Your SlideShare is downloading. ×
PBG presentation at CAGNY 2009
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

PBG presentation at CAGNY 2009

476
views

Published on

Presentation by senior management at PBG. …

Presentation by senior management at PBG.

Follow my blog at www.foodsfluidsandbeyond.com

Published in: Economy & Finance, Business

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
476
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
53
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Eric Foss Al Drewes Chairman & CEO SVP & CFO
  • 2. Cautionary Statement Statements made in this presentation that relate to future performance or financial results of PBG are forward-looking statements, which inv olv e uncertainties that could cause actual performance or results to materially differ. We undertake no obligation to update any of these statements. Listeners are cautioned not to place undue reliance on these forward-looking statements. These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in PBG’s annual report on Form 10-K for the year ended December 29, 2007. We hav e disclosed certain non-GAAP measures within this presentation. Our 2009 financial outlook also contains non-GAAP measures. “Non-GAAP” measures include those designated as “Comparable” as well as Operating Free Cash Flow (OFCF). Please see reconciliations to their respectiv e measures prescribed by accounting principles generally accepted in the U.S. included on our website at www.pbg.com under Inv estor Relations.
  • 3. REFRESH RETHINK REDEFINE
  • 4. AGENDA SNAPSHOT OF PBG THE EVOLVING LANDSCAPE STRATEGIC PRIORITIES TO DRIVE 2009 SHAREHOLDER VALUE PRIORITIES & FINANCIAL OUTLOOK
  • 5. 67,000 2 MILLION 85 BILLION SERVINGS 1.5 MILLION PIECES OF EMPLOYEES SOLD 3.5 MILLION COLD DRINK DELIVERIES POINTS OF EQUIPMENT PER WEEK ANNUALLY INTERRUPTION
  • 6. Snapshot of PBG Successful Portfolio Repositioning… With Clear Opportunities Geographies Brands Operating Profit Shifts U.S. Category Shifts 10 15 30 27 40 >35 90 85 70 73 60 <65 2002 2008 2012F 2002 2008 2012F U.S. International CSDs Non-Carbs Operating profit is on a comparable basis
  • 7. Snapshot of PBG Great Portfolio of Brands… Strong #1 or #2 Colas Flavors Water Non-Carbs Invigoration & Energy
  • 8. Snapshot of PBG Capable, Motivated, Experienced Workforce Capability Culture • Financial Literacy • Results Oriented • Metric Based Granular Focus • Continuity of Management • Tools, Training & Technology • Appreciation & Recognition
  • 9. Snapshot of PBG Operational Best-In-Class Execution Excellence Service Excellence Selling Excellence Revenue / Margin Management Excellence Executional Excellence “We Sell Soda.” 1999 2009 & Beyond
  • 10. Snapshot of PBG Proven Financial Track Record Topline Growth Operating Profit (in billions) (in billions) $13.8 $1.2 $11.7 $1.0 CAGR CAGR +6% +6% 2005 2008 2005 2008 EPS Growth Cash Flow (in dollars) (in millions) $2.27 $526 $504 $1.68 Total Payout CAGR +110% +11% 2005 2008 2005 2008 All figures are on a comparable basis
  • 11. The Evolving Landscape… Consumer Relevance • Craving Humanity, Optimism & Energy • Embracing Modern, Simple & Iconic Designs Variety • Purchasing Broader Repertoire of Products • Adopting New and Unique Brands & Flavors Health & Wellness • Searching for Better for You and Functional Products • Continuing to Focus on Better Tasting Hydration Value • Shopping Across Channels in Search of Value • Seeking Key Price Points
  • 12. Evolving Landscape… Channel & Customer Big Getting Bigger Continued Channel Migration Value Rules the Day Escalating Labor Costs
