CCE CAGNY 2010

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CCE Presentation at 2010 Consumer Goods Analyst Conference

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CCE CAGNY 2010

  1. 1. February 17, 2010 John F. Brock Chairman and Chief Executive Officer
  2. 2. Forward-Looking Statements Included in this presentation are forward-looking management comments and other statements that reflect management’s current outlook for future periods. As always, these expectations are based on currently available competitive, financial, and economic data along with our 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 news release should be read in conjunction with the risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent SEC filings.
  3. 3. Agenda BUILDING ON STRENGTHS DRIVING GROWTH DELIVERING VALUE KEY TAKEAWAYS
  4. 4. Our Vision, Global Operating Framework and Financial Objectives Focus Our Business VISION: BE THE BEST BEVERAGE SALES AND CUSTOMER SERVICE COMPANY DRIVE CONSISTENT LONG-TERM PROFITABLE GROWTH #1 or strong #2 Most valued supplier Winning and inclusive culture 4
  5. 5. Solid Results in a Challenging Environment FY09 % GROWTH  Improved operating results in COMPARABLE FX NEUTRAL North America  Continued solid growth in Revenue (1)% 3% Europe OI 9% 17%  Focused on creating value  Strengthened balance sheet EPS 21% 32%  Solid free cash flow Source: CCE Internal Reports; figures presented on a comparable basis
  6. 6. Improving Results in North America MARGIN GROWTH  Driving value for consumers and (price/pc – cost/pc) 2.5% customers  Enhancing brand value through 0.0% price/package architecture -1.5%  Managing to deliver results and -2.0% reinvest for growth -2.5%  Sparkling volume showing -5.0% sequential improvements 2004 2005 2006 2007 2008 2009  Economic headwinds demand Source: CCE Internal Reports; figures presented on a comparable continued improvement and currency-neutral basis
  7. 7. Continued Solid Results in Europe GROWING SHARE IN GROWING CATEGORIES  Balanced growth FY09 Industry CCE Share Volume Growth Point Change  Growth built on core brand In millions of USD NARTD SSD NARTD SSD success, portfolio expansion, and strong execution GB +0.8% +1.2% +0.1 +0.2  Driving improved effectiveness France +2.2% +6.8% +0.5 flat to be our customers’ most valued supplier Belgium +0.5% +2.7% +0.9 +1.2  Economic headwinds demand Netherlands +4.5% +5.0% +0.2 flat continued improvement Share source: Nielsen Europe aggregated database YTD to Dec 2009 Note: Sparkling includes Colas, flavored carbonates, lemonades and mixers. Excludes sparkling water, and sports and energy drinks.
  8. 8. Business Territories North America Europe Revenue ($ million) $15,128 $6,517 OI ($ million) $1,106 $970 Employees 59,000 11,000 Physical Cases 1.4 billion 0.5 billion Multi Serve / Single Serve % Mix 73% / 27% 59% / 41% Sparkling/Still % Mix 82% / 18% 87% / 13% Canada Great Britain Central Benelux East France South West Source: CCE Internal Reports as of YE 2009; figures presented on a comparable basis
  9. 9. Leading Brands Red, Black, Silver Still Sparkling flavors and energy Water
  10. 10. Opportunities for Growth Millions 800 TCCC Consumption Per Capita (8oz servings, 2008) 700 600 635 500 400 412 300 340 324 303 200 241 237 196 179 147 100 141 130 0 Ireland Mexico Belgium Spain Great Britain France Canada Australia United States Germany Netherlands Italy Source: The Coca-Cola Company (TCCC)
  11. 11. Agenda NORTH AMERICA BUILDING ON STRENGTHS DRIVING GROWTH – NORTH AMERICA DELIVERING VALUE KEY TAKEAWAYS
  12. 12. 2010 Priorities NORTH AMERICA  Proactively manage through dynamic environment  Evolve price / package architecture  Enhance in-store execution  Increase customer service  Drive employee engagement & diversity  Unlock system synergies & value
  13. 13. Red, Black, and Silver showed positive growth in NORTH AMERICA 4Q09, led by the strength of Coca-Cola Zero COCA-COLA ZERO CASE GROWTH Index to 2006 2.1x 1.8x 1.4x 1.0 2006 2007 2008 2009
  14. 14. Monster Driving Continued Growth in Energy NORTH AMERICA ENERGY PORTFOLIO GROWTH (volume) 22% 8½% 25% 2007 2008 2009 Full Throttle and Other Monster
