), continue focus on expanding
Slide 28: 2016 Modeling Reminders
2016 Modeling Reminders Q4 & Full-Year 2015 Quarterly profit phasing Majority of full-year Operating Income generated in third quarter Capital Expenditure Cold drink equipment, fleet, plant & equipment, etc., including shift of some projects from 2015 to 2016 Depreciation 2016 plan reflects ch
Slide 29: Wrap-Up
Wrap-Up yo? 100 YEARS OF THE COCA-COLA BOTTLE CxLbela Cast Japan DAFT —-AhY eo NRRL www.ccej.co.jp
Slide 30: Focusing on Growth
Focusing on Growth Q4 & Full-Year 2015 Maintain Roadmap transformational steps & timeframe, focusing on growth Growth Stabilizing in 2016, more rational pricing Speed Unprecedented speed and scope of change Synergies Reduce costs and drive efficiency Infrastructure Create optimal operating structure
Slide 31: Appendix
APPENDIX \ 100 YEARS OF THE COCA-COLA BOTTLE CxLbela Cast Japan DAFT —-AhY eo NRRL www.ccej.co.jp
Slide 32: Drivers of Fourth Quarter Operating Income
Drivers of Fourth Quarter Operating Income Q4 & Full-Year 2015 In MM JPY +121 -703 +719 -605 GP Impact +256 -492 of Mix & Vol. Supply Chain OPEX Other DME** Depreciation Savings Subsidiaries • 5.1% organic • Lower marketing • In line with plan vs. PY volume growth expense due to • Increase of labor
Slide 33: Fourth Quarter 2015 Results
Fourth Quarter 2015 Results Q4 & Full-Year 2015 • Gross profit margin slightly down due to increase of labor and cycling of PY • SG&A increase led by logistics & distribution, depreciation, Sendai integration, etc. • Taxes increased due to recalculation of securities sold and change of deferred tax
Slide 34: The Coca-Cola System
The Coca-Cola System Q4 & Full-Year 2015 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 be
Slide 35: Glossary of Frequently Used Terms
Glossary of Frequently Used Terms Q4 & Full-Year 2015 CDE Abbreviation of Cold Drink Equipment. Vending machines, coolers and beverage dispensers, etc. Coolers The equipment with Coca-Cola’s logos which keeps beverages at an appropriate temperature (chilled and/or hot) for immediate consumption, and
Slide 36: Thank You
THANK YOU Coca-Cola East Japan Q4 & Full-Year 2015 Earnings Call February 15, 2016 <Inquiries> Investor Relations Coca-Cola East Japan ir@ccej.co.jp +81-3-5575-3797 http://investor.ccej.co.jp/ www.ccej.co.jp www.facebook.com/cocacolaeastjapan/