Coca-cola Company (the) · NYSE:KO
Coca-cola Company (the) — The Coca-Cola Company — Morgan Stanley Global Consumer Conference 2015
23 slides from Coca-cola Company (the)'s conference presentation, Nov 17, 2015
Slide 1: Morgan Stanley Global Consumer Conference
Kathy Waller Chief Financial Officer Sandy Douglas President, Coca-Cola North America Morgan Stanley Global Consumer Conference November 17, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expres
Slide 3: Agenda
Agenda Year to date performance review – Kathy Waller North America review – Sandy Douglas 3
Slide 4: We Are Achieving Our Goals During Our Transition Year
We Are Achieving Our Goals During Our Transition Year 5 Strategic Actions On Track? Target disciplined brand and growth investments Drive revenue and profit growth with clear portfolio roles across our markets Revenue, Profit Refocus on our core business model & Returns Aggressively expand our produ
Slide 5: Our Reinvestment and Focus on Revenue is Yielding Results
Our Reinvestment and Focus on Revenue is Yielding Results We are accelerating price realization… …while maintaining volume growth PRICE/MIX UNIT CASE GROWTH 2% 2% 2% 2% 1% 1% 2013 2014 YTD 2015* 2013 2014 YTD 2015* *First nine months through September 5
Slide 6: Expanding Our Participation in High-Growth Areas Through Investments
Expanding Our Participation in High-Growth Areas Through Investments CATEGORIES & CAPABILITIES INVESTMENTS • Premium juice (cold pressed) • Plant-based beverages • Value-added dairy • Energy drinks • At-home dispensing China Culiangwang Beverage Holdings (Pending) 6
Slide 7: Productivity Will Deliver Bottom Line Improvements
Productivity Will Deliver Bottom Line Improvements PERCENT OF SPEND BASE 2015 DRIVERS 15–20% 15–20% COGS: • Added In-line blow molding equipment to 10 lines • Closed or converted 7 distribution facilities • 4 Plant closures ~10% Opex: • Implemented zero-based work into budgeting process MSD • Reduce
Slide 8: Our Underlying Margin Structure is Improving
Our Underlying Margin Structure is Improving PROFIT DRIVERS YTD MARGIN* EXPANSION • Pricing 75 bps • Productivity gains • Commodities ~ 60 bps • Bottler refranchising • Media reinvestment • One-time cost absorption – Pension expense – Cycling reversal of certain incentive plans Gross Margin Operatin
Slide 9: We are Driving Cash Flow Improvements
We are Driving Cash Flow Improvements WORKING CAPITAL INITIATIVE FREE CASH FLOW MARGIN 19.6% • Program initiated mid-2013 17.8% – Disciplined approach through 17.1% cross-functional teams – Initial focus on receivables and payables • $650m cash flow savings delivered in 2013 and 2014 combined • $600
Slide 10: We are Returning Excess Cash to Shareowners
We are Returning Excess Cash to Shareowners OVER BILLION OF VALUE of Free Cash Flow & Cash Free Cash Flow RETURNED TO SHAREOWNERS from Divestitures $3.5B $2.6B $3.1B $2.8B Consecutive Years of Annual $4.6B $5.0B $5.4B Dividend Increases $4.3B 2014 2011 2012 2013* 2014 Dividends Net Share Repurchases
Slide 11: We are Making Progress Amidst Slower Growth Environment
We are Making Progress Amidst Slower Growth Environment 2015 GDP GROWTH EXPECTATIONS 5.0 • Macros are challenging in many key 4.0 3.8 markets 3.1 • Focus on what we can control 2.3 2.0 – Reinvestment – Execution • Transition year in line with our expectations, year-to-date World Advanced Emerging Ma
Slide 12: Fourth Quarter is on Track But Now Expect Stronger Currency Headwind
Fourth Quarter is on Track But Now Expect Stronger Currency Headwind EMERGING MARKET CURRENCY INDEX • Currency neutral expectations remain 70.00 unchanged 69.50 69.00 68.50 • However, currencies are volatile 68.00 67.50 • Now expect currencies to be a 7% 67.00 headwind to revenue and an 11% 66.50 he
Slide 13: Year to date performance review / North America review
Year to date performance review – Kathy Waller North America review – Sandy Douglas 13
Slide 14: Coca-Cola North America Strategy and Key Metrics
Coca-Cola North America Strategy and Key Metrics BUILD CREATE DRIVE Strong Customer Capability Valuable Value to Sustain and Repeat Brands Key 1 Incidence 2 Revenue 3 Transactions Metrics 4 Margin Growth 5 Value Share 14
Slide 15: Improved Advertising and Strong Marketing Programs
Improved Advertising and Strong Marketing Programs QUALITY AND QUANTITY STRONG PROGRAMS ACTIVATION 15
Slide 16: We are Executing a Refreshment Oriented Price / Package Architecture
We are Executing a Refreshment Oriented Price / Package Architecture Nielsen All Measured Channels | Brand Coca-Cola YTD 2015 Transaction $ / Occasion $1.60 $1.35 $0.81 $0.51 $0.46 $0.40 $0.32 $0.19 $0.18 Core 1.25L 8.5 oz 7.5 oz 8 oz 12 oz 8 pk 6 pk 2L 12 oz 12 oz 500 mL 16
Slide 17: Consistent Performance and a Long Runway to Repeat
Consistent Performance and a Long Runway to Repeat Nielsen All Measured Channels | Brand Coca-Cola Transaction 14% 15% 12% 12% 10% Value Growth 0% -1% 0% -2% -2% Core Transaction 2011 2012 2013 2014 2015 YTD Core 10% 12% 14% % of Value Transaction 2011 2013 2015 YTD Other 17
Slide 18: We Continue to Build a Scaled and More Profitable Stills Portfolio
We Continue to Build a Scaled and More Profitable Stills Portfolio Juice & Juice Drinks Water & Active Hydration Nielsen AMC Retail $B $9 $7 Tea New Platforms 2015 YTD: +6% $5 2010 2011 2012 2013 2014 Source: Nielsen All Measured Channels Includes Monster beverages sold through Coca-Cola Refreshment
Slide 19: Transitioned or Signed Agreements for Over 30% of US Bottle/Can Volume
We Have Transitioned or Signed Agreements for Territories Representing Over 30% of US Bottle/Can Volume Pre- Transitions Current US bottle/can volume US bottle/can volume Independent CCR bottlers CCR ~80% ~20% <50% Coca-Cola Refreshments Territories Independent Bottlers (Legacy Territories) CCR Tran
Slide 20: Building a Stronger, More Streamlined Production System in the US
We Have Taken a Significant Step Toward Building a Stronger, More Streamlined Production System in the US NPSS Objectives Key Elements ● Facilitate optimal operation of the ● Integrated national production system that balances US product supply system in order system scale with being able to act loc
Slide 21: September 2015 NPSS Announcement Summary
September 2015 NPSS Announcement Summary National Product Supply Group (NPSG) Anticipated Plant Transitions (2016 – 2018) ● Sandston, Va. ● Baltimore, Md. ● Silver Spring, Md. ● Indianapolis, In. ● Portland, In. ● Cincinnati, Oh. ~95% of U.S. ● Phoenix, Az. Product ● Denver, Co. Supply System ● New
Slide 22: Coca-Cola North America Strategy and Key Metrics
Coca-Cola North America Strategy and Key Metrics BUILD CREATE DRIVE Strong Customer Capability Valuable Value to Sustain and Repeat Brands Key 1 Incidence 2 Revenue 3 Transactions Metrics 4 Margin Growth 5 Value Share 22
Slide 23: Q&A
Q&A
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