Keurig Dr Pepper Inc. · NASDAQ:KDP
Keurig Dr Pepper — Dr Pepper Snapple Group — Merger or Acquisition (January 2018)
30 slides from Keurig Dr Pepper's merger presentation, Jan 29, 2018
Slide 1: Forward Looking Statements
Forward Looking Statements Certain statements contained herein are “forward-looking statements” within the meaning of applicable securities laws and regulations. These forward-looking statements can generally be identified by the use of words such as “anticipate,” “expect,” “believe,” “could,” “esti
Slide 2: Presenters
Presenters LARRY YOUNG President & Chief Executive Officer Dr Pepper Snapple BOB GAMGORT Chief Executive Officer Keurig Green Mountain OZAN DOKMECIOGLU Chief Financial Officer Keurig Green Mountain 3
Slide 3: Today's Agenda
Today’s Agenda A Compelling Combination Overview of Keurig Green Mountain Overview of Dr Pepper Snapple Creating a New Challenger In the Beverage Industry Transaction Highlights 4
Slide 4: Strong Value Creation for Dr Pepper Snapple Shareholders
Strong Value Creation for Dr Pepper Snapple Shareholders Jan. 26 Value at Closing $103.75 Special Cash Dividend 1 2 1 Share of DPS 1 Share of KDP $95.65/share closing price KDP 2017 Pro Forma EPS of 1.273 1100% of DPS 213% of KDP 3 Based on KGM actual, consensus estimates for DPS, fully leveraged wi
Slide 5: Combining Two Industry Leaders
Combining Two Industry Leaders • Leading player in flavored beverages in North America across all major categories • Leader in single-serve coffee in North America with installed brewers in more than 25 million North American homes and offices • Over 50 owned, licensed and allied brands with 9 of th
Slide 6: Combining Two Industry Leaders: Owned, Licensed, Allied and Partner Brands
Combining Two Industry Owned, Licensed, Allied and Partner Brands Leaders 7
Slide 7: Our View of the Changing Consumer Beverage Industry
Our View of the Changing Consumer Beverage Industry From Manufacturer Definition Hot Beverage To Consumer Need States Indulgent Wholesome CSD E.g., consumer need for afternoon energy boost Consumer Choice Set Hydrate Water Refresh Refrigerated Energize 8
Slide 8: Any Consumer Need, Any Place, Anytime
Any Consumer Need, Any Place, Anytime Consumer Need For Afternoon Energy Boost Multiple Formats All Channels 9
Slide 9: Keurig Dr Pepper: A New Challenger In the Beverage Industry
Keurig Dr Pepper: A New Challenger In the Beverage Industry • Broad portfolio of iconic brands – the first with scale across cold and hot beverages Strong exposure to high-growth segments Broad and complementary point-of-sale reach, fully delivering scale benefit Attractive growth opportunities thro
Slide 10: Keurig Green Mountain Has Transformed Under Private Ownership
Keurig Green Mountain Has Transformed Under Private Ownership FROM: Unfocused management drifted into non-core category pursuits and international expansion TO: Disciplined business model focused on single-serve coffee in North America • • • Consumer-friendly, open system successfully gaining partne
Slide 11: Building on the Strengths of KGM's Strategic Assets
Building on the Strengths of KGM’s Strategic Assets RETAIL GROWTH ENGINE POWER OF KEURIG BRAND UNMATCHED CHOICE KGM is THE driver of dollar growth for the coffee category Over 75 leading owned, licensed and partner brands The Top 50 Brands $ Share Chg ’10 –’17 US Coffee Retail Sales ($ Billion) $10
Slide 12: Improving Business and Financial Performance
Improving Business and Financial Performance Strategic Pod Price Reduction Funded by Efficiencies Investments In Marketing and Innovation Have Restored Growth At-Home Pod Consumption Volume vs. Year-Ago 12.2% 1 Excludes one-time non-recurring expenses and intangible amortization 2 Change from 2015 t
Slide 13: Strong Ability to Capture Significant Additional Growth
Strong Ability to Capture Significant Additional Growth Single-Serve Coffee HH KGM/Bain US Household Penetration Research Penetration TODAY Quality Image Convenience Variety Value US Full Potential France Modern NL Consumer Need Clusters 14 Source: Keurig Green Mountain management, Bain & Company Co
Slide 14: Elements In Place To Deliver Further Growth
Elements In Place To Deliver Further Growth • Rollout of the brewer innovation pipeline • Expanded roll-out of recyclable K-Cup pods – Canada to be completed in 2018; on track for 2020 US completion System HH Penetration Growth • Significant e-commerce channel penetration, including Keurig.com • Lau
Slide 15: DPS' Iconic Brands Are Leaders In Their Categories
DPS’ Iconic Brands Are Leaders In Their Categories Flavor Leaders in US CSD Leading Non-Carbonated Brands #1 in its flavor category #2 overall flavored CSD in US #2 lemon-lime CSD in the US #1 ginger ale in US & Canada #2 Premium shelf-stable RTD tea in US Fastest growing enhanced water in US #1 bra