  15. 15. Still Portfolio NORTH AMERICA Stills VOLUME MIX Juice/Juice Waters: 42% Drinks: 15% Isotonics / Sports: 33% Source: CCE Internal Reports, FY09
  16. 16. Package Diversity NORTH AMERICA
  17. 17. Strong marketing assets and brand programming NORTH AMERICA World Cup 2010
  18. 18. North American Commercials NORTH AMERICA “Mini Can” Coca-Cola “Olympic Anton” “Olympic Game Cans” Coca-Cola Coca-Cola
  19. 19. Being our Customers’ Most Valued Supplier NORTH AMERICA Go-To-Market Execution  Improve our Go-To-Market  Improve daily execution Model  Drive order accuracy and  Unlock system synergies improve inventories and value  Create value for our  Deliver efficient and customers effective service Fact-Based Order W riting Based on Days Supply Increased Increased Top-Line Inventory on Grow th the Floor SMO Exceeds Customer Expectations Fountain R educed & Organized Harmony 100% In-Stock Backroom Inventory M erchandising A ligned w ith Consumer Demand
  20. 20. Right Execution Daily (R.E.D.) NORTH AMERICA RED is a continuous improvement model for in-store execution Plan: Look RED improves: of Success  Outlet specific information  Outlet specific execution Learn/Adjust Execute  Customer service Track
  21. 21. Selling and Merchandising Optimization (SMO) NORTH AMERICA From To SMO…  Improves in-stock conditions Fact-Based Order W riting  Reduces backroom inventory Based on Days Supply Increased Increased Top-Line Inventory on Grow th the Floor SMO Exceeds Customer Expectations  Increases cases on display R educed &  Drives sales and profit growth 100% Organized In-Stock Backroom Inventory for CCE and our customers M erchandising A ligned w ith Consumer Demand
  22. 22. Boost Zones are critical to building relationships NORTH AMERICA with consumers & customers  High density, high foot traffic area where consumers work, shop, and play  Connects our brands to consumers North America Boost Zones  Improves sales and customer satisfaction  Generates a positive return on investment  Double the number of Boost Zones in 2010
  23. 23. NORTH AMERICA Ownership Cost Management (OCM) A new way of managing operating expenses AGGRESSIVE TARGETS MATRIXED OWNERSHIP & ACCOUNTABILITY CLEAR COMMUNICATION DISCIPLINED ROUTINE MANAGEMENT TEAM DRIVEN SPIRIT Underpinned by Team-Driven Recognition for the Right Behaviors
  24. 24. Fountain Harmony NORTH AMERICA Integrating fountain and bottle/can in portions of CCE territories Integrated approach is  Decreasing costs  Improving financial results  Enhancing customer service  Capturing system synergies
  25. 25. Coca-Cola Supply NORTH AMERICA Supply Chain is a strategic asset and a critical driver of our business  Integrated approach to common Best Practices Working Capital activities  Optimize quality, flexibility, and service  Improve transportation efficiencies  Expand best practices  Optimize network operations  Improve working capital through Transportation Network Optimization more effective inventory management  Enable product and package innovation Supply Chain Integration: A single supply chain that services all customers in North America
  26. 26. Agenda EUROPE BUILDING ON STRENGTHS DRIVING GROWTH – EUROPE DELIVERING VALUE KEY TAKEAWAYS
  27. 27. 2010 Priorities EUROPE Grow Red, Black, Silver  Continue to execute  Build on world class Grow Portfolio commercial capabilities  Improve customer centric supply chain  Expand boost zones Be #1 with Customers
  28. 28. Red, Black, and Silver showed solid FY09 growth EUROPE FY09 Growth Growth of + 8% Red, Black, Silver 7½% 4½% + 15½% 3½% 2007 2008 2009 + 5%
  29. 29. Sparkling Flavors and Energy EUROPE Sparkling Flavors Energy
  30. 30. Stills EUROPE Water Isotonics/Sports Other Stills
  31. 31. Solid Marketing EUROPE Winter Fanta Relaunch Coca-Cola Olympics ‘Open Happiness’ Activation Coke Light Coca-Cola 25 Years Celebration Coca-Cola World Cup 2010
  32. 32. European Commercials EUROPE “Finals” Coca-Cola “Less Serious” “PowerAde” Fanta PowerAde
  33. 33. Clear plan for 2010 EUROPE Building My Coke Improving Flavors Growing Energy & Stills World Cup 2010 In Market Execution Customer-Centric Building Capabilities Supply Chain
