CORPORATE PRESENTATIONJ u n e 2 0 2 0
Coca-Cola System pioneers in Mexico
Strong partnership with
94YEARS
Serving5 countries across the Americas
2.2BUC
S a l e s
V o l u m e
162MXP$B
R e v e n u e
49
P r o d u c t i o n
F a c i l i t i e s
394
D i s t r i b u t i o n
C e n t e r s
63Thousand
A s s o c i a t e s
+1.4Million
P o i n t s o f
S a l e
USA
MEXICO
ECUADOR
PERU
ARGENTINA
3
11%
8%
3%
5%
33%
40%
99%
1%
A balanced portfolio of markets and business…
Mxp$ 13 billion
EXPORTS AND
VENDING
MEXICO
BEVERAGES
UNITED STATES
PERU
ECUADOR
ARGENTINA
2019Revenues
Mxp$ 163 billion
2002CAGR16%
4
MEXICO
SNACKS &
OTHER BUSINESS
13x
… and a strong presence in attractive markets
Start date: 1926
• Sales volume (MUC): 1,260
• % of KO volume: 33%
• Population served (MM): 33
MEXICO
Start date: 2015
• Sales volume (MUC): 282
• % of KO volume: 100%
• Population served (MM): 32
Start date: 2008
• Sales volume (MUC): 114
• % of KO volume: 23%
• Population served (MM): 9
Start date: 2010
• Sales volume (MUC): 143
• % of KO volume:100%
• Population served (MM): 17
Start date: 2017
• Sales volume (MUC): 441
• % of KO volume: 12%
• Population served (MM): 32
USA
ARGENTINA
ECUADOR
PERU
____________________
MUC –Million Unit Cases
KO – The Coca-Cola Company 5
Pursuing value creation via consistent organic growth and an excellent M&A track record
2002ARCA
Merger
2007Snacks
Mexico
2008Argentina &
Jugos del Valle
2010Ecuador
2011CONTAL
Merger
2012Snacks &
Santa Clara
2014Tonicorp
2015Peru
2016Sugar Mill
Argentina
2017USA, AdeS
& Snacks
2018Innovation &
Snacks
USA
Great Plains
Commitment to grow across our three core business segments
NARTD: Non-alcoholic ready to drink
Emerging still categories + Value added diaryStills
Food & Snacks
CORENARTD
7
New sparking beverage franchisesSSDs
A wide brand portfolio to satisfy every occasion of consumption…
+ 28 Brands
+ 128 SKUs
+60 Brands
+1,500 SKUs2006 2020
8
…with a commercial model that connects the entire organization
9
Fundamentals
Segmentation
RGM
Picture of success
Go to market
Market audit
Digital tools
People
Customer love score
We identified 4 phases… the quarantine period being the critical point
Quarantine CelebrationOutbreak“New Normal”
+ Economic Impact
• Accelerated Growth of
infections
• Panic in the population
• Purchases due to “over-stock”
in retail
• Peak of the pandemic
• Confinement begins
• Minimum purchases in
proximity channels
• Reduction of new cases and
recovery
• Confidence and euphoria
• On-Premise channels are
reopened
• New consumption trends
(eCommerce)
• Medium and long-term
economic impact
Retail
Traditional
FSOP
Convenience
Channel performance
• FSOP channel which represents ~10% of
our consolidated volume
• Peru and Ecuador were our most affected
operations due to greater mobility
restrictions
• Pricing impact due to change of mix and
channel shift
Solid momentum prior to COVID-19 pandemic
11
COVID-19 Impacts
• Gaining value share
• Strong financial position
• Digital transformation in place
Started the year strong
+2% Volume growth as of February
Taking actions, adapting to the current situation
Crisis
management
efforts
Focus areas Strategic actions being taken
Savings and efficiency initiatives
Reassessed Capex investments
Prioritize liquidity, profitability and
protect business for the long term
Special focus
in the
traditional
channel
RGM B2B platforms and e-commerce Accelerate digital initiatives to better
serve our customers
Support its recovery and
continuing to modernize this
channel
Supporting customers to comply with sanitary
measures
Fine tune the optimal portfolio of products
Promote returnable packages and affordability
COVID-19 has changed the way our customers need to be served and has helped
us quickly adapt to a new operating model based on the ACT model with a more
digital approach.
