warwick white managing director australasia - coca-cola ......premium to pepsi cola through pack...

Australian Beverages Strategy Reviewg gyIndonesia Investor Tour

Nov 24-26, 2010

Warwick White Managing Director Australasia

Agenda:

1) Trading Update) g p

2) Using Technology & Innovation ) g gyto Build a Competitive Edge

2

1) Trading Update) g p

Australian Beverages Business

3

Australian food retail sales growth has dropped from Australian food retail sales growth has dropped from 7% in 2009 to 2% in 20107% in 2009 to 2% in 2010

Australian food retail sales growth has dropped from Australian food retail sales growth has dropped from 7% in 2009 to 2% in 20107% in 2009 to 2% in 20107% in 2009 to 2% in 2010.7% in 2009 to 2% in 2010.7% in 2009 to 2% in 2010.7% in 2009 to 2% in 2010.

Food Retail YoY Sales Growth

11%12%

12%

14%

Food Retail YoY Sales Growth

%

7%8%

9%

7%8% 8%

8%

10%

5%6% 6%

5%4%

3%4%

6%

% G

row

th

1% 1%2% 2% 2% 2%

1%

0%

2%

Source: ABS 4

Rising interest rates in Australia are Rising interest rates in Australia are making cons mers’ more ca tio smaking cons mers’ more ca tio sRising interest rates in Australia are Rising interest rates in Australia are making cons mers’ more ca tio smaking cons mers’ more ca tio smaking consumers’ more cautious.making consumers’ more cautious.making consumers’ more cautious.making consumers’ more cautious.

5.0%5.0%

RBA Cash Rate

4.75%

Mortgagees are now paying an

additional4.0%

4.5%

4.0%

4.5%

additional $450pm on a

$500k mortgageS t LY

3.5%3.5%

3.0%vs Sept LY

2 5%

3.0%

2.5%

3.0%3.0%

5Source: RBA

2.5%

Jan-

09

Feb

-09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Jan-

10

Feb

-10

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

A wetter winter & spring has impacted CCA’s Australian A wetter winter & spring has impacted CCA’s Australian East Coast beverage volumeEast Coast beverage volume

A wetter winter & spring has impacted CCA’s Australian A wetter winter & spring has impacted CCA’s Australian East Coast beverage volumeEast Coast beverage volume

Jul-Oct Volume Growth Jul-Oct Volume Growth

East Coast beverage volume.East Coast beverage volume.East Coast beverage volume.East Coast beverage volume.

3 3%

7.6%

Queensland Western Australia4.7%

3.3%

Avg Jul Oct (2006 2009) Jul Oct 2010 Jul Oct 2010

-6.1%

Avg Jul Oct (2006 2009)Avg Jul‐Oct (2006‐2009) Jul‐Oct 2010 Jul‐Oct 2010

41mm 136mm 94mm 67mm

Avg Jul‐Oct (2006‐2009)

(11% lessthan LTA)

(3x higher than LTA)

(equal toLTA)

(29% lessthan LTA)

6Source: BOM (LTA = “Long Term Average”)

Despite the tough economic environment, Despite the tough economic environment, we are growing sharewe are growing share

Despite the tough economic environment, Despite the tough economic environment, we are growing sharewe are growing sharewe are growing share.we are growing share.we are growing share.we are growing share.

Total CC System NARTD Share Growth By Channel

0.8 0.8

Total CC System NARTD Share Growth By Channel

0.6 0.6 0.6

0.5

0.6

0.7

Gro

wth

0.2 0.20.2

0.3

0.4

har

e P

oin

t

0.0

0.1

Grocery YTD 31/10/10 Smaller Stores YTD 26/09/10 Total YTD

Sh

y

Volume share Growth Value share Growth

7Source: Aztec Grocery (excl Aldi), Aztec National P&C and Nielsen Route

The last 2 months are critical The last 2 months are critical to the second half performanceto the second half performance

The last 2 months are critical The last 2 months are critical to the second half performanceto the second half performanceto the second half performance.to the second half performance.to the second half performance.to the second half performance.

