View
825
Download
0
Category
Tags:
Preview:
DESCRIPTION
Presentation by senior KO management at 2009 CAGNY conferenceFollow my blog at www.foodsfluidsandbeyond.com
Citation preview
2/18/2009
1
1
Muhtar KentPresident and CEO
Forward-Looking StatementsThis 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” and similar
expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ materially from The Coca-Cola Company’s historical
experience and our present expectations or projections. These risks include, but are not limited to, obesity concerns; scarcity and
quality of water; changes in the nonalcoholic beverages business environment, including changes in consumer preferences based on
health and nutrition considerations and obesity concerns; shifting consumer tastes and needs, changes in lifestyles and increased
consumer information; increased competition; our ability to expand our operations in emerging markets; foreign currency and
interest rate fluctuations; our ability to maintain good relationships with our bottling partners; the financial condition of our bottlers;
our ability to maintain good labor relations, including our ability to renew collective bargaining agreements on satisfactory terms and
avoid strikes or work stoppages; increase in the cost of energy; increase in cost, disruption of supply or shortage of raw materials;
changes in laws and regulations relating to beverage containers and packaging, including mandatory deposit, recycling, eco-tax
and/or product stewardship laws or regulations; adoption of significant additional labeling or warning requirements; unfavorable
economic and political conditions in international markets, including civil unrest and product boycotts; changes in commercial or
market practices and business model within the European Union; litigation uncertainties; adverse weather conditions; our ability to
maintain brand image and product quality as well as other product issues such as product recalls; changes in legal and regulatory
environments; changes in accounting standards and taxation requirements; our ability to achieve overall long-term goals; our ability
to protect our information systems; additional impairment charges; our ability to successfully manage Company-owned bottling
operations; global or regional catastrophic events; and other risks discussed in our Company’s filings with the Securities and
Exchange Commission (SEC), including our Annual Report on Form 10-K, which filings are available from the SEC. You should not
place undue reliance on forward-looking statements, which speak only as of the date they are made. The Coca-Cola Company
undertakes no obligation to publicly update or revise any forward-looking statements.
Reconciliation To US GAAP Financial InformationThe following presentation includes certain "non-GAAP financial measures" as defined in Regulation G under the Securities Exchange
Act of 1934. A schedule is posted on the Company's website at thecoca-colacompany.com (in the "investors" section) which
reconciles the non-GAAP financial measures included in the following presentation to the most directly comparable financial
measures calculated and presented in accordance with Generally Accepted Accounting Principles.
2
2/18/2009
2
Overview
• Why Coca-Cola. . . Why Now?
• Our System was Built for Times Like These
• There is No Better Industry to Be In
• Consistent Strategies for Growth
• Winning in a New World
33
4444
2/18/2009
3
5
A System Like No Other
6
Over 1.5 Billion
Servings Every Day
20 Million Customers
Every Week
Top 40 Bottling Partners
~80% of Total Volume
2/18/2009
4
7
2005 2006 2007 2008
Revenue Growth1
1Ongoing Net Revenue Excluding Structural Change 2Long Term Target is Currency Neutral
Delivering Consistent, Quality Results
2005 2006 2007 2008
9%
7%
5% 9% 14% 17%
Ongoing EPS Growth
Long-Term Target2
11%12%6%6%
88
2/18/2009
5
Cash, It’s the Real Thing
2001 - 2008 Cash
From Operations - $47B
$ Billions
2009 – 2013 Expected Cash
From Operations $41B – $45B
Cash
Available
After
Capex
$27 - $35 B
$10 - $14 BCapital Expenditures*
Dividends
Share Repurchase
Acquisitions
2009E – 2013E
* Based on assumption of no changes in company owned bottlers
$4
$8
2001 2002 2003 2004 2005 2006 2007 2008
9
Providing Returns to Shareowners
10
2005 - 2008 Cash Returned
to Shareowners - $19.2BKO Relative Share
Performance
Total Return
2005 2006 2007 2008
$1.8$1.1
$ Billions (except DPS amounts)
$4.7
$5.4
$4.9$4.6
Dividends
Share Repurchase
$ 1.52
$ 1.12$ 1.24
$ 1.36
$2.0$2.5
2008
Jul-Dec
Dividend
Yield*
Coca-Cola -9.8% 3.3%
PepsiCo -13.7% 2.9%
Nestle -13.9% 3.0%
Danone -13.5% 2.9%
DJIA -22.9% 5.6%
S&P 500 -29.7% 3.8%
* As of 12/31/08
DPS = Dividends per Share
DPS
2/18/2009
6
A Real “Port in the Storm”
Quality
Balance
Sheet
Access to
Commercial
Paper
Liquidity
Dividends
11
12
The World’s Greatest Brands . . . and Growing
2/18/2009
7
Winning in the Marketplace
YTD Nov „08 Worldwide Retail Volume Share % Change vs. Prior Year
NARTD +0.6
SPARKLING3 - 0.1+0.6
STILL +0.9- 0.1 - 0.6- 0.4
- 0.3
NA
Source: Nielsen, Synovate Aztec/Frontline (South Africa).