Slide 16: DPS is the Partner of Choice for Entrepreneurial Brands
DPS is the Partner of Choice for Entrepreneurial Brands oda - introduced in 1937 17 Source: Company filings and company websites Leading coconut water brand #1 premium bottled water brand in the US Line of better-for-you sports drinks Combines the best of energy drinks and vitamin enriched waters Th
Slide 17: DPS Has Delivered Consistent Performance
DPS Has Delivered Consistent Performance Business Mix Revenue ($ in billions) Adjusted Operating Income ($ in billions) 18 Source: 2016 Company Results Source: 2013-2016 Company Results, 2017 Consensus Estimate
Slide 18: Creating a New Challenger In the Beverage Industry
Creating a New Challenger In the Beverage Industry + !<EURIG GREEN MOUNTAIN , .DR PEPPER t •SNAPPLEGRoup 19
Slide 19: Any Consumer Need, Any Place, Anytime
Any Consumer Need, Any Place, Anytime Consumer Need For Afternoon Energy Boost Multiple Formats All Channels 20
Slide 20: Strong Exposure to Segments That Generate Both Scale & High Growth
Strong Exposure to Segments That Generate Both Scale & High Growth Consumer Packaged Beverage Category, $US retail sales billions in US and CA, 2016 SCALE GROWTH $22 $47 $22 $21 $19 $10 $15 $4 100 bucha .8 Other % ’11-’16 CAGR Ranges 80 $12 Regular colas $1 Black >10% 60 6-10% 3-6% 40 $2 Green/ Herb
Slide 21: Expansion Into High-Growth RTD Coffee and Tea
Expansion Into High-Growth RTD Coffee and Tea KGM Owned JAB Owned JAB Owned KGM and JAB Minority Investment JAB Owned 22
Slide 22: World-Class Iconic Brands Across Hot and Cold Beverages
World-Class Iconic Brands Across Hot and Cold Beverages Carbonates (1%) to 1% Non-Colas +1 to 2% Juice (2%) to 0% Coconut +10% Water Sport / Energy RTD Tea RTD Coffee Tea SS Coffee Category Retail $ Trends1 3% to 6% 6% to 10% 6% to 10% +10% 0% to 2% +10% Dr Pepper Snapple Keurig Green Mountain/ JAB
Slide 23: Unrivaled Nationwide Distribution Capabilities
Unrivaled Nationwide Distribution Capabilities Each Company Brings Unique Channel Strengths That Expand the Reach of the Combined Business Ecommerce Convenience Retail Grocery / Mass Workplace / Office Drug / Dollar Club Department Specialty Local DSD Access Cold Drink / Vending Local Retail 24
Slide 24: $600 Million of Targeted Synergies
$600 Million of Targeted Synergies Integrating warehousing and transportation across the Direct procurement savings on overlapping materials Purchasing scale on indirect spend categories Optimization of duplicate positions and processes combined network Expected one-off costs of ~$750 million Estima
Slide 25: Management and Governance
Management and Governance • • • • Keurig Green Mountain and Dr Pepper Snapple will continue to operate out of their current locations Bob Gamgort, CEO of Keurig Green Mountain, will be the CEO of Keurig Dr Pepper, based in Burlington, MA Ozan Dokmecioglu, CFO of Keurig Green Mountain, will be CFO of
Slide 26: Key Transaction Highlights
Key Transaction Highlights • At closing, Dr Pepper Snapple shareholders to receive $103.75 per share special dividend in cash and will continue to own their shares in the existing but newly named public company Upon closing, Dr Pepper Snapple’s current shareholders will own 13% of Keurig Dr Pepper a
Slide 27: Pro Forma 2017 Financials
Pro Forma 2017 Financials DPS Consensus1 KGM Actual Synergy Full Run Rate2 Combined Pro-Forma M USD Sales 6,700 4,135 0 10,835 1,0693 Adjusted Op Income 1,393 600 3,062 Adjusted Net Income4 1,776 Shares (B) 1.4 Pro-Forma EPS 1.27 1 Analyst consensus estimate 2 Fully realized deal synergies 3 Exclude
Slide 28: Keurig Dr Pepper: A New Challenger In the Beverage Industry
Keurig Dr Pepper: A New Challenger In the Beverage Industry • Broad portfolio of iconic brands – the first with scale across cold and hot beverages Strong exposure to high-growth segments Broad and complementary point-of-sale reach, fully delivering scale benefit Attractive growth opportunities thro
Slide 29: Creating a New Challenger In the Beverage Industry
Creating a New Challenger In the Beverage Industry + !<EURIG GREEN MOUNTAIN , .DR PEPPER t •SNAPPLEGRoup 30
Slide 30: Additional Information
Additional Information: This communication may be deemed solicitation material in respect of the proposed business combination. In connection with the proposed transaction, Dr Pepper Snapple Group plans to file with the SEC and furnish to its stockholder a proxy statement and other relevant document
Dr Pepper Snapple Group — Merger or Acquisition (January 2018) on 6ix