Slide 1: Forward-Looking Statements
2 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,” “plan,” “seek”
Slide 2: The Agenda for Today
THE AGENDA FOR TODAY 3 Strategic Context Value Creation Potential Transaction Overview Next Steps
Slide 3: The Acquisition of Costa Provides a Compelling Strategic Rationale
THE ACQUISITION OF COSTA PROVIDES A COMPELLING STRATEGIC RATIONALE Coffee is significant, on-trend, fast-growing and profitable Costa has a strong consumer proposition Scalable coffee platform to engage with consumers across multiple formats and channels Opportunity for value creation via Costa’s ca
Slide 4: Accelerating Our Move to a Total Beverage Company Requires Focusing on Hot Beverages
ACCELERATING OUR MOVE TO A TOTAL BEVERAGE COMPANY REQUIRES FOCUSING ON HOT BEVERAGES 5 Source: Company estimates and internal analysis. Hot beverages includes brewed / dispensed coffee & tea and NRTD coffee and tea. Figures are rounded and exclude jug water and white milk. NRTD cold is primarily pow
Slide 5: Competing Only in the Smallest Segment of the Half Trillion Dollar Coffee & Tea Industry
NRTD ~$125B Coffee Shops 20% Out of Home ~$360B Other Out of Home 80% RTD ~$85B WE HAVE BEEN COMPETING AND LEADING ONLY IN THE SMALLEST SEGMENT WITHIN THE HALF TRILLION DOLLAR GLOBAL COFFEE & TEA INDUSTRY * Hot & Cold, Includes other hot Source: RTD & Other OOH Brewed/Dispensed = Company estimates;
Slide 6: Costa: A Profitable Business with Scale in the UK and Attractive Growth Areas
COSTA: A PROFITABLE BUSINESS WITH SCALE IN THE UK AND ATTRACTIVE GROWTH AREAS Multi-National Coffeehouse Based in the UK UK Stores $1.2B Sales 2,422 outlets International $210MM Sales 1,399 Stores 989 Express Machines UK Express $275MM Sales 7,248 Machines $1.7B Sales / $312MM EBITDA Retail Presence
Slide 7: Our Vision Is to Create a World Class Leading Coffee Business
OUR VISION IS TO CREATE A WORLD CLASS LEADING COFFEE BUSINESS STARTS WITH DELIVERING THE BEST COFFEE, ACROSS WIDE-REACHING FORMATS USE STORES FOR BRAND-BUILDING LEVERAGE COCA-COLA’S MARKETING EXPERTISE AND GLOBAL REACH 8
Slide 8: The Costa Ecosystem Provides the Edge to Build a Global Leadership Position in Coffee
THE COSTA ECOSYSTEM PROVIDES THE EDGE REQUIRED TO BUILD A GLOBAL LEADERSHIP POSITION IN COFFEE COFFEE EXPERTISE Sourcing, roasting Coffee Express (fresh beans, fresh milk) HOT CAPABILITY Perfect serve Temperature management Equipment & supplies RETAIL FOOTPRINT Second-largest coffee house in the wor
Slide 9: Building a Global Coffee Business Through Multiple Avenues
Launch the brand in both ready-to-drink and at-home consumption products globally Capitalize on consumers’ preference for ‘third place’ experiences by enhancing the attributes of Costa coffee Leverage current Coffee Club membership base to build / expand our direct-to-consumer digital marketing capa
Slide 10: Use the Retail Presence Strategically to Build the Brand and Experience
USE THE RETAIL PRESENCE STRATEGICALLY TO BUILD THE BRAND AND EXPERIENCE Real-Time Ritual Building Lab for Understanding Consumers and Testing Innovation Reinforce Brand Reputation (e.g. crafting, sustainability) Source of Cash Flow for Reinvestment 11
Slide 11: Costa Provides a Platform to Reimagine Our Beverage Solutions
COSTA PROVIDES A PLATFORM TO REIMAGINE OUR BEVERAGE SOLUTIONS FOR CHANNELS AND CUSTOMERS Leverage System’s Capabilities to Expand Total Beverage Solutions Convenience Stores, Cinemas, @Work, Transit Hotels, Cafes, Restaurants, Fine Dining Food Service Chains Vending Total Beverage Solutions Beans an
Slide 12: Expand into New Consumption Occasions
EXPAND INTO NEW CONSUMPTION OCCASIONS Energize Launch Globally as a Cold Hot RTD Coffee Brand, Extend Rapidly to New Formats & Products 13 Positioning Expand Cold RTD Coffee Launch Hot RTD Coffee @Home Solutions Portfolio Consumer Insights Marketing Capabilities to Define Brand Edge Launch in New Ge
Slide 13: Transaction Details
TRANSACTION DETAILS Acquire all the issued and outstanding shares of Costa Limited, a wholly owned subsidiary of Whitbread Purchase price of £3.9 billion or $5.1 billion* (16.4x 2018 EBITDA) Expected to be slightly accretive to earnings in first full year Funded with existing cash on hand Net Debt L
Slide 14: Next Steps
NEXT STEPS Whitbread to obtain shareholder approval, expected by end of October File required anti-trust documents for EU and China Transaction expected to close in the first half of 2019 15
Slide 15: Unlocks Entrance into Fast-Growing, Half Trillion Dollar Beverage Segment
Unlocks entrance into fast-growing, half trillion dollar beverage segment Costa is a strong brand with great-tasting coffee Costa has a platform that crosses multiple formats and channels Opportunity for value creation via Costa’s brand capabilities and Coca-Cola’s marketing expertise and global rea
Slide 16: Unlocks Entrance into Fast-Growing, Half Trillion Dollar Beverage Segment
UNLOCKS ENTRANCE INTO FAST-GROWING, HALF TRILLION DOLLAR BEVERAGE SEGMENT * Costa is a strong brand with great-tasting coffee % g a > * Costa has a platform that crosses multiple formats : ~— and channels THE COCA-COLA COMPANY * Opportunity for value creation via Costa’s brand oP & capabilities and
Slide 17: Costa by the Numbers (2018)
COSTA BY THE NUMBERS (2018) 23.5 million customers each month ~8,200 Costa Express vending machines across multiple countries ~3,800 stores in 32 countries 51% equity / owned / JVs 49% franchised >60% of stores in UK Voted U.K.’s favorite coffee shop for 8 consecutive years Preferred 2.8x vs. Starbu
Slide 18: Retail Coffee Shop Store Footprint Provides Brand Building & Flagship Store Opportunity
RETAIL COFFEE SHOP STORE FOOTPRINT PROVIDES BRAND BUILDING & FLAGSHIP STORE OPPORTUNITY UK 2,422 China449 Ireland 112 Poland 144 UK China Europe MEA Total Markets 1 1 14 16 32 Total Stores 2,422 449 472 478 3,821 UAE 147 3,821 Stores Across 32 Countries Source: Whitbread PLC 19
Slide 19: Roastery Provides Best in Class Supply Chain Capabilities
ROASTERY PROVIDES BEST IN CLASS SUPPLY CHAIN CAPABILITIES All Costa coffee sold globally* is roasted in a single, new roasting facility in the UK Expert coffee blenders and coffee tasters Production capacity offers ability to expand New packing lines being added to provide retail packs CSR credentia
Slide 20: Roastery Provides Best in Class Supply Chain Capabilities
ROASTERY PROVIDES BEST IN CLASS SUPPLY CHAIN CAPABILITIES All Costa coffee sold globally” is roasted in a single, new roasting facility in the UK Expert coffee blenders and coffee tasters Production capacity offers ability to expand New packing lines being added to provide retail packs CSR credentia