  • 13. Evolving Landscape… Category Big, Growing and Powerful Category US Retail Retail Sales Household Purchase LRB Sales Growth Penetration Frequency $110B 4% 4% 98% 63 $98B 73% 14 2005 2008 LRB Top 10 LRB Top 10 LRB Top 10 • Top Retail Sales Category • 110 Million Households Buying • Annual Growth of 4% • Top Destination Category • Innovation Fueling Growth • Highest Grocery Purchase Frequency
  • 14. Strategic Priorities to Drive Shareholder Value REFRESH RETHINK REDEFINE Reposition and Transform Capitalize on Strengthen Global Performance Through Geographic Growth Brand Portfolio Operating Excellence Opportunities
  • 15. Reposition and Strengthen Global Brand Portfolio REFRESH FILL PORTFOLIO PURSUE GAPS: GOAL #1 OR #2 SCALE ENTER INVEST IN POSITION CORE WHITE OPPORTUNITIES SPACE BRANDS
  • 16. REFRESH Transformational Re-Launch of Pepsi
  • 17. Invest in Core Brands REFRESH
  • 18. REFRESH Aligns Portfolio Across U.S. and Canada Strengthens Flavor CSD Brand Line-Up Significant Volume Potential
  • 19. REFRESH Expand Energy Portfolio
  • 20. Muscle Milk REFRESH Expands PBG’s Portfolio into White Space Leading Brand in High Growth Segment Strong Platform for Health & Wellness
  • 21. Lebedyansky Acquisition REFRESH Largest Juice Producer; #1 Share Position Growth Category within LRB Juice Drinks Introduction in 2009 Scale Business with Attractive Margins 75/25 Joint Venture with PepsiCo Integration Opportunities and Synergies
  • 22. Transform Performance Through Operating Excellence RETHINK Re-Conceptualize Consumer Step Change in Value Architecture Cost Structure and Productivity
  • 23. Transform Performance Through Operating Excellence RETHINK Re-Conceptualize Consumer Value Architecture Weeks in Value • Well-Defined Value Architecture • Best-in-Class Planning Tools Price / Package Architecture • Long-Range Value Migration Planning • Delivers Value Volume & Margin Runway Price Gap Management • Deep Insights & Experience • Understand Private Label Limitations Innovation & Limited Time Offer Packages • Pulse Value at Key Price Points • Big Brands & Big Packs, In & Out
  • 24. Transform Performance Through Operating Excellence RETHINK Step Change in Cost Structure and Productivity Optimize Transform Maximize Manufacturing Warehouse Go-To-Market Cost Capabilities Effectiveness 2009 Cost Savings of $250 Million
  • 25. Capitalize on Geographic Growth Opportunities REDEFINE Domestic Organic Growth New/Emerging Segments Geographies Independent Bottlers Other Anchors $1 BILLION OVER BOTTLERS 100 3 TO 5% RETAIL IN RETAIL SALES CATEGORY GROWTH INDEPENDENT • Consumer Value • PepsiCo Partnership • Enhanced Speed to Market • Executional Excellence • Distribution Agreements • Cost Rationalization • Leverage Innovation • Learning Labs • Financially Accretive
  • 26. Capitalize on Geographic Growth Opportunities REDEFINE International Markets… Positive Long-Term Potential Russia Mexico • Low LRB Per Capita Consumption • Large Population Base • Strong Brand Portfolio • Capitalize on Channel Shifts • Power of One with Frito • Strengthened Management Team • Capability as a Competitive Advantage • Restructuring Plans Being Executed
  • 27. Agenda PBG’S APPROACH TO CREATING SHAREHOLDER VALUE MANAGING IN THE CURRENT ENVIRONMENT 2009 FINANCIAL OUTLOOK
  • 28. PBG’s Approach to Creating Shareholder Value • Sustainable Topline and Bottomline Growth • Focused Cash Flow Priorities – Investments Increase ROIC – WACC Spread – Grow Operating Free Cash Flow – Effectively Return Cash to Shareholders