Beverages
Mexico
Mexico – The resilient traditional channel at its best
• Volume trend in April and May was better than
expected, with a Traditional Channel positive on
both months
• We developed our B2B solution for the traditional
trade since last year and now has been accelerated
• We increased our home delivery customers, more
than 5,000 new customers. We expect to add 15,000
more in the coming months
• Although we still have a deficit of around 2,500
customers, we have more new customers than
customers without a purchase, which makes the
balance positive
• In the last 5 weeks, we have recovered 3 p.p. of
customers without orders, reaching almost the same
level before the mobility restriction period
14
New customers Regular customers Customers w/o orders
215240
261 268 276
-82 -84 -85 -88 -88
112123
132 137 142
W14 - 17 W15 - 18 W16 - 19 W17 - 20 W18 - 21
Drop-size (MUC)
Traditional Channel
A flexible price-pack architecture to drive consumption and profitability
66%Retornable
No Retornable
$6 $10 $13 $20$6 $25
600 PET
3.0 NR
2.0 Ref Pet
355 mlVR
Low elasticity SKU´s Protect affordability
(multi-serve &
Returnable)
Leverage on single serve presentations
+25 SKUs only for regular Coke in Mexico
PACKAGE FORMATMXP
$6
MXP
$34
68%
32%
RETURNABLE
54%
46%
NON-RETURNABLE
MULTISERVE
SINGLE SERVE
15
Mexico – Continuous efforts in product
innovation
16
• Full channels roll out
• Around 20% of customer
coverage in traditional channel
• Contributing with 52K UC in
2019
• Full channels rolled-out
• Around 26% of customer
coverage in traditional channel
• Contributing with 193K Unit
Cases in 2019
Beverages
USA
USA – Setting the base for the new normal
18
• Immediate consumption focus on RGM
affordability small packages
• Continuous investment in our segmentation
platform
• Best in class Product Innovation launches
• MyCoke.com as primary order method for FSOP and
independent convenience stores migrating 15,000
outlets
• Enhancing the features of myCoke.com increasing the
payment methods and rolling-out new mobile
application
• Deploying “adapted” Go To Market service models for
the Home Market
• Strengthening OPEX and labor discipline
Adaptation strategies Reinforcing strategies
COVID-19 has changed the way our customers need to be served, the flexibility of our operations
has helped us to quickly adapt to a new operating model based on the ACT model with a more
digital approach
CCSWB New Normal
Humble
Approachable
Authentic
Culture Principles
#1 Safety of Our Associates
#2 Serving our Customers
Priorities
New Operating Model
Digitized Operation
E-Commerce Strategy
GTM Home Market
Small Vehicles
OPEX and Labor Discipline
RGM Affordability
Segmentation
Innovation Brands
New Operating Model to Fit our New Reality.
A Different Way to Serve Our Customers, Digital, Efficient, Flexible.
Accelerate Reinforce
Strategies to Quickly Adapt to
the New Market Necessities
Core Business Strategies to
Ensure Business Continuity
Detailed work plans for short and mid-term identified synergies
20
Northpoint Houston facilityThe newest member of the family
Started operating on March 2020 21
Beverages
South America
w156-11 apr
w1613-18 apr
w1720-25 apr
w1827apr-2may
w194-9 may
w2011-16 may
w2118-23 may
Peru – Gradual recovery, along with economic
stability• Focused on affordability through on multi-serve returnable, strengthening our brand communication of our
flavors, ensuring the presence of our core portfolio
• Vending channel routes were adapted to serve consumers directly to their homes with our full portfolio; on
target to reach our goal of serving over 6,000 consumers
• We continued working on the AC Digital platform through customers place direct orders using a mobile app;
currently 1,000 customers utilize this platform and is expanding to serve many more
23
Customers Performance
% Customers with orders
% Customers closed
+21p.p.
-15p.p.
Ecuador – Direct to consumer and digital
initiatives for the market reopening
• Focus on guarantee supply to our clients and consumers, adapting and optimizing our service models according to
the current environment
• B2B digital capabilities deployed to 7,200 customers in Quito and Guayaquil
• Given the mobility and sanitary restrictions in the country, we deployed 11 distribution routes in “Direct to
Consumer” Channel, which will allow us to directly serve more than 1,400 consumers
24
% Customers with orders
% Customers closed
Customers Performance
+23p.p.
-24p.p.
w156-11 apr
w1613-18 apr
w1720-25 apr
w1827apr-2may
w194-9 may
w2011-16 may
w2118-23 may
w2225-30 may
w156-11 apr
w1613-18 apr
w1720-25 apr
w1827apr-2may
w194-9 may
w2011-16 may
w2118-23 may
w2225-30 may
Argentina – Focusing on customer intimacy
and consumer affordability
• Activated call center sales with a very good rate. We are balancing these customer contacts with our regular presale
activity
• Deployed digital platforms initiatives, such as B2B
• Focused in key operational activities and reinforced affordability through a balanced price architecture
25
-5p.p.
+7p.p.
