John F. Brock Nik Jhangiani Chairman & CEO SVP & CFO 1 - - PowerPoint PPT Presentation

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John F. Brock Nik Jhangiani Chairman & CEO SVP & CFO 1 - - PowerPoint PPT Presentation

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John F. Brock Nik Jhangiani Chairman & CEO SVP & CFO 1 Forward-Looking Statements Included in this presentation are forward-looking management comments and other statements that reflect managements current outlook for future

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John F. Brock

Chairman & CEO

Nik Jhangiani

SVP & CFO

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Forward-Looking Statements

As always, these expectations are based

  • n currently available competitive,

financial, and economic data along with

  • ur 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 presentation should be read in conjunction with the risks and uncertainties discussed in our filings with the Securities and Exchange Commission (“SEC”), including our most recent Form 10-K and other SEC filings.

Included in this presentation are forward-looking management comments and other statements that reflect management’s current outlook for future periods.

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Agenda

Business & Category Profile Deliver Shareowner Value CRS & Key Takeaways

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CCE Overview

2014 10-K, rounded

Preeminent Western European bottler

BILLION NET SALES MILLION CONSUMERS BILLION SERVINGS ANNUALLY PRODUCTION FACILITIES THOUSAND EMPLOYEES

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Vision & Operating Framework

STRATEGIC PRIORITIES VISION

Deliver consistent long-term profitable growth

Be the best

beverage sales and service company

category value growth at serving our customers with world class capabilities an inclusive and passionate culture

LEAD EXCEL DRIVE

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Solid Foundation

CATEGORY

LARGE

CATEGORY

GROWIN WING

POSITION

LEADIN ING Participating in an attractive category

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1. AC Nielsen FY14, rounded 2. Canadean FY13, excludes tap/bulk water & dairy, rounded

Large & Growing Category – NARTD

~$29B 2014 NARTD Growth1

Measured Channels (Retail Value)

+0.6%

Still & Water Sparkling

+2.0%

NARTD +1.2%

Measured Channels Non-Measured Channels

$38B $38B2

$67B $67B

Retail Value

$29B $29B1

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2013 2014

1.1x 1.7x

AC Nielsen

Growing Category – NARTD

NARTD FMCG

NARTD Indexed to FMCG

Retail Value Growth

FMCG and NARTD have been negatively impacted by challenging conditions NARTD continues to grow faster than FMCG average

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CCE Share Ranking1

CATEGORY & SEGMENTS VALUE VOLUME

NARTD 1 1 Colas 1 1 Sparkling Flavors 1 1 Energy 3 3 Stills & Water 3 5

Leading NARTD Position

  • 1. AC Nielsen FY14
  • 2. CCE Internal Reports

NARTD Composition & CCE Mix

CCE is focused on high-value segments

1

NARTD Value CCE Volume

19% 35% 10% 46% 87%

2

Sparkling Stills Water

3%

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Coca-Cola Trademark 69% Mix

Consumer Preferred Brands

CCE Internal Reports, rounded

Grow sparkling segment Sparkling Flavors & Energy Selectively grow value share Stills 18% Mix 13% Mix

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Capturing Opportunity

Solid Marketing & Execution Great People Successful Brands & Packages

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Coca-Cola Trademark

Coca-Cola Life – territory expansion Coke Zero – continue to build consumer equity Diet Coke – ‘Regret Nothing’ campaign Package Innovation – 100th anniversary contour Coca-Cola Trademark – one brand strategy

