Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Q2 2023 Earnings Presentation
42 slides from Coca-cola Bottlers Japan's earnings presentation, Aug 10, 2023
Slide 1: Second Quarter 2023 Earnings & Strategic Business Plan 2024-2028
Second Quarter 2023 Earnings & Strategic Business Plan 2024 - 2028 Presentation August 10, 2023 Coca-Cola Bottlers Japan Holdings Inc. Calin Dragan, President Bjorn Ivar Ulgenes, Vice President & CFO (Posted to CCBJH website on Aug 9, 2023)
Slide 2: Coca-Cola Bottlers Japan Holdings Inc. (CCBJH)
Coca-Cola Bottlers Japan Holdings Inc. (CCBJH) Second Quarter 2023 Earnings & Strategic Business Plan 2024 - 2028 Presentation 1H 2023 Results Marketing Update 2H 2023 Outlook Strategic Business Plan 2024 - 2028 2
Slide 3: Today's Highlights
Today’s Highlights 1H achieved 7.5% revenue growth and a business income improvement of 11.5 billion yen. In addition to the profit generated from top-line growth, cost management efforts across all areas contributed. Price revisions, a top-priority initiative, are steadily producing results through
Slide 4: 1H 2023 Results
1H 2023 Results
Slide 5: 1H 2023 Results (vs 2022)
1H 2023 Results (vs 2022) Unit: Million JPY 1H 2023 1H 2022 Change YoY Actual Actual Revenue 404,109 375,948 +28,161 +7.5% Sales Volume (Million Cases) 230 224 +6 +3% NARTD (Non-alcoholic ready to drink) Beverage Volume (Million Cases) 227 220 +7 +3% COGS 227,313 212,810 +14,502 +6.8% Gross Profit 1
Slide 6: 1H 2023 Drivers of Business Income (vs 2022)
1H 2023 Drivers of Business Income (vs 2022) Top line growth and cost control improving profitability DME Manufacturing 1H 2022 Volume, Transformation (Direct Marketing Others Commodity & 1H 2023 (ex. Utility Cost) Actual Price & Mix* Expense, fixed only) Utility Cost Actual +2.2 -2.5 +2.9 -3.1 • Op
Slide 7: 1H 2023 NARTD Beverage Sales by Channel/Category (vs 2022)
1H 2023 NARTD Beverage Sales by Channel/Category (vs 2022) 3% volume growth by capturing traffic recovery demand, despite price revision impacts and cycling of hot summer in the previous year. Wholesale revenue per case improved in all channels from price revision benefits. Vending grew wholesale re
Slide 8: Building Foundation for Value Share Growth
Building Foundation for Value Share Growth Total channel value share grew by 0.2 pts. Vending market share continued to grow, but OTC channel market share trend impacted by price revisions. OTC retail price improved from the previous year with price revisions. Maintained price premium vs. market ave
Slide 9: Retail Price Update Following Price Revisions
Retail Price Update Following Price Revisions Three rounds of price revisions from 2022, retail prices trending favorably Implemented price revisions for Can and Large PET in May. Progressing as plan with swift and strong implementation. Can (VM): Over 80% of price reflection completed. Price trends
Slide 10: Marketing Update
Marketing Update
Slide 11: Q2 2023 Initiative Review
Q2 2023 Initiative Review Grew KO NARTD value share (+0.1pts*) with strong renewal & activations in core, new innovations and digitally-driven new ways of marketing * CCJC Internal Estimate MARKETING CORE INNOVATIONS TRANSFORMATION Coke TM “Which great taste do you like?” Georgia TM AQUARIUS Coke ON
Slide 12: Q3 2023 Initiative Highlights
Q3 2023 Initiative Highlights Expand user base and drinking occasions through core enhancement & new innovations by transforming the way of marketing MARKETING CORE INNOVATIONS TRANSFORMATION Yakan Barley Tea Fanta Coke Studio Package Promotion Summer Campaign Mystery Sweets with Live events Coca-Co
Slide 13: 2H 2023 Outlook
2H 2023 Outlook
Slide 14: Outlook
Outlook Top priority on profitability improvement, while uncertainty remains in market environment • Traffic recovery expected to continue, however weather factor remains an uncertainty (strong summer in previous year). Operating • Uncertain volume risk for the first peak season following price revi
Slide 15: Strategic Business Plan 2024-2028
Strategic Business Plan 2024 - 2028
Slide 16: Leadership Team Fostering Growth
Introduction Leadership Team Fostering Growth Coca-Cola Bottlers Japan Holdings Inc. Coca-Cola (Japan) Company, Ltd. Presenters Presenter Calin Dragan Bjorn Ivar Ulgenes Costin Mandrea Jorge Garduño Representative Director Representative Director Coca-Cola Bottlers Japan Inc. President and President