  • 29. PBG’s Approach to Creating Shareholder Value Sustainable Topline and Bottomline Growth Revenue Operating Profit EPS (in billions) (in billions) (in dollars) $2.27 $2.20 ~$1.2 $13.8 $13.6 ~$1.1 $.9 +2% +2% +3% $10.3 $1.41 CAGR CAGR CAGR +7% +5% +12% 2003 2007 2008 2003 2007 2008 2003 2007 2008 Operating profit and EPS are on a comparable basis
  • 30. PBG’s Approach to Creating Shareholder Value Focused Cash Flow Priorities 1999-2002 2003-2008 Reinvest in the Business $2.3 Billion $4.4 Billion Acquisitions $1.3 Billion $1.1 Billion Share Buybacks & Dividends $700 Million $3.5 Billion
  • 31. PBG’s Approach to Creating Shareholder Value Focused Cash Flow Priorities OFCF ROIC 7.8% $526 $440 7.0% WACC CAGR +4% 2003 2008 2003 2008 Non-GAAP
  • 32. Managing in the Current Environment Environment Priorities • Global GDP Pressure = • Ensure Strong Liquidity LRB Category Pressure • Enhance Risk • Double-Digit Foreign Management Capability Currency Devaluation • Accelerate Productivity • Tight Credit Markets • Strengthen Cash Flow • Commodity Costs Improving and Working Capital Goal: Solid Near-Term Results… an Even Stronger PBG Post-Recession
  • 33. Managing in the Current Environment Liquidity Bond Maturity Ladder (in billions) • Reaffirmed A/A2 Credit Rating $1.3 $1.0 $1.0 • Guarantee Liquidity $0.8 $0.75 – $1.1B Committed Bank Lines Through 2012 $0.4 – $1.3B 5 Year Offering in Oct. 2008 $0.25 – $750 10 Year Offering in Jan. 2009 $0 ’09 -’11 ’12 ’13 ’14 ’15 ’16 ’19 ’29
  • 34. Managing in the Current Environment Risk Management • Balanced Maturity ladder Liquidity / Refinancing • Committed Bank Lines in Place… $1.1 Billion Through 2012 • Rigorous Cash Conversion Cycle Management Working Capital • Global Receivable & Inventory Controls • Minimum Criteria for Financial Institutions & Global Suppliers Counter Party • Quarterly Review of Exposure • Rigorous Assessment of Suppliers • Smooth Volatility and Manage Risks Hedging • Hedges Matched to Future Needs… No Speculation • Rolling Average Hedge Positions & Centralized Control
  • 35. Managing in the Current Environment New Approach to Planning • Real-Time Decision Making • Multiple Scenario Plans • Heightened Focus on Productivity • New Working Capital / Capital Spending Approach • Local Currency Profit Targets Balancing the Near-Term Pressures with the Long-Term Attractiveness of PBG
  • 36. Managing in the Current Environment Productivity Initiatives Productivity Savings (in millions) • Structured to Succeed $250 • Self M anufacturing and $170 Light Weighting $100 • Transform Warehouse Operations 2007 2008 2009F • Optimize Route-To-M arket
  • 37. Managing in the Current Environment Capital Spending Working Capital (in millions) $869 • Accounts Receivable and $693 Credit M onitoring Enhanced $550 - $600 • Cash Conversion Scorecards and Targets by Country 2007 2008 2009F • US Best Practices to 6.4% 5.0% 4.0% International M arkets Capex as % of Revenues
  • 38. 2009 Guidance Currency Neutral U.S. Dollar Down Low Top-Line Growth + Low-Single Digits to Mid-Single Digits Down Low Operating Profit Growth* + Low-Single Digits to Mid-Single Digits ~ $(0.18) Earnings Per Share* $2.15 to $2.25 ForEx Impact Operating Free Cash Flow ~ $450 Million *Comparable
  • 39. Financial Outlook Summary Strong Track Record of Results Clear Priorities for 2009 Financial Flexibility due to Strong Balance Sheet Bright Future as Macros Rebound
  • 40. Summary STRATEGIC STRENGTHENING BEST-IN-CLASS BRAND REPOSITIONING OPERATING OF GEOGRAPHIC CAPABILITY PORTFOLIO PORTFOLIO