Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Coca-Cola East Japan — Q3 2013 Earnings Presentation
55 slides from Coca-cola Bottlers Japan's earnings presentation, Nov 14, 2013
Slide 1: one+ Coca-Cola East Japan
Slide 2: Forward-Looking Statements
Forward-Looking Statements The plans, performance forecasts, and strategies appearing in this material are based on the judgment of the management in view of data obtained as of the date this material was released. Please note that these forecasts may differ materially from actual performance due to
Slide 3: Opening Video
Opening Video
Slide 4: A World-Class Japanese Bottler
@ A WORLD-CLASS JAPANESE BOTTLER CALIN DRAGAN CHIEF EXECUTIVE OFFICER MICHAEL COOMBS CHIEF FINANCIAL OFFICER November 14, 2013 | TOKYO JAPAN
Slide 5: A World-Class Japanese Bottler
A World-Class Japanese Bottler Introducing Coca-Cola East Japan • Moving with Unprecedented Speed • Our Roadmap for Sustainable Growth Coke Break Strategic Direction • Solid Plans for Growth • Strong Savings Opportunities • Investing in Infrastructure & Capabilities Q&A
Slide 6: Introducing Coca-Cola East Japan
ey ee Lene oA seu A y INTRODUCING COCA-COLA EAST JAPAN
Slide 7: Established July 1, 2013
Established July 1, 2013 Publicly listed on the Tokyo and Nagoya Stock Exchanges 2580-TO Mikuni Integration of four bottlers (comprising 26 legal entities) Tone • Coca-Cola Central Japan (publicly traded) Tokyo • Mikuni Coca-Cola Bottling (publicly traded) Central • Tokyo Coca-Cola Bottling (private
Slide 8: We Have Significant Reach: 800+ SKUs
We Have Significant Reach 800+ SKUs
Slide 9: We Are The Largest Coca-Cola Bottler in Japan
We Are The Largest Coca-Cola Bottler in Japan * 2012 pro-forma results
Slide 10: We Sell the Most Popular Beverage Brands in Japan
We Sell the Most Popular Beverage Brands in Japan
Slide 11: We Are a Partner in the Coca-Cola Franchise System
We Are a Partner in the Coca-Cola Franchise System What is The Coca-Cola System? • An enduring & effective partnership • Meeting the needs of both consumers & customers to win in the marketplace + Innovation Global Perspective Customer Optimal Focus Cost Brands Route-to- Superior Supply Consumer Wor
Slide 12: The Japan Coca-Cola System Continues to Evolve
The Japan Coca-Cola System Continues to Evolve 1957-99 17 bottlers 2001 14 bottlers 2006 12 bottlers 2013 8 bottlers Tokyo Tokyo Tokyo Tone Tone CCEJ Tone 2013 Mikuni Mikuni Mikuni Fuji CCCJ CCCJ 2001 Chukyo Sendai Sendai Sendai Sendai Michinoku Michinoku Michinoku Michinoku Hokuriku 1999 Hokuriku H
Slide 13: We Are Evolving to Win in the Marketplace
We Are Evolving to Win in the Marketplace Our Roadmap for Sustainable Growth 2017- Tokyo Olympic Games & Beyond 2015-2017 Accelerating 2014-2015 Performing 2013-2014 Norming Meet & exceed Approaching world-class 2012-2013 Storming Refine & global bottler bottler levels optimize new performance Formi
Slide 14: We Are Still Very Early in Our Roadmap
We Are Still Very Early in Our Roadmap 2017- Tokyo Olympic Games & Beyond 2015-2017 Accelerating 2014-2015 Performing 2013-2014 Norming Meet & exceed Approaching world-class 2012-2013 Storming Refine & global bottler bottler levels optimize new performance Forming Define & deploy levels new bus. mod
Slide 15: Not Simply a Merger of Four Bottlers
Not Simply a Merger of Four Bottlers • Integration taking place in a highly competitive environment • From 26 entities to an optimized structure Moving from complex to simple Number of 26 legal entities at Day One Future state CCEJ CCEJ CCCJ Mikuni Tokyo Tone CCEJP Optimized Structure 4 subs 6 subs
Slide 16: We Are Moving with Unprecedented Speed
We Are Moving with Unprecedented Speed Five non-executive BOD July 1, 2013 Full 2,000+ Employees members in place functional integration relocating now Balanced governance Functional structures in Office decentralization and structure established place from Day One relocation of HQ Legal Entit