H2 2009 Published EBIT Split

70 0%

46.2%53.8%

50.0%

60.0%

70.0%

plit

30.0%

40.0%

% E

BIT

Sp

0 0%

10.0%

20.0%%

8

0.0%

Jul-Oct Nov-Dec

2) Using Technology & Innovation B ild C i i Edto Build a Competitive Edge

Australian Beverages BusinessAustralian Beverages Business

9

We have built a supply chain that competitors have not We have built a supply chain that competitors have not been able to profitably matchbeen able to profitably match

We have built a supply chain that competitors have not We have built a supply chain that competitors have not been able to profitably matchbeen able to profitably matchbeen able to profitably match.been able to profitably match.been able to profitably match.been able to profitably match.

(1)

Production

(2)

Warehouse

(3)

Distribution

(4)

EquipmentCONSUMER

10

We invested ahead of the curve to deliver local We invested ahead of the curve to deliver local manufacturing capability.manufacturing capability.We invested ahead of the curve to deliver local We invested ahead of the curve to deliver local manufacturing capability.manufacturing capability.

(1)

Production manufacturing capability. manufacturing capability. manufacturing capability. manufacturing capability.

Current Peak

CSD 89%

Current Peak CapacityUtilisation

CSD 89%

HOTFILL 53%

WATER 77%

11

And we have built production capability for all And we have built production capability for all our new productsour new productsAnd we have built production capability for all And we have built production capability for all our new productsour new products

(1)

Production our new products.our new products.our new products.our new products.

CSD

HOTFILLHOTFILL

WATER

JUICE

MILK

COFFEE

BEER

ARTD

12

Our state of the art warehouse technology has Our state of the art warehouse technology has ll d t d SKU b ith tll d t d SKU b ith t

Our state of the art warehouse technology has Our state of the art warehouse technology has ll d t d SKU b ith tll d t d SKU b ith t

(2)allowed us to expand our SKU base without allowed us to expand our SKU base without adding additional cost.adding additional cost.allowed us to expand our SKU base without allowed us to expand our SKU base without adding additional cost.adding additional cost.

Warehouse

NSW Highbay Warehouse Out Of Stocks

5.9%

5.0%

6.0%

7.0%

3.0%

4.0%

2.0%

0.0%

1.0%

2.0%

13

2006 2007 2008 2009 YTD 2010

Technology has driven improved delivery Technology has driven improved delivery ii

Technology has driven improved delivery Technology has driven improved delivery ii

(3)

Distribution service.service.service.service.Distribution

Total inventory returns

3.3%

2 9%

3.5%

Total inventory returns as a % of total orders

2.9%

2.3%

1.9%2 0%

2.5%

3.0%

1.6%

1.0%

1.5%

2.0%

0.0%

0.5%

2006 2007 2008 2009 YTD 20102006 2007 2008 2009 YTD 2010

14Source: SIM

Following the successful phased implementation Following the successful phased implementation of SAP we continue to improve our customerof SAP we continue to improve our customerFollowing the successful phased implementation Following the successful phased implementation of SAP we continue to improve our customerof SAP we continue to improve our customer

(3)of SAP, we continue to improve our customer of SAP, we continue to improve our customer service levels. We plan to hit 98% by 2013.service levels. We plan to hit 98% by 2013.of SAP, we continue to improve our customer of SAP, we continue to improve our customer service levels. We plan to hit 98% by 2013.service levels. We plan to hit 98% by 2013.

Distribution

%

CCA Aus Beverages DIFOTAI(Delivered In Full On Time & Accurately Invoiced)

94.7%

98.0%

95.0%

100.0%

87 0%90.0%

87.0%

85.0%

80.0%

2004 2010 201315

Our Cold Drink Equipment is more pervasive, Our Cold Drink Equipment is more pervasive, energy efficient & visually prominent than everenergy efficient & visually prominent than everOur Cold Drink Equipment is more pervasive, Our Cold Drink Equipment is more pervasive, energy efficient & visually prominent than everenergy efficient & visually prominent than ever

(4)energy efficient & visually prominent than ever energy efficient & visually prominent than ever before.before.energy efficient & visually prominent than ever energy efficient & visually prominent than ever before.before.

