Coca-cola Bottlers Japan Holdings Inc. · TSE:2579
Coca-cola Bottlers Japan — Coca-Cola West Company — Q1 2016 Earnings Presentation
40 slides from Coca-cola Bottlers Japan's earnings presentation, Apr 27, 2016
Slide 1: Results briefing for the 1st quarter of Fiscal Year ending December 2016
HAUMO HET Nve-ze Cito: West Results briefing for the 1st quarter of Fiscal Year ending December 2016 April 27, 2016 Coca-Cola West Company, Limited (2579) [Contact]Planning Department (IR team) TEL 092-641-8774 FAX 092-632-4304 [URL] http: //www.ccwest.co.jp/ [E-mail] koji-nakagawa@ccwest.co.jp
Slide 2: Opening remarks
•Good morning everyone and thank you for attending our Financial Results Briefing despite your busy schedules. I’m Yoshimatsu. •Today, I would like to brief you on the highlight of financial results for the 1st Quarter and our plan for the 2nd Quarter. 1
Slide 3: Review of the 1st Quarter
•I will start with a review of the 1st Quarter. 2
Slide 4: Sales volume in the 1st Quarter
• The slide illustrates our sales volume in the 1st Quarter. • Compared with plans, both CCW and Shikoku CCBC delivered positive growth in volume by 3.3% in total of both companies. • On the other hand, our sales volume increased by 14.1% year-on-year to 6.25 million cases, partly because of incorpo
Slide 5: Sales volume by channel
• Now, let’s take a look at the sales volume by channel. • Key channels outperformed the volume plans. • In terms of year-over-year comparison, volume growth in Supermarket and Convenience stores contributed to the overall positive results. In supermarket, the volume grew by 7% through new product l
Slide 6: RGM initiatives in Supermarket
• In Supermarket, we have been working on RGM aiming to raise revenue and profits. • We took actions in 3 strategies of ensured sales activities based on price guidelines, value communication upon new product launches and execution of non-price promotions in the 1st Quarter. • Particularly solid res
Slide 7: Sales volume by package
• Next is sales volume by the package. • Sales volume of all packages except for Syrup and Powder turned positive compared with plans. • Against previous year, sales volume of highly profitable small PET outperformed the growth of large PET. This is attributable to the volume growth of small PET in
Slide 8: Sales volume by brand
• Next is sales volume by the brand. • With a 4.5% positive, core 8 in total contributed to the overall positive results against plans. • We reinforced promotional activities for “Coca-Cola” and “Coca-Cola Zero” leveraging the launch of original items aligned with a global campaign deployed from Jan
Slide 9: Financial summary of the 1st Quarter
• From page 8, I would like to brief you on our financial summary of the 1st Quarter. • We generated revenue of 100.545 billion yen, operating profits of 2.209 billion yen, ordinary profits of 2.069 billion yen and current net profits of 953 million yen. • Revenue increased both from plan and last y
Slide 10: Variance factors of performance against plans
• Now, I would like to brief you on variance factors of performances. First is against plans. • Coca-Cola business generated positive gross profits by 1.6 billion yen with 3.5 billion revenue growth thanks to sales volume exceeding plans. Furthermore, operating profits turned positive by 2.1 billion
Slide 11: Operating profit variance against plans
• The graph on page 10 shows variance factors of operating profits against plans. • Operating profits of Coca-Cola business exceeded the plan by 2.1 billion yen. • Marginal profits turned positive by 800 million yen with sales volume outperforming the plans in all channels. • SCM also generated impa
Slide 12: Comparison with the previous year
• Following is comparisons with the previous year. • Coca-Cola business saw gross profit increase of a 5.7 billion yen with increased revenue of a 9.4 billion yen from the previous year by incorporating the performances of Shikoku CCBC from January to March, in addition to sales volume increase. • B
Slide 13: Operating profit variance against previous year
• The graph on page 12 indicates variance factors of operating profits against the previous year. • Marginal profits in Coca-Cola business increased by 1 billion yen from the previous year helped by sales volume growth in Chain store. • Operating profits also rose by 3.2 billion yen from the previou