Slide 17: And Investing Now for Future Growth
And Investing Now for Future Growth ¥30 Billion Five Production lines Investing Now in People CAPEX in 2013 already on order Global Coke training program Aggressively investing for for top 120 leaders Modernizing production growth Marketplace execution pilot capacity program started in Chiba
Slide 18: Our Diverse & Experienced Leadership Team
Our Diverse & Experienced Leadership Team Tapping into subject matter experts from across the global Coca-Cola system
Slide 19: Forming: Our Performance Year-to-Date
Forming: Our Performance Year-to-Date Year-to-date 2013 normalized results on a pro-forma basis, excluding one-time integration-related costs JPY MM 2013 Q3 YTD 2013 Q3 YTD 2013 Q3 YTD 2013 Q3 YTD Actual (Reported) Pro-Forma One-time item Normalized Sales Volume 132,405 217,163 217,163 (BAPC) (,000
Slide 20: Forming: Non-Recurring Items in 2013 YTD Results
Forming: Non-Recurring Items in 2013 YTD Results Non-Recurring Items（2013 YTD) 2013 YTD 2013 YTD P/L Line Items (CCEJ) P/L Line Items (CCEJ) In million yen In million yen Purchase Accounting Extraordinary One-time gain from COGS Valuation Impact 1,135 Profit negative goodwill -12,969 Extraordinary O
Slide 21: Forming: Price/Mix Pressure Continues
Forming: Price/Mix Pressure Continues Commercial Sales Revenue Reconciliation – YTD 2013 Total Volume (BAPC) 0% Pricing -1% Mix 0% • Maintained volumes at even during a period of active and rapid integration • Competitive pricing pressure continues to impact revenue • Strong plans in place to grow s
Slide 22: Forming: Some Encouraging Signs of Progress
Forming: Some Encouraging Signs of Progress YTD Volume by Category YTD Volume By Channel (% of total volume) (% of total volume) 0% Juice 6% Sparkling Other Other SM 26% 12% 11% 22% Drug & Coffee Vending Discount 15% Tea 31% Eating & 10% Sports Water CVS 20% Drinking 12% 9% 12% 14% Category Volume G
Slide 23: Forming: CCEJ Full-Year 2013 Estimate Highlights
Forming: CCEJ Full-Year 2013 Estimate Highlights • Growing volume for the full year in a competitive environment • Competitive pricing pressure impacting net sales revenue • Delivering cost of goods (COGS) synergies to benefit gross profit 2013 FY 2013 FY 2013 FY 2012 FY Vs. PY Pro-Forma Estimate On
Slide 24: In Review
In Review • Unprecedented speed and scope of change – Starting point of 26 legal entities – 250+ integration projects in process – Many visible signs of progress across our business • Roadmap for Sustainable Growth in place – Q3 2013 still early in our roadmap
Slide 25: Coke Break
Slide 26: Our One+ Roadmap to Sustainable Growth
OUR One ROADMAP TO SUSTAINABLE CROWTH
Slide 27: Our Roadmap for Sustainable Growth
Our Roadmap for Sustainable Growth A Clear Path for Growth 2017- Tokyo Olympic Games & Beyond 2015-2017 Accelerating 2014-2015 Performing 2013-2014 Norming Meet & exceed Approaching world-class 2012-2013 Storming Refine & global bottler bottler levels optimize new performance Forming Define & deploy
Slide 28: World-Class Performance Aspirations
World-Class Performance Aspirations • Market share #1 NARTD* Market share in our territory Performance Long-Term: By 2017 • Volume growth Greater than Industry performance • NSR growth Ahead of volume growth mid- to long-term • OI margin** +4 pts by 2017 Operational Employee Customer Capabilities En
Slide 29: 2020 Tokyo Olympic Games: The Hometown Coke Bottler
2020 Tokyo Olympic Games: The “Hometown Coke Bottler”
Slide 30: Positioning for the Future
Positioning for the Future Growth Speed Synergies Realign against Unprecedented Reduce costs current strength speed and scope and drive and future of change efficiency Growth Infrastructure People Create optimal Build a world- operating class, modernized structure workforce