Equipment

3 Door Coolers Fountain Glass Front Frozen Coke

16

We have built technology that can detect technical issues, We have built technology that can detect technical issues, securing more equipment up time for our customerssecuring more equipment up time for our customers

We have built technology that can detect technical issues, We have built technology that can detect technical issues, securing more equipment up time for our customerssecuring more equipment up time for our customerssecuring more equipment up time for our customers.securing more equipment up time for our customers.securing more equipment up time for our customers.securing more equipment up time for our customers.

How this helps the Customer?

1. Improved Customer Service

2. Quicker Response TimesQu c e espo se es

3. Reduced Downtime

17

Over the next 3 years we are targeting high single digit Over the next 3 years we are targeting high single digit EBIT growth p a in Australia & New ZealandEBIT growth p a in Australia & New Zealand


2011 - 2013 KEY DRIVERS OF EBIT GROWTH

EBIT growth p.a. in Australia & New Zealand.EBIT growth p.a. in Australia & New Zealand.EBIT growth p.a. in Australia & New Zealand.EBIT growth p.a. in Australia & New Zealand.

Project Zero /Cost Management

Alcohol (10-15%)

Non Sparkling (15-20%)

(20-25%)

Sparkling(45-50%)

18

We continue to widen the Coke Trademark price We continue to widen the Coke Trademark price premium to Pepsi Cola through pack price innovationpremium to Pepsi Cola through pack price innovation

We continue to widen the Coke Trademark price We continue to widen the Coke Trademark price premium to Pepsi Cola through pack price innovationpremium to Pepsi Cola through pack price innovationpremium to Pepsi Cola through pack price innovation.premium to Pepsi Cola through pack price innovation.premium to Pepsi Cola through pack price innovation.premium to Pepsi Cola through pack price innovation.

Price Premium

FY 2004

Price Premium: 30%YTD 31/10/10

Price Premium: 42%Vol Share*: 46.2% Vol Share*: 46.9%

19* Share of Grocery ex Aldi Std CSDs excl 600ml

To drive loyalty & frequency for brand Coke, we have To drive loyalty & frequency for brand Coke, we have launched our largest ever promotional programlaunched our largest ever promotional program

To drive loyalty & frequency for brand Coke, we have To drive loyalty & frequency for brand Coke, we have launched our largest ever promotional programlaunched our largest ever promotional programlaunched our largest ever promotional program.launched our largest ever promotional program.launched our largest ever promotional program.launched our largest ever promotional program.

www. .com.au

“Get Refreshed f…Get Rewards!”

20

How Coke Unleashed Works: 4 easy stepsHow Coke Unleashed Works: 4 easy stepsHow Coke Unleashed Works: 4 easy stepsHow Coke Unleashed Works: 4 easy steps

BUY A COKE, UNIQUE CODE ON THE BACK OF LABEL

REGISTER & ENTER YOUR CODE VIA SMS OR ONLINE

USE TOKENS SHOP FOR REWARDS

COLLECT TOKENS

21

Coke Unleashed Coke Unleashed –– Partnering with iconic teenage brandsPartnering with iconic teenage brandsCoke Unleashed Coke Unleashed –– Partnering with iconic teenage brandsPartnering with iconic teenage brands

1 Bottle = 10 Tokens1 Bottle = 10 Tokens

70 Tokens 286 Tokens

$20 recharge $5 Music

22

cardVoucher

Coke Unleashed Coke Unleashed -- Partnering with our customers to Partnering with our customers to offer even greater valueoffer even greater value

Coke Unleashed Coke Unleashed -- Partnering with our customers to Partnering with our customers to offer even greater valueoffer even greater valueoffer even greater value.offer even greater value.offer even greater value.offer even greater value.

QSR

MOVIES

Discounted Shopping Free Frozen COKE

23

Discounted Tickets

Shopping Vouchers

Free Frozen COKE with every Whopper

We are building a new set of Coke occasions We are building a new set of Coke occasions with Frozen Cokewith Frozen Coke

We are building a new set of Coke occasions We are building a new set of Coke occasions with Frozen Cokewith Frozen Cokewith Frozen Coke.with Frozen Coke.with Frozen Coke.with Frozen Coke.

2003 2009

24

Frozen Coke Beverage Serves

And now we have Frozen Coke in a packaged format…And now we have Frozen Coke in a packaged format…S CS C

And now we have Frozen Coke in a packaged format…And now we have Frozen Coke in a packaged format…S CS CSUPERCHILL!SUPERCHILL!SUPERCHILL!SUPERCHILL!

