sept 2009 cott cot presentation

8/14/2019 Sept 2009 Cott COT Presentation

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- Cott Profile

- Private Label Refocus Plan

- Performance Metrics

- Valuation Upside

- Q&A

Agenda


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Driving Fundamental Changes SinceQ2 2008

Sales increases on Fx-neutral basis over thepast six months(1)

EBITDA margins have nearly doubled(1)

Gross margins have increased 490 bps(1)

Cash flow and successful equity offering drivefurther debt reductions (net debt reduced from

over $400M to below $300MM by year end)

___________________________1. First half 2009 compared to first half 2008


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5

21

38

1,598

1,188

340

North

Amer ica

UK Mexico RCI & Other Total Cott

`

#1 Private Label CSD Producer in the US, UK, Canada and Mexico

$1.6 billion in total sales (2008)

+/- 60% share of retail brand CSDs sold in North America & UK

Substantial R&D capability and vertical integration with own concentrate production

Concentrate sales to over 50 countries outside of core markets

Leading Producer of Retailer Brand CarbonatedSoft Drinks ( CSD )

Sales (1) EBITDA (1,2)

2Q09 LTM Sales and EBITDA Breakdown (USD $MM)

___________________________1. RCI & Other includes Asia business.2. Excludes restructuring charges, goodwill impairments and asset impairments.

26

110

133

(7)4

North

Amer ica

UK Mexico RCI & Other Total Cott

`


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With Global Scale, Vertical Integration andStrong Value-Add for Retailers

9 bottling facilities in the U.S.

5 bottling facilities in Canada

3 bottling facilities in the UK

2 bottling facilities in Mexico Vertically-integrated concentrate facility in

Columbus, GA

Offers customers dedicated, full-service,vertically-integrated, low-cost production

Private label enhances customer loyaltyand retailer profitability

High product quality & blind tastepreference scores

Proven high quality service and supply

chain

FortWorth

San Antonio

San Bernardino

Sikeston

St. Louis

ColumbusBlairsville

Concordville

Wilson

Tampa

Surrey, BC

Calgary, AB Mississauga, ON

Point-Claire, QC

Scoudouc, NB

North American Manufactur ing Network

Global Scale

Favorable Environment for Private Label

Current economic environment drawing

consumers to private label Retailers increasing their focus on private

label given current economic environment

Strategic Importance to Retailers


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- Cott Profile



- Valuation Upside

- Q&A

Agenda


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Our Efforts to Refocus on Private Label areProceeding Across Multiple Fronts

Implementingour 4 Cs

StrongerBalance Sheet

InternationalImprovements

FavorableEnvironment for

Private Label

Mission: To be the lowest cost,preferred supplier of a broad range ofhigh-value and innovative private labelsoft drinks to our retailer partners.

Focus: 4 Cs - strengthen

customerrelationships,reduce operating costs,

control capital expenditures,all to improve cash flow.

Enablers

North AmericaTurnaround


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We Remain Focused on the 4 Cs

Customer relationships and servicestandards are strongest in recent years (over

98% on-time, in full service levels)

Capex reduced to 2.5% of sales(1)

1H09 SG&A expense reduced to below 9% ofnet sales; top quartile of peers (1)

Cash management teams have reduced DSOsby 4 days and inventories by 2 days (2)

___________________________1. Operational key indicators YTD / full year forecast2. 2Q09 vs. 2Q08



International

Improvements

FavorableEnvironment forPrivate Label



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Performance Has Improved MostSignificantly in North America



International

Improvements


Stabilized customer relationships multipleretailers expanding product range

Over 600 bps gross margin improvement (2)

SG&A expense reduced approximately $14M(2)

Above 4% revenue growth on Fx-neutralbasis(1)


___________________________1. See GAAP to Non-GAAP reconciliation posted on the Investors - Financial Reports section of

Cotts website at www.Cott.com2. First half 2009 compared to first half 2008
http://www.cott.com/http://www.cott.com/


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Internationally, We Are Seeing Stabilization andEven Improving Trends In Some Markets

Progressively improving volume trends over

the past three quarters

In the UK, July private label share is athighest point in last 12 months; (2) product mix

improving

Mexico is trending towards local cash break-even; expanding with key customers

International gross margins up 200 bps(1)



International

Improvements



___________________________1. Q2 2009 vs. Q2 20082. July UK scanner data per Nielsen


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We Are Seeing Opportunities For Growth InPrivate Label In Some Channels

As customers shift to value, retailers are

putting more focus on private label

Retailer share of PL CSDs sold on promotionis up 20%(1) vs. prior year in Nielsen grocery

channel

Strong private label penetration enhancingoverall category profitability

Private label gains predicted to last well pasteconomic recovery



International

Improvements



___________________________1. Nielsen U.S. grocery channel, YTD 8/9/09


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Balance Sheet Is Much Stronger

Leverage reduced to 2.4X throughoperational cash generation and successful

secondary equity offering

Over-subscribed secondary equity offering,trading above offer price

Amended ABL provides additional flexibility

With free cash flow generation and proceedsfrom secondary equity offering, $120M debt

reduction since Q2 2008



International

Improvements




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- Cott Profile



- Valuation Upside

- Q&A

Agenda


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First Half 2009 Performance ConfirmsImprovements Are Now In Place

Summary P&L

(in USD MM)

