03-van Oers MTM FINAL - library.corporate-ir.netlibrary.corporate-ir.net/.../items/314451/VanOersMTMFINALSlides.pdf · Supermarket Hypermarket Discounter Convenience Cash & Carry

International BeverageFrank van Oers

2

Long-term Growth Will Come from Single-Serve and Instants

38%

12%18%11%8%

7% 6%

$3.2 Billion

Multi-Serve (ex. Brazil)Single-ServeInstantsMulti-Serve (Brazil)LiquidsTeaOther

FY08

56%

12%

1%

4%

24%3%

European RetailRussiaEuropean FoodserviceBrazilAustraliaAsia Pacific Foodservice

3

Agenda

•Premiumization

•Geographic Expansion

•Drive Foodservice

4

Agenda

•Premiumization



5

Premiumization

•Leverage and defend #1 and #2 positions to build margin•DRIVE Single-Serve opportunities in key markets

•UPGRADE position in decreasing Multi-Serve segment

•BROADEN existing product range in premium instants & espresso segments

6

Premiumization




7

Long-term Growth Will Come from Single-Serve and Instants

38%

12%18%11%8%

7% 6%

FY08$3.2 Billion

31%

13%20%

11%

13% 7% 5%

Multi-Serve (ex. Brazil) Multi-Serve (Brazil)Single-Serve LiquidsInstants TeaOther

38%

12%18%11%8%

7% 6%

8

Significant Growth Opportunitiesin Single-Serve

• Senseo system growth through added-value appliance and beverage innovation

• Continue to drive switch from drip filter to single-serve

• Increase soft pod consumption and maintain strong“multi-beverage” share within category

• Drive market leadership in appliance and pods in current markets

• Enter in new markets with potential by 2010

9

SENSEOSENSEO BEANBEAN

Upgrade Senseo

Add fresh milk: LATTE SELECT

Add filter option

Single-serve Will Also Grow Through Machine Innovation

Upgrade Base Senseo

Full-auto coffee systemwith flexible bean

containers

Fresh Beans + Jug

High Pressure Espresso

10

Premiumization




11

Consumer Trends Lead to Premium Strategy and A Focus on Value

Consumer Demand Benefit driven/Premium/Health

Value-Driven/Basic

Gro

wth

12

Discounters have been able to exploit ‘value driven’ trends to gain share

Source: MVI database

45.2% 41.8% 40.6%

24.7% 26.1% 26.8%

14.1% 16.3% 17.4%

9.4% 9.1% 8.5%6.7% 6.7% 6.7%

0%

25%

50%

75%

100%

2003 2008 2013E

Supermarket Hypermarket Discounter Convenience Cash & Carry

Share of grocery formats across Europe

13

Health & Wellness Is an Important Consumer Trend

Naturalness Cell protection (AOX)

Hydration Mental Performance

14

We Have Developed a Profitable Tea Position in Selected Countries

15

Build One Strong Aroma Lady Brand

16

We Will Upgrade Our Multi-Serve Assortment Through Innovation

Premium & Enjoyment Health & Wellness

17

Pepites d’Arome Represents Another Revolutionary Innovation in Coffee

TV

Shelf Impact

Consumer Education

Promotion

Sampling

Bill Boards

The Product

Coupons

18

Premiumization




19

Agenda

•Premiumization



20

Geographic Expansion

• Invest in high growth regions using appropriate forms of coffee•CONTINUE our ‘volume to value’ strategy in Brazil

•DEVELOP Russia (Instants, later Tea, Ukraine)

•EXPLORE acceleration Asia (Thailand Instants, Vietnam R&G)

21

Investments in Emerging Markets Will Change our Portfolio Over the Long-Term

56%

12%

1%

4%

24%3%

FY08$3.2 Billion

51%

13%

4%5%

24%3%

European Retail BrazilRussia AustraliaEuropean Foodservice Asia Pacific Foodservice

22

• Profitable incremental sales over the long-termReturn

•Russia is the largest instants market in Europe•Premium segment is growing rapidly

Attractiveness of the

opportunity

The Russian Opportunity

• Well-positioned product and packaging• High investment levels• Strong organization and distributor

Why Int'l. Beveragecan win

23

Russian Coffee Market Growing Rapidly

* Estimated volume Green, 2003-04Source: The Coffee Market FY06 CBI April 2006

69

89

122

122

134

144

163

252

300

538

Thousands tons Retail value CAGR, 2002 – 2006

-3

-3

-1

-1

-1

-1

0

1

1

16Russia

Italy

Netherlands

France

Spain

Poland

Sweden

U.K.

