Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Coca-Cola East Japan — Q3 2016 Earnings Presentation
27 slides from Coca-cola Bottlers Japan's earnings presentation, Nov 14, 2016
Slide 1: Coca-Cola East Japan Q3 & Year-to-Date 2016 Earnings Conference Call
Coca-Cola East Japan Q3 & Year-to-Date 2016 Earnings Conference Call Calin Dragan, CEO Jawahar Solai, CFO November 14, 2016 (Posted to CCEJ Website November 11, 2016) コカ･コーライーストジャパン株式会社 www.ccej.co.jp
Slide 2: Forward-Looking Statements
CCEJ Q3/YTD 2016 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 foreca
Slide 3: Q3 & YTD 2016 Earnings Presentation
CCEJ Q3/YTD 2016 Q3 & YTD 2016 Earnings Presentation Introduction •Overview and Key Messages Third Quarter and Year-to-Date (YTD) Results •Volume, Share and Financial Results Outlook Toward Rest of the Year •Initiatives and Remarks コカ･コーライーストジャパン株式会社 3
Slide 4: Successful Integration Model Delivering Results
CCEJ Q3/YTD 2016 Successful Integration Model Delivering Results Strong results year-to-date—upward revision to full-year targets on September 9 Reported operating income up 2.3X prior year; Net income up 2.7X prior year Growth in both value and volume share Gross margins improved as we cont
Slide 5: Q3/YTD 2016 Sales Results
Q3/YTD 2016 Sales Results コカ･コーライーストジャパン株式会社
Slide 6: Balanced Growth in Volume and Value
CCEJ Q3/YTD 2016 Balanced Growth in Volume and Value Reported Volume Q1 Highlights • Strong start to the year– maintained positive momentum from Q4 2015 in Q1 YTD 2016 Q3 2016 • Benefit from Sendai acquisition in prior year +5.8% (+3.3%*) +1.4% Q2 Highlights • Volume growth led by product innovation
Slide 7: Three Points that Led to Q3 Success in Marketplace
CCEJ Q3/YTD 2016 Three Points that Led to Q3 Success in Marketplace 1. Growth of key new products 2. Aggressive rollout of vending machine exclusive products 3. Strong in-store execution コカ･コーライーストジャパン株式会社 7
Slide 8: Initiatives to Stabilize Vending Channel are Working
CCEJ Q3/YTD 2016 Initiatives to Stabilize Vending Channel are Working Per Machine Performance Coke ON Promotion Vending task forces, exclusive products and strong in-store execution successfully stopped per machine Volume approx. +3% Better than non Coke ON enabled machines volume downtrends in Q3 +
Slide 9: Retail Pricing Trends
CCEJ Q3/YTD 2016 Retail Pricing Trends • Starting to see a change in retail price downtrend on Coca-Cola 1.5L • Coca-Cola 1L PET launch delivering good results Coca-Cola 1.5L Retail Price Coca-Cola 1.5L & 1L Retail Price 1L launch 1.5L (2016) 1.5L (2015) 1L 2012 2013 2014 2015 2016 Actual retail pri
Slide 10: Continued Market Share Recovery and Growth
CCEJ Q3/YTD 2016 Continued Market Share Recovery and Growth Market vs. Prior Year • Value and volume share growth momentum continues Share Q3 2016 YTD 2016 • Value share gains in Drug & Discounter and Supermarket channels Value +0.3 +0.3 • Volume share gains in Water and Coffee Volume +0.6 +0.6 Valu
Slide 11: Performance by Channel
CCEJ Q3/YTD 2016 Performance by Channel Q3 Volume by Channel (% of total) Channel Volume Growth Others Supermarket 12% (SM) Drug & Vending (VM) 23% Nat’l Local Discounter vs. PY CVS D&D VM E&D 25% SM SM (D&D) 13% Q3 2016 +3% +10% +2% +1% -3% even Eating & Convenience Drinking (E&D) Store (CVS) YTD 2
Slide 12: Performance by Category
CCEJ Q3/YTD 2016 Performance by Category Q3 Volume by Category (% of total) Category Volume Growth Juice 4% Others Sparkling Sports 11% (SSD) 26% 13% vs. PY NST Water Coffee SSD Sports Juice Water Q3 2016 Even +13% +2% +3% -8% Even Coffee Teas YTD 2016 +6% +19% +10% +4% -6% +5% 11% 14% 21% * Compari
Slide 13: Q3/YTD 2016 Financial Results
Q3/YTD 2016 Financial Results コカ･コーライーストジャパン株式会社
Slide 14: Drivers of YTD Strong Operating Income Growth
