Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Coca-Cola West Company — Q3 2016 Earnings Presentation
44 slides from Coca-cola Bottlers Japan's earnings presentation, Nov 1, 2016
Slide 1: Results briefing for the 3rd quarter of Fiscal Year ending December 2016
#AKROD HELE Nve-ze Gitta West Results briefing for the 3rd quarter of Fiscal Year ending December 2016 November 1, 2016 Coca-Cola West Company, Limited (2579) [Contact]Planning Department (IR team) TEL 092-641-8774 FAX 092-632-4304 [URL] http: //www.ccewest.co.jp/ [E-mail] koji-nakagawa@ccwest.co.jp
Slide 2: Introduction to the financial results briefing
•Good morning everyone and thank you for attending our Financial Results Briefing despite your busy schedules. I’m Yoshimatsu. •Today, I would like to brief you on the highlight of financial results for the third quarter and our plans for the fourth quarter and full-year. 1
Slide 3: Looking back at the third quarter
•Now, let’s look back the third quarter. 2
Slide 4: Sales volume and market share
•First is on the sales volume. •Compared with plans, volume registered positive by 1.1% for the accumulated total from January to September. •Against prior year on the other hand, our volume closed with 10% positive. The volume was 4.8% positive from the year earlier even excluding the impact of Shi
Slide 5: Sales volume by channel
• Now, let’s take a look at the sales volume by the channel. • All channels outperformed the volume plans. • In terms of year-over-year comparison, Supermarket and Convenience stores grew volume by 7.9% and 10.7% respectively from the year earlier, driven by the sales from new launches including hig
Slide 6: Sales volume by package
• Next is on the sales volume by the package. • Key packages delivered positive volume compared with plans. • Against previous year, sales volume of highly profitable small PET outperformed the growth of large PET. • In addition, major growth of Midi PET from prior year came from increased sales con
Slide 7: Sales volume by brand
• Next is on the sales volume by the brand. • Against plans, core 8 brands delivered 1.4% positive in volume. • On the other hand, comparison with last year shows positive volume growth of 6.2% driven by the sales of 950ml PET “Georgia Café Bottle Coffee” primarily being launched in Supermarket unde
Slide 8: Revenue per case
• Next, I would like to update you on the status of Revenue per case. • Revenue from July to September grew 6.2% from prior year greater than volume growth, finishing with positive Revenue per case of 1.1%, or 19 yen more from the year earlier. • Revenue per case increased in the third quarter compa
Slide 9: Activities to raise trading wholesale price
• Next, I would like to go over activities “to raise trading wholesale price” among RGM initiatives in Supermarket, Drug store and Discounter. • RGM initiatives began to show some benefits as I explained earlier that total Revenue per case of each channel exceeded that of last year and even seen fro
Slide 10: Revenue per case initiatives for 500ml PET and MS PET
• With 500ml PET, we tried to raise Revenue per case by working on “compliance of guard rail” which is the lowest permissible wholesale price and “ensured executions of sales activities based on price guidelines”. • Almost all sales below the lowest permissible wholesale price set are now eliminated
Slide 11: Vending status
• Next, I would like to take you through our Vending status. We have been working on “Revenue growth” and “Profitability enhancement” in Vending. • We newly installed 18,100 vending machines which was more than 1,300 units we placed last year for “Revenue growth”. Volume contribution per machine fro
Slide 12: Highlights of earnings for third quarter year to date
•I now would like to go over the highlight of earnings in the third quarter year to date from slide 11. •We booked revenue at 353.71 billion yen, operating profits at 19.025 billion yen, ordinary profits at 18.32 billion yen, and current net profits at 10.627 billion yen. •Revenue increased by 24 bi
Slide 13: Performance drivers against the plan
• Now let’s move on to performance drivers, firstly against the plan. • Coca-Cola business increased revenue by 3.3 billion yen thanks to volume exceeding the plan by 1.1%, also delivering gross profit increase by 1.3 billion yen. Furthermore, operating profits were closed with positive 1 billion ye
Slide 14: Operating profit drivers compared with plan
• The chart on page 13 shows operating profit drivers compared with plans. • Coca-Cola business finished with 1 billion yen positive operating profits against the plan. • Marginal profits were up by 1.3 billion yen thanks to Chain store’s volume outperformance and Revenue per case increase. • Please