NARTD = Nonalcoholic, Ready-to-Drink, Excluding Dairy and Bulk Water
YTD November = Jan/Feb/Mar/Apr/May/Jun/July/Aug/Sep/Oct /Nov except USA ( = Jan-Dec ‘08 AMC).
NA
NARTD SPARKLING STILL
+0.8 +0.5 +1.0 +0.9
Volume Share Gains Driven by International
1 PepsiCo: RTD Tea includes Unilever.2Nestle: RTD Tea JV with San Pellegrino for Belte in Italy.
3KO Core Sparkling Brands
Flat
- 0.5
- 0.3
Global
International North America
1
NARTD SPARKLING STILL
2
3 3
1313
PEPSI DANONE NESTLE
Flat
13
Delivering Through Economic Downturns
14
2001 U.S. Slowdown
• US GDP Growth : +0.8%
• US Volume Growth: 1.7%
1998-99 Latin America
Financial Crisis
• Latin America GDP Growth: -0.1%
• Latin America Volume Growth: 3.8%
1997-98 Southeast Asia
Financial Crisis
• SE Asia GDP Growth : -0.7%
• SE Asia Volume Growth: 4.4%
1997-98 Russia Financial Crisis
• Russia GDP Growth : -5.3%
• Russia Volume Growth: 0.8%
Sandy Douglas21 Years
Gary Fayard 15 Years
Joe Tripodi1 Year
Alex Cummings 12 Years Irial Finan
27 Years
José Octavio Reyes
28 Years
Dominique Reiniche17 Years
Ahmet Bozer 19 Years
Glenn Jordan
31 Years
2/18/2009
8
Making Smart, Prudent Investment Choices
* Ongoing net revenue and operating expenses
15
Selling & Advertising*% of Net Revenue
2005 2006 2007 2008
25.7% 26.9% 27.0% 27.5%
2006
General & Administrative*% of Net Revenue
2005 2007 2008
12.0% 11.8% 10.9% 9.4%
Leveraging Productivity as a Growth Enabler
16
Rewiring the Organization
Reallocating Marketing Investments
Redesigning the Business
Rewiring the Organization
• Re-Architected to Drive Speed
& Consistency, Less Cost
Reallocating Marketing Investments
• Global Campaigns
“Fewer, Bigger, Better”
• Marketing Effectiveness
More than
$500 Million
Annualized
Savings
$
$
$
Redesigning the Business
• Packaging Optimization
• Manufacturing Productivity
• Logistics & Warehousing
2/18/2009
9
Leveraging Our Core Capabilities
17
• Price Point
Management
• Communications
• Messaging
• Driving Traffic
Impulse
• Partnering with
Customers
• Gaining Share
• Differentiating
Products/Packages
• Committing “Feet
on the Street”
• “Marketing In
Market”
Consumer
Marketing
Commercial
Leadership
17
Franchise
Leadership
$AR
470
Flexible Execution for These New Times
18
Leveraging
Balanced
Geographic
Portfolio
Coke SmilePhilippines
RetornosArgentina
Value TeasJapan
Smile Back at Life. Have a Every Day!
