Coca-Cola HBC AG · LSE:CCH
Coca-Cola HBC — Investor Day (May 2013)
35 slides from Coca-Cola HBC's investor day presentation, May 31, 2013
Slide 1: Russia in Focus
Russia in Focus Keith Sanders Regional Director Coca-Cola HBC 1
Slide 2: The opportunity we see in Russia
The opportunity we see in Russia… Russia GDP NARTD market Russia NARTD We have leading Per Caps Brands in all core $2.5 Trillion 2.2 Bn UC in 2012 ~3.1 Bn UC by 2020 ~ 45% Poland’s NARTD categories 7th in the world ~ 46% Hungary PDI Growth* 70% Urban 5.6% Developing Retail 371 MM UC Infrastructure C
Slide 3: Favorable socio-economic trends
Favorable socio-economic trends Middle class is expanding foot print Employment trends fuel Retail turnover 11% 14% 14% 15% 16% 17% 20% 16.1% 13.7% 35% 15% Rich ($1200+) 38% 40% 42% 44% 45% 10% 6.4% 7.0% 5.9% High-Mid ($1200) 4.3% 4.9% 5.0% 5% 33% Low-Mid ($500) 31% 30% 0% 29% 28% 27% Poor ($250) 22
Slide 4: Russia's NARTD opportunity is relatively underdeveloped
Hungary Poland 488 Poland Czech Rep 344 Romania Hungary 828 815 810 Source: Canadean Norway 717 Czech Rep Bulgaria 639 Bulgaria 277 265 250 NARTD per capita WATER per capita Sweden Romania 100 Sweden 544 527 87 Norway Finland 469 81 RUSSIA RUSSIA 374 78 Finland Poland Czech Rep 483 Finland Norway 17
Slide 5: We have leading brands in >70% of NARTD
We have leading brands in >70% of NARTD 100 75 2012 share relationship (CCH=100) 50 25 Sparkling - Coca-Cola Pepsi-Cola Private Chernogol Laimon NARTD 2012 Market Split Labels Fresh 100 75 St ill 26% 50 Sp arkling Water 25 45% - Wa ter 125 Bonaqua Aqua Private Shishkin Les Saint Springs 29% Minerale
Slide 6: We have established a strong foothold in Russia
We have established a strong foothold in Russia 1980 1991 1994 2001 2004 2005 2007 2010 2011 2012 2014 2018 CCH Russia breaks 300MUC CCH takes all Investment in Sochi Russian Aquavision Olympics Summer operations bottling facilities Olympics 1st KO beverage 1st Aseptic Coke sells 100MUC in line Russ
Slide 7: We have built a leadership platform across key categories
We have built a leadership platform across key categories 10% 400 Mln, Unit Cases 10% 0% 14% -2% 350 20% -13% 300 39% 250 18% 10Y CAGR 10% 200 +10% 150 100 50 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Premium sparkling Value sparkling Water Tea Energy Other* Juice** 2004 – Nestea firs
Slide 8: We have developed a very balanced business
We have developed a very balanced business Sales by Category* Sales by Channel** Immediate consumption Local & Traditional 18% Sparkling 63% Stores 20% Third Still 21% Party Organized 30% By Brand Trade Water 16% Sprite BonAqua 32% Fanta 10% 8% 16% Nestea 8% Coca-Cola 37% Dobriy 11% Rich 1% Other**
Slide 9: We have a broad portfolio of winning brands
We have a broad portfolio of winning brands Russia is world’s largest market 2012 vs. PY +15% +10% +23% +25% +21% MMUC 46 -11% 41 34 +5% 36 20 +45% 30 28 +10% 31 3.7 +2% 3.8 2008 2012 2008 2012 2008 2012 2008 2012 2008 2012 Source: Russia internal data 9
Slide 10: We have a growth engine in brand Coca-Cola
We have a growth engine in brand Coca-Cola +20% Coca-Cola Brand performance in Russia +11% +26% -6% +58% Volume MM UC 84 78 99 110 132 +48MMUC Market Share 13.6% 13.6% 16.6% 17.0% 18.8% +5.2PTS Source: Russia internal data, Nielsen 2012 market share 10
Slide 11: Russia contributed 18% to CCH Group sales in 2012