Slide 15: Comparison with prior year
•Next is the comparison with prior year. •Coca-Cola business increased revenue by 23.9 billion yen from last year along with volume growth and incorporation of Shikoku CCBC’s performances in the first half, delivering gross profit gains of 15.8 billion yen as well. •Note also that the 8.6 billion ye
Slide 16: Operating profit drivers against previous year
• The chart on page 15 shows drivers of operating profits against the previous year. • Coca-Cola business increased marginal profits by 3 billion yen from last year contributed by volume growth in Chain store. There were also 2 billion yen contribution profits with the growth of Revenue per case, sh
Slide 17: Plans for the fourth quarter and full-year
•Now, I would like to talk about plans for the fourth quarter and full-year. 16
Slide 18: Coca-Cola business sales volume plans
• I will first take you though Coca-Cola business. These are sales volume plans by the channel and the brand. • We did not change the sales volume plan of the fourth quarter from the initial forecast. As we project the market environment conservatively, we expect 1.9% negative for the fourth quarter
Slide 19: RGM initiatives in chain store
• Now, let me explain our sales strategies beginning with RGM initiatives in Chain store. • To increase Revenue per case, we will take actions around the three strategies of “ensured sales activities based on price guideline”, “compliance of guard rail” and “reinforcement of package lineup”. • For "
Slide 20: Vending strategies
• Next, I would like to describe our Vending strategies. We will continue to reinforce initiatives for “Revenue growth” and “Profitability enhancement” even in the fourth quarter. • For the first element of “Revenue growth”, we aim to deliver annual new placement of more than 20,000 units by focusin
Slide 21: Initiatives to reinforce brand competitiveness
• Now, let me discuss our initiatives to reinforce brand competitiveness. • Firstly with Coca-Cola brand, we will launch a winter campaign from November 7 to align with the winter party season and raise the competitive advantage by combining “products” and “promotions”. • As to “products“, we will i
Slide 22: Healthcare & skincare business plans
•Let me now move on to introducing the plans for Healthcare & skincare business. • In the fourth quarter, we will capture new demands for healthcare products with new launches of collaboration products between Coca-Cola and Healthcare & skincare business in addition to sales reinforcement of core pr
Slide 23: Full-year consolidated performance forecasts
• Let me now show you our full-year consolidated performance forecasts. These plans remain unchanged from the ones announced on August 12. •We project full-year consolidated revenue at 460.2 billion yen, operating profits at 20.5 billion yen, ordinary profits at 18.8 billion yen, and current net pro
Slide 24: Drivers of full-year operating profits
•Slide 23 shows drivers of full-year operating profits against prior year. •While we expect 1.9% negative sales volume in the fourth quarter for Coca-Cola Business from prior year, we project marginal profits at last year’s level through improvement of Revenue per case. •We also plan negative operat
Slide 25: Summary of takeaways
• Lastly, I would like to summarize some takeaways. • Our consolidated operating profits were booked exceeding the plan which was revised upward in August by another 800 million yen. • In addition, when compared with prior year, the operating profits were up by 2.9 billion yen in real terms even exc
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Slide 27: Q3 (July-Sep) financial results
Q3 (July-Sep) financial results —————————————e Coca-Cola Susiness Mesitncare & Stincere Business Gross prorfit Operating income Coca-Cola Susiness Henncare & Shincare Business Current net income {attrinutable to shareholders) * Phar reteento yaluns bane on parterrrarce foranmits aeroerced on Avg 1,
Slide 28: Trend of OTC market share (excl. VM)
Trend of OTC market share (excl. VM) 100% (Unit: %, pts) 2 Biss) ; -09 2015 Q3 Q4 Q1 * Values outside the graph show year-over-year differences, + Along with changes in data aggregation targets by the research company, G3 2015 Actual was retroactively revised (Source: intage} 27
Slide 29: Q3 YTD financial results — Mix by brand/by channel
Q3 YTD (Jan-Sep) financial results — Mix by brand/by channel “Wong with changes in the scope of data aggregation for actual spies performances, 2015 Actus! wes retroactively revised. 28
Slide 30: Q3 — Mix by brand/by channel
Q3 (July-Sep) — Mix by brand/by channel Vtonas ¥ [ a Coca-Cola Zero “Wong with changes in the scope of data aggregation for actual spies performances, 2015 Actus! wes retroactively revised. 29
