Starbucks Coffee Company - jimleouf.free.frjimleouf.free.fr/starbuck.pdfExpertise Corporate Social...
Transcript of Starbucks Coffee Company - jimleouf.free.frjimleouf.free.fr/starbuck.pdfExpertise Corporate Social...
Starbucks Coffee Starbucks Coffee CompanyCompany
Jeremy Hanoun [email protected]
Fabon Dzogang [email protected]
English Presentation EPITA
Forward Looking Statement Forward Looking Statement This presentation includes the following forward looking This presentation includes the following forward looking statements: statements: anticipated store openings, comparable store sales anticipated store openings, comparable store sales expectations, trends in or expectations regarding the Companyexpectations, trends in or expectations regarding the Company’’s s net revenue, net earnings and earnings per share results and net revenue, net earnings and earnings per share results and capital expenditures.capital expenditures. These forward looking statements are These forward looking statements are based on currently available operating, financial, and competitibased on currently available operating, financial, and competitive ve information and are subject to various risks and uncertainties. information and are subject to various risks and uncertainties. Actual future results and trends may differ materially dependingActual future results and trends may differ materially dependingon a variety of factors including but not limited to, coffee, daon a variety of factors including but not limited to, coffee, dairy iry and other raw material prices and availability, successful and other raw material prices and availability, successful execution of internal performance and expansion plans, execution of internal performance and expansion plans, fluctuations in U.S. and international economies and currencies,fluctuations in U.S. and international economies and currencies,the impact of initiatives by competitors, the effect of legal the impact of initiatives by competitors, the effect of legal proceedings, and other risks detailed in the Companyproceedings, and other risks detailed in the Company’’s filings s filings with the Securities and Exchange Commission, including the with the Securities and Exchange Commission, including the ““Risk FactorsRisk Factors”” section of Starbucks Annual Report on Form 10section of Starbucks Annual Report on Form 10--K K for the fiscal year ended October 1, 2006. The Company assumes for the fiscal year ended October 1, 2006. The Company assumes no obligation to update any of these forwardno obligation to update any of these forward--looking statements.looking statements.
The Coffee IndustryThe Coffee Industry
Diverse and Fragmented IndustryDiverse and Fragmented IndustryTotal worldwide coffee Total worldwide coffee production production –– 15 billion 15 billion pounds annuallypounds annually
60 countries60 countries~25 million farmers~25 million farmers
Starbucks purchases 2% Starbucks purchases 2% of the worldof the world’’s coffee supply s coffee supply per yearper yearFrom 2001 to 2006 specialty From 2001 to 2006 specialty coffee consumption grew coffee consumption grew over 48% in the U.S.over 48% in the U.S.
Starbucks2%
Specialty8%
Arabica70%
Robusta30%
World Coffee Supply World Coffee Supply By TypeBy Type
Sources: International Coffee Association and Specialty Coffee ASources: International Coffee Association and Specialty Coffee Association of Americassociation of America
Demonstrated LeadershipDemonstrated LeadershipPublicly traded since 1992Publicly traded since 1992
Led creation of North American specialty Led creation of North American specialty coffee industrycoffee industryExpanded globally to become one of the Expanded globally to become one of the worldworld’’s most recognized brandss most recognized brandsEstablished progressive work Established progressive work environment and environment and ““employer of choiceemployer of choice””Built a reputation for ethical and Built a reputation for ethical and responsible behaviorresponsible behaviorRecognized as one of AmericaRecognized as one of America’’s Most s Most Admired CompaniesAdmired Companies
Recent Company RecognitionRecent Company Recognition
“Top 50 Companies
for Diversity”
“100 Best Corporate Citizens”
“World’s Most Respected
Companies”
#6 “Top 25 Green Power
Partners”
# 2 “Most Admired Companies in
America”#16 “100 Best Companies to
Work For”
Starbucks DifferentiatorsStarbucks Differentiators
Balanced Balanced Growth Growth StrategyStrategy
Site Selection Site Selection ExpertiseExpertise Corporate Social Corporate Social
ResponsibilityResponsibility
Brand Strength Brand Strength / Loyalty/ Loyalty
Starbucks Starbucks ExperienceExperience
Starbucks Starbucks DifferentiationDifferentiation
Coffee Coffee ExpertiseExpertise
Passionate Passionate PartnersPartners
Large & Diverse Large & Diverse Customer BaseCustomer Base