Germany

Austria

Germany

France

Italy

Spain

Russia

Netherlands

U.K.

Poland

Sweden

Austria

24

• Profitable incremental sales over the long-termReturn

• Russia is the largest instants market in Europe• Premium segment is growing rapidly

Attractiveness of the opportunity


•Well-positioned product and packaging•High investment levels•Strong organization and distributor


25

Well-Positioned Premium Product Line

26

•Profitable incremental sales over the long-termReturn

• Russia is the largest instants market in Europe• Premium segment is growing rapidly

Attractiveness of the opportunity


• Well-positioned product and packaging• High investment levels• Strong organization and distributor


27

Large Investment in Russia

•Market investment of $25 million

•Targeted market share of 15% by FY11

•Sales of $200 million by FY11

28

The Brazilian Opportunity

BRAZIL

29

By 2010 Brazil is expected to bethe largest coffee market in the world

Brazilian Market Very Large and Growing

16%1,108,500 TonsU.S.

13%881,300 TonsBrazil

100%6,927,000 TonsTotal World Market FY07

Source: Latin Panel, June 2008

Basis: green coffee equivalent

30

We Have Broad Distribution

Jundiai

Recife

FactoriesDCsOutbound Routes

31

PREMIUM

MAINSTREAM

VALUE

Segmented Portfolio of Strong Brands

32

Brazil Retail Coffee Market Share

11.8 11.713.5

6.8 7.4 7.3

16.518.5 19.0

0

5

10

15

20

FY06 FY07 FY08

Sara Lee

Sta Clara

Melitta

Source: Nielsen

+2 pts from Mokaacquisition

33

Results Are Improving in Brazil

308340Net Sales

214Operating Income

FY07FY08$ in millions

34

Agenda

•Premiumization



35

International Foodservice Overview

•FY08 sales of $860 million, up 10%

•Primary countries include Netherlands, Belgium, Germany, Denmark and Australia

36

Foodservice Business Model Improvement

•Rationalization of direct business models

•Attack tail of unprofitable customers

•Develop indirect channels

37

Focus on Health Care And Business Segments

Segment NOS (%)Operating Profit(% of NOS)

QSR/Coffeeshops

Education

Medium business

Leisure

Largebusiness

Smallbusiness

Convenienceand retail

Hotelsand

gaming

BaReCaHealthand care

Average

38

Roll out C600

Roll out C100

Roll out TQL

Roll out C300

DescriptionActivity

Strong Innovation Pipeline

39

International Beverage Performance Overview

+6-8%+1-3%+9.2%OperatingSegment Income

+5-7%+2-4%+8.6%Net Sales

Long-term Guidance

FY09 Guidance

Adjusted FY08 vs. FY07

FY08 Adjusted Net Sales = $3.2 billionFY08 Adjusted Operating Segment Income = $562 million

Note: See table at the end of this presentation deck for a reconciliation to reported numbers.

40

International Beverage Net Sales

$2,962

(347)2

$2,617

FY07

$3,215

––

$3,215

FY08

8.6%Adj. Net Sales

Less:Foreign currencyAcquisitions/Divestitures

22.9%Net Sales

Change

41

International Beverage Operating Segment Income

$515

(59)(118)(21)

$317

FY07

$562

––

(15)

$547

FY08

9.2%Adj. Operating Segment Income

Less:Foreign currencyImpairment chargesOther significant items, net

72.8%Operating Segment Income

Change

Documents

03-van Oers MTM FINAL - library.corporate-ir.netlibrary.corporate-ir.net/.../items/314451/VanOersMTMFINALSlides.pdf · Supermarket Hypermarket Discounter Convenience Cash & Carry