25

There will be new product innovation to drive flavours.There will be new product innovation to drive flavours.There will be new product innovation to drive flavours.There will be new product innovation to drive flavours.

H lthi O ti F C k BHealthier Options to drive permissibility

Launched Nov 2010

Frozen Coke Beveragesto drive trial

Rotation of Flavours26

We are the official sparkling beverage sponsor for the We are the official sparkling beverage sponsor for the Ashes We will leverage this to drive volume duringAshes We will leverage this to drive volume during

We are the official sparkling beverage sponsor for the We are the official sparkling beverage sponsor for the Ashes We will leverage this to drive volume duringAshes We will leverage this to drive volume duringAshes. We will leverage this to drive volume during Ashes. We will leverage this to drive volume during

summer when flavours over trade.summer when flavours over trade.Ashes. We will leverage this to drive volume during Ashes. We will leverage this to drive volume during

summer when flavours over trade.summer when flavours over trade.

Fl % f T t l G Std

37%

Flavours as a % of Total Grocery Std Soft Drink Sales

Summer

33%

35%

So

ft D

rin

ks Summer

27%

29%

31%

Sh

are

of

Std

25%

27%

n-09

ul-0

9

g-09

p-09

ct-0

9

v-09

c-09

n-10

b-10

ar-1

0

pr-1

0

y-10

n-10

% S

27

Jun

Ju Aug

Sep Oc

Nov

Dec Jan

Feb

Ma

Ap

May Jun

Source: Aztec Grocery (excl Aldi)

We are now leveraging the full capability We are now leveraging the full capability of our system to win in Energy!of our system to win in Energy!

We are now leveraging the full capability We are now leveraging the full capability of our system to win in Energy!of our system to win in Energy!of our system to win in Energy!of our system to win in Energy!of our system to win in Energy!of our system to win in Energy!

Mother has captured 25% of the

Total Energy MarketTotal Energy Market

15 pack CansVending Fountain

28Source: Aztec Grocery (excl Aldi), C&P, Route Aztec (excl licensed)

We have doubled We have doubled our sparkling water volume in 2 yearsour sparkling water volume in 2 years

We have doubled We have doubled our sparkling water volume in 2 yearsour sparkling water volume in 2 yearsour sparkling water volume in 2 years.our sparkling water volume in 2 years.our sparkling water volume in 2 years.our sparkling water volume in 2 years.

Deep Spring

supporting

Mt Franklin Lightly Sparkling

pp gPancreatic

Cancerg y p g

29






Alcohol (10-15%)


(20-25%)

Sparkling(45-50%)

30

Investing in production capability to drive innovation Investing in production capability to drive innovation ––Lightest weight water PET bottle in the Australian marketLightest weight water PET bottle in the Australian market

Investing in production capability to drive innovation Investing in production capability to drive innovation ––Lightest weight water PET bottle in the Australian marketLightest weight water PET bottle in the Australian market

2009

Lightest weight water PET bottle in the Australian market.Lightest weight water PET bottle in the Australian market.Lightest weight water PET bottle in the Australian market.Lightest weight water PET bottle in the Australian market.

Launched Nov 20102010

600ml 600ml Mt Franklin 500ml

31

19 grams 16 grams 20 Pack

We have launched Powerade & Nestea in cans to build We have launched Powerade & Nestea in cans to build ffff

We have launched Powerade & Nestea in cans to build We have launched Powerade & Nestea in cans to build ffffdifferentiation in their categories.differentiation in their categories.differentiation in their categories.differentiation in their categories.

Launched: Nov 10 Launched: Oct 10

32

We are now selling the equivalent of 110m cups of We are now selling the equivalent of 110m cups of coffee p a and have increased ourcoffee p a and have increased our

We are now selling the equivalent of 110m cups of We are now selling the equivalent of 110m cups of coffee p a and have increased ourcoffee p a and have increased ourcoffee p.a. and have increased our coffee p.a. and have increased our

roasting capacity so we can triple our business.roasting capacity so we can triple our business.coffee p.a. and have increased our coffee p.a. and have increased our

roasting capacity so we can triple our business.roasting capacity so we can triple our business.