Slide 14: Plans for the 2nd Quarter
•Let me now move on to our plans for the 2nd Quarter. 13
Slide 15: Sales volume plans by channel
• First, I would like to touch on Coca-Cola business. This is sales volume plans by the channel. • Without changing the initial plan, we aim to grow 1.9% of sales volume in the 2nd Quarter from the previous year. • For Shikoku CCBC, we project sales volume of 5.04 million cases in the 2nd Quarter. T
Slide 16: RGM initiatives in Supermarket
• Now, let me explain our sales strategies beginning with RGM initiatives in Supermarket. We will increase revenue and profits by combining the 3 elements of “Raising wholesale prices in trade”, “Improvement of product mix” and “sales volume growth”. • First, we will work on advancing “Price guideli
Slide 17: Vending strategies
• Next, I would like to describe our Vending strategies. We will transform the Vending business by executing strategies from 3 perspectives of “Revenue growth”, “Productivity enhancement” and “Efficiency”. • For the 1st element of Revenue growth, we have launched a promotion leveraging an exclusive
Slide 18: Vending profitability and efficiency initiatives
• For the 2nd initiative to raise profitability, we will continue to work on improvement of unprofitable locations and review of trade terms with customers. In the 1st Quarter, we generated total profit contribution of a 50 million yen with the improvement of unprofitable locations by 30 million yen
Slide 19: Sales volume plans by brand
• Next, let’s look at sales volume plans by the brand. • We will reinforce raising market competitiveness of this year’s key focus brands and categories of “Sparkling”, “Coffee”, “Non-sugar tea” as well as “Water & Sports”. In addition, we will strategically introduce new products to capture new gro
Slide 20: Brand strategies
• Now, let me explain about our brand strategies. • For Coca-Cola brand both with Coca-Cola and Coca-Cola zero, we aim to grow 4.7% from the previous year with the ongoing “Stamp bottle campaign” tied-up with famous artists. • With Georgia, we strive to attain a 4.4% growth, projecting positive from
Slide 21: Healthcare & skincare business
• Next is on Healthcare & skincare business. Let me first briefly introduce the business. • Our wholly-owned subsidiary of Q’sai Co., Ltd. mainly runs Healthcare & skincare business by producing and offering Healthcare & skincare products. • Healthcare products include “Kale Aojiru” using 100% domes
Slide 22: Healthcare & skincare Q1 status and strategies
• These are status of the 1st Quarter and sales strategies for Healthcare & skincare business for the 2nd Quarter. • Revenue from Healthcare products in the 1st Quarter increased from the year earlier in the joint category thanks to stronger advertisement of “Knee-support Collagen” and “Glucosamine
Slide 23: 2nd Quarter performance plans
• This shows our consolidated and business-based performance plans for the 2nd Quarter. There is no change from our initial plans. • We project increased revenue and operating profits from the year earlier with revenue at 116.4 billion yen, operating profits at 4.8 billion yen, ordinary profits at 4
Slide 24: Operating profit variance factors in 2nd Quarter
• Page 23 shows variance factors of operating profits in the 2nd Quarter against the previous year. • We forecast Coca-Cola business to increase profits by 1.1 billion yen from last year. • On commercial side, we expect contribution profits of additional 200 million yen from last year, incorporating
Slide 25: New products and new business cultivation
• Let me describe development of new products and cultivation of new businesses here which we raise as one of key strategies in our mid-term 3 year plan. • CCW and Q’sai together invested 50 million yen to establish “CQ Ventures Co., Ltd.” as of February 29. Setting 1.3 billion yen as the total inve
Slide 26: Summary
• Here is the summary. • We increased profits in the 1st Quarter by 3.4 billion yen from the year earlier, outperforming the consolidated operating profit plan by 2.5 billion yen with steady progress of performances. The momentum of good cycle generated last year has continued. • On the commercial s