Slide 31: Sales update on vending machines by channel
Sales update on vending machines by channel (CCW Aven) a7] 18 oa 25 +13] a1] -24) 23 “Salem Youre per vending machine 30 30
Slide 32: Q3 YTD — Sales Volume by channel/package
Q3 YTD (Jan-Sep) — Sales Volume by channel/package Confinc!.botecany Other Michain store Ys. Plan® vs. PY on | *% om | ® ‘SS PET (smatior than 850m) "133 5) 1999 73 Midi PET (tess than 1-S00mt ) +328) +174 raat ne +45 COW tota! Cenc. Shikolw CCRC) [LS PET (1.500m or larger) ~ Gan (inet bottle CAN) C
Slide 33: Q3 — Sales Volume by channel
Q3 (July-Sep) — Sales Volume by channel Vs. Plan Vs. PY funit: K cfs, %) biff Diff % Diff Diff % Super market/Drug/Discounter +898 =m) +1913) +87) Convenience store +155 +19 +734) +9.9) Chain store total +1,052 a4 +2,647 +9.0) Vending +82 40.4 +373) 42.0) Retail +97) +2.9) +72 +21 Food service +118)
Slide 34: Q3 — Sales Volume by brand
Q3 (July-Sep) — Sales Volume by brand ee ——— Vs. Plan Vs. py”? toni fy, Diff Diff % Diff Diff % ___ +118} 425] 4388} 488 ass) ka] +53 ya +100) +41 105 09 +497) +45 +130) 3.9 +199) +61 +955 +115) +984, +119 +405 74 +478, 48.4) 216 “Al +729) 17.0 +1,498) 84 +3,524| +85 368) 33 200) 18 41,130) 24 +3324
Slide 35: Q3 — Sales Volume by package
Q3 (July-Sep) — Sales Volume by package ET Vs. Plan Vs. PY funat: K c/s, %) Diff Diff % Diff Diff % Smat!l (less than 850ml) +278 +14 +2075 +11.3) Medium (less than 1,500ml) +343 +425) = 4125.1 PET | Large (less than 1,500ml) +353 +23 +582) +3.3| Total +974 +27] +3,297| 49.6) Can (inel. bottle can)
Slide 36: Q3 — Sales Volume by channel and package
Q3 (July-Sep) — Sales Volume by channel and package | a Vs. Plan Vs. PY pit | itt % Diff Diff % SSPET (smaller than 850m) Sty) a3 32 5. Midi PET (Jess than 1,500mi } +28 432 1622 +1338 US PET (1.50004 or larger) 43 +28 618 “43 Can (incl. bottle CAN} “8 +12 376 +86 Other #120) 4247) +39 4194 Cow tota
Slide 37: Q4 — Sales Volume Plan by package
Q4 (Oct-Dec) — Sales Volume Plan by package Vs. PY {unit: K c/s, %) Diff Diff % Small (less than 850ml) “4 0.0 Medium (less than 1,500m!) +142 443.2 PET | Large (less than 1,500m!) -400 4.0 Total -263 ‘11 Can (ind. bottle can) -483 3.6 Other +147 +4.6 Syrup & powder -420 41 CCW total (excl.Shikoku C
Slide 38: Q4 — Sales Volume Plan by channel and package
Bchain store SS PET (smaller than 850ml) ‘Midi PET (less than 1,500mt) LS PET (1.500! or Can (incl. bottle CAN) Other COW total Cexct. Shikoku CCRC) Q4 (Oct-Dec) — Sales Volume Plan by channel and package Can {incl bottle CAN) Other Syrup/Powder COW total Cercl. Shikoku CCRC) Bitetall & Food service
Slide 39: Performance Trend
Performance Trend tunic Mure) twos | 2000 | 2001 | 2002 | 2003 | aana | 2008 | aoce | seer | anos | one | sore | 2orr | anre | aoea | sone | are | *EkF [Revenue | 164755] sorasz| som 191] 247727] vannas] swasaa| oane7e| a97.A9%] a0msa:] sasnen| oesme a7K 704] 200717) seems7| 431711] a2eace aanare] a
Slide 40: Managerial KPI trend
Managerial KPI trend -_— [Operating profits/Operating profit ratia> <Net asset/capital ratio> (MM Jer) twa very 9 Ope meng wrote ay, as bad 15,000 a 10,000 bd 4 5,000 2 ° ° 2011 2012 2013 2014 215 2011 2012 2013 2014 2015 <ROA/ROE> <EPS/PER> (ers (%) ‘i 2a 202 202 20 2088 EPS™ Currest net profits di
Slide 41: Coca-Cola System in Japan — Capital Relationship
Coca-Cola System in Japan — Capital Relationship | with figures | } in total by CCW+ Shikoku | {As of Jan 1, 2016} Joint companies of Teccyceg and bottlers Coca-Cola " . A integrated a Coce+.G usiness Systems Weise Oe; The ocaCola onmpany [TCC Co., Utd. {CCIBS} . 6.1%) Coca-Cola Business 2 Coca-Cola
Slide 42: Coca-Cola affiliated companies and their roles
Coca-Cola affiliated companies and their roles 1. Coca-Cola Wert Co,, Ltd. (CCW) Coca-Cola West Japan (CCW3) was established in 1999 by merging Kitakyushu CCBC and Sanyo CCBC. CCW! acquired ownership of Mikasa CCBC in 2001. In 2006, CCW and Kinki CCBC merged the management of both companies, and in
Slide 43: Glossary
Glossary ———ooooooeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee *Coce-Cola business (soft drink business) |Business to manufacture and sell soft drink beverages including Cocs-Cole sHealthcare & skincare business. Business to manutacture and sell health food and cosmetics and thee 5 subsidiaries “Vending Busin
Slide 44: Forward-looking statement
Forward-looking statement The plans, performance forecasts, and strategies appearing in this material are based on the judgment of the management Please note that these forecasts may differ materially from actual performance due to risks and uncertain factors such as those listed below, - Intensific
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