Long History Long History of Strong of Strong Financial Financial
PerformancePerformance
The The Starbucks ExperienceStarbucks ExperienceEstablished a Third PlaceEstablished a Third Place to to facilitate human connectionfacilitate human connectionInfluenced world view of coffee Influenced world view of coffee through education and thethrough education and theStarbucks ExperienceStarbucks ExperienceAppeal is universalAppeal is universal
High quality productsHigh quality productsPrepared the way you like itPrepared the way you like itFriendly serviceFriendly serviceClean comfortable environmentClean comfortable environmentConvenient Convenient
Successful Growth StrategySuccessful Growth Strategy13,000+ stores in 13,000+ stores in 39 countries39 countriesNearly 44 million Nearly 44 million customer visits per customer visits per week worldwideweek worldwideApproximately Approximately 150,000 partners 150,000 partners (employees)(employees)15 consecutive 15 consecutive years of years of comparable store comparable store sales growth sales growth ≥≥5%5%
$0
$2,000
$4,000
$6,000
$8,000
$10,000
FY02 FY03 FY04 FY05 FY06 Q1 06 Q1 07
Expansion Fuels TopExpansion Fuels Top--Line Growth Line Growth
InternationalInternationalUnited StatesUnited States Global Consumer Products GroupGlobal Consumer Products Group
millionsmillions
$4,076
Total Net RevenuesTotal Net Revenues
5-Year CAGR = 24% $7,787
$6,369
$1,934
$5,294
$2,356Growth Rate = 22%
$3,289
Operating Margin PerformanceOperating Margin Performance
Operating MarginOperating Margin
9.5%10.3%
11.5%12.3%
11.5%
14.5%13.6%
0.0%
5.0%
10.0%
15.0%
FY02 FY03 FY04 FY05 FY06 Q1 06 Q1 07
$0.26$0.33
$0.47
$0.61
$0.71
$0.22$0.26
$0.00
$0.20
$0.40
$0.60
$0.80
FY02 FY03 FY04 FY05 FY06 Q1 06 Q1 07
Strong LongStrong Long--Term PerformanceTerm Performance
FY06 includes the cumulative impact of the accounting change to FY06 includes the cumulative impact of the accounting change to adopt FIN 47adopt FIN 47
Earnings Per ShareEarnings Per Share
CAGR = 25%
Growth Rate = 18%
Strong Q1 FY07 ResultsStrong Q1 FY07 Results13 weeks ended December 31, 200613 weeks ended December 31, 2006
Opened a record 728 new storesOpened a record 728 new stores$2.4 billion in net revenues $2.4 billion in net revenues 6% comparable store sales growth6% comparable store sales growth13.6% operating margin 13.6% operating margin $205 million in net earnings$205 million in net earnings$0.26 earnings per share$0.26 earnings per share
FY 2007 Performance MetricsFY 2007 Performance Metrics
2,400 net new stores2,400 net new stores3% 3% -- 7% comparable store sales growth7% comparable store sales growth20% net revenue growth20% net revenue growth$0.87 $0.87 -- $0.89 EPS range$0.89 EPS range
FY 2007 Business DriversFY 2007 Business DriversFY 2007 Business Drivers
Open 2,400 new Starbucks storesMaintain operating margins in the U.S. businessImprove International operating marginIncrease global presence of the brand beyond the Starbucks retail storesContinue to leverage G&A expenses
Open 2,400 new Starbucks storesOpen 2,400 new Starbucks storesMaintain operating margins in the Maintain operating margins in the U.S. businessU.S. businessImprove International operating Improve International operating marginmarginIncrease global presence of the brand Increase global presence of the brand beyond the Starbucks retail storesbeyond the Starbucks retail storesContinue to leverage G&A expensesContinue to leverage G&A expenses
LongLong--Term Growth GoalsTerm Growth Goals
Open at least 10,000 new stores in next Open at least 10,000 new stores in next four yearsfour yearsDouble the size of the business in next Double the size of the business in next 4 4 –– 5 years5 yearsGrow net earnings faster than revenueGrow net earnings faster than revenuePotential for 40,000 stores worldwidePotential for 40,000 stores worldwide
Initiatives Driving U.S. SegmentInitiatives Driving U.S. Segment
Expand store footprint in new and Expand store footprint in new and existing marketsexisting marketsIncrease average unit volumesIncrease average unit volumesPromote continuous innovation to Promote continuous innovation to meet customer preferences and needsmeet customer preferences and needsLeverage the Starbucks brand with Leverage the Starbucks brand with complementary offeringscomplementary offeringsRemain employer of choiceRemain employer of choice
Rapid Retail Store GrowthRapid Retail Store Growth
4,2725,239
6,1777,353
8,8969,401
~10,600
0
5,000
10,000
15,000
20,000
FY02 FY03 FY04 FY05 FY06 Q1 FY07 FY07e
U.S. StoresU.S. Stores International StoresInternational Stores
7,2257,2258,5698,569
10,24110,241
12,44012,440
14,84014,840
FY07 estimates based on Company store opening targetsFY07 estimates based on Company store opening targets
5,8865,886
13,16813,168
Total Store CountTotal Store Count
5-Year CAGR = 21%
Strong Comparable Store PerformanceStrong Comparable Store Performance
5% 5%6%
9%
5%6%
8%
10%
