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CCE CCEP Coca Cola European Partners CAGNY 2018
CCE CCEP Coca Cola European Partners CAGNY 2018
CCE CCEP Coca Cola European Partners CAGNY 2018
FORWARD-LOOKING STATEMENTS
This document may contain statements, estimates or projections that constitute “forward-looking statements” concerning the financial condition, performance, results, strategy and objectives of Coca-Cola European Partners
plc and its subsidiaries (“CCEP”). Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “plan,” “seek,” “may,” “could,” “would,” “should,” “might,” “will,” “forecast,” “outlook,” “guidance,” “possible,”
“potential,” “predict” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual
results to differ materially from CCEP’s historical experience and its present expectations or projections. These risks and uncertainties include, but are not limited to, obesity concerns; water scarcity and poor quality; evolving
consumer preferences; increased competition and capabilities in the marketplace; product safety and quality concerns; perceived negative health consequences of certain ingredients, such as non-nutritive sweeteners and
biotechnology-derived substances, and of other substances present in CCEP’s beverage products or packaging materials; increased demand for food products and decreased agricultural productivity; changes in the retail
landscape or the loss of key retail or foodservice customers; fluctuations in foreign currency exchange rates; fluctuations in the stability of the Euro; interest rate increases; an inability of CCEP to maintain good relationships
with its partners; a deterioration in its partners’ financial condition; increases in income tax rates, changes in income tax laws or unfavourable resolution of tax matters; increased or new indirect taxes in CCEP’s tax
jurisdictions; increased cost, disruption of supply or shortage of energy or fuels; increased cost, disruption of supply or shortage of ingredients, other raw materials or packaging materials; changes in laws and regulations
relating to beverage containers and packaging; significant additional labelling or warning requirements or limitations on the availability of CCEP’s products; an inability of CCEP to protect its information systems against
service interruption, misappropriation of data or breaches of security; unfavourable general economic or political conditions in Europe or elsewhere; the United Kingdom’s exit from the European Union; litigation or legal
proceedings; non-compliance with anti-corruption laws and regulations and economic sanctions programmes; adverse weather conditions; climate change; damage to CCEP’s brand images and corporate reputation from
negative publicity, even if unwarranted, related to product safety or quality, human and workplace rights, obesity or other issues; changes in, or failure to comply with, the laws and regulations applicable to CCEP’s products
or business operations; changes in accounting standards; an inability of CCEP to achieve its overall long-term growth objectives; deterioration of global credit market conditions; default by or failure of one or more of CCEP’s
counterparty financial institutions; fluctuations in CCEP’s debt rating; an inability to timely implement any previously announced actions to reinvigorate growth, or to realise the economic benefits CCEP anticipates from these
actions; failure to realise a significant portion of the anticipated benefits of strategic relationships, including (without limitation) The Coca-Cola Company’s relationship with Monster Beverage Corporation; an inability to renew
collective bargaining agreements on satisfactory terms, or CCEP or its partners experience strikes, work stoppages or labour unrest; future impairment charges; an inability to realise business integration and synergy
savings; an inability to successfully manage the possible negative consequences of productivity initiatives; global or regional catastrophic events; and other risks discussed in the reports that CCEP files with the U.S.
Securities and Exchange Commission. Due to these risks and uncertainties, CCEP’s actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, expectations and
guidance set out in CCEP’s forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. CCEP does not undertake any obligation to
publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable rules, laws and regulations. CCEP assumes no responsibility
for the accuracy and completeness of any forward-looking statements. Any or all of the forward-looking statements contained in this filing and in any other of CCEP’s public statements may prove to be incorrect.
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AGENDA
PLATFORM OUR
GROWTH
DELIVER
SHAREHOLDER
SUSTAINABILITY
& KEY
FOR GROWTH OPPORTUNITIES VALUE TAKEAWAYS
3
ONE OF THE WORLD’S
LARGEST BEVERAGE COMPANIES
Sweden
Iceland
Germany
Belgium
5
AGENDA
ONE OF THE
WORLD’S OUR DELIVER SUSTAINABILITY
LARGEST GROWTH SHAREHOLDER & KEY
BEVERAGE VALUE TAKEAWAYS
COMPANIES
OPPORTUNITIES
6
OPPORTUNITY TO GROW NARTD CATEGORY IS
IN ~€100B1 RETAIL NARTD CATEGORY ~€100B1 IN RETAIL SALES
CATEGORY MIX & CCEP VALUE SHARE
~71%
26% FOCUSED ON LEVERAGING
49% 4% CONSUMER PREFERRED
24%
28% 1%
BRANDS & LEADING
NARTD Volume 1 NARTD Value 1 CCEP Value Share 2 CUSTOMER SERVICE
Sparkling Still Water
Water,
CONSUMER SEGMENTS
Juices,
Stills.