Slide 27: Impact from the Kumamoto Earthquake
• Finally I would like to report you on the impacts from the Kumamoto Earthquake. • Still many people are forced to live in evacuation centers in the disaster-hit areas. First I would like to express my deep condolences to those who are in the region and all the parties involved. I believe it gives
Slide 28: References
[References] 27 27
Slide 29: OTC market share trends (excl. VM)
OTC market share trends (excl. VM) (Unit: %, pts) 2015Q1 Q2 + Values outsidethe graph show gapvs. PY same period (source: Intage) 28 28
Slide 30: Q1 mix by brand/channel
Q1 (Jan — Mar) — Mix by brand/channel Sales Vol. Revenue i Gross profit Revenue Gross profit 29 29
Slide 31: Sales update on vending machines by cluster
Sales update on vending machines by cluster Vending machine full service CAN VPM* [CCW Area] |At-work (office) |At-work (plant) Mass retailer Transportation School Leisure Pachinko Sports Hospital Accommodation lother (Indoor) Outdoor Total *sales Vol. per vending machine 30 30
Slide 32: Q1 sales volume by channel/package
Q1 (Jan — Mar) — Sales Volume by channel/package = Michain store Vs. Plan Vs. PY (Unit: Kcases, %) Diff % Diff % $$ PET (smaller than 1,000ml) +504 +73 +667; +99 idi PET (less than 1,500ml ) . +69: 425.1) +106; +454) LS PET(1,500ml or larger) +391 45.2 +485: +6.6 +176) +48) +453 413.4 433 4205) +3)
Slide 33: Q2 sales volume plan by package
Q2 (Apr —Jun) — Sales Volume Plan by package (Unit: K cases, %) $5 (1,000ml or smaller) Midi(smaller than 1,500ml] PET LS (1,500mI or larger) Total Can (incl. bottle can) Others Syrup, powder CCW total (excl. Shikoku CCBC) [__ 55.836] +1,020 +1.9 CCW-+Shikoku CCBC total vs. PY Diff % +864 45.5 +237
Slide 34: Q2 sales volume plan by channel/package
Q2 (Apr —Jun) — Sales Volume Plan by channel/package Wichain store (Unit: K cases, %) ET (sma n 1,001 __Midi PET (less than 1,500m! ) [CCW total (excl. Shikoku CCBC) Mending (unit: K cases, %) __SSPET (smaller than 1,000ml) tS PEC(1, arger) __£an (incl. bottle CAN) _Other Syrup/Powder [ccw total Cex
Slide 35: Performance Trend
Performance Trend = (Unit: MMAPY) 1900 | 2000 | 2001 | 2002 | 2003 | 2004 | 2008 | 2006 | 2007 | 2008 | 2000 | 2010 | 2011 | 2012 | 2013 | 2014 | 201s | 76 Revenue | 164731] 207.827] 226.111] 247,737] 240.825| 253.248] 248.874] 327,821] 409,521/ 395558| 369.698] 375.764] 399,717] 386637| 431,711| 42
Slide 36: KBI Trend
KBI Trend = _ <Operating income & its ratio> <Net asset/capital ratio> (MM JPY) (mM Py) —— v0 Neca NP 7 we = 10 = Capital ratio () i 15,000 14,262 10,000 8 “114 5,000 2 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 <ROA/ROE> <EPS/PER> ~ (EPS: JPY) (PER: times) | ROE ROA L 7 . 47 4a 56 90 : 3.0 3
Slide 37: Coca-Cola System in Japan — Capital Relationship
Coca-Cola System in Japan — Capital Relationship [investments with figures indicate %;() in total by CCW+ Shikoku (As of Jan 1, 2016) Joint companies of TCCC/CCI The Coca-Cola Company (TCCC) @ 100% 100% Coca-Cola Tokyo Research & Development Co., Ltd (cctr&D) @ Coca-Cola (Japan)Co., Ltd (cacy @ and
Slide 38: Coca-Cola affiliated companies and their roles
Coca-Cola affiliated companies and their roles 1. Coca-Cola West Co., Ltd. (CCW) Coca-Cola West Japan (CCWJ) was established in 1999 by merging Kitakyushu CCBC and Sanyo CCBC. CCWJ acquired ownership of Mikasa CCBC in 2001. In 2006, CCWS and Kinki CCBC merged the management of both companies, and in
Slide 39: Glossary
Glossary Vending Retail sale business to distribute products through vending machines to consumers Chain store Wholesale business for supermarket chain Convenience Store (CVS) Wholesale business for convenience store chains Retail Wholesale bu: jess for grocery stores, liquor shops, and other over-t
Slide 40: Forward-looking statement
Forward-looking statement The plans, performance forecasts, and strategies appearing in this material are based on the judgment of the management Please note that these forecasts may differ materially from actual performance due to risks and uncertain factors such as those listed below. - Intensific
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