Russia contributed 18% to CCH Group sales in 2012 Group Sales Mix Emerging Developing Markets Markets 31% 19% 400 10% Established 10% 0% Russia Markets 350 Mln, UC 14% -2% 47 18% 20% -13% 32% 58 59 47 42 300 51 39% 47 250 32 200 18% 10% 150 323 286 284 294 294 261 253 100 228 187 144 159 50 0 2002 2
Slide 12: Russia is a priority for the Global Coca-Cola System
Russia is a priority for the Global Coca-Cola System % growth vs. PY Global ranking among 2012 Top 22 in 2012 NARTD +8.1% #3 Sparkling +12.6% #4 +20.3% #2 +23.2% #1 +10.4% # 10 12
Slide 13: We have the largest supply chain infrastructure in Russia
We have the largest supply chain infrastructure in Russia • 14 Plants, strategically located across Russia • 37 Lines: PET, Aseptic, NRGB, CAN, Hot fill • 32 Juice Fillers x2 St. Petersburg • Annual capacity 380MM physical cases • Efficient and expandable infrastructure x3 Moscow Nizhny Novgorod Ory
Slide 14: Our supply chain capabilities ensure competitive advantage
Our supply chain capabilities ensure competitive advantage Oryol – Samara = 1126 Km = Zurich – Krakow Moscow – Novosibirsk = 3200 Km ~ Athens - London x2 St. Petersburg x3 Moscow Nizhny Novgorod Moscow - Vladivostok = 8900 Km= Athens – Toronto Oryel Samara Volgograd Yekaterinburg Rostov Krasnoyarsk
Slide 15: Our Strategic Framework provides clarity and focus
Our Strategic Framework provides clarity and focus - 15
Slide 16: Everything starts with our people
Everything starts with our people • 13,000 Highly Engaged Employees • Focus ensured thru 6 Regions, 26 Commercial Territories • Market Developers (2,700) serving 300K customers direct • 130 Management Trainees in 2013 – 2 year program • 120 Internal Trainers - 350,000 training hours per year • Best
Slide 17: The 4C's ensure dedication of purpose
The 4C’s ensure dedication of purpose Consumer Customer Cost Community Relevance Preference Leadership Trust • Brand Priorities • Joint Value • Infrastructure • Wellbeing/ Creation optimization Responsible • OBPPC Marketing • Customer Care • Cost Ownership • Single Serves Centers • Social Equity • S
Slide 18: Consumer Relevance
Consumer Relevance - • Clear brand priorities led by Coca-Cola • Drive leadership in Juice & RTD Tea • OBPPC • Leverage “Assets” • Responsible Marketing 18
Slide 19: Coca-Cola will remain our growth engine
Coca-Cola will remain our growth engine Recruit teens & young adults Drive IC through key occasions Build home consumption Sochi Olympic full year IMC Cooler placement FC OBPPC Sampling PRE-OTR/OTR IC Coke & food activation COKE@HOME IMC Branding teens hot-spots IC OBPPC FWST DRIVE Responsible Marke
Slide 20: We are fully leveraging our total SSD portfolio
We are fully leveraging our total SSD portfolio Driving FANTA Incidence Strengthen SPRITE’s EDGE Building Adult Occasions Orange focused IMC Digital investment New TVC campaign Focused flavors Strategic partnerships Enhanced OBPPC New label New formula Live music events Expanded Footprint Launch Moj
Slide 21: While continuing to grow our profitable stills business
While continuing to grow our profitable stills business… Go for leadership Grow the base Pioneer new categories ENERGY: 24/7 INNOVATION BONAQUA : SUSTAINABILITY POWERADE: SPORTS CREDENTIALS Tropic Blue Gladiator Lake Baikal Glass New VIVA ION4 Olympic Games 2012 NESTEA: PREFERENCE & OPBBC KVASS: SUP
Slide 22: Smart innovation on Product/Brands