33






Alcohol (10-15%)


(20-25%)

Sparkling(45-50%)

34

We are building capability to develop a We are building capability to develop a strong earnings stream from beer Market share ofstrong earnings stream from beer Market share of

We are building capability to develop a We are building capability to develop a strong earnings stream from beer Market share ofstrong earnings stream from beer Market share ofstrong earnings stream from beer. Market share of strong earnings stream from beer. Market share of

premium beer 10% and growing.premium beer 10% and growing.strong earnings stream from beer. Market share of strong earnings stream from beer. Market share of

premium beer 10% and growing.premium beer 10% and growing.

Leadership & Customer Relationships

Product & Packaging Innovation Capability

35

John MurphyMD Licensed/Alcohol Australasia

Warnervale NSWCapacity 500k HL

We have built supply chain capacity & capability.We have built supply chain capacity & capability.We have built supply chain capacity & capability.We have built supply chain capacity & capability.

From Jan 2011 equipment service Investment in brand building toFrom Jan 2011 equipment service capability to deliver a one stop shop

Investment in brand building to give customers a 3rd alternative

36

We have built supply chain capacity & capability.We have built supply chain capacity & capability.We have built supply chain capacity & capability.We have built supply chain capacity & capability.

Current capacity to capture 20% Capability to deliver kegs to all p y pof the premium beer market

p y gon-premise outlets

Current PotentialCurrent Potential

37

We continue to grow our spirits market share.We continue to grow our spirits market share.We continue to grow our spirits market share.We continue to grow our spirits market share.

28 7 30.0

Total Australia - Vol % Share

28.7

14.1 15.1

Total BGA Dark RTD Total BGA Spirits

38

MAT TO 30/09/2009 MAT TO 30/09/2010

Source: AC Nielsen

Russian Standard now the #2 mainstream Vodka BrandRussian Standard now the #2 mainstream Vodka BrandRussian Standard now the #2 mainstream Vodka BrandRussian Standard now the #2 mainstream Vodka Brand

Now 7% share of Mainstream Vodka since launch

World First Launch of Russian Standard ARTDof Russian Standard ARTD

39

Canadian Club is the fastest growing Canadian Club is the fastest growing major spirit in Australiamajor spirit in Australia

Canadian Club is the fastest growing Canadian Club is the fastest growing major spirit in Australiamajor spirit in Australiamajor spirit in Australia.major spirit in Australia.major spirit in Australia.major spirit in Australia.

Canadian Club 12 Canadian Club 12 month volume Growth:

40Source: AC Nielsen

Demonstrating our capability to build strong brands Demonstrating our capability to build strong brands ––Maker’s MarkMaker’s Mark

Demonstrating our capability to build strong brands Demonstrating our capability to build strong brands ––Maker’s MarkMaker’s MarkMaker s Mark.Maker s Mark.Maker s Mark.Maker s Mark.

Australia is now the Australia is now the biggest market for this Bourbon outside the USA.Bourbon outside the USA.

Important for high profile venues

41

Key initiatives to drive high single digit EBIT growth p.a. Key initiatives to drive high single digit EBIT growth p.a. over the next 3 yearsover the next 3 years

Key initiatives to drive high single digit EBIT growth p.a. Key initiatives to drive high single digit EBIT growth p.a. over the next 3 yearsover the next 3 yearsover the next 3 years.over the next 3 years.over the next 3 years.over the next 3 years.

1. Cost Efficiencies - Project Zero

2 Customer Service Leveraging SAP2. Customer Service - Leveraging SAP

3. Revenue - Coke UnleashedG ti M thGeneration - MotherPriorities - Mount Franklin

4. Alcohol - Driving On-Premise Beer

- Strong Spirits Portfolio

42

DisclaimerDisclaimerCCA advises that these presentation slides contain forward looking statements which may be subject to significant uncertainties outside of CCA’s control.

No representation is made as to the accuracy or reliability of forecasts or the assumptions on which they are based.

Actual future events may vary from these forecasts and you are cautioned not to place undue reliance on any forward looking statement.

43

warwick white managing director australasia - coca-cola ......premium to pepsi cola through pack...

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