2/18/2009
10
1919
We Expect Strong Consumption Tailwinds
3.3B
2008 2020
4.2B
+0.9 B
1.2B
2008 2020
+1 B
2.2B
4.1BDeveloped Emerging
Non-RTD BeveragesRTD Commercial Beverages
Developed Emerging
30%
30%
70%
70%
Middle Class GrowthUrban Growth RTD Conversion
20Source: Population Division of the Department of Economic and Social Affairs of the United
Nations Secretariat, World Bank Development Indicators
Opportunity
2/18/2009
11
Our Industry Will Experience Healthy Growth
0%
20%
40%
Sparkling Juice / Juice Drinks
Packaged Water
Tea / Coffee
Energy Sports Drinks
% of Incremental Volume % of Incremental Value
2008-20 Incremental Category GrowthVolume = ~60 B Unit Cases
Value = ~ $600 B
21Source: KO Internal Estimates; Including Soy and Dairy
0
200
400
600
Global Mexico US Spain S. Africa Romania Brazil Turkey Poland Russia China
Per Caps: “We’re Really Just Getting Started”
22
KO Per Capita Consumption
*Per capita consumption of all Company beverage products
2/18/2009
12
23
Driving Global
Beverage
Leadership
Accelerating
Innovation
Leading Our
System for
Growth
Leveraging
Balanced
Geographic
Portfolio
24
Consistent Strategies Driving Growth
2/18/2009
13
Driving Global
Beverage
Leadership
Accelerating
Innovation
Leading Our
System for
Growth
Leveraging
Balanced
Geographic
Portfolio
25
Consistent Strategies Driving Growth
Driving Global Beverage LeadershipThree-Cola Strategy
26
Driving Global
Beverage
Leadership
EXECUTING DELIVERING
• China
Olympics
• TM Coca-Cola –
International Growth +3%
– China +12%
– India +10%
– Japan +6%
– Brazil +5%
• Three-Cola
Strategy
• Zero Zero 7;
Super Bowl
• Sex & the
City;
Red Dress
REFRESHING
Volume Growth Rates are for 2008
2/18/2009
14
27
Driving Global Beverage Leadership Sparkling Commercials
Driving Global
Beverage
Leadership
“Troy”North America
“Heist”Global
“Library”Global
Driving Global Beverage Leadership Sparkling: Innovating for Growth
28
REFRESHING EXECUTING DELIVERING
• New Sprite &
Fanta Graphics
• Leveraging the
“Power of Zero”
• Fanta up 13% in Japan• Marketing the Category
• Sprite up
18% in
China
Driving Global
Beverage
Leadership
• New Consumer
Needs
Volume Growth Rates are for 2008
2/18/2009
15
29
REFRESHING EXECUTING DELIVERING
• New Business Models • Speed and Scale
• Leveraging Acquisitions
• Growing
Georgia
Coffee
• New Consumer
Needs
• New Identity for
Juices
• Minute Maid
Pulpy
Expansion
Driving Global Beverage LeadershipWinning in Stills
• Burn Energy
in 70+
Markets
Driving Global
Beverage
Leadership
Up 2% in
2008
Accelerating Glacéau Globally
30
• Driving Innovation
• One Global Formula and Package
• Global Expansion to 10+ Markets
vitaminwater10
New Flavors
New Packaging
New Partnerships
Driving Global
Beverage
Leadership
2/18/2009
16
31
Driving Global Beverage LeadershipStill Commercials
Driving Global
Beverage
Leadership
“Horse Whisperer”North America
“Armor”Japan
“Café”China
Screen grab to come
Partnering with Our Global Customers
32
Marketing Integration at
a New Level
• Innovation
• Customized Promotions
• Joint Brand-Building
Top 24 Customers
Grew 7% in 2008
Driving Global
Beverage
Leadership
2/18/2009
17
Innovating Across Our Business
Fermented
Beverages
Illy RTD
Minute Maid
Pulpy
Powerade
Ion4
Nestea Vitao
Nestea
Honey Pear Tea
glaceauvitaminWater
Accelerating
Innovation
33
Honest Tea*
Sprite
Green
vitaminwater 10
* KO is a minority investee in Honest Tea with right and obligation to purchase in the future