% Customers with orders
% Customers closed
Customers Performance
Food and
Snacks
Around USD$ 394 MM Sales
High potential growth opportunity based on strategic adjacencies
Complementary to our core business
60 new routes in Bokados territory
Expand business coverage in Mexico and Ecuador
27
Innovation at Arca
Continental
We are moving forward swiftly on our digital transformation journey…
AC digital agenda
Capabilities assessment
Workshops with AC leaders
Silicon Valley digital tour
Framework & programs
Structure & communication
29
…resulting in our digital transformtion agenda
30
Digital programs that create significant value to the current business and
enable business engines
Optimize business
Digital programs to accelerate and / or create new sources of growth
Potential business engines
Customer Optimize core assets Consumer
Digital enablers
Enablers that are critical to reach the potential of the digital agenda
Governance
Traditional trade 2.0
AC digital transformation agenda31
Digital enablers
Potential business engines
Consumer
• Modernize &
expand direct-to-
consumer
• Digitalize &
expand vending
• “Modernize” TT
• Become the
integrator/ distributor
for TT
Optimize business
Customer Optimize core assets
• Digitalize ACT
• Become the preferred
partner for MT &
digital channels
• Optimize manufacturing
efficiency and flexibility
• Create fully automated
logistics network
• Support functions
digitalization
Enablers that are critical to reach the potential of the digital agenda
Governance
Technology & systems Capabilities Organizational model
Traditional trade 2.0
Modernizing the traditional trade through digitalization
32
1
Large & X-large
customers
Micro, small and
medium customers
B2B+
20%
80%
Credit card & service
transactions
Supply consolidation
Automated
replenishment
B2CPayment options
Variety of services
Online commerce
10,500
Customers
Advanced analytics use cases
33
Suggested
order
Progress update Next steps
Full Mexico rollout; 15% OOS
reduction
Predictive recommendation model for
all products in collaboration with MIT
Extend development to Peru and Ecuador
+ complementary business units
Execution
Human
resources
Supply chain &
manufacturing
Analytics
capabilities
Work order prioritization in f(x) of
revenue impact Next Best Action model development
Initial results: 30% staff turnover
reduction in West Mexico and Peru
Mexico, CCSWB and complementary
business units model extension
Talent Analytics team implementation to
recruit, retain and develop talent
Production lines’ digitalization & info
standardization
Preventive maintenance on T2 vehicles
+ component mapping
Maintenance costs reduction through
Predictive Failure model
Analytic tools training program
deployment
Data lake (Mexico & Peru)
Data enrichment (Mexico)
Data ecosystem (company-wide)
Center of Excellence development
Financial
Performance
Conservative debt profile & diversified
maturity schedule
• 93% debt is in local currency
• Projected debt profile with average maturity of 6.3 years
AC Debt Maturity Profile
Total Debt: MXP$ 60,760 million
____________________
*Using an exchange rate as of March 2020 of MXP $24.29
Cash Position
By Currency
By
Currency
35
21%
70%
8%
1%
MXP
USD
USD 14%
42%
44%
MXP
PEN
MX$ 29,589 millones
PEN
ARP
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
7,1947,742
6,156 6,188
3,638
1,5182,501
6,395
9,714 9,714
USPP Bancos Bonos
…with the highest credit rating among Mexican issuers
Financial flexibility and low leverage ratio
“A2”
Global Investment Grade above Mexico’s
sovereign rating
“AAA(mex)”
“A”
“mxAAA”
Global Scale
National Scale
Net Debt / EBITDA
36* Without considering M&A
1.31.2
1.5
1.0 1.0
2016 2017 2018 2019 1Q20
Consistent and disciplined capital allocation
Focus on
acquisitions
with high
opportunities
for value
creation
Annual
dividend with
a payout ratio
of at least 30%
of net income
CAPEX
focused on
growth and
productivity
to improve
ROIC
Improve cash
conversion
cycle through
better
negotiations
with suppliers
and customers
Prioritization of our capital allocation to higher-return opportunities37
Social
Responsibility
Making sustainability a core business strategy
39
Human Capital and Sustainability Committee
Operational Committees
Portfolio Water Packaging Well-being Value Chain Operations
Institutional commitment to achieve higher standards
and build a culture of social responsibility
Petstar
$48
• The largest PET recycling plant in the world
• Capacity to recycle 4 billion bottles every year
• The equivalent to fill a stadium 3 times
Integral approach for sustainable packaging
41
*2019 data for AC consolidated
of resin produced by PetStar
30% of PCR
50,186 Tons
1.6Water Lts. /
Beverage Lts.
100% treated
24.5 g CO2/
Beverage Lts.
26% energy reductionvs 2010
32% from renewable
sources
Leader in water reuse
technology Mexico is the global leader in
recycled resin use
Strong commitment towards our environment
WATER* ENERGY*RECYCLINGMexico 2018
42
Key investment highlightsKey investment highlights
43
Investor Relations Contact Information:
Ulises Fernandez [email protected]
Felipe Barquin [email protected]
Pamela Ortiz [email protected]
Francisco Leyva [email protected]
THANK YOU!