20 2015 15 High ghligh ghts

VALUE E SH SHARE E

in all territories

VOLUME ME SH SHARE E

in all territories

AC Nielsen FY14

# 1

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Coca-Cola Life

Aug 2014 Sep 2014 Dec 2014 Jan 2015 Feb 2015

Lower calories, sweetened from natural sources

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Coca-Cola Zero

1. CCE Internal Reports, rounded 2. AC Nielsen FY14

Growing value and volume share in each

  • f our territories

2014 2014 Growth2

Coca-Cola Zero Volume Growth1

2012 2013 2014

14

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100 Years of Contour

Embossed Logo Bigger label Uniform Cap

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‘Kiss Happiness’ Campaign

Celebrating Coke’s iconic heritage

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Commercials

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One Brand Strategy

Four distinct product benefits

Uplifting taste No Calories No Sugar Great Coke taste Zero sugar Sweetness from natural sources Lower calorie

One Iconic Brand, One Coca-Cola Family

One common identity across all variants

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‘choose happiness’

A Coca-Cola to suit every taste and lifestyle

Putting choice at the heart of our trademark strategy

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Energy Continues to Grow

AC Nielsen FY14

17.2% value share, growing +50 bps vs. PY 15.5% volume share, growing +130 bps vs. PY

2014 CCE Energy y Share

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Product Innovation & Expansion

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Commercial – Finley

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Other Areas of Growth

Small Small Baskets Digi Digital al Sales Disco Discount Channel Co Cold Channel

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2015 Marketing Calendar

‘COKE WITH MEALS’

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Customer Centric Supply Chain

Procurement, Production, and Logistics Excellence

Pan-European scale supported with global procurement capability Flexible & efficient logistics Cost-efficient production & expandable infrastructure Responsible & sustainable

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Business Transformation Program

e.g. channel-focused sales and marketing

  • rganization

e.g. shared services center e.g. cold-drink equipment service activities

Continually enhancing our operating model to drive sustainable future growth

Standardized Centralized Improved

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Our People

Experienced team Solid bench strength Focus on diversity Investing in capabilities Drive an inclusive and passionate culture

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Agenda

Business & Category Profile Deliver Shareowner Value CRS & Key Takeaways

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Financial Priorities

earnings in line with our long-term

  • bjectives

free cash flow (FCF) and maintain financial flexibility return on invested capital and deliver shareowner value

Continually enhancing our operating model to drive sustainable future growth

Consistent Maximize Increase

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Financial Approach

Focus on total shareowner return

Drive Cash from Operations Optimize Capital Structure Opportunistically Invest and/or Return Cash to Shareowners

Grow profitably while investing CapEx prudently Maintain target leverage range Invest in high return M&A opportunities and/or return cash to shareowners

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Growing Free Cash Flow

2013 2014 2015E

$600– $650 $677 $524

FCF ($M) Increasing cash from operations Proven ability to manage CapEx Significant FX headwind in 2015 at recent rates

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Improving Free Cash Flow Conversion

Over time, we expect FCF to more closely align with Net Income

CCE internal Reports (excludes asset disposals), rounded

Focus on annual ROIC improvement

FCF as a % of Net Income

2013 2014

76% 90%

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Cost of Sales

CCE Internal Reports, rounded

45% 30% 15% 10%

COGS Mix

Concentrate, Finished Goods Manufacturing, D&A, A/O Commodity Based Costs Excise Taxes

Maintain and opportunistically expand gross margins ~85% of COGS is variable, while ~15% is fixed Of commodity-based costs, ~half are related to conversion

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Selling, Delivery, and Administrative (SD&A)

CCE Internal Reports, comparable, rounded

D&A 10%

D&A 10% General Admin 30% Sales & Marketing 30% Supply Chain 30% Non-Labor, 45% Labor 45%

Expand operating margins with modest SD&A leverage Ownership Cost Management approach Flexible routes-to-market allows us to work with customers to optimize delivery

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Invest for Long-Term Growth

Long-term target 4.0% – 4.5% of net sales ~2/3 supports growth ~1/3 maintains existing assets