Innovating Across Our BusinessAccelerating
Innovation
34
Fermented
Beverages
Illy RTD
Minute Maid
Pulpy
Powerade
Ion4
Nestea Vitao
Nestea
Honey Pear Tea
glaceauvitaminWater
Honest Tea*
Sprite
Green
vitaminwater 10
Lightweight &
Recyclable PET
Lightweight
Glass
* KO is a minority investee in Honest Tea with right and obligation to purchase in the future
2/18/2009
18
Innovating Across Our BusinessAccelerating
Innovation
35
Fermented
Beverages
Illy RTD
Minute Maid
Pulpy
Powerade
Ion4
Nestea Vitao
Nestea
Honey Pear Tea
glaceauvitaminWater
Honest Tea*
Sprite
Green
vitaminwater 10
Lightweight &
Recyclable PET
Light Weight
Glass
Natural Sweetener
* KO is a minority investee in Honest Tea with right and obligation to purchase in the future
Innovating Across Our BusinessAccelerating
Innovation
36
Fermented
Beverages
Illy RTD
Minute Maid
Pulpy
Powerade
Ion4
Nestea Vitao
Nestea
Honey Pear Tea
glaceauvitaminWater
Honest Tea*
Sprite
Green
vitaminwater 10
Lightweight &
Recyclable PET
Light Weight
Glass
Natural
Sweetener Equipment of
the Future
Fountain of the
Future
Tea
Equipment
* KO is a minority investee in Honest Tea with right and obligation to purchase in the future
2/18/2009
19
Our Worldwide Portfolio Strategy
• Maximize Volume
• Investing in
Infrastructure
• Maximize Value
• Building Consumer
Loyalty
• Maximize Profit
• Funding Growth
Emerging
Developing
Developed
37
Leveraging
Balanced
Geographic
Portfolio
Note: Breakdown of 2008 Volume represents 22 Key Markets
North America: Progress on Priorities
• 5 of 10 Fastest
Growing
Trademarks
• Packaging
Differentiation
• Still
Portfolio
Innovation
• Properties
• New Incidence
Model
• New Price/Pack
Architecture
• Coca-Cola Supply, Inc• Account Management
and In-Store Execution
• Cannondale Rankings
• Foodservice - New
Categories
• Supply Chain • Light-weighting Packaging
• Logistics • Marketing Efficiency
38
Enduring BrandsStrong Customer
Relationships
System
Alignment
Leveraging
Balanced
Geographic
Portfolio
Enabled by
Productivity
2/18/2009
20
Leading Our System to Long-Term Growth
Aligning
RelationshipsOperating
Effectiveness
Adding
Value
• Building on Strategic
Acquisitions
• Expanding Volume Base
• Enhancing Margins
“Are We Ready for
Tomorrow, Today?”
• First Time Together Since
1997
• Visualizing the Future
• Building a Shared Vision
• Well Positioned to
“Weather the Storm”
-1.2%-0.9%
2.1%2.6%
3.6%
2004 2005 2006 2007 2008
Bottling Investments Group
Operating Margins1
FROM TO
39
Leading Our
System for
Growth
1Margins based on ongoing results
Leading Our System to Sustainability
• New Low-Calorie Drinks and Fortified Beverages
• Supplier Diversity
Marketplace
• Economic Development
• Water Initiatives
Community
• Top 50 Companies for Diversity
• HIV/AIDS Healthcare &Education
Workplace
• New CO2 Coolers and Hybrid Trucks
• World’s Largest PET Recycling Plant
Environment
40
“Doing Well by Doing Good”
2/18/2009
21
Why Coca-Cola . . . Why Now?
4141
• Our System was Built for Times Like These
• There is No Better Industry to Be In
• Consistent Strategies for Growth
Real Value Today, Real Opportunity Tomorrow
• A Company Like No Other
• Delivering Consistent
Quality Results
• We Remain Constructively
Discontent
*Ongoing, currency neutral
3%-4%
5%-6%
6%-8%
Volume Net Revenue* OI* EPS*
High Single Digit
Long-Term Growth Targets Why Coca-Cola? Why Now?
42
2/18/2009
22
43
4444
Recommended