8%7%
3%- 7%
0%
5%
10%
15%
FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06
CompanyCompany--operated stores open 13 months or longeroperated stores open 13 months or longer
Comparable Store Sales GrowthComparable Store Sales Growth
2007 Target Range
2.2 : 12.2 : 1
$424$424
$920$920
ForecastForecastFY 2006FY 2006
1.7 : 11.7 : 1
$371$371
$631$631
FY 2000FY 2000
Year 1 Sales to Year 1 Sales to Investment Investment RatioRatio
AverageAverageNew StoreNew StoreInvestmentInvestment
Year 1 Sales Year 1 Sales
Compelling New Store PerformanceCompelling New Store Performance
$s in$s inthousandsthousands
Average U.S. CompanyAverage U.S. Company--Operated Retail StoresOperated Retail Stores
FY06 new store firstFY06 new store first--year sales based on current Company forecastyear sales based on current Company forecast
$671
$812 $806$863 $872
$937$910
$1,004
$920
$1,045
FY02 FY03 FY04 FY05 FY06
Increasing Average Unit VolumeIncreasing Average Unit Volume
thousandsthousands
Average U.S. CompanyAverage U.S. Company--Operated Store SalesOperated Store Sales
Total StoresTotal StoresNew StoresNew Stores
Innovation: Expanded HandInnovation: Expanded Hand--Crafted Crafted Beverage OfferingsBeverage Offerings
Innovation: Complementary OfferingsInnovation: Complementary Offerings
texttext
International Business International Business Demonstrates Brand PowerDemonstrates Brand Power
Primary focus on introduction Primary focus on introduction of core beverage offeringsof core beverage offeringsCommitted to delivering the Committed to delivering the Starbucks ExperienceStarbucks ExperienceBuild key joint venture Build key joint venture partner relationships partner relationships Opportunistically increase Opportunistically increase equity ownershipequity ownership
100% in 10 countries100% in 10 countries50% in 6 countries50% in 6 countries
Strategic expansion into new Strategic expansion into new markets with existing partnersmarkets with existing partners
Canada35%
United Kingdom
39%
Other Company-operated
16%
JV/ Licensed
10%
International Segment International Segment Revenue BreakdownRevenue Breakdown
Q1 FY 2007 Q1 FY 2007
1.6 : 11.6 : 1
$420$420
$692$692
Forecast Forecast FY 2006 FY 2006
1.2 : 11.2 : 1
$424$424
$527$527
FY 2000FY 2000
Canada Canada (1)(1)United Kingdom United Kingdom (1)(1)
1.3 : 11.3 : 1
$610$610
$803$803
FY 2000FY 2000
1.6 : 11.6 : 1Year 1 Sales to Year 1 Sales to Investment Investment RatioRatio
$561$561AverageAverageNew StoreNew StoreInvestmentInvestment
$905$905Year 1 Sales Year 1 Sales
Forecast Forecast FY 2006FY 2006
Solid International Store PerformanceSolid International Store Performance
$s in$s in thousands thousands U.S.D U.S.D (2)(2)
(1)(1) CompanyCompany--operated retail stores onlyoperated retail stores only(2)(2) Excludes the impact of foreign currency fluctuationsExcludes the impact of foreign currency fluctuations
The Bahamas5Puerto Rico
22
Expanding International PresenceExpanding International Presence3,767 International Locations In 38 Countries3,767 International Locations In 38 Countries
Cyprus7
Germany 75
Ireland 10
Jordan6
Kuwait38
Lebanon11
France 30
Oman5
Qatar 9
South Korea 187
Switzerland 31
Taiwan 189
Thailand91
UAE 46
UK 528 Turkey
62
Philippines 106
Canada725
Japan 665
Bahrain8
Saudi Arabia52
Spain 58
Mexico116
Peru9
Chile17
Malaysia 79
Indonesia 48
New Zealand47
Singapore42
Austria 11
Australia89
China288
500 + Brazil2
India
In 2007, Starbucks expects to open more than 6 stores per day worldwideIn 2007, Starbucks expects to open more than 6 stores per day woIn 2007, Starbucks expects to open more than 6 stores per day worldwiderldwide
100 - 500
< 100
Note: Store count as of December 31, 2006.Note: Store count as of December 31, 2006.
Greece 52
Egypt1
Global Consumer Products GroupGlobal Consumer Products Group (CPG)(CPG)Beyond the Retail StoreBeyond the Retail Store
Early stage of growth and developmentEarly stage of growth and developmentExtends the Extends the Starbucks ExperienceStarbucks Experience to to our customers anywhere and any time our customers anywhere and any time beyond beyond theirtheir Starbucks storeStarbucks storeProvides platform to leverage business Provides platform to leverage business partnerspartners’’ manufacturing and manufacturing and distribution competencies while distribution competencies while managing brand integritymanaging brand integrityRepresents 26% of specialty revenues Represents 26% of specialty revenues and 4% of net revenuesand 4% of net revenues
Growth Opportunity of CPG SegmentGrowth Opportunity of CPG Segment
Investment ConsiderationsInvestment ConsiderationsWorldwide brand recognition Worldwide brand recognition Long runway for future growth Long runway for future growth Strong financial fundamentalsStrong financial fundamentalsInnovation is part of our DNAInnovation is part of our DNATalented & cohesive management teamTalented & cohesive management team