June 27, 2009 June 28, 2008

Revenue, net 805.8$ 856.2$

Cost of sales 674.3 758.4

Gross profit 131.5 97.8% of Sales 16.3% 11.4%

S&A Expense 69.8 97.3% of Sales 8.7% 11.4%

Restructuring,

impairments & Other 5.1 7.2

Operating income

(reported) 56.6 (6.9)

For the Six Months Ended

$75MM Fx drag on top line;

otherwise stable

GM improvement onoperational savings

Permanent SG&A reductions;run-rate is new normal

Significant EBITDA & cashflow improvement used to

reduce debt


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More Benign Commodity Environment Coupledwith Forward Buying Program

Continuing with Forward Buying Programs on Key Commodities

With the majority of our 2009 aluminium and HFCS

With more than half of our 2010 aluminum(1)

79%

21%

Cott 2008 Fixed vs.Variable Costs (2)

`

Majority of variable costs arecommodities, including:

Aluminium HFCS

PET plastics

Commodity cost drivers:

underlying commodity costs(more volatile, market-driven)

tolling / conversion costs(less volatile, contract-driven)Variable

Costs

FixedCosts

___________________________1. As of end of Q2 20092. Measured as a percentage of Sales


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Significant Improvement in Leverage andCapital Structure

___________________________1. Based on LTM EBITDA of $133 million2. Actual June ABL Revolver balance of $66.6 million - $47.0 million of net equity proceeds3. Assumes 2Q09 ending balance of $300.9 + $47.0 million of additional equity

Capitalization AmountNet EBITDAMultiple (1)

Cash $13.2

ABL Revolver 19.6 0.1xOther Secured Debt 28.6 0.2x

Total Sr Secured Debt $48.2 0.3x

8% Senior Sub Notes 269.0 1.8x

Other Debt 2.9 0.0x

Total Debt (3) $320.1 2.4x

Minority Interest 17.2

Equity 348.9

Total Capitalization $685.4

PF Capitalization as of 6/27/2009

($ in millions)

(2)

(3)

Below Industry Average Leverage

Stronger Balance Sheet Creates Value for Equity Investors

Improved responsiveness to opportunities

Heightened customer confidence

Enhanced ability to manage uncertainties

Elimination of liquidity concerns


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- Cott Profile


- Turnaround Drivers

- Valuation Upside

- Q&A

Agenda


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Compared To Our Peers, We See ValuationUpside

1-yr Forward EV / EBITDA Multiples

While modest multiple discount to branded peers is expected, current multiple does notreflect benefits of refocus plan or balance sheet improvements

Multiple discount vs. peer group has increased from 8% to 32% since 3Q07

Peer Group comprised of Coca Cola Enterprises, Coca-Cola Consolidated, National Beverage, Pepsi Bottling Group and Pepsi Americas,

8.4x7.6x

8.9x7.9x

7.6x

8.2x

6.4x

8.1x

5.8x

7.4x

6.5x6.6x

4.9x

7.0x

4.5x

6.7x

4.4x

6.6x

5.6x

7.6x

5.3x

7.8x

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 9/3/2009

Cott Peer Group


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Current Valuation Does Not Fully ReflectProgress Achieved

Top line growth

Vulnerability to national brand

promotions

Perceived uncertainty in ourcustomer base

Common Questions / FactorsAffecting Valuation

Margins are our current toppriority, while we lay foundations

for future growth

Our products are of increasing

importance to retailer CSDmargins / profitability

We are used to earning ourbusiness and we expect changes

wil l be manageable

Our View

Strength of balance sheet

Signif icant excess ABLavailability, over-subscribedsecondary equity offering,

improved cash flow


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We Remain Focused On Our Opportunities

Top Line

MarginsCash Generation

Further reductionsin SG&A &operational focus

Less adverse Fx

Opportunities tofurther improveproduct mix

20MM cases ofshort to medium-term opportunityidentified in North

America

Continuedinternationalimprovements

Easing of Fx dragon revenue

Ongoing focus onworking capital

Cash proceedsused to reduce debt

Reduced interest

cost on lower debtbalances vs. prioryear


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Summary

Private Label

Refocus &Operational

Improvements

AddressedShort-TermLiquidity

Strengthened

Balance Sheet,Focused on

Opportunities

AttractiveValue

A Refocused Cott With Strong Balance Sheet Represents An Attractive Value

Refocus plan and operational improvements have proceeded as indicated

Stronger balance sheet and liquidity de-risks the model and unlocks opportunities

Current valuation is not commensurate with progress or potential

Management team focused on execution and building future growth


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- Cott Profile



- Valuation Upside

- Q&A

Agenda

N G R ili ti f 2009


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Non-Gaap Reconciliation for 2009Barclays Back to School Conference

Cott Corporation

Back to School Presentation

EBITDA Calculation

LTM H1 H1 Full Year

FY 2008 Jun-09 Jun-08 FY 2008

Net Income (loss) (46.1) 53.6 (23.1) (122.8)

Income tax provision (benefit) (36.8) (11.6) 5.7 (19.5)

Interest expense 31.7 15.1 15.7 32.3

Depreciation and amortization 73.2 33.3 40.8 80.7

EBITDA 22.0 90.4 39.1 (29.3)

Restructuirng 1.6 1.6 6.7 6.7Asset impairments 40.1 3.5 0.4 37.0

Goodwill impairments 69.2 69.2

Adjusted EBITDA 132.9 95.5 46.2 83.6

sept 2009 cott cot presentation

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