Profitably Growing Per Capita Consumption in Australia Warwick White Managing Director Pat Malloy Jeff Maguire Operations Director Director, Sales & Customer Service 13 October 2005 1 October 2005 Overall Agenda � Capitalising on the Health & Well-being Lifestyle Trend Warwick White � Cementing stronger customer relationships with tailored solutions Pat Malloy � Leveraging our capital and scale for value and service Jeff Maguire � Current Trading Environment Warwick White 2 October 2005 1
The Australian business continues to grow strongly 2001 to 2004 $M EBIT Growth of CCA Australia CAGR +15.2% 450 400 350 1993 to 2000 CAGR +7.0% 300 250 200 150 100 50 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 3 October 2005 Our Success Continues to be Driven by Execution of our Pillars of Growth 1. Product and package innovation 2. Non-carbonated beverage expansion 3. Growing product availability through cold drink placements and outlet expansion 4. Customer service improvement 5. Revenue management and cost discipline 4 October 2005 2
Our Success Continues to be Driven by Execution of our Pillars of Growth 1. Product and package innovation 2. Non-carbonated beverage expansion 3. Growing product availability through cold drink placements and outlet expansion 4. Customer service improvement 5. Revenue management and cost discipline 5 October 2005 The Australian Beverage Market: There Is Still Significant Potential for Growth � Total market size: $9.0bn CCA share in each category Market Size based on Litres consumed CSD 60% CSD 19.0% Water 35% Energy Other Juice 6% RTD Coffee/Tea 58% 19.0% Sports Sports 46% Juice Water 1.7% Energy 8% 0.4% 0.5% 1.6% RTD tea 4% 6 October 2005 Source: Industry Estimates/ACN Food & Convenience T1/T2 3
We still have not maxed out the per capita consumption growth � Each week, every Australian drinks one more of our beverages than they were in 2000 � CCA volume growth of 5.2% pa since 2000. � Consumption of Commercial Beverages In Australia has increased from 1,218 per capita in 2000 to 1,266 per capita in 2004 In 2004: Total Industry Non-alcoholic ready to drink beverage per capita (8oz Serves) 2500 2278 2000 1912 1659 1511 1500 1415 1377 1266 1178 1142 1021 1000 500 0 New Zealand France Germany UK Australia Belgium Canada Spain USA Mexico 7 October 2005 Source: TCCC Infact – Market Estimates We now have a Strong Portfolio of Brands to Tap into all the Consumer Needs States The Coca-Cola System: Bringing You A World Of Refreshment Simple Pleasure Better for You Pleasure Health & Lifestyle Sugar CSDS Sugar Free CSDS NCBs & NPD 8 October 2005 4
Global Comparisons Highlight That There Is Still Significant CSD Growth Potential… � The Carbonated Soft Drinks Market ($4.9bn, 2,400m litres) CARBONATED SOFT DRINKS � Australia consumption patterns and consumer habits follow the US � Australian CSD per capita at 63% that of the USA In 2004: Total Industry Carbonated Soft Drink Consumption Per Capita (8oz Serve) 900 777 800 700 624 600 497 493 463 500 428 400 379 339 400 300 200 100 0 Germany New UK Belguim Canada Australia Northern Mexico United Zealand Ireland States 9 October 2005 Source: TCCC Infact – Market Estimates In Australia, Sugar Free Products Have Grown From 23% to 27% of The Market in 7 Years CARBONATED SOFT DRINKS ACNielsen Food & Convenience (T1/T2) - Value Sales (000s) Sugar Free CSDs 0.8% 6.9% Sugar CSDs 1.9% 3.9% 8.1% 5.6% 5.1% 27% 23% 1998 1999 2000 2001 2002 2003 2004 Value Growth 10 October 2005 Source: ACNielsen Food & Conv (T1/T2) 5
Sprite is Leveraging Its Urban Youth Connection and Zero Young Adult Opportunity CARBONATED SOFT DRINKS The Opportunity � Sprite highly responsive to support – and Sprite Zero communication haloing back onto Sprite brand � Sprite Sales +8.4% YTD 11 October 2005 Source: TCCC Infact – Market Estimates Sprite Zero Ad CARBONATED SOFT DRINKS 12 October 2005 6
Against This Background, Diet Coke Has Grown in Volume by 25% and contributed $498M to growth since 2000 CARBONATED SOFT DRINKS Launched in Australia in 1983 � Core user base of loyal female drinkers (70% of volume) � 70% of volume from highly loyal daily drinkers Diet Coke – Australia’s favourite diet brand amongst Australian women � Campaigns over time have developed a sexy, confident, female character � Flavour variants over the last 3 years have brought in new users to the franchise 2006 � Driving Equity: “Its Good to be Me” 13 October 2005 CARBONATED SOFT DRINKS Diet Coke Ads – The Business Presentation May 2005 14 7