56% 31% 13%

Operations Cold Drink, Equipment IT, Other

Capital Mix

10-K 2014

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2010 2011 2012 2013 2014

1.6x 1.6x2 1.7x 1.7x 2.0x 2.0x 2.6x 2.6x 2.6 2.6x

Balance Sheet Flexibility

Net Debt1 to EBITDA

Long-term target range 2.5x – 3.0x

  • 1. 10-K, Net Debt is total 3rd party debt less cash & cash equivalents, comparable EBITDA
  • 2. Pro forma FY10 assumes D&A of low to mid $300M
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Balanced Debt Portfolio

25 25 24 23 22 21 20 19 18 17 16 15

300 420 420 545 520 420 425 250 620

Debt Maturity ($M)

Annual maturities are < annual FCF

10-K 2014, CCE Internal Reports, rounded

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Invest In High Return M&A

Core business growth Adjacent territories/categories Other territories New business Cash flow of existing business Incremental value creation by CCE Incremental value to CCE’s core Risk, cost, and timeframe

Opportunities evaluated against alternatives, including return of cash to shareowners

OPPORTUNITIES EVALUATION CRITERIA

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Future Cash Availability

~6 ~6-7% 7% ~8 ~8-10% 10% ~2-3%

CCE Internal Reports, illustrative

Annual Cash Available as % of Market Capitalization

Net Income Organic growth while maintaining debt leverage Annual cash available

+ = Opportunity to generate significant cash annually for M&A and/or shareowners

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8 consecutive years of increases

Dividends

Increased 2015 Annualized Rate By 12% $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 05 06 07 08 09 10 11 12 13 14 15E

10-K, CCE Internal Reports, rounded

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Cash Returned to Shareowners

2010 2011 2012 2013 2014

$3.6 $3.6B $1.0B $1.0B $1.0B $1.0B $1.2 $1.2B $1.2 .2B

Share Repurchase Dividends Cash Distribution

10-K, YE market cap, CCE Internal Reports, rounded

~$8B of cash returned after the formation of new CCE through 2014

44% 44% 12% 12% 11% 11% 11% 11% 11 11%

% of Mkt Cap

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$4.5B Cash Opportunity Results

  • 1. 2011 Investor Event presentation

2. 2H11-2014 FCF from historical earnings releases and 10-Ks, Balance Sheet represents net debt issued less debt retired, rounded 3. FCF adjusted for cash restructuring, cash tax, pension contributions in excess of pension expense, rounded

During 2011, we outlined a $4.5B opportunity through 2014

While the environment was more challenging than expected, we delivered ~$4.4B in cash

2H11 - 2014 ($B) OPPORTUNITY1 RESULTS2

Free Cash Flow3 2.5 2.7 Balance Sheet 2.0 1.7

Total 4.5 4.4

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Key Financial Takeaways

Realistic about the continued challenging environment and the impact of currency translation History of, and commitment to, managing the levers of

  • ur business to deliver value

Favorable and flexible capital structure

Focus on generating cash from operations, consistent long-term profitable growth and driving shareowner value

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Agenda

Business & Category Profile Deliver Shareowner Value CRS & Key Takeaways

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Increase

engagement and advocacy

Enhance

relationships with communities

CRS Vision and Recognition

#2 #1

Improve

  • perational

effectiveness

Food/Beverage Rankings

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Decreasing environmental impact while reducing costs

CRS Progress/Achievements

2007 2010 2012 2014 2020 target

91 91 88 88 82 82 74 74 75 75

Energy Use Ratio

Energy Consumed Per 1,000 Liters Of Product 2007 2010 2012 2014 2020 target

1.64 1.48 1.40 1.36 1.2

Water Use Ratio

Water Used To Make 1 Liter Of Product

CCE Internal Reports

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Business Environment Risks

Though optimistic long-term, we are realistic about the current environment

Challenging macroeconomic environment Increasing focus on health and well-being Risk of increased taxes

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Key Takeaways

CCE is executing our strategic priorities

Operating environment remains challenging Financial priorities focused on long-term profitable growth Track record of, and focus on, delivering shareowner value

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John F. Brock

Chairman & CEO

Nik Jhangiani

SVP & CFO