Business Outlook coca cola enterprises
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Transcript of Business Outlook coca cola enterprises
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Forward-Looking Statements
Included in this presentation are forward-looking management
comments and other statements that reflect management’s current
outlook for future periods. As always, these expectations are based on
currently available competitive, financial, and economic data along
with our current operating plans and are subject to risks and
uncertainties that could cause actual results to differ materially from
the results contemplated by the forward-looking statements. The
forward-looking statements in this news release should be read in
conjunction with the risks and uncertainties discussed in our filings with
the Securities and Exchange Commission, including our most recent
annual report on Form 10-K and subsequent SEC filings.
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Agenda
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North America – Restoring Growth
Europe – Delivering Growth
Financial Overview
Summary
120-Day Initiative
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Our 120-Day Review Is Complete – We Have Accomplished The Objectives Stated In July
• Accelerate and expand the scope and pace of change
• Focus on supply chain, operations, price-package architecture
• Put into motion essential changes required to drive long-term profitable growth in North America (NA)
• Work with The Coca-Cola Company (TCCC) to improve the long-term outlook for our NA business through a continuous stream of value creating initiatives
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Our Vision and Global Operating Framework
Be the Best Beverage Sales and Customer Service Company
DRIVE CONSISTENT DRIVE CONSISTENT LONGLONG--TERM TERM PROFITABLE GROWTHPROFITABLE GROWTH
VISION
• #1 or strong #2 • Most valued supplier• Winning and
inclusive culture
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Key North American 120-Day Actions
New integrated supply chain initiative
New price/package architecture
New incidence-based economic model
Reorganization of our operations
Identified additional areas of opportunities
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Outlook for 2008 and 2009
• Execute against our three strategic priorities
• Deliver 2008 EPS of $1.28 - $1.31(comparable)
• Deliver 2009 mid single-digit EPS growth (comparable, currency neutral)
• Long-term objectives are challenging, but attainable
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Agenda
120-Day Initiative
North America – Restoring Growth
Europe – Delivering Growth
Financial Overview
Summary9
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Outlook
• Challenging economic environment
• Employees committed to winning in the marketplace
• Improved alignment with TCCC
• Improved commodity cost outlook
North America
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Restoring Growth
• Reduce, Reallocate, Recruit, and Reenergize
• Revitalize sparkling beverages
• Accelerate still beverage growth
• Win in on-premise
• Improve execution
• Focus on expense control
North America
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Brand Initiatives
SPARKLING STILL
North America
Red Black Silver
Sprite and Fanta
Grow Energy
Marketing Activation
glacéau
PowerAde
Water
Teas & Juices
SPARKLING STILL
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MULTI-SERVE SINGLE-SERVE
Price / Package North America
• Diversified can packs
• Big bottle shrink multi-pack
• New pricing strategy
• 2 Liter contour bottle
• Package diversification
• “Entry priced” package
• Expand aluminum bottles in targeted locations
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System Supply Chain Integration North America
VISION
OBJECTIVEEfficiently deliver products to the customer on time and in full
An integrated supply network of people and assets in NA that is a strategic asset to the Coca-Cola System, enabling brand-building and our customer growth agenda
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System Supply Chain Integration
• Supply chain as a strategic asset
• Integrated approach to common activities
• Enable growth while reducing waste and inefficiency
• Optimize quality, flexibility, and service
North America
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New Incidence-based Economic Model
• More closely aligns TCCC and CCE
• Simplifies economic relationship by netting funding
• More aligned annual planning process
• 2009 is a transition year
U.S.
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Key Takeaways – North America 2009
• Focused on sparkling beverage revitalization• Be the fastest growing still beverage
company• Drive productivity to invest in growth and
capability• Strengthened partnership with TCCC focused
on volume and profit growth• Win in the marketplace
North America
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Coca-Cola North America – Strategic Goals
• Revitalize and grow sparkling beverages
• Lead profitable growth in still beverages
• Develop best-in-class commercial and customer service capabilities
• Drive productivity in everything we do
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North America
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Agenda
120-Day Initiative
North America – Restoring Growth
Europe – Delivering Growth
Financial Overview
Summary20
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Business Environment
• Solid 2008 performance
• Acknowledged view of the headwinds in Europe
• Declining GDP and recessionary trends
• Consumers changing spending habits
• Retailers increasing focus on price/value
Europe
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Delivering Growth
• Business is profitable and balanced• Significant room for growth in Europe• Clear plan for 2009
– Strengthen sparkling beverages
– Grow still beverages
– Drive efficiencies, leveraging our European scale
• Systematic approach to transformation
Europe
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Focused on Four Portfolio Growth Strategies
Europe
Accelerate Three Cola
momentum
Step-changepresence in sports and energy drinks
Build on a winning still juice drink
portfolio
Increase presence in water
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Key Takeaways – Europe 2009
• Build from a 2008 plan that is working in a challenging business environment
• Continue to drive growth profitably
• Extend presence in underdeveloped channels
• Systematic approach to transformation
• Invest to sustain growth while tightly managing expenses
Europe
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Corporate Responsibility and Sustainability (CRS)
Energy Conservation/
Climate Change
Water Stewardship
Sustainable Packaging/
Recycling
Product Portfolio/ Well-Being
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Diverse & Inclusive Culture
• Most talented, skilled team in the industry
• Proven ability to seize new ideas
• Driving new cost management initiatives forward
• Possess a driving will to win in the marketplace
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Agenda
120-Day Initiative
North America – Restoring Growth
Europe – Delivering Growth
Financial Overview
Summary27
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Outlook for 2008*
Full Year Earnings Per Share $1.28 to $1.31
GROWTH RATESNorth America
Volume decline low single-digits Price per case mid single-digitsCost per case high single-digits
* Excludes items impacting comparability
Europe Volume low single-digitsPrice per case low single-digitsCost per case low single-digits
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Commodities
• YOY growth has not been in-line with historical expectations of 2% to 3%
• Volatility has increased
• Recent declines will be weighted to 2H09
• Continued focus on using less and recycling more
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Debt / Liquidity
• Cash flow and capital resources cover funding needs – Raised ~$500M in commercial paper in 4Q
– Raised $1B in term debt in 4Q
– Revolving 5 year credit facility of $2.5 billion
• Year end cash balance will be ~$400M • ~$400M maturing in 1H09
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Other Key Financial Considerations
• Capital spend
• Free cash flow
• Foreign currency headwinds
• Capital structure / share repurchase
• Pension
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Outlook for 2009*
* Currency neutral and excludes items impacting comparability
NORTH AMERICA Growth Rates
Revenue mid single-digits
Cost per Case approximately 10%
EUROPE Growth Rates
Revenue mid single-digits
Cost per Case low single-digits
CCE Growth Rates
Revenue Growth mid single-digits
EPS Growth mid single-digits
Free Cash Flow > $650 million
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Long-Term Growth Objectives
Revenue Growth:4%-5%
Operating Income Growth:5%-6%
EPS Growth:High Single-Digits
ROIC Improvement:≥
20 bps/yr
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Agenda
120-Day Initiative
North America – Restoring Growth
Europe – Delivering Growth
Financial Overview
Summary34
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Key Takeaways
• Business environment is challenging
• CCE is executing against strategic priorities
• Our 120-day business review has accelerated plans to restore sustained, profitable growth and improved our alignment with TCCC
• 2008 EPS of $1.28 - $1.31 (comparable)
• 2009 mid single-digit EPS growth (comparable, currency neutral)
• Long-term objectives challenging, but attainable
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