  34. 34. Agenda BUILDING ON STRENGTHS DRIVING GROWTH Corporate Responsibility and Sustainability (CRS) DELIVERING VALUE KEY TAKEAWAYS
  35. 35. Corporate Responsibility and Sustainability (CRS) WATER PACKAGING & STEWARDSHIP RECYCLING DIVERSE & ENERGY & PRODUCT INCLUSIVE CLIMATE PORTFOLIO / CULTURE BALANCED & ACTIVE LIFESTYLE
  36. 36. Corporate Responsibility and Sustainability (CRS) Reduced water Facilities recycle use by more than more than 89% of 5% since 2006 waste in NA, 98% in Europe Conducted first Already reduced Reduced calories global CRS in overall carbon in US schools by Action Week for footprint by more 75%, committed to 70,000 employees than 1% more clear caloric labeling
  37. 37. CRS – Olympic Activation in Vancouver Recycling 100% of Hybrid Electric Vehicles Beverage Packages Plant Bottle and HFC-free Coolers RPET Uniforms
  38. 38. CRS: EMS in Europe Within the past year, we began installing energy management system (EMS) devices on refrigeration equipment. Through the use of motion sensors, the EMS devices can be programmed to detect a store’s hours of operations and auto-adjust the equipment’s temperature and energy settings. More than 55,000 EMS devices have been installed to date. Collectively, they have produced a 35% energy savings.
  39. 39. CRS: Hybrid Trucks in North America  Largest heavy-duty hybrid delivery fleet in North America – 336 trucks in North America, piloted in Europe – Will have more than 500 by end of 2010  Fuel efficiency increased ~ 30%  Emissions decreased ~ 30%
  40. 40. CRS: Bellevue, WA Facility Water Sustainable Stewardship – Packaging/Recycling Reduced Water - Recycle 99.8% of Use Ratio Over materials 15% since 2006 Cost of Waste Removal Recycle Revenue 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 Energy Conservation/Climate Change - The Financial Impact & Benefit – Waste Reduced energy use by Removal Costs down 70% and Exceeded 3.7 million kW hours/yr by Recycling Revenue
  41. 41. Our People  Motivate our people & manage relationships  Build talent pipeline & develop capabilities  Ensure right environment, rewards & opportunities  Expand diversity
  42. 42. Agenda BUILDING ON STRENGTHS DRIVING GROWTH DELIVERING VALUE KEY TAKEAWAYS
  43. 43. Financial Priorities  Consistent earnings in line with our long-term objectives  Maximize free cash flow and improve financial flexibility  Increase return on invested capital and improve shareowner returns DRIVE CONSISTENT LONG-TERM PROFITABLE GROWTH
  44. 44. Long-Term Growth Objectives Revenue Growth: 4%-5% Operating Income Growth: 5%-6% EPS growth: High single digits ROIC Improvement: ≥ 20 bps/yr
  45. 45. Outlook for 2010 2010 Guidance Long-Term Goals Revenue Low Single Digits 4 – 6% Growth OI Growth Mid to High Single Digits 5 – 6% EPS High Single Digits High Single Digits Growth Notes: Excludes non-recurring items. Currency neutral, as of Feb 10, 2010.
  46. 46. Increasing Financial Flexibility Net Debt to EBITDA 5.0x 4.6x 4.3x 4.0x 3.9x 3.5x 3.3x 2.9x 2002 2003 2004 2005 2006 2007 2008 2009 $12.0 $11.6 $11.0 $10.0 $9.8 $9.2 $8.3 $7.7 Net Debt (in Billions) Note: Net Debt is total debt less cash; EBITDA figures are on a comparable basis
  47. 47. Strong Free Cash Flow and Increasing Shareowner Returns Free Cash Flow ($ millions)  Expected free cash flow in 2010 is approximately $800 million  Dividend is up 50% since 2006 $872 $655 $800  Planned share repurchase of up to $600 million by YE 2010 2008 2009 2010E Note: Free cash flow is defined as total debt, current and long-term, less cash and cash equivalents
  48. 48. Key Takeaways  CCE is executing our strategic priorities  2009 was a record earnings year for CCE in a difficult economic environment  Despite some improvements, the overall economic environment remains challenging  Working with TCCC, we are focused on restoring sustained, profitable growth  Long-term financial objectives are attainable
  49. 49. February 17, 2010 John F. Brock Chairman and Chief Executive Officer

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