Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Q1 2020 Earnings Presentation
34 slides from Coca-cola Bottlers Japan's earnings presentation, May 14, 2020
Slide 1: First quarter 2020 Earnings Presentation
First quarter 2020 Earnings Presentation May 14, 2020 Coca-Cola Bottlers Japan Holdings Inc. Calin Dragan, President Bjorn Ulgenes, Vice President & Chief Financial Officer (Posted to CCBJH website on May 13, 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: Q1 2020 earnings presentation agenda
Coca-Cola Bottlers Japan Holdings Inc. (CCBJH) First quarter (Q1) 2020 earnings presentation Overview and situational analysis Q1 2020 results and year-to-go outlook Looking forward to post COVID-19 Q&A 3
Slide 4: Overview and situational analysis
Overview and situational analysis
Slide 5: Together! Coca-Cola Bottlers Japan
Together! Coca-Cola Bottlers Japan CCBJI salutes everyone working to keep us safe and prevent the spread of COVID-19 Employees working every day to ensure stable supply of essential goods and services Donating beverages to frontline medical workers and to food banks Rigorous safety and hygiene proto
Slide 6: Overview
Overview Solid start to year pre coronavirus. January, February on plan – Transformation work delivering, progress in vending, Lemon-dou alcohol brand continues strong Overall Q1 results hit in March by COVID-19, with peak impact expected in Q2. Withdrawing full-year 2020 forecast due to current unc
Slide 7: Macro and industry impact from COVID-19. What is "new normal"?
Macro and industry impact from COVID-19. What is “new normal”? Consumer Confidence Index NARTD industry volume YoY Global Great East C-tax hike COVID-19 Jan Feb Mar Apr C-tax hike financial Japan (5% to 8%) (8% to 10%) 2% crisis Earthquake -3% -4% -16% April Consumer Confidence Index showed worst-ev
Slide 8: Initial assessment of COVID-19
Initial assessment of COVID-19 Tackling current impact; deeper transformation to prepare for the future Consumers & Customers People Business Strong decline in NARTD market since Workstyle reforms since 2019 helping Protecting our business while March with rapid shift of consumer to protect our peop
Slide 9: Market environment requires agile and flexible response
Market environment requires agile and flexible response Current industry situation CCBJI focus Supermarket, Volume growth. Shift in basket composition & size impacts product mix. Stable traffic, reduced weekly • Assess strategic priorities Drug & Discounter visits. Some industry discounting observed
Slide 10: Deeper and faster efforts required to navigate critical year
Deeper and faster efforts required to navigate critical year Solid start pre-coronavirus, current strategy working, but more is needed Situational analysis Must focus on what’s in our control • Crisis hit at beginning of strategic • Major programs underway transformation year. and delivering results
Slide 11: Q1 2020 results and year-to-go outlook
Q1 2020 results and year-to-go outlook
Slide 12: Q1 2020 results vs. 2019
Q1 2020 results vs. 2019 Beverage Business Income decline led by volume and mix pressure in March, higher fixed costs. Operating income progressed versus prior year, cycling one-time expenses. Q1 2020 Q1 2019 YoY Revenue 198,715 198,733 0.0% Beverage Business Sales Volume (Million Cases) 108 110 -2%
Slide 13: Q1 2020 Drivers of Business Income
Q1 2020 Drivers of Business Income January to February in line with plan; Initial volume, mix pressure in March due to COVID-19 Q1 2019 Volume, DME Commodity Manufacturing Others Healthcare & Q1 2020 Business Price & Mix* (Direct Marketing Skincare Business Income Expense, fixed only) Business Incom
Slide 14: First-quarter beverage volume performance (excluding alcohol)
First-quarter beverage volume performance (excluding alcohol) Q1 volume decline due to March drop in retail, food and vending channels Jan-Feb in-line with plan Volume Jan Feb Mar Q1 Apr Sharp March volume decline in retail, Over YoY -2% +2% -10% -4% -20% food, vending, as people refrained to go out
Slide 15: Q1 2020 NARTD channel & category volume performance
Q1 2020 NARTD channel & category volume performance 4% volume decline led by retail & food and vending impact from COVID-19. Wholesale revenue per case growth maintained since April 2019 wholesale price increase. By channel By category Wholesale Vs. PY Volume 1% Vs. PY Volume revenue per case 10% Sp
