Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Coca-Cola East Japan — Q1 2014 Earnings Presentation
22 slides from Coca-cola Bottlers Japan's earnings presentation, May 13, 2014
Slide 1: Q1 2014 Earnings Conference Call
Q1 2014 Earnings Conference Call Calin Dragan, Chief Executive Officer Michael Coombs, Chief Financial Officer May 13, 2014
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 East Japan Co. Ltd. (CCEJ) in view of data obtained as of the date this material was released. These forecasts may differ ma
Slide 3: 128th Anniversary of Coca-Cola
May 8, 2014 128th Anniversary of Coca-Cola Calin Dragan, Chief Executive Officer Michael Coombs, Chief Financial Officer May 13, 2014 3
Slide 4: Q1 2014 Earnings Conference Call: Supporting Presentation
Q1 2014 Earnings Conference Call Supporting Presentation Introduction • Key Messages • Our Roadmap for Sustainable Growth On-Track in First Quarter 2014 • Rapidly and Actively Integrating • Q1 2014 Results Upward Revision to 2014 Plan • Revised 2014 Full-Year Plan • Details on Change to Accounting P
Slide 5: Key Messages
Coca-Cola East Japan Key Messages Volume growth of 3%, sequential improvement in most channels Q1 revenue includes -1% impact of divesting non-core assets like Mikuni Wine. Excluding this impact, Q1 revenue would be positive Operating income in line with full-year plan, but overshadowed in Q1
Slide 6: One+ Roadmap for Growth
One+ Roadmap for Growth 2014: A Year of Transition 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 levels op
Slide 7: On Track in 2014
ON TRACK IN 2014
Slide 8: Rapidly and Actively Integrating
Rapidly and Actively Integrating As Committed Last Quarter Two new production lines in Hakushu and Iwatsuki up and running. Call center consolidation from six to two centers (Nagoya, Okegawa) New performance management & incentive program in place Second Voluntary Separation Plan (VSP) compl
Slide 9: Q1: Continuing Signs of Progress
Q1: Continuing Signs of Progress Positive volume and share trends Q1 Market Share* Q1 2014 Actual vs. Prior Year vs. Prior Year Sales (NARTD Beverages) Volume 60,431 (BAPC) +3.4% Volume +0.4 82,681 (UC) +3.3% Value +0.2 Volume Share vs. Prior Year Value Share vs. Prior Year Q1 2014 Q1 2014 +0.4 +0.2
Slide 10: Q1: Improving Trends Across Channels
Q1: Improving Trends Across Channels Vending Volume Even, Challenges Remain in CVS Q1 2014 Volume By Channel Channel Volume Growth (% of total volume) Other Supermarket Q1 Vending and 12% 21% Drug & Eating & Drinking hurt Vending Discount by snows in February 31% 9% Eating & CVS Drinking 12% 15% vs.
Slide 11: Q1: Improving Trends Across Categories
Q1: Improving Trends Across Categories Balanced Volume Growth, CVS Impacting Coffee Q1 2014 Volume by Category Category Volume Growth (% of total volume) Other Juice 6% Sparkling Q1 Coffee +3% 12% 27% Coffee in vending 18% Tea Water 22% Sports 9% 7% Total BAPC* Pro-Forma vs. prior year SSD NST Sport
Slide 12: Q1 2014 Results
Q1 2014 Results Foundation for full-year growth • Revenue mix reflects volume growth, tax increase, heavy snows, competitive pricing and mix pressure • Consolidated revenue includes -1% impact of divesting non-core businesses (Mikuni Wine) • Q1 operating Income includes -3.4 billion yen net impact d
Slide 13: Drivers of Q1 Operating Income
Drivers of Q1 Operating Income Underlying performance on-track with full-year plan In million JPY -759 -1,433 -4,825 -2,192 -1,057 Impact of accounting +465 -433 change: -325 Q1 negative -5,584 GP impact SCM OPEX of vol & mix synergies • New CCEJ -83 FY positive Marketing • Positive Uniforms (DME) v
Slide 14: Upward Revision to 2014 Plan
UPWARD REVISION TO 2014 PLAN
Slide 15: Upward Revision to 2014 Plan
Upward Revision to 2014 Plan • Upward revision driven by accounting policy changes. No change to underlying plan. • Supply chain synergies to increase sequentially with introduction of five new production lines • New full-year comparable operating margin target of 3.5% 2014 FY 2014 FY 2014 FY 2013 F
Slide 16: Upward Revision to 2014 Plan: Driven by Change in Accounting Policy
Upward Revision to 2014 Plan Driven by Change in Accounting Policy +8,760 In million JPY +1,122 -862 DME +4,000 Other -1,297 OPEX -218 Depreciation Non-Core Net Benefit Business of Accounting +5,915 Change 19,000 2014 plan shared 2/12/2014 15,000 (no change in +100 underlying plan) Volume SCM 10,240
Slide 17: Changes to Accounting Policy & Estimates
Changes to Accounting Policy & Estimates Aligning with global bottler peers As part of our investment and operational strategies to ensure assets are productive over their entire lives and to maximize usage periods, we revised accounting policies to: • Align depreciation method for all asset classes
Slide 18: 2014 Capital Expenditure Plans
2014 Capital Expenditure Plans Investing for Growth Approx. ¥60 Billion in total CAPEX for 2014; ¥26 Billion in total depreciation • Reflects impact of accounting policy change • Includes five new production lines and two in-line PET bottle blowers in 2014 • Reflects continuing investment in cold dr
Slide 19: Expanding New RTM across our Territory
Expanding New RTM across our Territory Improve customer service & operational efficiency Route-to-Market (RTM) • Expansion from model pilot program to all territories now underway • Tochigi, Ibaraki, Chiba to be complete by end of Q2 • 120 sales centers will be covered by July 2015 19
Slide 20: Strong Marketing & Innovation Plans
Strong Marketing & Innovation Plans Leveraging our portfolio of brands Q1 Winter Coca-Cola Zero Limit Q2 FIFA World Cup 4/10 – 4/13 Trophy Tour in Japan Q1 “Weekly Georgia” & New Georgia Campaign Q2 Georgia European Restage Luana Renewal 4/7 Launch 5/19 Renewal Jointly developed with Sarutahiko spec
Slide 21: Q2 2014 Milestones
Q2 2014 Milestones Two new production lines in Ebina and Tokai commissioned in May Integration of Logistics and Equipment subsidiary companies in Coca-Cola East Japan Products (CCEJP) New Route-to-Market deployed in Tochigi, Ibaraki and Chiba areas Continued roll-out of new pricing and packa
Slide 22: Thank You
Thank You Q1 2014 Earnings Conference Call May 13, 2014