& Dairy
RTD Tea
& Coffee
Energy
Sports
Other SSDs
Light Colas
Regular Colas
NARTD
VALUE SHARE COLLABORATE WITH CUSTOMERS FOR JOINT VALUE CREATION
Supermarkets E-Commerce Convenience Discounters HoReCa Food on the Go Education & Leisure &
Workplace Travel
ILLUSTRATIVE CCEP SHARE ALL OTHER CUSTOMER CHANNELS
CCEP analysis – value share is illustrative based on select FY17 AC Nielsen (measured channels); SSD refers to Sparkling Soft Drinks; HoReCa refers to Hotel/Restaurant/Cafél CCEP 8
OUR APPROACH TO GROWTH
NARTD CATEGORY MULTI -YEAR GROWTH OUTLOOK - ILLUSTRATIVE
EXPLORE
INNOVATION TO
EXPAND UNLOCK NEW
REVENUE
ENHANCE PRODUCTS
STREAMS
9
ENHANCE OUR CORE BRANDS
CLASSIC COLA #1 LIGHT COLAS #1 SPARKLING FLAVOURS #1
DRIVE VALUE LEAD SEGMENT GROWTH BUILD ON SUCCESS
THROUGH PACKAGE INNOVATION THROUGH INNOVATION THROUGH INNOVATION,
& INCREASED INCIDENCE & NEW FLAVOURS REFORMULATION & EXPANSION
FY 2017 AC Nielsen (measured channels); 2018 Category Value Growth is internal forecast excluding accounting impact of incremental
soft drinks industry taxes CCEP OTHER 10
EXPAND IN GROWING SEGMENTS
ENERGY #2 WATER #7 MIXERS #4
EXECUTE MULTI-BRAND EXPAND TO NEW MARKETS DIFFERENTIATE
STRATEGY & CONTINUED & NEW FLAVOURS THROUGH PREMIUMISATION &
INNOVATION ADULT SPARKLING
FY 2017 AC Nielsen (measured channels); 2018 Category Value Growth is internal forecast excluding accounting impact of incremental
soft drinks industry taxes CCEP OTHER 11
EXPLORE WITH NEW BRANDS
12
INVEST FOR LONG-TERM GROWTH
SALES FORCE
COOLERS
CAPABILITIES
DIGITAL
TECHNOLOGIES
ROUTE-TO-
OPERATIONS
MARKET
13
COVERING MORE OUTLETS MORE OFTEN
DRIVING EXTENDING
EFFICIENCIES OUTLET COVERAGE
~ 12.0
DEDICATING EXPANDING ~ 7.5
SALES TEAMS FOR DIGITAL CAPABILITIES
NEW PRODUCTS Jun-16 Dec-17
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ACCELERATING COLD DRINK AVAILABILITY
SUPPORT
CORE RANGE AVAILABILITY
ENABLE
PORTFOLIO EXPANSION
DEDICATED
COOLERS FOR
NEW PRODUCTS
16
IMPROVING OUR ROUTE-TO-MARKET
FOCUSING ON KEY AREAS
Invoicing
Customer Order
Warehousing Delivery & Cash Execution OUTLET
Development Capture
Collections
17
BUILDING ON SUPPLY CHAIN EXCELLENCE
INNOVATION INVESTMENTS
18
AGENDA
DELIVER
WITH
ONE OF THE
COMPELLING
WORLD’S SUSTAINABILITY
OPPORTUNITIES
LARGEST
& PLANS FOR SHAREHOLDER & KEY
BEVERAGE TAKEAWAYS
COMPANIES
PROFITABLE
GROWTH
VALUE
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FINANCIAL FRAMEWORK
GROW FREE CASH GROW FCF IN-LINE WITH LONG-TERM TARGETS,
FLOW (FCF) INCREASE FCF TO NET INCOME CONVERSION
Free cash flow is defined as net cash flows from operations, less capital expenditures and interest paid, plus proceeds from capital disposals 20
DELIVERING VALUE IN 2017
GROWING REVENUE & PROFIT
REVENUE UP 3.0%
OPERATING PROFIT UP 10.5%
DILUTED EPS UP 15.0%
INCREASING ROIC
ROIC OF 9% IN 2017, UP ~100 BPS
REDUCING LEVERAGE
NET DEBT TO ADJUSTED EBITDA OF 2.8x
FY 2017; revenue, operating profit, and diluted EPS growth are comparable and fx-neutral (non-GAAP performance measures); free cash flow is defined as net cash flows from operations, less
capital expenditures and interest paid, plus proceeds from capital disposals; ROIC = after tax comparable operating profit / (beginning & ending net debt & equity) / 2; adjusted EBITDA is profit after 21
tax plus taxes, net finance costs, non-operating items, depreciation, amortisation, and adjusted for items impacting comparability (a non-GAAP performance measure)
GROW FREE CASH FLOW
DELIVER CONSISTENT
PRUDENT CAPITAL DRIVE CASH