Slide 31: Positioning for the Future
Positioning for the Future Growth Speed Synergies Realign against Unprecedented Reduce costs current strength speed and scope and drive and future of change efficiency Growth Infrastructure People Create optimal Build a world- operating class, modernized structure workforce
Slide 32: Commercial Roadmap: Solid Growth Pillars
Commercial Roadmap: Solid Growth Pillars • Laser focus on market share • Appropriate balance between volume and value Growth Channel Realign against NSR • Reignite growth & build vending as a competitive advantage current strength • Win in key accounts and future Growth Geography/Occasion • Activate
Slide 33: Commercial Roadmap: Channel
Commercial Roadmap: Solid Growth Pillars Channel NSR Growth Build Vending as a Competitive Advantage Realign against • Improve Indoor share (from 29% to 34%) current strength • Consumer-based price/pack lineup and future • World-class energy-saving equipment (¥14Bn in 2014) Growth • Standardized ope
Slide 34: Commercial Roadmap: Geography/Occasion
Commercial Roadmap: Solid Growth Pillars Geography/Occasion NSR Growth Availability and Activation Realign against current strength • Investing in the Tokyo metropolitan area and future Growth • Increase time-in-market: 30% 50% • Realign structure from Support to Field: +300 “feet on the street” s
Slide 35: Commercial Roadmap: Category
Commercial Roadmap: Solid Growth Pillars Category NSR Growth Focus on Five Key Beverage Categories Realign against • Sparkling: Recruitment & retention led by Coke TM current strength and future • Coffee: Innovate across the portfolio Growth • Tea: Accelerate momentum and win across segments • Sport
Slide 36: Positioning for the Future
Positioning for the Future Growth Speed Synergies Realign against Unprecedented Reduce costs current strength speed and scope and drive and future of change efficiency Growth Infrastructure People Create optimal Build a world- operating class, modernized structure workforce
Slide 37: Supply Chain Roadmap: Significant Synergies
Supply Chain Roadmap: Significant Synergies Synergies Reduce costs and drive • Strategic infrastructure planning efficiency • Packaging optimization • Manufacturing efficiency • Logistics; Demand, Operations & Inventory Planning
Slide 38: Supply Chain Roadmap: Significant Synergies
Supply Chain Roadmap: Significant Synergies Strategic infrastructure planning • Reduce high cost 3rd party packers • Consolidate sales warehouses Packaging optimization • In-house PET blow molds in 2014 Synergies • Light-weighting & standardization Reduce costs and drive Manufacturing efficiency eff
Slide 39: Supply Chain Roadmap: Procurement Savings
Supply Chain Roadmap: Procurement Savings Maximizing cost efficiency with a centralized Procurement function and KO-standard ERP system: Incremental procurement savings in 2017 vs. 2012 Synergies Reduce costs and drive efficiency Indirect spend Direct spend Managed • repair & maintenance with CCBSC
Slide 40: Positioning for the Future
Positioning for the Future Growth Speed Synergies Realign against Unprecedented Reduce costs current strength speed and scope and drive and future of change efficiency Growth Infrastructure People Create optimal Build a world- operating Class, modernized structure workforce
Slide 41: Supply Chain Roadmap: Investing for Growth
Supply Chain Roadmap: Investing for Growth From 2012 base Infrastructure Create optimal • Installation of new production lines operating structure ~10 new lines by 2017 • Plant warehouse expansion • PET bottle in-line blowing capacity • World-Class ERP system
Slide 42: Supply Chain Roadmap: Investing for Growth