Smart innovation on Product/Brands Coca-Cola & Flavoured Sparkling Energy OBPPC High profitability 0.237L 1.5L frequency Multipacks Burn 0.33/.5L Gladiator recruitment Nestea Juices Water New occasions Increase frequency Revenue growth NRGB At Home Pulpy- Still 1L new pack pack At Home Flavored HoRe
Slide 23: Beer presents a smart opportunity to expand NARTD
Beer presents a smart opportunity to expand NARTD NARTD 2012 Market Split and Beer opportunity 80% of NARTD Volume (MN UC) 999 648 583 1,794 160% of NARTD Value (BN USD) 5.8 2.3 5.1 21.0 Sparkling Water Still Beer Sources: Canadean, Nielsen, internal data 23
Slide 24: We are in a strong position to exploit the opportunities from beer
We are in a strong position to exploit the opportunities from beer PORTFOLIO COOLERS RTM 2013 Key Initiatives 2013-2014 Key Initiatives 2013-2015 Key Initiatives Recruit beer switchers to kvass through Replace Beer coolers in top outlets Capture Leisure At Home Krushka & Bochka Production on C
Slide 25: We are building a sustainable legacy with Sochi 2014
We are building a sustainable legacy with Sochi 2014 Create A Positive Change In Russian Lives And Accelerate Our Business Towards Our 2020 Vision People Reputation Coca-Cola South Region Unlock the pride, Be recognized as Grow Coca-Cola, Expand our passion & the most trusted enabling the brand lead
Slide 26: Our story will be told in phases, across dedicated moments
Our story will be told in 3 phases, across 7 dedicated moments COCA-COLA INVITES US TO JOIN IN THE SOCHI OLYMPICS. COCA-COLA VLIVAISYA! ANTICIPATE ENGAGE CELEBRATE 2 years out 1 year out 3 months out 2012 2013 2014 London-Sochi OTR Olympic Games Consumer Time IMC “Handover” IMC Promo After Games Cam
Slide 27: VLIVAISYA
“VLIVAISYA” Coca-Cola HBC 27
Slide 28: Customers are at the heart of everything we do
Customers are at the heart of everything we do - • Joint Value Creation • Hellenic Good Morning Meetings • Right Execution Daily • Customer Care Centre • Cross Functional Teams • DIFOTAI 28
Slide 29: Building excellence at the point of sale - RED
Building excellence at the point of sale - RED Improve ours and 35 Cities > 40% Volume customers revenue and profit City > 2 months after launch City has been recently launched In cooperation with 2 ppt improvement our customers in RED score = +1% volume 29
Slide 30: Cost Leadership
Cost Leadership - • Move from fixed to variable models • Logistics – 3PL • SAP exploitation • Shared Services • Demand Planning • Working Capital • Personal Cost Ownership 30
Slide 31: Reinvesting efficiencies for sustainable growth
Reinvesting efficiencies for sustainable growth 31
Slide 32: Moving from fixed to variable in logistics through 3PL
Moving from fixed to variable in logistics through 3rd party logistics (“3PL”) • SAP is a key enabler • Current RTM is predominantly DSD (77%) • In-House operations • Convert 25* in house to 3PL over 3 years • 2 Locations converted in „12, 8 planned in ‟13 % Own Depot Locations vs 3PL locations 2013
Slide 33: Community Trust
Community Trust - • Reputation – Olympic Legacy • Active Healthy Living • Water preservation • Community activities • Environmental programs 33
Slide 34: We will continue to be a force for good
We will continue to be a force for good… Refresh 2020: Holistic plan to Active Healthy Living: Water Preservation: step change perception Grassroots football Living Volga (with UNESCO) Responsible Marketing : No Reputation Legacy: Sochi 2014 Community : Xmas Caravan preservatives 34
Slide 35: Thank You Q&A
Thank You Q&A Coca-Cola HBC 35