Slide 16: NARTD market share
NARTD market share Maintaining positive value share momentum in Q1 as overall market contracts OTC Market Share Q1 value share growth ahead of volume; Market Share (vs. PY, PP) Value Volume Exercising restraint in discounts, deductions Q1 +0.2 -0.7 from revenue. Momentum continued in April Value sha
Slide 17: Year-to-go outlook
Year-to-go outlook • Full-year 2020 forecast withdrawn • Expecting strong impact in Q2 and higher uncertainty for rest of the year • Evaluating impact for both 2020 plan & strategic business plan toward 2024 Current situation What we are doing now • Significant contraction of beverage sales • Accele
Slide 18: Protecting our business while continuing to transform
Protecting our business while continuing to transform Fast, agile reaction; Enabled by ongoing capability & transformation work 1 Countermeasures – High speed tactical response Quickly deployed multiple programs to enhance activation at point of sale Vending OTC Direct Sales to Workplaces Expansion
Slide 19: Protecting our business while continuing to transform
Protecting our business while continuing to transform Accelerating transformation initiatives to leverage good initial progress 2 Business Model – Accelerating Transformation From Pilot to National in record time Vending OTC Kinki area vending model Sales Force Transformation Expanding to all region
Slide 20: Priority on good stewardship of capital
Priority on good stewardship of capital Maintaining solid financial position, liquidity, access to cash Fundamentals in place Additional initiatives Maintain strong financial position Redirecting capital allocation priorities • 52.6% equity ratio March 2020 • Evaluating cash priorities; Capex plan u
Slide 21: Update from The Coca-Cola (Japan) Company
Update from The Coca-Cola (Japan) Company Our system response to the COVID-19 situation Flexibility in marketing plans for 2020 Portfolio communication 21
Slide 22: Its times like these when Coca-Cola can do something
Its times like these when Coca-Cola can do something Donation to Healthcare Workers ＃Refresh yourself at home Program Social Distancing Product Donation “Staying apart is the best way to stay united” Alcohol Sanitizers 22
Slide 23: Flexibility in Marketing Plans
Flexibility in Marketing Plans Focus on At Home occasions Strengthening eCommerce Big Bet New Products Build Portfolio Strengthen Subscription and Loyalty Program 23
Slide 24: Coca-Cola Portfolio Communication
Coca-Cola Portfolio Communication “Hope will bring us together” 24
Slide 25: Looking forward to post COVID-19
Looking forward to post COVID-19
Slide 26: Peak impact expected in Q2, with uncertainty toward recovery
Peak impact expected in Q2, with uncertainty toward recovery Preparing for gradual exit while focusing on immediate actions Emergency Gradual Post Pre-Crisis declaration easing COVID-19 Solid start High impact period Gradual exit from COVID-19 crisis • Progress in key • Steep declines in • Exit timi
Slide 27: Wrap up
Wrap up Good start to year through February Protecting our business while accelerating transformation; Heavy pressure in Q2, uncertainty in rest of year Reviewing 2020 plan. Expect to emerge from COVID-19 stronger and more agile Update 2020 earnings & dividend outlook during third quarter “Business
Slide 28: We are all in this together
We are all in this together Delivering happy moments to everyone, while creating value 28
Slide 29: Bottlers Japan Holdings Inc.
BOTTLERS JAPAN HOLDINGS INC.
Slide 30: Appendix
Appendix BOTTLERS JAPAN HOLDINGS INC.
Slide 31: Q1 2020 NARTD package volume performance & retail price trend
Q1 2020 NARTD package volume performance & retail price trend By package vs PY Volume NARTD OTC Retail Price 3% S-PET +3% OTC Retail Price Vs. Market 7% Vs. PY L-PET -7% (Jan. to Mar. 2020, JPY per bottle) Average 12% Can -11% 39% Small PET +3.4 -1.2 6% Bottle Can -3% Large PET (2L PET) +24.1 +6.0 1
Slide 32: 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 33: 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 34: 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 — Q1 2020 Earnings Presentation on 6ix