Slide 17: Achievements and Learnings: Our Journey
Strategic Business Plan Outline Achievements and Learnings: Our Journey Attained learnings and results amidst challenging environment for the future Strategic business plan announced in 2019 COVID impact: Drop in traffic and channel mix impact Stabilizing Cost environment: Commodity and energy price
Slide 18: Reason to Believe: Now is the Time to Move Toward the Future
Strategic Business Plan Outline Reason to Believe: Now is the Time to Move Toward the Future Key transformation initiatives to date have built a strong business foundation The business environment is gradually stabilizing, despite being significantly affected by the impact of COVID and challenging c
Slide 19: 5 Year Strategic Business Plan Focused on Profitability and Capital Efficiency
Strategic Business Plan Outline 5 Year Strategic Business Plan Focused on Profitability and Capital Efficiency Vision 2028: Sustainable Profitable Growth +2-3% CAGR Profitability-focused commercial activity REVENUE GROWTH Optimization to enhance value creation in supply chain, back-office and IT 5%+
Slide 20: Key Pillars for Achieving Strategic Business Plan
Strategic Business Plan Outline Key Pillars for Achieving Strategic Business Plan Vision 2028: Sustainable profitable growth Profitable growth and build cost structure resilient to change Commercial Excellence Supply Chain Back-Office and IT Optimization Optimization Product strategies in-line with
Slide 21: Improving Macro Environment and Changing Consumption Trends Provide Opportunities for Growth
Commercial Excellence Improving Macro Environment and Changing Consumption Trends Provide Opportunities for Growth Macro indicators trending upwards Changing NARTD industry trends Beverage category inflation rising above CPI since mid-2022 2018 – 2023, normalized to Jan 2018 110 CPI (all items) Alco
Slide 22: Strong "One System" Partnerships Driving Growth
Commercial Excellence Strong “One System” Partnerships Driving Growth A PARTNERSHIP WITH PURPOSE... Refresh Japan, Create Positive Difference One System with Clear Role Sort Nurture a Growth Mindset Shape Healthy Industry Dynamics Consumer Insights Customer Collaboration & Brand Building & Market Ex
Slide 23: The Leading Beverage Portfolio in Japan, with Room for Growth
Commercial Excellence The Leading Beverage Portfolio in Japan, with Room for Growth MARKET GROWTH MARKET SIZE (BN JPY)* (Act 2022) KEY BRANDS Coca-Cola Brands Sparkling +5% Tea +4% Coffee flat Water +8% Sports +7% Juice +5% 0 200 400 600 800 1,000 1,200 *2022 CCJC estimate 23
Slide 24: Unique Blend of Global and Local Strengths for Sustainable Edge
Commercial Excellence Unique Blend of Global and Local Strengths for Sustainable Edge Accelerating Expanding Transforming CORE BRANDS FOOTPRINT MARKETING Digital x GenZ culture for GEORGIA Renewal Photo turning into Anime Scaled Coke Studios Festival Unique Code Cap Promotion leveraging Coke ON 24
Slide 25: Execute Tailored Growth Strategies to Seize Opportunity Across Every Channel
Commercial Excellence Execute Tailored Growth Strategies to Seize Opportunity Across Every Channel Leverage foundation and execute profitability-focused channel strategies Channels Expected Our Volume Current Status & Strengths Key Strategies Growth (2024 - 2028) Implement initiatives to increase ba
Slide 26: Disciplined Commercial Actions for Enhanced Business Profitability
Commercial Excellence Disciplined Commercial Actions for Enhanced Business Profitability PACKAGING AND CHANNEL MIX PRICING STRATEGY Accelerate growth of immediate Pricing strategy reflecting market trends consumption packaging Pricing based on Channel, Package, and Optimize pricing by package Locati
Slide 27: Transforming the Vending Business to a Higher Level
Commercial Excellence Transforming the Vending Business to a Higher Level Leverage technology for growth and optimized operations PLACEMENT OPTIMIZATION VALUE CREATION • Expansion in high-quality locations IN VENDING • Location development solutions • Office space solutions • Increase technology cap
Slide 28: Technology as Key Driver of Vending Transformation