CCEJ Q3/YTD 2016 Drivers of YTD Strong Operating Income Growth Q3 YTD 2015 Q3 YTD 2016 Comparable Comparable Operating Supply Chain DME Other Operating Savings Other Depreciation Income OPEX Income Subsidiaries -2,602 -934 +1,868 +1,393 • CAPEX timing • Higher volume • Labor related • Adjusting for
Slide 15: Q3 YTD 2016 Financial Results Summary
CCEJ Q3/YTD 2016 Q3 YTD 2016 Financial Results Summary Significant Operating Income Improvement • Balanced volume & commercial revenue growth • Revenue impacted by lower sales to other bottlers • Improved gross margin • SG&A led by decrease in labor and logistic/distribution, partially offset by mar
Slide 16: Supply Chain Synergies: Examples of Contributors
CCEJ Q3/YTD 2016 Supply Chain Synergies: Examples of Contributors Truck loading space improvements Accelerated Manufacturing Efficiency • Manufacturing cost per case has been decreasing 1410 1625 Logistics and Distribution Efficiency Improvements • Improved truck and cube utilization +17% increase +
Slide 17: Outlook toward Rest of the Year
Outlook toward Rest of the Year コカ･コーライーストジャパン株式会社
Slide 18: Extensive Marketing Activities in Q4
CCEJ Q3/YTD 2016 Extensive Marketing Activities in Q4 Coca-Cola Winter Campaign and “Ribbon Bottles” Georgia Campaign I LOHAS Flavor Extension Coke ON Music Japanese pear “Nashi” flavor コカ･コーライーストジャパン株式会社 18
Slide 19: Remarks for the Rest of Year
CCEJ Q3/YTD 2016 Remarks for the Rest of Year • Q4 2016 results • Expect cycling from prior year • Capex plan update • Full-year Capex will be approximately JPY 40 B • Proposed business integration with Coca-Cola West • Appointed Vikas Tiku as CCEJ’s Vice President and Chief Integration Officer コカ･コ
Slide 20: One+ Roadmap for Growth
CCEJ Q3/YTD 2016 CCEJ One+ Roadmap for Growth 2018- Tokyo Olympic Games & Beyond 2016-2017 Accelerating 2015-2016 Performing 2012-2014 Norming Meet & exceed Approaching world-class Forming & Storming 2012-2013 Refine & global bottler bottler levels optimize new performance Forming Define & deploy ne
Slide 21: Appendix
Appendix コカ･コーライーストジャパン株式会社
Slide 22: Drivers of Q3 2016 Operating Income
CCEJ Q3/YTD 2016 Drivers of Q3 2016 Operating Income Q3 2016 Q3 2015 Comparable Comparable Operating Operating Depreciation Other Other Income Income Supply Chain DME OPEX Subsidiaries +736 Synergies -336 +604 +171 • CAPEX timing and plan review • Moderate • Labor related • Full-year capex increase
Slide 23: Q3 2016 Financial Results Summary
CCEJ Q3/YTD 2016 Q3 2016 Financial Results Summary • Slight decline of revenue due to decrease of sales to other Coca-Cola bottlers • Improved gross margin driven by strong supply chain efficiency improvement • SG&A decrease led by cycling of PY (labor, logistics, etc.), partly offset by marketing i
Slide 24: The Japan Coca-Cola System Continues to Evolve
CCEJ Q3/YTD 2016 The Japan Coca-Cola System Continues to Evolve Together with the customer, consumer, competitive landscape 1956-99 2001 2006 2013 2015 2017 17 14 12 8 6 5 bottlers bottlers bottlers bottlers bottlers bottlers Tokyo Tokyo Tokyo 2013 2015 2017 CCEJ Tone Tone Tone Mikuni Fuji 2001 Miku
Slide 25: The Coca-Cola System
CCEJ Q3/YTD 2016 The Coca-Cola System A powerful partnership driving growth of the Coca-Cola business The Coca-Cola system in Japan consists of the Coca-Cola (Japan) Company (CCJC), bottlers and other related companies. CCJC, as the franchise owner, is responsible for supplying concentrate and bever
Slide 26: Glossary of Frequently Used Terms
CCEJ Q3/YTD 2016 Glossary of Frequently Used Terms CDE Abbreviation of Cold Drink Equipment. Vending machines, coolers and beverage dispensers, etc. DME Abbreviation of Direct Marketing Expenses. Sales promotion-related expenses reported in advertisement & sales promotion expenses and partly in sale
Slide 27: THANK YOU
THANK YOU Coca-Cola East Japan Q3/YTD 2016 Earnings Conference Call November 14, 2016 <Inquiries> Investor Relations Coca-Cola East Japan ir@ccej.co.jp +81-3-5575-3797 http://investor.ccej.co.jp/ コカ･コーライーストジャパン株式会社