However, As Older Consumers Reduce Their Frequency Of Consumption of Sugar CSDs, Not All Of Them Move into Diet CSDs…. CARBONATED SOFT DRINKS INCIDENCE (PAST 24HRS) CSD X AGE 60% 55% SUGAR 50% 43% DIE T 40% 32% 33% 30% 26% 20% 13% 16% 9% 9% 8% 6% 10% 7% 0% Total 12-19 Years 20-29 Years 30-39 Years 40-49 Years 50-65 Years 15 Source: COG 12MMT May ’05 – All Beverages October 2005 To fill this Gap, We are Introducing….. CARBONATED SOFT DRINKS 16 October 2005 8
CARBONATED SOFT DRINKS And now lets taste it.. May 2005 17 International Markets Highlight Overall Potential Of The Water Market (Currently $1.2bn, 740m litres) Household penetration remains low relative to the long term potential of the category � 80% of consumers claimed they consumed tap water in the last 24 hrs � Bottled water has only 17% household penetration WATER In 2004: Total Industry Packaged Water Consumption Per Capita (8oz Serve) 800 760 700 585 580 576 600 522 500 402 400 300 240 200 152 152 96 100 47 0 NZ Netherlands UK Australia Canada USA Germany Belgium France Spain Italy 18 October 2005 Source: TCCC Infact – Market Estimates 9
Our Increased Investment in Water Driving Results with 12% Volume and 21% Value Growth pa Over the Last 3 Years Water - Volume & Value Growth (ACN Food & Conv) 35.0% 31.6% Volume Grth Value Grth 30.0% WATER 25.0% 20.8% 21.1% 20.0% 16.9% 14.6% 14.5% 15.0% 12.2% 10.2% 11.2% 10.4% 10.2% 10.0% 5.7% 5.0% 0.0% 1999 2000 2001 2002 2003 2004 19 October 2005 Source: TCCC Infact – Market Estimates We Have The Most Powerful Portfolio of Water Brands in The Australian Market Place Younger WATER At Home Out & About Older No 1 share of voice in Water 20 October 2005 10
Key Brand Initiatives to Increase Total Water consumption ensure We have an Offering for every Water Occasion Mount Franklin � Sparkling & still in glass � Premium glass multi pack WATER � Drive in home availability of 1.5 litre multi serve & 6 x 600mL multi serve Pump � Introduce 4 x 750mL multi pack Pump 4 x 750mL Pump 4 x 750mL 21 October 2005 Mt Franklin Commercial WATER May 2005 22 11
Key Brand Initiatives to Increase Total Water consumption ensure We have an Offering for every Water Occasion Peat's Ridge Drive Value through pack innovation • Neverfail Leverage the brand with the 5 litre pack • WATER 23 October 2005 Relaunch of Deep Spring Re-ignite as the adult carbonated good for you offering 24 October 2005 12
Deep Spring Commercial May 2005 25 Building on Fruitopia’s Early Success, We Will Continue To Drive Value Ahead of Volume Growth In The Juice Market • 2nd largest NARTD category behind CSD (21% share of NARTD market) • Juice growth driven by consumers desire for healthy beverage solutions Juice & Juice Drinks - Volume & Value Growth JUICE (ACN Food& Conv) 3.5% Volume Grth 3.0% Value Grth 2.5% 2.0% Market Size: 1.5% 1.0% $1.4bn 0.5% 766m litres 0.0% - 0.5% - 1.0% - 1.5% 2002 2003 2004 2005 E st 26 October 2005 Source: ACN Food & Con (T1/T2); 13
Fruitopia Classic is now the Number 2 Brand in Foodstores ahead of Golden Circle Manufacturer % Share of Juice 16 Launch of Fruitopia 14 Classic JUICE % $ share of Juice 12 10 8 6 4 2 0 Aug 05 Jun 05 Jul 05 Sep 05 Golden Circle TCCC 27 October 2005 Source: ACNielsen Foodstore Further Fruitopia product & pack launches will continue the growth momentum Fruitopia Carafe Alive’s “Juice bar” in a bottle JUICE 28 October 2005 14
CARBONATED SOFT DRINKS And now lets taste Alive.. May 2005 29 Powerade is “Powering Ahead” with +7.8pts Volume Share Gain in Quarter to Sept 2005 in Foodstores Powerade Volume % Share gain versus year ago 10.0 9.0 8.0 7.7 8.0 SPORTS 6.0 4.0 2.0 1.1 0.0 -2.0 -1.9 -2.9 -4.0 -4.1 -4.2 -6.0 -5.6 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E -8.0 4W/E 23/01/2005 20/02/2005 20/03/2005 17/04/2005 15/05/2005 12/06/2005 10/07/2005 07/08/2005 04/09/2005 30 October 2005 Source: ACN Foodstore 15
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