Commercial Excellence Technology as Key Driver of Vending Transformation Transformation Levers Innovations for Greater Consumer Experience Online Vending Machine Implement big data and further use of PLACEMENT sale activity support systems (SFA) OPTIMIZATION Improve business performance, at the same
Slide 29: Leverage Strong Supply Chain Foundation and Drive Further Efficiency
Supply Chain Optimization Leverage Strong Supply Chain Foundation and Drive Further Efficiency Promote transformation including digital innovation Examples of success STRATEGIES FOR HIGH QUALITY SERVICE AT LOWEST COST SUPPLY CHAIN VALUE CREATION Construction and implementation of 2 Mega DCs (automat
Slide 30: Optimizing All Enterprise Operations and IT
Back-Office and IT Optimization Optimizing All Enterprise Operations and IT Promote data-driven decision making A novel JV with Accenture to build industry-leading operations in the business CREATING VALUE process and in digitalization. IN BACK-OFFICE AND IT Strengthen business foundation to be cost
Slide 31: Achieving Business Income Target for 2028
Financial Foundation Achieving Business Income Target for 2028 Achieve BI target with revenue growth and transformation Business Income, B JPY 5%+ Drivers of Business Income Growth, B JPY +6 pts. Business Income 45-50 Margin by 2028 ~40% -1% IMPACT 5%+ -2% -5 ~60% 45-50 -14 2028E IMPACT 2023E 2022 R
Slide 32: Initiatives to Improve ROIC and Increase Shareholder Value
Financial Foundation Initiatives to Improve ROIC and Increase Shareholder Value ROIC Improvement Shareholder Return Business Income Margin Improvement Commercial initiatives focused on profitability Shareholder Value Transformation initiatives aimed at achieving improved profitability Improvement Ta
Slide 33: ESG Initiatives to Create a Sustainable Business
ESG ESG Initiatives to Create a Sustainable Business Major Initiatives Target Results*2 Scope 1, 2 -50% -20% GHG Emission*1 -30% -25% Scope 3 RESOURCE (2030) Water 200% Replenishment 420% (2025) # of Participants of COMMUNITY 1,000K 910K Community (2025) Program Female Manager 20% 6.6% Ratio (2030)
Slide 34: Key Metrics and Picture of Success for 2028
Key KPI Key Metrics and Picture of Success for 2028 TARGET FOR 2028 Revenue growth above REVENUE +2-3% CAGR volume growth Growth aligned with profitability- VOLUME +0.5-1% CAGR focused commercial strategy BUSINESS 5%+ margin Aiming for sustainable profit growth. INCOME 45-50 B JPY Return to profitab
Slide 35: Returning to a Growth Trajectory and Achieving Sustainable Growth
Roadmap for Growth Returning to a Growth Trajectory and Achieving Sustainable Growth 2029 - 2024 - 2028 2019 - 2023 Accelerate growth Profitable growth and build cost structure Driving transformation in a resilient to change challenging business environment ROIC above WACC Responding to unprecedente
Slide 36: Thank You
THANK YOU Investor Relations Coca-Cola Bottlers Japan Holdings Inc. ir@ccbji.co.jp https://en.ccbj-holdings.com/ir/
Slide 37: Appendix
Appendix
Slide 38: 1H: ESG Initiatives
1H: ESG Initiatives -------------------------------------------Major Initiatives---------------------------------------- ----------Values---------- Began Bottle to Bottle project with Suzuka Circuit Customer Contribute to Collaboration Held Learn from Forest events with customers and expanding busin
Slide 39: Q2QTD 2023 Results (vs 2022)
Q2QTD 2023 Results (vs 2022) Unit: Million JPY Q2QTD 2023 Q2QTD 2022 Change YoY Actual Actual Revenue 222,046 207,095 +14,951 +7.2% Sales Volume (Million Cases) 126 123 +3 +2% NARTD (Non-alcoholic ready to drink) Beverage Volume (Million Cases) 124 122 +3 +2% COGS 123,990 115,968 +8,022 +6.9% Gross
Slide 40: NARTD Channel / Category / Package Sales Volume
NARTD Channel / Category / Package Sales Volume Q2QTD (Apr to Jun) Sales Volume +2% By Package 1H (Jan to Jun) By Channel Wholesale 3% Package Volume 5% 1% Channel Volume revenue per case (Yen) S-PET -4% 11% Supermarket (SM) -4% +63 M-PET +7% 23% 5% 37% 17% L-PET +5% Drug & Discounter (D&D) +4% +49
Slide 41: Staying True to Our Mission, Vision, Values
Staying True to Our Mission, Vision, Values 41
Slide 42: 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
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