STRATEGY LONG-TERM
INVESTMENTS FROM OPERATIONS
PROFITABLE GROWTH
1,951 (488)
266 (247)
(94) (347)
1,041
2017 FCF 1950
€M
1040
Adjusted Net CAPEX Working Capital Taxes Interest Restructuring, Free Cash Flow
EBITDA Provisions &
Other
2017 FCF CONVERSION TO NET INCOME ~100% BENEFITING FROM WORKING CAPITAL
Free cash flow is defined as net cash flows from operations, less capital expenditures and interest paid, plus proceeds from capital disposals; adjusted EBITDA is profit after tax plus taxes, net 22
finance costs, non-operating items, depreciation, amortisation, and adjusted for items impacting comparability (a non-GAAP performance measure)
IMPROVE WORKING CAPITAL
ACCOUNTS PAYABLE ACCOUNTS RECEIVABLE
OPTIMISING ~3 DAYS
ENHANCING TRACKING AND REPORTING AND
INVENTORY AND 2017 IMPROVED
INTEGRATING INTO MANAGEMENT ROUTINES
RATIONALISING SKUS INVENTORY DAYS
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MAINTAIN OPTIMAL CAPITAL STRUCTURE
LONG-TERM OBJECTIVES NET DEBT TO ADJUSTED EBITDA
2.8x
MAINTAIN INVESTMENT
2 GRADE DEBT RATING ~2.5x
PERIODICALLY RE-EVALUATE
3 OPTIMAL STRUCTURE YE15PF YE16PF YE17 YE18E
Net Debt to Adjusted EBITDA
Adjusted EBITDA is defined as profit after tax plus taxes, net finance costs, non-operating items, depreciation, amortisation and adjusted for items impacting comparability (a non-GAAP
performance measure); YE15PF and YE16PF calculated assuming the merger occurred at the beginning of each year and reflect internal reports; numbers are rounded 24
PURSUE DISCIPLINED INVESTMENT
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REALISING SYNERGIES
TOP-LINE GROWTH SUPPLY CHAIN OPERATING EXPENSES
Synergy areas include supply chain, procurement, and operating expenses – top-line growth synergies are not included in savings target 26
SELECT SYNERGY HIGHLIGHTS
PROCUREMENT SAVINGS AND IMPROVED SCALE
~€70M (E.G. COOLER HARMONISATION, PAN-EUROPEAN HAULAGE)
DECREASED EXPENSES
~€25M
(E.G. CENTRALISE AND OPTIMISE CORPORATE FUNCTIONS)
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DRIVING SHAREHOLDER VALUE
LONG-TERM TARGETS RETURN CASH TO ANNUALISED DIVIDEND PAYOUT
SHAREHOLDERS Annual Payout Payout Percentage
SHAREHOLDER VALUE
REMAINS KEY PRIORITY
WELL POSITIONED TO DELIVER LONG-TERM PROFITABLE GROWTH & DRIVE SHAREHOLDER VALUE
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AGENDA
WITH
ONE OF THE DRIVING
WORLD’S
COMPELLING
SHAREHOLDER SUSTAINABILITY
OPPORTUNITIES
LARGEST
& PLANS FOR
VALUE & KEY
BEVERAGE
COMPANIES
PROFITABLE
REMAINS A KEY
PRIORITY TAKEAWAYS
GROWTH
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WE’VE MADE STRONG PROGRESS
NAMED BY
1ST DOW JONES
STAKEHOLDER CORPORATE KNIGHTS
STAKEHOLDER SUSTAINABILITY INDEX SUSTAINABILITY
INSIGHT AS ONE OF THE MOST
PROGRESS LISTING & CDP A LIST PLAN LAUNCH
& ROUNDTABLES SUSTAINABLE
REPORT FOR CLIMATE & WATER
CORPORATIONS
✓ ✓ ✓ ✓ ✓
32
NEW SUSTAINABILITY STRATEGY
LAUNCHED IN NOVEMBER 2017
33
OUR TRACK RECORD ON SUSTAINABILITY
KEY RESULTS & PROGRESS PRIOR TO THIS IS FORWARD
L E V E R AG I N G C A PA B I L I T I E S AC RO S S
O U R L A RG E R O RG A N I S AT I O N
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KEY TAKEAWAYS
WE ARE THE
WE ARE
SHARE WE
CLOSELY
LEADER IN AN UNDERSTAND
ALIGNED WITH
ATTRACTIVE, THE CONSUMER
TCCC ON OUR
DYNAMIC, AND OPPORTUNITIES
AMBITION &
GROWING & CHALLENGES
OUR PRIORITIES
CATEGORY
WE ARE
WE ARE ON
EXECUTING
TRACK TO
OUR PLANS &
DELIVER OUR
CAPTURING
SYNERGY
GROWTH
BENEFITS
OPPORTUNITIES
36
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