Supply Chain Roadmap: Investing for Growth Five new production lines in 2014 • Improve manufacturing capacity • Increase flexibility and efficiency • Ensure stable supply Iwatsuki Plant Saitama New Line x 1 Plant Infrastructure Hakusyu Plant Ibaraki Create optimal New Line x 1 Plant operating struct
Slide 43: Positioning for the Future
Positioning for the Future Growth Speed Synergies Realign against Unprecedented Reduce costs current strength speed and scope and drive and future of change efficiency Growth Infrastructure People Create optimal Build a world- operating class, modernized structure workforce
Slide 44: People Roadmap: Capturing People Synergies
People Roadmap: Capturing People Synergies Strategic Workforce Alignment People Holistic review of all options for optimizing structures Build a world- class, modernized Appropriate Balance of workforce Permanent & Non-Permanent Employees Redeploy resources to where they matter Significant Overtime
Slide 45: People Roadmap: Capabilities to be Fit to Fight
People Roadmap: Capabilities to be “Fit to Fight” Capability-based leadership selection • Based on functional capability and leadership competency instead of seniority, resulting in new leadership teams World-class leadership development People for top 120 leaders Build a world- class, modernized •
Slide 46: People Roadmap: Capabilities to be Fit to Fight
People Roadmap: Capabilities to be “Fit to Fight” Core skill development • For improving core professional skills such as self-leadership, communication & presentation and English language. To be launched 2014. Technical skill development to drive People Build a world- functional professionalism cla
Slide 47: Our One+ Financial Overview
Slide 48: Our Roadmap for Sustainable Growth
Our Roadmap for Sustainable Growth A Clear Path for Growth 2017- Tokyo Olympic Games & Beyond 2015-2017 Accelerating 2014-2015 Performing 2013-2014 Norming Meet & exceed Approaching world-class 2012-2013 Storming Refine & global bottler bottler levels optimize new performance Forming Define & deploy
Slide 49: Our Roadmap for Growth in Numbers
Our Roadmap for Growth– in Numbers 2017- 2020 Tokyo Olympic Games & Beyond 2012 Pro-forma base
Slide 50: Our Roadmap for Sustainable Growth
Our Roadmap for Sustainable Growth A Clear Path for Growth OI Margin OI Margin +1-2 pts 2017- Tokyo Olympic Games & Beyond +1-2 pts OI Margin 2015-2017 Accelerating +1 pt 2014-2015 Performing 2013-2014 Norming Meet & exceed Approaching world-class 2012-2013 Storming Refine & global bottler bottler l
Slide 51: Commodities and Foreign Exchange
Commodities and Foreign Exchange Procurement scale advantage • Leverage Japan Coca-Cola system scale through Coca-Cola Business Services Company • Benefit from global Coca-Cola system scale and know-how through Cross-Enterprise Procurement Group Commodities Exchange rate impact on total material cos
Slide 52: Providing Solid Returns to Shareowners
Providing Solid Returns to Shareowners Dividend Growing Dividends per Share • Increase annual dividend per share from 2013 ¥30/share in 2012* to ¥32/share in 2013 To ¥32 per share • CCEJ integration a unique opportunity to create value • Investing substantially for growth (¥40-50 bn CAPEX by 2017) +
Slide 53: 2014 Integration Milestones
2014 Integration Milestones Next Wave of Additional New Performance & Subsidiary Consolidation Workforce Plans Incentive Management Further Commercial Commissioning of Closure of Redundant Structure Alignment New Production Lines Infrastructure
Slide 54: Reasons to Believe
Reasons to Believe Growth Speed Synergies Realign against Unprecedented Reduce costs current strength speed and scope and drive and future of change efficiency Growth Infrastructure People Create optimal Build a world- operating class, modernized structure workforce
Slide 55: Q&A